Apple fined $17.4 million by Russian agency because the App Store is a monopoly

The App Store continues to land Apple in hot water, this time in Russia. The country’s Federal Antimonopoly Service (FAS) fined Apple the equivalent of $17.4 million because Russian developers were forced to use Apple’s in-app payment platform. Apple forces developers to use its payment platform and takes a 15% to 30% cut of in-app subscriptions and payments. Any attempt to bypass the platform results in Apple kicking the offending app out of the App Store as it did with Epic Games and its hit title Fortnite.

Apple’s actions were previously found to violate Russian competition rules and the tech giant is being told that it must pay the new fine within two months. You might recall that back in April 2021 the company was hit with a $12 million fine from the same agency after losing a lawsuit filed by Russian cybersecurity firm Kaspersky. In 2018, the developer was planning to update its Safe Kids parental control app but Apple blocked the update as it released its own Screen Time feature in iOS 12.

At the time, the FAS released a statement that said, “Apple was found to have abused its dominant position in the distribution of mobile applications on the iOS operating system through a series of actions that led to a competitive advantage for its own products, and at the same time worsened the distribution conditions for competing products.” Apple claimed that it removed a number of parental tracking apps from the App Store because they were invasive and “put users’ privacy and security at risk.”

At the time, the FAS also ordered Apple to remove from its terms and conditions any terms that allow Apple to “reject third-party applications from the App Store for any reason, even if they meet all requirements.” The agency also demanded that Apple no longer give its in-house apps precedence over third-party apps. While Apple was allowed to appeal the $12 million fine, it isn’t clear whether the Russian regulators are allowing Apple to contest the latest action. While under appeal, the FAS orders that Apple must obey are temporarily suspended.

The App Store monopoly could be coming to an end thanks to the European Union’s Digital Markets Act (DMA). Apple reportedly is working to allow iPhone users, in Europe at first, to sideload apps. This merely means allowing users to download apps from third-party iOS app storefronts. Apple claims that for security reasons it prevents iPhone owners from sideloading apps.

Apple isn’t totally wrong about this since its walled garden does give it control over the apps installed on an iPhone. On the other hand, people don’t like to be told what to eat or drink or put into their bodies and many feel that they should be allowed to make their own decision whether or not to risk having their iPhone attacked by a malware-infected app that contains a banking trojan (which will steal the log-in info to their banking apps).

It should be pointed out that Google allows Android users to sideload apps and this writer has done so without issue in the past. Look at the comments section for red flags before installing apps from developers you’ve never heard of before.

Whew! Did we take a detour! Anyway, should Apple allow sideloading on the iPhone, the company would no longer be accused of being a monopoly. Right now though, there is only one official way to install an app on an iPhone and that is through iOS. And this means that developers have to pay the Apple tax on in-app purchases. And regardless of the fines imposed on Apple, it still remains more profitable for it to demand that developers pay the 15% to 30% tax.