Apple revises App Store policy, allows third-party payments 'without tax' after losing in court

[DragonSlayer101]

Bottom line: A day after a federal judge ruled that Apple must allow developers to offer third-party payment options using in-app links, the Cupertino giant announced key changes to its App Store policies to comply with the ruling. The revised guidelines now allow app developers to provide external links or payment gateways for app purchases and subscriptions without paying Apple a commission.

According to Apple's revised guidelines, apps listed on the iOS and macOS App Stores will no longer be prohibited from including "buttons, external links, or other calls to action" that direct consumers to third-party payment options. However, the change only affects apps on the US App Store, meaning there will be no changes to the existing policies in overseas markets.

The guidelines were updated last year following a court ruling that ordered Apple to allow apps to include external payment options. However, Apple still charged a fee from developers for allowing them to offer third-party payment links. The latest change now removes that "entitlement" clause, allowing developers to accept payment through external sources without paying the so-called "Apple Tax."

The latest change now removes that "entitlement" clause, allowing developers to accept payment through external sources without paying the so-called "Apple Tax."

Spotify quickly embraced the new policy, releasing an app update that offers subscribers an external payment option. Calling Apple's policy reversal a "victory for consumers, artists, creators, and authors," the company said the revised guidelines would finally allow it to offer US consumers "lower prices, more control, and easier access to the Spotify experience."

The policy changes were announced a day after a landmark ruling by California District Court Judge Yvonne Gonzalez Rogers in the long-running antitrust case filed by Epic Games against Apple. In her decision, Judge Rogers criticized Apple for failing to comply with a previous court order and rebuked CEO Tim Cook and other executives for defying the court.

The judge had earlier ruled that Apple must allow developers to offer consumers external payment options without requiring them to pay Apple's standard 30 percent commission. However, Apple had attempted to circumvent the order by imposing a 27 percent commission on apps using external payment methods.

Apple's compliance with the ruling doesn't mean the company is taking the setback lying down. The company has openly stated they strongly disagree with the decision and plan to appeal the ruling in accordance with the law.

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Apple revises App Store policy, allows third-party payments 'without tax' after losing in court

 

[pnntmp]

There's a 99% chance this ruling to be repealed, so no one should make strategies or revenue projections based on the assumption it will stay.
The only question now is how long it will take for the ruling to be repealed.

 

[Dreadcthulhu]

There's a 99% chance this ruling to be repealed, so no one should make strategies or revenue projections based on the assumption it will stay.
The only question now is how long it will take for the ruling to be repealed.

That's funny, I consulted my Magic 8 ball and it told me that this ruling will hold on appeal.

 

[Porkous]

People argue that every device comes with some kind of app for downloading other applications. So why is Apple less entitled to do the same—lock down its ecosystem and control its economy

Owning the mall (Apple's device and OS) is fine. But if you're also a store owner in that mall (Apple Music, Apple Books), and you charge rent to all other stores while favoring your own, that’s where people start saying: "This isn't just good business—it's unfair control."

 

[Kotters]

I want things to be open, but game consoles have done this for generations. Imagine Nintendo forced to open up the Switch to 3rd parties.

 

[Dreadcthulhu]

People have an argument: Every device comes with an app, of sorts, for downloading applications on that device. Why is Apple less entitled to do that ?

1. Apple has a dominant position in the US smartphone market.
2. Apple has been found to be using its dominant market position to break various anti-trust laws; restrictions on how they can run their store are part of the remedy/punishment for breaking those anti-trust laws. When a company breaks anti-trust laws the government can either bust the company up and/or place restrictions on how that company can behave as part of the punishment.

 

[Kirby1]

People argue that every device comes with some kind of app for downloading other applications. So why is Apple less entitled to do the same—lock down its ecosystem and control its economy

Because app developers have no other choices. Apple and Google have anti-competitive monopolistic control over the mobile app market. They have both taken serious steps to embolden their monopolistic stranglehold over the market, and that is illegal because it's anti-competitive.

 

[Axeia]

People argue that every device comes with some kind of app for downloading other applications. So why is Apple less entitled to do the same—lock down its ecosystem and control its economy

All this allows is for developers to place a link in their own app to their own payment processor so you can pay for the App they wrote. Without Apple forbidding it or wanting a 27-30% slice of the pie.
Still no downloading other apps.

I want things to be open, but game consoles have done this for generations. Imagine Nintendo forced to open up the Switch to 3rd parties.

Different market, consoles used to at least be sold at nearly no profit or even a loss. They also used to pay studios to keep things exclusive and interacted with a fairly limited amount of companies. Pretty much always a game you pay for rather than a subscription as well.

Now that consoles are sold for profit, there aren't any sponsored exclusives anymore and indie studios release on them... I'd be okay with them having to open up although it's bound to end up in higher console prices or subscription fees and or game prices.

Also they didn't use to have a browser so they didn't need to forbid placing links to other payment options.

 

[OortCloud]

Couldn't happen to a more deserving company. The way Apple go about their business is disgusting in so many ways. Tim Cook is a reptile.

 

[poltevo]

Lots going on with antitrust but this is still a land mark ruling - with Apple being called out for lying under oath among other things and force to take the worst option (for Apple). We are in the middle of many big tech antitrust cases - the tech landscape is shifting.

Still amazed by some of the comments here. Why are you defending multi trillion dollar companies as they distort markets and rent seek? Apple and others actively reduce technological progress and prevent new apps and services being created. They are anti-innovation and anti-consumer (basically anti you and me).

 

[unoficialoficial]

Now, they should return with interest all the 30% they've illegally taken. I am joking.

In reality, with competition on the rise, they'll likely reduce that 30% to around 10-15%. And while they'll probably still keep a significant portion of the transactions, the developers will see more funding and the entire ecosystem will become stronger. Sure, the 'poor startup' might struggle a bit with a smaller percentage cut (which can become more in absolute value if the ecosystem grow because now will be more competitive), but they'll manage it just fine.