By Sam Tabahriti
LONDON, June 30 (Reuters) – Britain’s competition regulator on Tuesday proposed allowing app developers to steer users to alternative payment options outside Apple and Alphabet’s Google app stores to cut fees and boost competition.
The Competition and Markets Authority said the proposals would remove restrictions that currently prevent UK developers from directing users to off-platform payment options, which are banned by Apple and restricted by Google.
The watchdog said any fees charged by two of the world’s largest technology companies for allowing such “steering” would need to be fair and reasonable, and should be lower than current app store commissions, with savings passed on to consumers or reinvested in innovation.
“While it is only fair for Apple and Google to be compensated for the services they provide, any fees they charge must be justified through a robust, evidence-led framework involving due reference to both cost and value,” Will Hayter, executive director for digital markets, is expected to say later on Tuesday, according to an excerpt of his speech.
PAYMENT RULES UNDER REVIEW
The CMA said it was also considering requiring Apple to open up access to its near-field communication technology, which is used for contactless payments, potentially allowing developers to offer payment services within their own iOS apps.
This could enable UK fintech companies to build alternatives to Apple’s wallet, including account-to-account payments and emerging technologies such as digital currencies, the CMA said.
The proposals are part of a consultation under Britain’s new digital markets regime, which gives the watchdog powers to impose tailored requirements on companies with so-called “strategic market status”.
Google said in an emailed statement it had already taken steps in that direction, pointing to new Play Store terms introduced earlier this month allowing developers to steer users to complete transactions outside the platform.
The CMA said it would assess Google’s recent changes as part of its work before deciding later this year whether to impose formal requirements.
Apple has previously said it does not support allowing developers to direct users to off-platform payments, arguing this could undermine user security and fraud protections and limit its ability to verify transactions.
An Apple spokesperson said it could open the door to “scams, bait-and-switch tactics, and the circumvention of parental controls”.
“When users are directed away from Apple’s trusted payment infrastructure, they lose the protections they rely on Apple to provide,” the spokesperson said, adding the U.S. tech giant would continue to “make our concerns clear” to the CMA.
The regulator designated Apple and Google as having strategic market status in mobile ecosystems last year, giving it the power to intervene more directly to boost competition.
In February, it secured commitments from the two companies to make their app stores fairer and more transparent, including changes to rankings, reviews and access to certain features – but they did not address commissions, which can reach up to 30%.
The CMA said at the time that enabling developers to steer users to alternative payment methods remained a priority, an issue that has also drawn scrutiny from regulators in the European Union, the United States and Japan.
(Reporting by Sam Tabahriti; Editing by Sarah Young and Emelia Sithole-Matarise)
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