Russia takes $13.5M bite out of Apple over in-app purchases

Apple has paid a fine of ₽1.2 billion ($13.5 million) to the Russian government after Moscow decided the company violated its antitrust laws by preventing iOS users from going outside the App Store for in-app purchases (IAP).

News of the payment was shared by the Russian Federal Antimonopoly Service (FAS) on Monday, which said it decided Apple had broken Russian antitrust laws in July 2022. The payment was made on January 19, and “went to the budget of the Russian Federation,” the FAS said.

“Apple prohibited iOS application developers from informing in-app customers about the possibility of paying for purchases outside the App Store, as well as using alternative payment methods,” the FAS said in a Russian-language statement.

It’s possible Apple needed the time to work out a deal with the US Department of the Treasury’s Office of Foreign Asset Controls, which issues licenses to companies seeking dispensation to conduct a transaction that would otherwise be prohibited by US economic and trade sanctions. We’ve asked both Apple and the Treasury to comment, but haven’t heard back from either.

The fine was levied for a familiar reason, namely Apple’s decision to prohibit developers from offering IAPs in a manner that would prevent Cupertino from extracting its 30 percent cut. Makers of popular video game Fortnite kicked off much of the brouhaha in 2020 after being banned from the App Store for offering IAPs outside of Apple’s reach, for which it sued the company.

The US Supreme Court, which recently declined to hear appeals from Epic and Apple over their years-long feud, effectively settled the issue in Apple’s favor in the US, though lower courts decided Apple must allow developers to steer users outside the app store for IAPs. Apple still intends to collect a 27 percent cut of IAPs made outside the App Store, frustrating many developers.

To Russia, with harrumphs

It’s unsurprising that the FAS has fined Apple for its IAP restrictions – the agency has a long history of coming down on the iGiant for perceived antitrust violations.

Apple reportedly paid a ₽906 million ($12.1 million at the time) fine early last year after the FAS determined in 2020 that Apple had abused its dominant position by rejecting an app developed by Russian cybersecurity firm Kaspersky. According to Reuters, Apple “respectfully disagreed” with the FAS’s decision in that case, but appears to have paid the fine regardless.

The FAS also bit Apple in 2017 after deciding it had engaged in illegal price fixing of iPhone 5 and iPhone 6 series devices in Russia.

Apple, along with Zoom and internet speed testing service Ookla, were also fined by Russia in 2022 for not storing the data of Russian citizens inside Russia’s borders.

Like many other tech companies, Apple exited the Russian market shortly after the country invaded Ukraine in February 2022, but that hasn’t stopped the latest iPhones from being made available in the country.

Russia legalized parallel imports in March 2022, effectively creating a government-sanctioned gray market for goods unavailable after businesses fled the country to avoid sanctions. Remaining stock of Apple devices, and those imported through purchases in other countries via the parallel imports scheme, have been available for sale in Russia since then. ®


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