Cheaper payment methods: Apple relaxes rules for app providers

Previously, app providers had to give 30 percent of their in-app income to Apple. This can now be circumvented with a new regulation. But the comparison is less spectacular than it looks at first glance.

Apple wants to allow app developers in the future to enable their users to send e-mails via cheaper payment options for digital subscriptions and media. This would eliminate the 30 percent commission for the provider. So far, the commission system has brought the iPhone manufacturer billions of dollars in revenue every year.

At first glance, the comparison sounds more spectacular than it turns out on closer inspection: In future, US app operators will be allowed to advertise other payment methods. For example, by sending their users an email or SMS. They can then offer alternative payment options and send users to a website, for example. That sounds complicated at first and should be in practice.

A calculated accommodation

It is also forbidden for companies to integrate an alternative payment system within an app or to send users from the app to a payment website. The company from Silicon Valley praises the new regulation as a generous concession towards the developer community.

However, the developers’ request was different: They want to display their own payment options within the app. The Californian company did not go that far. Many app developers are now likely to rebuild their apps and require their users to register in order to be able to send them an email. The big question is whether they actually pay elsewhere.

A fund for small developers

Apple also accommodates small app developer companies on another point. It extended the 15 percent commission announced at the turn of the year for another three years.

The group has also set up a fund: US developers can apply for compensation under certain conditions. However, only for the period between June 4, 2015 and April 26, 2021. To do this, you must have had an app in the app store and made less than a million dollars in sales with it. Developers could then be awarded between $ 250,000 and $ 30,000 in damages.

The enthusiasm is limited

Reactions to Apple’s compromise offer are rather subdued: Democratic Senator Amy Klobuchar, chairwoman of the Senate Antitrust Subcommittee, described the settlement as “a good first step towards addressing some of these competition concerns.” But more needs to be done to ensure an open, competitive market for mobile apps.

The “Coalition for App Fairness”, consisting of the game company Epic, the music streaming service Spotify and others, announced that the deal proposed by Apple does not go far enough. “Apple’s bogus settlement offer is nothing more than a desperate attempt to avoid judgment from courts, regulators and lawmakers worldwide,” Meghan DiMuzio said in a statement. “This offering does nothing to solve the structural, fundamental problems that all developers – big or small – face that undermine innovation and competition in the app ecosystem.”

Not the first practice for Apple

The settlement now reached is part of a class action lawsuit under the name “Cameron et al v. Apple”. This lawsuit had already been filed in 2019 by a merger of several developers. The settlement must be approved by Judge Yvonne Gonzalez Rogers at the Oakland District Court in Northern California. She also chairs the more popular case between the gaming company Epic and Apple. There, too, it was alleged anti-competitive behavior by Apple.

In its press release published that evening, Apple did not specify whether the agreement, if approved by the court, also applies to app developers outside the United States. It is also unclear when the new rules will apply.