Three years after the Epic v. Apple lawsuit, Apple finally meets the court requirements, allowing app developers to use external payment methods. However, this solution has faced a wave of criticism.
Apple now allows developers to redirect app users outside of the built-in iOS payment system, marking the first time since the California court ruling in 2021. According to the court’s decision, Apple cannot prevent developers from including links, buttons, or other prompts that direct users to external payment methods. In a statement regarding these changes, Apple claims to have “fully complied” with this order – but is that really the case?
Although the new system technically allows developers to bypass Apple’s fees, which can reach up to 30% of in-app purchases, this victory appears to be hollow. The company’s new policy imposes a commission fee of up to 27% on each purchase. Furthermore, Apple introduces other obstacles for developers that may discourage users from making purchases on external websites. This is an action that CEO Tim Sweeney described as a “deliberate act carried out in bad faith” and threatened legal action in response.
The court ruling does not clearly prohibit Apple from charging fees on purchases made on external websites, and Apple fully takes advantage of this opportunity. In compliance with the judgment, Apple charges a 27% commission on transactions that “take place on the developer’s website within seven days after the user clicks an external purchase link.” However, Apple introduces several exceptions: members of its Small Business Program are subject to reduced rates of 12%. Additionally, transactions that automatically renew will also incur a 12% commission from the second year onwards.
The 27% commission is lower than the 30% commission Apple charges for transactions in the App Store, and the 12% rate is lower than the standard 15% commission in the Small Business Program. However, developers will have to use an external payment processor, which typically adds an additional fee of around 3% – so they are unlikely to save any money. Moreover, this process introduces additional complications. Users have to click through warning screens each time they choose an external payment link. These screens inform them that Apple is not responsible for the “privacy or security of purchases made online” and that they will not have access to their App Store account, saved payment methods, or the ability to process refunds on the given website.
Apple also prohibits the inclusion of links on pages containing an “in-app purchase sequence,” and payments must redirect to a website opened in the device’s default browser. Not only can this make it difficult for users to find alternative payment methods, but it can also deter them from making a purchase. As Sweeney noted, this process may force users to log in again on the developer’s website, where they will have to “re-find the digital item they wanted to purchase.” Developers who include links to external payment processors must submit transaction reports to Apple every 15 days (even if there were no transactions), and Apple has the right to audit these records to ensure that the “appropriate commission has been paid to Apple.” If Apple does not receive the commission on time, the company will charge developers with late fees.
Daniel McCuaig, partner at Cohen Milstein and former trial lawyer in the Department of Justice’s antitrust division, believes it is “unlikely” that the court will ultimately accept Apple’s 27% tax. “Apple only charges 30% for payment processing, and the ruling says it must allow others to do it,” McCuaig told The Verge. “It doesn’t say you can keep your full level of profits if others do it… Apple is trying to keep competitors’ margins low and eliminate any possibility of competition in the payment processing market.”
Apple already applies similar rules in the Netherlands, where the country’s regulator forced Apple to enable Dutch dating apps to use alternative payment methods in 2022. The only difference is that Apple primarily allows the inclusion of external payment processors in dating apps in the country. Besides that, the company charges the same commissions of up to 27% and requires the display of (arguably less intimidating) warnings on the screen after a user clicks on the option for an alternative payment method.
While the Dutch regulator does not seem to criticize these changes at the moment, Bloomberg obtained a confidential ruling in October 2023 suggesting that the agency is not pleased with Apple’s 27% tax on dating apps. Apple may also be forced to open its closed ecosystem and allow the use of external payment methods based on the European Union’s Digital Markets Act (DMA), which aims to combat anti-competitive practices among companies considered “digital gatekeepers.” Spotify already has plans to introduce its own payment system in its app in Europe, but everything depends on how Apple will comply with the new regulations. The Wall Street Journal report indicates that Apple is already planning new fees and restrictions for apps that want to offer app installations outside the store.
In the US, Epic Games is not the only developer frustrated with Apple’s actions. Nick Farina, an iOS programmer who co-founded the payment app Kuto, calls Apple’s 27% tax a “farce.” “No one will use this new Apple policy,” says Farina. “Handling your own payments costs…”
FAQ Section:
1. What is Apple’s latest decision regarding app developers’ payments?
Apple has finally agreed to allow app developers to redirect users to external payment methods, as a result of the Epic v. Apple lawsuit.
2. Will developers have to pay any fees after Apple implements the new policy?
Yes, the new policy introduces a commission fee of up to 27% on each purchase, which can be burdensome for developers.
3. Will developers save money through external payment processors?
Most likely not, as external payment processors usually charge additional fees of around 3%.
4. How does Apple’s new policy affect app users?
Users have to click through warning screens each time they choose an external payment link, which may discourage them from making a purchase. Additionally, certain features, such as automatic subscription renewals, will be subject to a commission.
5. Will Apple continue to charge a commission on purchases made on external websites?
Yes, Apple will charge a 27% commission on transactions made on external websites, according to the new rules. The exception is the Small Business Program members.
The source of the article is from the blog j6simracing.com.br