Apple's Losing Battle in the Netherlands

A few weeks ago, regulators in the Netherlands ruled that Apple must allow dating apps to integrate 3rd party payment solutions into their apps. Exactly what Epic was fighting for last summer. But only dating apps. Why? I'm not exactly sure... But that's old news.

Apple has since conceded and said they'd allow it but will continue to charge developers a fee of 27%. If you're familiar with payment processing, you know the cost is usually more than 3%, so this isn't really a discount but rather a penalty.

The regulators didn't like this and announced a fine of €5M for every week Apple doesn't change their terms.

Wow. Just wow!

I think this was a pivotal moment for Apple, and they dropped the ball, which will have a direct impact on the entire industry.

But first, data.

How much money is Apple making from dating apps in the Netherlands? And, is it enough to cover this new fine?

Absolutely not.

I summed up the gross revenue of the top 10 dating apps in the Netherlands for Q4 of 2021 and January of 2022, so we can see. And since the fine is in euros and not dollars, I converted all of the numbers here to euros for easy comparison.

Between September and January, the top 10 dating apps brought in €9.4M of gross revenue as per our estimates. Reminder, euros not dollars.

Of this, Apple's 30% fee nets out to roughly €2.8M. By this calculation, a week's worth of fine is about the same amount as Apple earns from dating apps in an entire year in the Netherlands.

I suspect regulators had access to this data, and the number wasn't a random guess.

Personally, I think Apple really messed up on this one. Without getting into the main issue, which is whether 3rd party payments should be allowed into the App Store because that's a much bigger conversation, this 3% discount feels more like an insult. And that wasn't even it!

The other requirements to use out of store payments are that the developers ship a separate app and also warn their users with a very specific message crafted by Apple. Another insult to developers.

It's these insults that will anger even more regulators, in my opinion, and will lead to tougher regulations on Apple, which will ripple across our industry.