Apple has revised its App Store guidelines, eliminating the commission on app purchases and subscriptions made through external payment links for developers in the United States. This significant change follows a California District Court ruling that found Apple in violation of antitrust laws, stemming from the landmark 2021 Apple vs. Epic Games case. This decision effectively overturns Apple’s previous practice of charging a commission, often referred to as the “Apple Tax,” on such transactions.
Previously, while Apple permitted developers to incorporate external payment links within their apps, they still levied a 27% commission on any sales generated through these links. This applied even after Apple allowed developers to bypass in-app purchases, a system where developers earning over $1 million annually faced a 30% commission. Apple has historically defended these fees, citing the security and fraud prevention measures provided by its technologies, like Store Kit.
External payments for Spotify premium subscription.
This new ruling specifically impacts US developers. Developers in other regions might still encounter commission fees. For example, Apple’s current EU regulations stipulate commissions of at least 10% or 17% on sales, depending on revenue, regardless of the payment system used. To avoid these charges in the past, companies like Spotify and Netflix disabled in-app payment options, directing users to subscribe or renew through their websites. This court decision is anticipated to alter this practice, allowing developers to retain all profits.
The previous commission structure also impacted consumers, as developers often raised subscription prices to offset these costs. The price disparity between in-app and web-based subscriptions for services like X’s premium tier highlights this. With this ruling, there is hope for lower subscription costs for consumers as developer expenses decrease.
For developers without dedicated payment platforms, Epic Games offers a potential solution. Developers listing their apps on the Epic Games Store pay 0% commission on the first $1 million in yearly revenue. However, this may primarily benefit consumers within the European Union, where separate antitrust rulings have compelled Apple to provide App Store alternatives.
Beyond the commission ruling, the court has also referred Apple and its CFO to the United States Attorney for potential investigation of criminal contempt, a factor possibly contributing to these guideline revisions. According to Reuters, Apple intends to comply with the ruling before appealing, although their chances appear slim after the US Supreme Court rejected a previous appeal seeking to overturn the 2021 judgment.
New App Store Review Guidelines
