Russians Fined Apple $12.1 Million for Anti-Competitive Practices

By Bill Toulas / April 28, 2021

It appears that Apple’s acceptance of the Russian state demands to allow them to preinstall apps on iPhones wasn’t enough to get them out of regulatory trouble, as the Federal Antimonopoly Service (FAS) in Russia has decided to fine Apple $12.1 million for giving its own applications a competitive advantage. Apple said it “respectfully disagrees” with the ruling and will appeal it, but the chances of seeing any vindication through this process are slim.

According to FAS, the investigation and the resulting fine were based on findings concerning how the company functioned in August 2020. Back then, Apple allegedly abused its dominant position and rejected third-party applications from its App Store, often without providing any details on the reasons behind these rejections.

One prominent example of this was the ‘Safe Kids’ apps made by the Russian security firm Kaspersky. Apple rejected the app back then and now claims that they had worked with Kaspersky to sincerely help them modify their app in a way that would make it compatible with the App Store rules. As proof of that, Apple says Kaspersky now has 13 apps on the App Store and has had hundreds of updates successfully passed Apple’s inspections.

Russian politician and member of the Duma, Anton Gorelkin, stated that the fine was never meant to hurt Apple but instead has the goal of convincing Big Tech that they need to sit down with national regulators and have a serious talk about how they can operate with respect to market and trade rules.

In the meantime, Australia’s top consumer watchdog, the ACCC, has released an interim report on its investigation into the dominance of Apple and Google and how their respective app store rules impact competition and consumers. What is mentioned in the media release won’t satisfy either company, as the ACCC mentions the following:

"Apple and Google…have the ability and incentive to promote their own apps over others, and they control the terms that their competitors must comply with to gain access to their stores. …we believe app developers should have more information about how their apps are made discoverable to consumers and that consumers should have the ability to change or remove any pre-installed or default apps. Apple and Google should also be prevented from using information collected about third-party apps to advantage their own competing apps. …The ACCC is also concerned with restrictions imposed by Apple and Google which mean developers have no choice but to use Apple and Google’s own payment systems for any in-app purchases."

This all sounds like ACCC is preparing some big fines for Google and Apple, but we’ll get to know more about it on August 31, 2021, when the final form of the report is due for publication.

Back in Russia, we must also not forget about this draft bill that may pass into law soon, and which would force Apple and Google to cap their app store commissions to 20%, losing one-third of their current cut. The relevant clauses were actually based on a 2020 FAS decision, which demanded that Apple lifts all limitations and anti-competition hindrances towards third-party app developers.

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