UK Regulator Proposes Opening Apple and Google App Stores to Rival Payments

TLDR

• UK’s Competition and Markets Authority (CMA) proposed letting app developers steer users to outside payment options.
• The plan would target rules at Apple and Google that currently restrict or ban this kind of steering.
• Any new fees charged for steering must be fair and lower than current app store commissions, the CMA said.
• The CMA is also considering forcing Apple to open up its NFC technology used for contactless payments.
• Google says it already updated Play Store terms this month to allow steering; Apple opposes the changes over security concerns.

Britain’s competition watchdog has proposed new rules that could change how Apple and Google handle in-app payments. The Competition and Markets Authority announced the plan on Tuesday.

The proposal targets a practice called “steering.” This is when app developers tell users about payment options outside of Apple and Google’s own systems.

Right now, Apple bans this kind of steering. Google restricts it. Developers are mostly required to use the platforms’ built-in payment systems.

What the New Rules Would Change

Those in-app payment systems come with commissions that can reach 30% on some purchases. The CMA wants that to change.

Under the proposal, companies would still be allowed to charge fees for steering. But those fees would need to be fair, reasonable, and lower than current commissions.

The regulator said any savings should be passed on to consumers or put back into innovation. Will Hayter, the CMA’s executive director for digital markets, said the goal is to give both developers and users more choice.

He added that fees charged by Apple and Google must be backed by clear evidence tied to cost and value.

Apple’s NFC Technology Also Under Review

The CMA is also looking at requiring Apple to open access to its near-field communication technology. This is the tech that powers contactless payments on iPhones.

If that happens, developers could build payment services directly into their own iOS apps. This could let UK fintech companies create alternatives to Apple’s wallet.

The CMA specifically mentioned account-to-account payments and emerging technologies, including digital currencies, as possible use cases.

The proposals fall under Britain’s digital markets regime. This gives the CMA power to set specific rules for companies it has labeled as having “strategic market status.”

Both Apple and Google received that label last year for their mobile ecosystems.

Google responded by pointing to changes it already made. The company updated its Play Store terms earlier this month to let developers steer users to outside payment options.

The CMA said it will review those changes as part of its work before making a final decision later this year.

Apple has taken a different stance. The company says it does not support directing users away from its own payment system.

An Apple spokesperson said doing so could open the door to scams, bait-and-switch tactics, and ways around parental controls. The spokesperson said users lose protections when they are directed away from Apple’s payment infrastructure.

Apple said it will continue raising its concerns with the CMA directly.

This is not the first action the CMA has taken against the two companies. In February, it secured commitments from Apple and Google to make their app stores more transparent.

Those changes covered rankings, reviews, and access to certain features. They did not address commissions.

The CMA said at the time that steering remained a priority issue. Regulators in the European Union, the United States, and Japan have also been scrutinizing similar app store practices.

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