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Apple condemned for ‘bad-faith’ response to app store payment system ruling

Over two years ago Apple was ordered to allow iOS apps to access third party payment systems in the US. Now it has finally complied, but with a major catch.

Scott Bicheno

January 17, 2024

2 Min Read

In a characteristically supercilious post on its developer site, having exhausted all its appeals Apple announced US developers can now request an ‘entitlement’ to link to their own website from iOS apps. Even if Apple sees fit to grant such a request, developers face a seemingly excessive level of bureaucracy to insert that simple link and, gallingly, will still have to pay Apple 27% of the value of every transaction that takes place through it.

“Apple is charging a commission on digital purchases initiated within seven days from link out, as described below,” says the developer post. “This will not capture all transactions that Apple has facilitated through the App Store, but is a reasonable means to account for the substantial value Apple provides developers, including in facilitating linked transactions.

“Apple’s commission will be 27% on proceeds you earn from sales (“transactions“) to the user for digital goods or services on your website after a link out (i.e., they tap “Continue” on the system disclosure sheet), provided that the sale was initiated within seven days and the digital goods or services can be used in an app.”

Unsurprisingly, app developers are not happy with this supposed concession, since the main reason they want to use third party payment systems was to avoid the 30% commission Apple charges for using its own, which was previously the only one allowed. As ever, the most prominent Apple antagonist in this context is Tim Sweeny, head of game developer Epic, which fought the legal battle that culminated in the September 2021 ruling.

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“Apple’s approach to ‘compliance’ with the District Court’s decision will not benefit developers and consumers,” said Rick VanMeter, Executive Director of the Coalition for App Fairness, of which Epic and Spotify are the most prominent members. “The new 27 percent commission on payments it does not process defies the intention of the District Court’s injunction and undermines competition.

“These changes do nothing to enhance consumer choice, lower prices for in-app purchases or inject competition into Apple’s walled garden. It is precisely this type of abusive, monopolistic behavior that makes it imperative for Congress to pass the Open App Markets Act.”

Digital liberty group Reclaim the Net concurs.

Apple has had years to work out how to interpret the, admittedly weak and ambiguous, court ruling to its advantage and has used that time well. It seems the US judiciary feels it has had its final say on the matter so now developers are counting on the legislature to intervene.

The Open App Markets Act has made glacial progress through Congress since it was introduced in 2021. But if, in complying with the European Digital Markets Act, Apple is unable to inflict this new tax on developers, and thus consumers, that would set a very strong precedent for the rest of the world.

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About the Author(s)

Scott Bicheno

As the Editorial Director of Telecoms.com, Scott oversees all editorial activity on the site and also manages the Telecoms.com Intelligence arm, which focuses on analysis and bespoke content.
Scott has been covering the mobile phone and broader technology industries for over ten years. Prior to Telecoms.com Scott was the primary smartphone specialist at industry analyst Strategy Analytics’. Before that Scott was a technology journalist, covering the PC and telecoms sectors from a business perspective.
Follow him @scottbicheno

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