Brazil Moves to Sanction Apple for Blocking Competition in App Store

Brazil’s antitrust authority, CADE, has recommended sanctions against Apple after a two-year investigation into how the company runs its App Store and related iPhone features.

The investigation started in 2022, when Latin American e-commerce giant MercadoLibre and others complained that Apple’s rules made it too hard for competitors to reach iPhone users.

CADE’s technical team found that Apple requires all in-app purchases on iPhones to go through its own payment system. This means developers cannot offer other payment options, even if they are cheaper or more convenient.

Apple also stops developers from telling users about other ways to pay, a practice called “anti-steering.” In addition, Apple blocks outside companies from using the iPhone’s NFC chip, a key technology for mobile payments.

These rules make it difficult for new payment services and app stores to compete in Brazil. CADE concluded that Apple’s restrictions create artificial barriers for other companies.

The agency said these rules allow Apple to keep its strong position in the market and limit choices for both developers and users. CADE’s report stated that this behavior violates Brazilian competition law.

It urged its internal tribunal to impose a financial penalty on Apple and require the company to change its policies. The exact size of the fine is not public yet.

Brazil’s Antitrust Case Against Apple Could Reshape App Store Rules

Apple responded by defending its App Store policies. The company said its rules protect user privacy and security, and that making changes could put users at risk.

Apple also argued that it does not have a dominant position in Brazil, pointing out that Android phones are more common in the country. CADE’s case stands out because it does not just focus on one market, like music or dating apps.

Instead, it looks at how Apple controls the entire iOS ecosystem. CADE’s “ecosystem theory of harm” says Apple’s rules make it hard for any new business to compete, even if Apple is not active in their market.

This approach is new for competition authorities and could set a precedent for other countries, especially in Latin America. The outcome of this case could have a big impact.

If CADE’s tribunal agrees with the recommendation, Apple may have to let other companies use its payment technology and allow developers to tell users about alternative ways to pay.

This would make it easier for new apps and payment services to enter the market, possibly lowering costs and increasing choices for Brazilian consumers.

The case is still ongoing, and CADE’s internal tribunal will make the final decision. For now, Brazil joins a growing list of countries pushing back against Apple’s control over its app ecosystem.