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Apple’s Grip on the App Store Is Finally Loosening

Third-party in-app payments are almost here. Or are they?

By Charlie Sorrel Charlie Sorrel Senior Tech Reporter Charlie Sorrel has been writing about technology, and its effects on society and the planet, for 13 years. lifewire's editorial guidelines Published on October 11, 2021 02:29PM EDT Fact checked by Rich Scherr Fact checked by Rich Scherr University of Maryland Baltimore County Rich Scherr is a seasoned technology and financial journalist who spent nearly two decades as the editor of Potomac and Bay Area Tech Wire. lifewire's fact checking process Tweet Share Email Tweet Share Email Software & Apps Mobile Phones Internet & Security Computers & Tablets Smart Life Home Theater & Entertainment Software & Apps Social Media Streaming Gaming

Key Takeaways

Apple is no longer allowed to ban apps from linking to their own in-app payment methods.In-app purchases may get cheaper, but less private.Apple already has appealed against Judge Yvonne Gonzalez Rogers’ ruling.
Apple In September, a Californian judge ruled that Apple had to stop blocking outside payments in App Store apps. And now, we’re already seeing what the future might look like. Apple won its App Store court fight against Epic Games on all but one point. Judge Yvonne Gonzalez Rogers ruled that Apple must drop its "anti-steering" policy, an absurd set of rules that stops an app from even telling the user that a world exists outside the App Store. And now, app-payment company Paddle has already shown some alternative in-app payment systems to replace Apple’s. "Alternative payment options allow customers to have direct relationships with software vendors that will enable them to provide better customer support and use a personalized approach to each customer," Oleksandr Kosovan, founder and CEO of MacPaw and Setapp, told Lifewire via email.

Anti-Steering

Current App Store rules say that all purchases must be made using Apple’s built-in in-app purchase system. That goes for in-app subscriptions, the purchase of in-game currency, or plain old feature unlocks. However, Apple does allow some apps to skirt these rules. Apple has a monopoly that is too large to ignore, and not losing control of the revenue flow is critical. For example, you can subscribe to The New York Times, or Netflix, or Amazon Prime, and pay outside the store, but once you log into your account, you can read and watch everything. But—and this is where it gets wild—those apps cannot link to the sign-up pages on their own websites. They can’t even say they’re not allowed to link to their subscription sites. This is what Judge Gonzalez Rogers ruled against, saying developers must be able to link to alternate payments.

Why Do We Want This

The benefits for users are pretty good. For starters, it’s just a lot easier to sign up for Netflix, etc. when you only have to click a link to do so. And remember, most people will realize they have to go to Netflix.com to sign up. For smaller apps, being able to link out might be the difference between viability or shutting down. It also can be cheaper. Some developers offer Apple-approved in-app purchases, along with a separate subscription option. Often, the in-app purchase is around 30% more expensive, to make up for Apple’s 30% cut of all App Store transactions. Now, they can offer the choice right in the app. Alternative payment options allow customers to have direct relationships with software vendors... For developers, direct subscriptions are about more than just avoiding Apple’s 30% cut. They're about having a direct line to the customer. Developers have no idea who is paying them. They cannot offer support, nor special offers. Of course, they can’t spam their users or sell their private information either, so it goes both ways. For users, in-app subscription purchases are great. They’re easy to activate, and just as easy to deactivate. But there’s nothing stopping Apple from requiring third-party subscriptions to support its current system, and building tools to integrate it with iOS’s excellent parental controls. Paddle These payments can be slick, too. Paddle’s options can use Apple Pay. All a user has to do is tap the new payment link, then agree to the purchase. It’s as easy as a regular in-app purchase.

Can Apple Stop This

Apple already has requested a stay. If successful, Judge Gonzalez Rogers’ ruling will not be implemented until the entire case’s appeal process is done. That could take years, which is no doubt Apple’s intention. Currently, the ruling will go into effect in December. Legal issues aside, Apple could make it difficult for developers to implement their new rights. The ruling says Apple cannot ban links or buttons that take users to external payment systems, but it could make them hard to find, or tie up developers in endless other unrelated rule-based minutiae when they attempt to get their apps approved. "Apple has a monopoly that is too large to ignore, and not losing control of the revenue flow is critical. The implementation of alternative payment options might face major obstacles or be delayed in time," says Kosovan. "Unofficially, there might be some consequences, like developers won’t be featured on the App Store if they use third-party payment methods, or they might face some compliance restrictions when using third-party payment options." Or Apple could just say, screw it, let’s build a robust set of tools that makes outside payments safe for our users. The tide seems to be moving this way. A recent Japanese government investigation resulted in Apple letting "reader apps" link out to subscription pages, and in South Korea, Apple and Google both have to open their App Stores to alternate payment systems. Barely a week passes without another government proposing tighter App Store regulation. Apple may not have lost this fight yet, but it doesn’t look good.
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