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Apple this week updated its App Store rules to comply with a court order after the Supreme Court declined to hear the Epic Games-initiated antitrust case against Apple over commissions. As a result, developers can now promote alternative means to pay for their in-app purchases and subscriptions via links or buttons inside their iOS apps. But Apple’s compliance comes with several caveats, including technical requirements, an application process, and even what sort of apps will be allowed to direct customers to their websites. In a court filing, Apple details its new rules for developers noting, among other things, that apps participating in its existing Video Partner and News Partner program are not eligible to use the Link Entitlement.
This seems to skirt the court’s decision requiring Apple to remove the “anti-steering” clause from its agreement with App Store developers. This clause had earlier prevented developers from directing customers to a link, button, or other call-to-action inside their app that offered them another way to pay for in-app purchases, subscriptions, or other virtual goods beyond Apple’s own in-app purchase mechanism.
But in its place is a complicated process that requires app developers to apply for permission to include their desired link or button, via something dubbed the StoreKit External Purchase Link Entitlement.
Apple has used entitlements to set up exceptions to its App Store rules — for example, last year when it allowed “reader” apps (apps that provide access to digital content, like audio, music, video, book, and more) to point to an external website where customers could manage their accounts with the app developers. It also used an entitlement to make an exception for dating apps in the Netherlands, when ordered to allow developers to point users to other purchase options if they chose.
In the case of the new U.S.-based Link Entitlement, Apple is again demanding to first vet which applications can include external links and control how they’ve been implemented. Apple is able to do this because the court said it didn’t plan to “micromanage” Apple’s new framework. It also said that Apple was still allowed to require developers to use IAP (Apple’s payment platform) for in-app transactions and it could “take steps to protect users” from the new threats that emerge from sending consumers to websites to process their payments.
The latter resulted in what Epic Games calls “scare screens” that are meant to discourage users from transacting outside the App Store.
Someone needs to add this to the Wikipedia entry: “malicious compliance” https://t.co/RTgG9zFanL
— Snazzy Labs (@SnazzyLabs) January 17, 2024
But the new Link Entitlement also includes many other rules, including that Apple gets to approve which apps are granted the entitlement and which are not.
Developers seeking to add links to other purchase options in their app must provide Apple with details about the app, the app’s unique identifier (bundle ID), the link they want to include, and the website domain users will be directed to.
The website will need to be one “the developer owns or maintains responsibly,” Apple explains in the court filing, which seems to mean a developer could not drop a customer directly on a PayPal payment screen, for instance. Instead, whatever mechanism they chose to provide for payments would have to be on their own website. This is also detailed on the support page for the new entitlement where developers are instructed that links must go to their website “without any redirect or intermediate links or landing page.”
The page also can’t mimic Apple’s in-app purchase system — nor, in a case of Apple policing what developers post on their own websites — “discourage users from using it.”
In addition, the payment processors have to meet “certain industry standards,” Apple says, and have to provide users with processes for disputing unauthorized transactions, managing subscriptions, and requesting refunds. This part seems fine, as it’s more in line with Apple’s goal of protecting users from possible subscription scams.
One interesting tidbit, however, is that Apple notes in the filing that “apps participating in the Apple Video Partner Program or the News Partner Program are not eligible for the Link Entitlement — an exception also documented on the support page for the StoreKit Link Entitlement in the U.S.
Apple Video Partners already pay a 15% commission rate to Apple when customers sign up through IAP and their customers are allowed to transact within their app on things like rentals and purchases using the payment method on file with the company, if the customer had already signed up with a payment method outside the app.
News Partners, meanwhile, also qualify for a commission rate of 15% from day one, instead of year two, as with other subscription offerings.
It’s interesting to note that participation in these programs means developers have to continue to follow those programs’ rules instead of being offered the ability to market their payment links in-app, as others can.
Apple’s rules for the entitlement also require that developers show the link to the alternative payment mechanism “on no more than one app page the end user navigates to (not an interstitial, modal, or pop-up), in a single, dedicated location on such page, and may not persist beyond that page,” Apple wrote.
In addition, Apple is providing developers with compliant templates where they can tell their users that clicking the link will give them “X% off” or that a “lower price” is offered via the link. But Apple warns developers the templates aren’t used to make “subjective claims” about their competing purchase mechanism — again, an example of Apple policing how developers are allowed to talk to their own customers.
Since the court ruled that Apple is entitled to commissions, even if IAP was optional, Apple was able to set its own rate on out-of-app-store purchases of goods and services. Specifically, it will require a 27% commission on those that take place on a developer’s website, within 7 days of a user tapping through an external link. This is the most notable caveat to the whole charade of choice Apple is proposing because it leaves developers better off by not including a link in their app at all. The developer would only save money if they could convince users to sign up on their websites without clicking an in-app link since the cost to run their own payment processing could bump the total even higher than Apple’s standard 30% commission.
Epic, Spotify, and a related lobbying group of app developers, the Coalition for App Fairness, have taken issue with how Apple has complied with the court order, with Epic dubbing it “bad faith” compliance and Spotify calling it “outrageous” and “abusive.”
That may be, but knowing Apple’s lawyers, it’s likely legal, too.
