Brazil’s antitrust regulator Cade has ruled that Apple must lift its restrictions on in-app purchases. This ruling comes as other countries, including the United States and Japan, take similar regulatory action against the iOS App Store.
Regulators continue poking holes in Apple’s walled garden. The Brazil ruling forces Apple to permit developers offering iPhone and iPad apps in the Brazilian App Store to link to external websites for subscriptions like Netflix and digital purchases like virtual in-game items.
The ruling is a result of a complaint Latin America e-commerce merchant MercadoLibre filed against Apple’s in-app purchase and App Store terms back in 2021. It accuses Apple of imposing a series of restrictions on third-party developers, including forcing them to use its own payment processing system for in-app transactions, disallowing external links in apps, and stopping developers from informing iPhone and iPad owners that they could save money by purchasing subscriptions on official websites. Apple’s rules even prevent developers from advertising different prices or alternative payment options.
As always, the main point of contention is money. Apple imposes its controversial fee on all transactions that use the In-App Purchase feature built into its software platform, which entails paying it a 15-30 percent commission on the vast majority of in-app sales.
In the past few years, regulators around the world have taken issue with Apple’s handling of the App Store and some of its business terms. For example, watchdogs in the United States, the European Union, Japan, and South Korea have successfully forced Apple to allow third-party payments and links to external websites, but Apple isn’t off the hook yet.
If Apple doesn’t comply with Brazil’s ruling within 20 days, it could face fines of 250,000 real per day (about $43,000). That’s pocket change for a company that has been selling iPhones for over fifteen years! For illustration, Apple on average brings in more than $1 billion in revenue each day (its revenue for the 2024 financial year was about $391 billion).
The company currently allows developers to add one external link to iPhone apps distributed through the App Store. There are fewer restrictions for apps hosted on alternative app stores in the European Union, though the European Commission doesn’t think this is enough and continues investigating the company for compliance with the bloc’s Digital Markets Act.
Source: Reuters
