UK regulator proposes easing app store payment restrictions on Apple and Google

The UK competition regulator proposed sweeping changes to how Apple and Google operate their app stores, giving developers more freedom over payments and potentially lowering the fees charged on digital transactions. The proposals are part of the country’s new digital markets regime and aim to boost competition and choice for consumers in the mobile app ecosystem.The Competition and Markets Authority (CMA) said on Tuesday it wants to give app developers the ability to direct users to payment methods outside Apple’s App Store and Google’s Play Store. The regulator says the existing restrictions by the two tech giants stifle competition by making developers reliant on their in-app payment systems and the accompanying commission structures.Under the proposed regime, UK developers would be able to point consumers to payment channels outside of the app stores. Apple bans such practices, while Google allows some forms of external payment steering under certain conditions. “The CMA said the changes are intended to create a more competitive landscape and could lead to lower costs for both developers and consumers.The watchdog also said that if Apple and Google continue to charge developers fees to allow such payment redirection, those fees must be “fair and reasonable.” Any fees linked to alternative payment options must be lower than current commission rates for the App Store and Play Store, and should enable developers to pass savings on to consumers or to reinvest them in innovation and product development, the regulator said.Also read: Apple fast-tracks security updates amid AI-driven cybersecurity concernsIt is right that Apple and Google are compensated for the services they provide, but any charges must be justified by a robust, evidence-based assessment of cost and value,” said Will Hayter, Executive Director for Digital Markets at the CMA in a comment on the proposals.The regulator is also looking at whether Apple should be forced to give broader access to its near-field communication (NFC) technology that allows contactless payments through Apple Pay. Giving developers and fintech firms access to NFC capabilities could empower them to provide their own contactless payment solutions inside iOS apps, giving alternatives to Apple's existing payments ecosystem.More widespread access to NFC technology could spur innovation in the UK’s financial technology companies by unlocking new payment methods, including account-to-account transfers and potentially future digital currency solutions, the CMA said.The proposals are part of a wider consultation exercise being run under the UK’s digital markets legislation, which gives the regulator powers to impose specific requirements on companies designated as having Strategic Market Status (SMS). The iOS ecosystem has already been identified as likely to face greater scrutiny under the framework, giving the CMA scope to consider targeted measures to boost competition within the platform.Google said it was already moving in the direction suggested by the regulator. The company said in a statement cited by Reuters that earlier this month it introduced new Play Store terms that give developers the ability to direct users to complete transactions outside of the platform, subject to certain restrictions. Google also cited recent changes in its fee structure as evidence of ongoing efforts to address competition concerns.Read more: Meta restricts employees' use of Claude Code and Codex over model distillation: ReportApple, meanwhile, has been fighting to stop developers from bypassing its payment system. The company says outside payment systems could leave users vulnerable to fraud, scams and fewer consumer protections. "Taking users outside of Apple's payment ecosystem could open the door to scams, bait-and-switch tactics, and the circumvention of parental controls," said an Apple spokesperson. “The protections that users rely on are lost when transactions happen outside of Apple’s trusted payment framework,” the spokesperson said, adding that the company would continue to communicate its concerns to the regulator.The CMA said it will continue to consult developers, platform operators and other stakeholders before reaching a final decision. The regulator will also consider Google's recent policy changes as part of its evaluation before deciding later this year if formal requirements need to be imposed on Apple and Google in the UK market.