Apple will let some subscription apps bypass App Store payments, disrupting its commission-based profits


The news: Apple will allow certain apps to invite users to purchase subscriptions with a link to their own websites, according to CNBC. This is a radical change for the iPhone maker, which previously banned subscription-based apps like Netflix and Spotify to allow users to subscribe to their services through a website.

  • Apple said the change was part of a regulation with the Japanese Fair Trade Commission, but would apply the new rule globally.
  • The change mainly affects Subscription “reading applications” that require monthly subscriptions for eBooks, music, or videos.
  • Rule does not apply to all App Store transactions– game-oriented in-app purchases must always go through Apple’s payment system, which charges between 15% and 30% gross sales.

How we got here: Apple and Google have been forced to loosen their duopoly’s grip on their developer, app and payments ecosystems, mainly due to the looming threat of antitrust regulation in various countries as well as growing reluctance from developers .

  • South Korea was the first country to past a law end the stranglehold of Apple and Google on their respective application stores. The move gives mobile app users the freedom to choose which provider they use to make in-app payments, and developers can choose how they want to be paid.
  • American senators introduced a bill last month designed to curb the anti-competitive policies of app stores. The Open Application Markets Act would prohibit companies from forcing developers to use their app store’s payment systems.
  • Apple just installed a antitrust case by letting developers choose from more app awards, although the settlement is seen as a minor capitulation as it only benefits US-based developers who earn less than $ 1 million per year.

The overview: Cracks are appearing in the app store duopoly model that could slowly open the floodgates to other app payment options for developers and their customers, defying the profitability of Apple and Google. 15% to 30% committee structure.


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