mkodo’s Stuart Godfree: Apple App Store faces legislatory impact

Apple reportedly set to face €500m penalty in EU antitrust ruling

Stuart Godfree, Managing Director at mkodo, has opened up on new European legislation that threatens to impact Apple’s App Store, notably in relation to real-money gaming. 

The new legislation, he said, will see the removal of restrictions on In-App Purchasing (IAP), allowing third parties to use external payment for services as well as changes for external App Stores.

Stuart Godfree, mkodo – Source: mkodo

He explained: “Back in 2020, Spotify lodged a complaint against Apple to the European Commission Anti-Trust organisation, stating Apple IAP was anti-competitive and restrictive. An unnamed (but I suspect we can all guess) audiobook and e-reader retailer made a similar claim, and, although not considered directly, the Epic Games suit against brought in the US one can assume was on the periphery of the commission’s decision, brought in new legislation under the Digital Markets Act (DMA). 

“Fundamentally, under the DMA, Apple cannot mandate the use of IAP by app developers, allowing apps to access external payment services to top up or buy content. This, I think, overall is good for the industry, though, and we should be mindful of this. Apple has the right under the DMA to charge ‘commission’, and I suspect they will do this through the App Store submission process. We’ll have to wait and see on that one!” 

On external App Stores, Godfree stated: “Apparently, the restrictive practices that Apple applies to their ‘Guidelines’ (let’s face it, they are rules) under their review process are considered anticompetitive. Now I have to say that I disagree with this. 

As we have seen with Google, which now has a similar review process to Apple with their Play Store, both companies are trying to build trust and stop fraudulent apps from being installed on their platforms. With the significant increase in digital fraud, surely their approach should be applauded rather than maligned?” 

As for the implications for real-money gaming, Godfree said: “Well, the new Apple Guidelines have been published, and the original 4.7 section has subtly changed; importantly, section 5.3 has NOT changed, and critically, the issue of IAP never applied to the betting, gaming, and lottery (BGL) industries. So, ironically, the Digital Markets Act is somewhat irrelevant to us. 

“The original guideline requirement under 4.7.1 of ‘not provide access to real-money gaming’ has been removed. However, critically, this has been added to 4.7: ‘You are responsible for all such software offered in your app, including ensuring that such software complies with these guidelines and all applicable laws’.” 

Godfree’s interpretation is that the organisation submitting an app to Apple App Store is responsible for all content that the app offers and, critically, within the BGL space, that it complies with all the Apple Guidelines and local applicable laws. 

He concluded: “So, provided your HTML5 casino games are licensed by an appropriate regulator (and thus comply with applicable laws), you are now free not to embed the content in the app – bye, bye ODR! 

“We are still waiting for full clarity from Apple. Part of their answer has been to submit an app and see what happens – which is exactly what we have just done – so we’ll see, but this does seem to be a 180 reversal of Apple’s original 2019 guideline change.”