CMA weighs alternative payments to Apple, Google app stores

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

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 (CMA) 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.

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 ‌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.

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.