In response to the European Union’s Digital Markets Act (DMA), which mandates that Apple permit iPhone developers to utilize alternative payment systems, Apple has implemented prominent warnings for apps employing third-party payment processors. This approach has sparked criticism, with allegations that it contravenes Apple’s own guidelines and potentially breaches EU antitrust laws.
Developer Viktor Maric highlighted this issue by sharing a screenshot of the warning displayed in the Instacar app, a widely used business application in Hungary. The warning employs a critical alert symbol—an orange triangle with an exclamation mark—typically reserved for severe situations, such as potential data loss. Apple’s Human Interface Guidelines advise using this symbol sparingly to maintain its significance. The application of such a warning for third-party payment systems, especially those as reputable as Stripe or PayPal, has been deemed excessive and unwarranted.
Critics argue that this tactic may violate the DMA, which prohibits practices that dissuade users from opting for alternative payment methods. By employing such warnings, Apple could be seen as engaging in anti-steering measures, which are illegal under the DMA. John Gruber, a prominent tech commentator, accused Apple of spreading fear, uncertainty, and doubt (FUD) regarding third-party payment systems. He suggested that Apple’s insular approach to the App Store has led to a lack of awareness about the security and privacy standards maintained by external payment processors.
This development is part of a broader pattern of resistance from Apple concerning alternative payment systems. In January 2024, the U.S. Supreme Court declined to hear Apple’s appeal in a case involving Epic Games, effectively upholding a lower court’s decision that Apple must allow developers to inform users about alternative payment options. Despite this, Apple introduced policies that permitted external payment links but imposed a commission of 12% to 27% on such transactions. Additionally, Apple required developers to present a warning message to users when they opted for external payment methods, stating that Apple is not responsible for the privacy or security of purchases made outside its ecosystem.
These warnings have been criticized as scare tactics designed to deter users from utilizing third-party payment options. The Digital Trends article The Ugly Side to Apple’s Embrace of Third-Party Payments discusses how these warnings can create a cumbersome user experience and potentially drive users away from apps that offer alternative payment methods.
Apple’s stance on third-party payment systems has also faced scrutiny in other jurisdictions. In November 2024, Brazil’s antitrust authority, Cade, ruled that Apple must lift restrictions on in-app payment methods, following a complaint by MercadoLibre. Cade mandated that Apple allow app developers to implement tools like external website links for purchases and alternative in-app payment processes. Apple was given 20 days to comply or face daily fines.
In response to these regulatory pressures, Apple has expressed concerns about the potential risks associated with alternative payment systems. The company argues that allowing third-party payment processors could introduce new threats to user security and privacy, including increased exposure to scams and malicious apps. Apple’s developer documentation emphasizes that using alternative payment service providers and linking out to purchase can create new threats to user security and privacy and may compromise the user experience.
Despite these concerns, critics argue that Apple’s warnings and policies are primarily aimed at maintaining its control over the App Store ecosystem and the lucrative commissions it collects from in-app purchases. The company’s services division, which includes the App Store, generated $85 billion in revenue during the fiscal year ending in September 2023. Allowing alternative payment methods could significantly impact this revenue stream.
The debate over Apple’s handling of third-party payment systems underscores the ongoing tension between regulatory authorities seeking to promote competition and consumer choice, and tech giants aiming to protect their business models. As legal and regulatory challenges continue to mount, it remains to be seen how Apple will adapt its policies to comply with new requirements while addressing concerns about user security and privacy.
