The past week saw Apple easing some of its time-hallowed restrictions that had hitherto made its App Store a big revenue generator, with the company having to mandate app developers to pay high commissions to it on the sales of paid apps and the purchase of subscriptions and digital items in their apps.
The South Korean parliament had earlier in the week passed a law that would give developers the opportunity to sidestep payment systems run by both Apple and Google, in addition to the 15% to 30% commissions they charge.
But then Apple itself has been vague in the explanation of its recent moves to its users, with many iPhone users having to deal with unanswered questions on their fate with the tech firm’s moves.
So What Exactly Is Apple Up To?
Apple had on the 1st of this month said it would make some App Store changes as part of efforts to resolve investigations by Japanese regulators who have been on Apples neck over policies. The changes which will come into effect next year will allow Spotify, Netflix and other apps on the Apple Store that sells digital music subscriptions, video, magazines, newspapers, books and audio to include an in-app link to their own sites. In the new change, users can sign up outside Apple’s payment system.
Apple last week also agreed to allow app developers email their users methods to sidestep Apple in the process of signing in for subscriptions, a method some app developers tried in the past that got get banned from the Apple’s store. But then this change came as a result of preliminary settlement in a lawsuit awaiting court approval.
Daniel Ek, the CEO of digital music service provider, Spotify on Wednesday in a tweet applauded Apple’s move, calling it a “step in the right direction” but lamented that Apple isn’t granting the same freedom to all apps, including those that make video games.
“Our goal is to restore competition once and for all, not one arbitrary, self-serving step at a time,” Ek tweeted.
The Move Will Not Necessarily Make Apps Cheaper For Users
There is the tendency that subscription apps could lower their prices if they want to, even though the likelihood is slim. Netflix for example has in recent times has its subscription prices shoot up, on the excuse that the increment in price would help it pay for a steady stream of new original programming, an indication that the price hike has nothing to do with Apple’s commissions
Despite this, Apple’s commission changes could provide a seamless leeway for users of Spotify and Netflix who had blocked sign-ups in their iPhone apps to bypass shared revenue with Apple. They will now have to visit the websites of the companies to initiate a subscription they would use with the apps on their iPhone.
Iron Fist Running Of The App Store Explained
Apple justifies it iron-fist approach to the app store commission charges when it noted that the fees it charges form the App Store helped it recoup its over 100 billion dollars investment in iPhone ecosystem, adding that most of the 1.8 billion apps on its store do not pay anything as they rely on ads instead of subscriptions and user purchases.
It also justified its actions as it says its control over the app ecosystem would help in protecting the privacy and security of its teeming customers, but this was not convincing enough to sceptics as critics are of the opinion that it’s a smokescreen for preserving a commission system that is now a goldmine. They also question Apple’s non-disclosure of its App Store’s financial performance in its stated financial results that had generated $54 billion in revenue the last fiscal year.
Question Is, Will Apple’s Latest Move Have An Effect On The Expected Lawsuit Ruling?
This may prove to be unlikely even after Apple’s changes had addressed key concerns Yvonne Gonzalez, the United States District Judge had enumerated in the May 2021 Apple-Epic trial. In the trial she had raised serious concerns on one of Apple’s provisions that had forbade in-app notifications, indicating that purchases can be initiated not just within the apps but through websites and other means, She further mused that such notices has the inkling of a merchant’s display of the different credit cards — Visa, Mastercard, America Express or Discover — that has long been a staple at cash registers.