Issue 34  February 5th 2022

This week's big story is clearly the fallout from the Meta/Facebook earnings report. We'll get to that in a minute.

But first: a few thoughts on the ever-unfolding situation around alternative in-app payment methods, this time for dating apps in the Netherlands. There have been so many 'alternative payment methods' stories over the last year that you might be thinking 'wait, another one?'

If so, I don't blame you. The short version this time:

1. The Dutch antitrust authority recently found Apple's rules to be anti-competitive and ordered changes.
2. In response, Apple grudgingly announced some plans.
3. But the Dutch authority clearly felt those plans weren't sufficient, and assessed a €5m fine.
4. Apple followed up this week with scrupulously detailed guidance, which I certainly recommend reading (key points: a completely separate app just for the Netherlands, a required pre-payment warning modal, and a 27% commission rate with mandatory audit rights to Apple).

But the Byzantine twists of each new version of this story are much less interesting than the clear pattern that is starting to emerge: while these showdowns are always phrased around allowing alternative in-app payment methods, that's just a means to an end: the real objection is the 15-30% commission rate.

I think the unspoken assumption here has been that the commercial models behind the App Store and Play Store are the digital equivalent of a Prince Rupert's drop, and that forcing Apple and Google to budge even slightly on payment methods would cause the whole thing to shift.

In other words, most seemed to hope that if Apple and Google could be forced to allow alternative payment methods in even a small jurisdiction, they would either quickly give up, or decide to overhaul the entire system.

That's not what has happened, at all. In reality, the result so far has been much closer to scorched earth, trench warfare. In every case, Apple and Google are giving only the bare minimum in concessions necessary to comply with the literal letter of each new law, while making sure each change is a Pyrrhic victory for those who brought the complaint (for an example of what I mean, just see the scrupulously detailed guidance above)

One can't entirely blame them for this approach — no one enjoys it when their product roadmap is dictated by court order — but the unfortunate thing is that all this ultimately harms the broader mobile ecosystem. Yes, there are many issues with walled garden app stores. Discoverability, high commission rates, and mercurial review decisions are just a few examples.

But there are also major benefits (no one really wants a return to the days of Windows 98, when an antivirus scanner was the only thing standing between your computer and total anarchy), and avoiding heavy-handed regulation via a few thoughtful compromises would seem like a worthwhile trade.