Apple has revised app store guidelines for developers, allowing them to enable external links or payment gateways to pay for app purchases and subscriptions without any commission. The change comes a day after a California-based District Court ruled Apple had failed to comply with the 2021 judgment in the landmark Apple vs. Epic Games antitrust case, which held the Cupertino-based giant guilty of violating California’s antitrust laws and forced it to open up external payments in apps.
With these revisions, apps listed on the iOS and macOS App Stores will no longer be “prohibited from including buttons, external links, or other calls to action” for payments outside the app. While these changes were already implemented last year, Apple required developers to apply for a special “entitlement” for them to allow payments through external sources. This would essentially allow developers to route users to click on a button within the app and take them to an external page where they could complete the transaction for purchases or subscriptions.
However, Apple would still charge a 27% commission, infamously referred to as “Apple Tax,” on any sales the developers made through external links — in comparison to the 30% that developers with over $1 million of annual revenue would have to pay on in-app payments. Apple has long justified these payments saying its secure technologies, including Store Kit, prevent fraudulent transactions and allow them to go through securely with proper tracking measures.
With the latest ruling, Apple has agreed to repeal the 27% commission, as reflected in its updated app store guidelines for developers. However, the ruling still applies only to developers in the U.S., and those in the other regions may still be subject to commission. For instance, Apple’s rules for the EU still state developers may be subject to at least 10% or 17% commission — based on their revenue — on sales, irrespective of the system.
To circumvent these commissions, many developers, including Spotify and Netflix had disabled the payment links within the app and required consumers to pay for or renew subscriptions through the web. This is expected to change with the latest ruling, which will allow developers to retain 100% of the profits.
The costs for commissions were also absorbed by the consumers, and developers had to increase their subscription prices to cover them up. For instance, the monthly subscription you would pay for X’s premium tier differs based on whether you pay via the app or the web. With the latest ruling, we hope prices to go down as costs for developers are reduced.
For developers who do not wish to set up their own payment pages, Epic Games, as part of its continued defiance to Apple, has offered a simpler solution. If the app is listed on Epic Games Store, developers will have to pay 0% commission on the first $1,000,000 in annual revenue. However, these may only benefit consumers in the European Union, where Apple has been forced to offer alternatives to the App Store as part of another antitrust ruling against it.
In addition to the ruling, the court has referred Apple and its finance chief to the United States Attorney for “investigation of criminal contempt,” which may have actually triggered these changes in its regulations. Apple insists on first complying and then appealing this ruling, as per Reuters, but it may have lean chances after the U.S. Supreme Court struck down a previous appeal in the case, asking for an overturning of the 2021 judgment.
