If the company leaves its App Store in the country in its current state, Apple faces a fine of up to 41,000 euros (250,000 Brazilian reals) per day. The decision was made by the Conselho Administrativo de Defesa Económica (CADE), the national competition regulator in the South American country. The request came from e-commerce giant MercadoLibre, which wants to use its payment methods in Apple’s software store but is currently not allowed to do so. The case is reminiscent of similar conflicts in the European Union, the United States, and other regions of the world.
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Fines are comparatively “cheaper”
What sounds like a lot of money in fines is still cost-effective for Apple. In the EU, Apple alone is expected to pay 1.8 billion euros due to the ban on music service Spotify, but is taking action against the EU Commission decision. However, further proceedings are still underway due to a possible violation of the Digital Markets Act (DMA), which could cost Apple quite a lot. Here too, the app store is a central element that competition authorities pay attention to.
MercadoLibre already complained to CADE in 2022 and a similar process is underway in Mexico. The provider wants to be able to freely sell content such as movies, music or electronic books without paying the 30 percent commission Apple typically charges. Apple routinely blocks apps that redirect payment transactions to its websites, and even bans the hyperlinks and mentions that make this possible. CADE now wants Apple to allow app developers to use alternative in-app payment methods that are not proprietary to the company. If Apple does not do this within 20 days, there will be a danger in Brazil. Told about a fine of Rs 250,000 per dayReuters news agency writes citing authorities.
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The question now is how Apple will enforce the requirements or whether the company will file a complaint against the decision. Whether the latter possibility existed initially remained unclear. In individual markets, Apple certainly offers developers the opportunity to use alternative payment methods if the company is forced to do so by regulators. However, this is hardly a good deal. These routes exist in the United States and the Netherlands.
However, in the latter market, Apple’s commission is reduced to only 4 percent when using other payment providers, which may not really be worth it depending on the payment service provider. Apple could potentially take this path in Brazil as well, thus making the offer unattractive.
(B.Sc.)
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