Apple under investigation in Brazil over App Store payment rules after Mercado Livre complaint

Apple is the target of new investigations by the Administrative Council for Economic Defense (Cade), of the Ministry of Justice, for alleged anti-competitive practices in the iOS app store. The process follows complaints from Mercado Livre, which criticizes the US company’s restrictive policies on the iPhone’s operating system.

As accused by the Latin American marketplace company, big tech holds a dominant position in the application distribution market and imposes restrictions that hurt developers who rely on iOS in-app purchasesin addition to subjecting them to the payment of a commission that can reach 30%.

Mercado Livre observes that Apple’s policies are the subject of lawsuits that go beyond Brazil, generating lawsuits in various regions of the world. A notorious case is the cell phone manufacturer’s dispute against Epic Games, a game developer that sued the rival after the removal of Fortnite from the App Store.

In a defense sent to the national market regulator, Apple claims that it does not have the capacity to implement, and has not implemented, any practice with the aim of preventing Mercado Livre’s activities or harming competition in Brazil. Furthermore, the company claims that its market share of mobile devices in the country is less than 20%.

The tech giant alleges that Mercado Livre’s arguments “function only to cover up a private dispute against Apple with the aim of obtaining private benefits”, and have no intention of protecting the country’s market competition.

Another highlighted point says that Apple has operated the same business model since 2008, the year the App Store was launched, therefore, its practices could not be considered abusive.

Cade will continue to investigate the possible effects of Apple’s restrictive operation in Brazil. The Board set a deadline of January 27 for the company to manifest requested documents, including a Portuguese version of the App Store Review Guidelines (store guidelines guide) and relevant developments in antitrust lawsuits.

If the company does not comply with the manifestation of the requested documents, the agency will apply a fine of R$ 5 thousand per day, subject to readjustment of up to 20 times.

(updated Jan 20, 2023 at 5:34 PM)