Apple agrees to collect commission from the App Store even through alternative payment systems

Apple is forced to support alternative payment systems in a growing number of regions, but has made it clear that it still intends to collect a commission.

Historically, Apple has charged a 30% commission on App Store sales, including in-app purchases and subscriptions. In 2021, Apple reportedly generated $85.1 billion in gross app revenue worldwide.

Apple has come under more scrutiny than most platform holders due to its “walled garden” that allows no alternatives to its own app store and payment system. Apple says its approach is to protect users. However, a growing number of third parties believe the company is abusing its market position.

The Dutch Authority for Consumers and Markets (ACM) recently ordered Apple to allow dating apps in the country to use alternative payment systems.

“Consistent with the ACM order, dating apps that have the right to connect or use a third-party integrated payment provider will pay Apple a commission on transactions,” Apple wrote in an update.

“Because we do not believe these orders are in the best interests of our users, we have appealed the ACM’s decision to a higher court. We are concerned that these changes will compromise user experience and create new threats to user privacy and data security.

In August 2021, Russia’s Federal Antimonopoly Service (FAS) also warned Apple that clause 3.1 of the App Store Guidelines – which prohibits iOS app developers from notifying in-app users of the possibility to pay for their purchases outside the App Store – violates Russian antimonopoly legislation.

Following an agreement reached with the Japan Fair Trade Commission to close its own investigation into the App Store, Apple has agreed to let developers link to external websites for in-app purchases. However, it was limited to only “player” apps like Spotify, Netflix and others.

Apple did not specify how much commission it will take on transactions outside of its own payment system, but that more information will be “available shortly”.

During one of the company’s infamous court cases with Epic Games over the issue, Apple CEO Tim Cook defended the convenience and security of his own systems and that a new way of perceiving his commission would be necessary if it were forced to support alternatives.

“We should find another way to collect our commission,” Cook said, saying the company should find a way to track transactions in order to properly charge developers and that this is a “process that doesn’t doesn’t need to exist.”

In a response from Apple to Epic Games’ suggestion that the former would not receive a discount for transactions made outside of the App Store, the company’s attorneys wrote: “This is not correct. Previously, Apple had not taken a commission from purchases of digital content through buttons and links, as these purchases were not authorized.

“If the injunction were to take effect, Apple could charge a commission on purchases made through such mechanisms.”

Apple now charges a fairer 15% discount for most App Store transactions for the “vast majority” of developers under its Small Business Program. To be eligible, developers must earn less than $1 million for their apps per calendar year. However, it is clear that many believe that the company must at least offer the possibility of using alternatives.

(Photo by André Taassin on Unsplash)

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Keywords: acm, app store, apple, authority for consumers and markets, commission, iap, in-app purchases, ios, ipad, iphone, revenue, sales

Aurora J. William