Apple removes restrictions on iPhone payments, now allowing transactions through third-party applications, outside of its proprietary App Store.
Turning the Tide in Tech: Apple Loosens Grip on App Store Payments
In a dramatic shift for tech giants, Apple's juggernaut has begun to bend in the face of mounting pressure. Last Wednesday, the U.S. tech titan updated its App Store guidelines, allowing developers to use alternative payment platforms within their apps — without Apple's hefty 30% commission.
This latest move comes hot on the heels of U.S. District Judge Yvonne Gonzalez Rogers' ruling in September 2021, which demanded Apple to provide developers with the option to bypass its proprietary payment system. The court declared that Apple's previous approach, charging a 27% commission on external purchases and restricting direct links to competitors, constituted a violation of antitrust laws. The ruling dubbed Apple's strategy as "malicious compliance." [4]
In an apparent sign of compliance with the judge's edict, Apple announced the new policy changes on its website. Developers can now seamlessly incorporate direct links or buttons to external payment services, such as Stripe, without being subject to Apple's former cut of 30% (or 15% for smaller app developers). [1][5]
Historically, the App Store's exclusivity was a lucrative income source for Apple. The company's services activity, which encompasses the App Store, music and video streaming platforms (Apple Music and Apple TV), and cloud storage (iCloud), currently accounts for 28% of its total revenue. [6]
The pressure from regulators and the courts has forced Apple to furnish some concessions in the past. However, it had still levied a 27% commission even when developers used external payment platforms. This latest update to the guidelines omits any mention of a commission, signifying that using third-party payment systems is now completely free.
So far, the changes to the App Store's payment policy apply only to the U.S. market. However, the wider impact of this ruling could reverberate across the globe, particularly in Europe, where the Digital Markets Act (DMA) requires tech behemoths like Apple to make their platforms more accessible to competition.
Under the terms of Judge Gonzalez Rogers' ruling on Wednesday, Apple is now barred from charging commissions on transactions processed outside the confines of its App Store. Additionally, Apple is forbidden from sending stern warnings to users discouraging them from using external app stores or making external purchases. [4]
In response to the public outcry and the ruling, Apple issued a statement on its website, indicating its intention to abide by the court ruling in the U.S. Payment processors, such as Stripe, have also stepped up to the plate, offering implementation guides that help developers implement external payment links while staying in compliance with the new guidelines. [2] Furthermore, RevenueCat has introduced a "Web Paywall Button" feature, making it simpler for developers to incorporate external payments within their apps. [3]
In summary, Apple's recent policy shift marks a turning point in the tech landscape. The days of developers’ being coerced to capitulate to Apple's demanding 30% commission may soon be numbered.
- The update to Apple's App Store guidelines signifies that developers can now use third-party payment systems without paying any commission, a significant shift from earlier policies.
- The Digital Markets Act (DMA) in Europe could potentially have far-reaching implications, as it requires tech giants like Apple to make their platforms more accessible to competition.
- In compliance with the U.S. District Judge's ruling, Apple has omitted any mention of commission for using third-party payment systems, marking a step towards fairness in the tech industry.
- With the implementation of external payment links and buttons, developers are now able to comply with the new guidelines without sacrificing a large portion of their earnings to finance Apple's business operations.
