Apple eases App Store terms, allows apps to use external payment methods
Apple Inc. has announced a revision to the terms of service for its App Store, allowing apps to link to external payment methods. Until now, apps distributed through the App Store were required to use Apple’s payment platform for user purchases. However, this change comes with a catch – Apple is charging a significant fee for app purchases made through outside payment platforms.
Controversy surrounds Apple’s new fee for app purchases through outside platforms
The introduction of a fee for processing app purchases through external payment platforms has drawn criticism towards Apple. While developers can now direct users to compete payment services, they are still required to offer the option to make purchases using Apple’s platform. The fee, which defaults at 27%, can be reduced to 12% for developers enrolled in Apple’s small business program or for app subscriptions active for at least two years.
Epic Games’ antitrust lawsuit prompts Apple to revise App Store policies
The change in Apple’s App Store terms is a direct response to the high-profile antitrust case brought against the company by Epic Games Inc. in 2020. Epic Games introduced the ability to make in-app purchases in its flagship game “Fortnite” using a payment platform not operated by Apple. This action led to the removal of “Fortnite” from the App Store and prompted the antitrust lawsuit.
U.S. Supreme Court declines to review Apple’s antitrust case, Ninth Circuit ruling upheld
Both Apple and Epic Games appealed the Ninth Circuit Court of Appeals decision, which ruled in favor of Apple on nine out of ten counts. The court determined that Apple can continue requiring iOS apps to use its payment platform for in-app purchases. However, the ruling also stated that Apple must allow developers to include a link to competing payment platforms. With the U.S. Supreme Court declining to review the case, the Ninth Circuit ruling is now in effect.
Apple’s new policy on third-party payment platforms comes with hefty fees
Developers are now required to request permission from Apple via a web form before adding an in-app link to an external payment service. Along with the permission request, Apple will apply a fee of 27% to in-app purchases made through third-party platforms by default. This fee is reduced to 12% for developers in the small business program or for automatically renewing app subscriptions active for at least two years.
Despite the changes, Apple’s new policy has faced criticism from Epic Games’ Chief Executive, Tim Sweeney. Sweeney argues that the fee applied to purchases made via external payment platforms is anticompetitive and takes issue with the technical restrictions on in-app payment links. Epic Games intends to challenge these changes in court.
Analyst comment
Positive news: Apple eases App Store terms, allows apps to use external payment methods.
Analyst’s perspective: Apple’s decision to allow apps to link to external payment methods is a positive move for developers and users. However, the hefty fees imposed for app purchases made through outside platforms might hinder the adoption of this change in the market. Legal challenges from companies like Epic Games could also impact the implementation of the new policy.
