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How Apple’s App Store Concession Affects Music & Video Subscription Apps
Apple will be updating its App Store rules for the iPhone and other devices, making concessions that will affect developers of video and music apps, among others. The nature of the change might appear small but it is actually quite significant and could signal the beginning of a domino effect. Apple has been besieged with challenges to its App Store rules recently after fending off efforts by Fortnite developer, Epic, to allow its own in-app payment system.
The latest change to the App Store rules follows closely upon two related legal situations. Apple proposed a $100 million settlement in a class-action suit. Besides the payout to developers that earned $1 million or less from the App Store in the last six years, the change would allow emails to be sent to app users suggesting an alternate payment method that bypassed the App Store and thereby avoid Apple’s commission. A regulatory bill passed in South Korea, if signed into law will require Apple, Google, and other companies with similar app stores, to allow third-party payment processing systems, another way to avoid paying App Store commissions.
In a major concession to close a five-year investigation by the Japan Fair Trade Commission (JFTC), Apple recently announced that it would be changing App Store rules in the future to allow ‘reader’ apps a method of sharing account management and alternate payment options within the app. This would take the form of an in-app link to the developer’s website.
According to Reuters, JFTC’s investigation focused upon video and music apps rather than games, which would be a much more contentious issue. When this change takes effect in early 2022, according to Apple, a website link within the app will become an option for some. After the change, developers will have an opportunity to attempt to make a sale from their own websites and avoid paying a commission to Apple.
What Are Reader Apps And Why Are They Different?
The big change in App Store rules only affects what Apple described as ‘reader’ apps, meaning apps which provide subscriptions for digital video, music, ebooks, audiobook, newspapers, and magazines. What makes these apps different from others, according to Apple is that they do not offer goods or services for purchase from within the app. This will undoubtedly lead to further challenges from apps that might not be recognized as reader apps, yet in some ways fit the conditions Apple has described.
Apple does allow website links on an app’s page in the App Store but the link is labeled as ‘support.’ It would not be surprising to see Apple require the in-app link to be labeled as ‘account management’ in a similar fashion. Apple’s press release didn’t provide these details and much is left to be seen. With Apple under U.S. Trade Commission scrutiny, this saga of App Store investigations and lawsuits is certain to be ongoing. In the meantime, Apple customers can expect to find in-app links for account management around the world in 2022 and developers will learn more about the rules before that time.