Apple Gives Up Some Control Over the App Store
Apple Makes Exceptions for Subscription Services
Apple (AAPL) is relinquishing some of its control over the apps in the App Store, announcing that the likes of Spotify (SPOT), Netflix (NFLX), and other media apps can create in-app links for customers to sign up for their services on their own websites. This will enable the apps to bypass giving Apple a cut of subscription fees. For years, app developers have decried Apple’s rule which prevented apps from directing users outside of the App Store to sign up.
The changes, which Apple said will go into effect in 2022, were part of an arrangement with the Japan Fair Trade Commission, which has been investigating Apple’s app business practices. The change will apply globally.
Apple Faces Regulatory Pushback
Apple’s decision comes as regulators across the globe are looking at the control the tech giant wields over the apps in the App Store. In the US, a judge is presiding over an antitrust case against Apple brought by Epic Games, the maker of Fortnite. Epic Games contends that Apple limits distribution of apps through the App Store and requires payments to be made only on Apple’s in-app payment system. Apple gets a 30% cut of that revenue. The changes coming in the new year do not apply to Epic Games.
Meanwhile, South Korea passed a new law earlier this week which requires Apple and Google (GOOGL) to allow alternative payment methods in its app stores.
Apple Still Gets a Cut
Apple was willing to let digital magazines, books, music, video, and newspaper apps share a link to their websites because they do not sell in-app goods and services that Apple would lose a cut of. The iPhone maker also said it would work with developers of these content apps to ensure users are protected when they click on an external link. It is worth noting that if the app developers sell a subscription through their app, Apple still gets a cut.
Apple has been feeling the heat as regulators around the world try to blunt some of its dominance in the app marketplace. While allowing content apps to share a single link is a step forward for Apple, it may not be enough to soothe regulators.
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