The Brazilian Federal Court in the Federal District delivered a significant ruling on March 18, 2025, that favors Apple Inc., allowing the tech giant to maintain its exclusive distribution model for apps through its App Store in Brazil. This ruling means Apple is not obligated to comply with a recent directive from the country’s Administrative Council for Economic Defense (Cade) that required the company to open iOS to competitor app stores.
The decision stemmed from a case brought to the 14th Federal Civil Court, presided over by Judge Eduardo Santos da Rocha Penteado. The judge ruled that Cade's mandate, which intended to enforce changes allowing Brazilian users to download applications from alternative platforms besides the App Store, should not be enforced at this time. This directive had been initially issued on November 25, 2024, alongside a daily fine of R$250,000 for non-compliance.
According to reports, this case began after Cade's notification to Apple in late 2024, asserting that the company’s practices could represent anti-competitive behavior. A previous ruling from Judge Pablo Zuniga Dourado rebuffed the earlier injunction from the Federal District’s court, reinstating Cade's preventative approach and mandating Apple to make specified changes within 90 days. However, this was met with swift legal challenges from Apple.
In the latest developments, Judge Penteado deemed Cade's actions "anticipated" and "disproportionate." He emphasized that the regulatory measures imposed would punish Apple as if it had already been convicted of wrongdoing while the legal processes were still underway. Penteado stated, "In the case under analysis, the preventive measure imposed by the Cade is laden with the vice of disproportionality," reflecting a potential hesitation from the judiciary to endorse what could be seen as overreach by a government agency. Such concerns indicate the complexity and contentiousness of market regulations in the sector.
The administrative proceedings against Apple arose from a complaint filed by the e-commerce company Mercado Livre, which accused Apple of enforcing contract terms that limit competition by imposing a fee structure for transactions made within apps distributed via its platform. Such tactics, critics argue, can be viewed as establishing a form of a virtual toll on developers aiming to reach iOS users.
Marcela Mattiuzzo, an attorney representing Mercado Livre, criticized the judicial rulings as overly simplistic, stating, "The only thing the first instance judge says is that the Cade's decision is very interventionist." This suggests a perceived disconnect between regulatory intentions and judicial interpretations throughout the ongoing proceedings.
The implications of this ruling stretch beyond Apple, as it also jeopardizes plans by other developers, like Epic Games, to offer titles such as "Fortnite" and its own Epic Games Store on iOS devices in Brazil. Epic Games is involved in a protracted legal confrontation with Apple, advocating for the right to utilize its payment platform rather than being forced to use Apple’s proprietary system which carries a hefty transaction fee of approximately 30%.
Initially, Cade argued that Apple's business model could effectively stifle competition across digital platforms by restricting developers’ abilities to communicate alternative payment methods to consumers. The Brazilian regulator's position sought to remedy what they viewed as monopolistic practices, which might close off access to essential services, thereby limiting consumer choice.
Despite this, the ruling affirms Apple's capacity to enforce its requirements, allowing it to compel developers to use its In-App Purchase (IAP) system, further embedding its control over the app ecosystem. This has raised concerns among consumer advocates who assert that such dominance diminishes overall market robustness.
Proponents of Apple argue that its 10% market share in the Brazilian smartphone sector undermines claims of monopolistic behavior. They express concerns that increasing regulatory burdens might compel Apple to dilute its security measures, which are essential for safeguarding users from potential scams and viruses—issues more prevalent in less secure environments.
As the situation unfolds, it remains to be seen how the ongoing courtroom battles, alongside regulatory initiatives, will ultimately influence Brazil's app market and consumer rights. For now, Apple can continue to maintain its current rules for app distribution while Cade evaluates its next steps, with the potential for further appeals looming on the horizon.
