What you should know
- The U.S. Supreme Court decided not to hear Apple‘s appeal related to the Epic v. Apple court case, meaning Apple has to follow the ruling of Judge Yvonne Gonzalez Rogers from 2021.
- Apple has changed its App Store Guidelines in the U.S. to comply with the court’s ruling, allowing developers to link to alternative payment platforms for in-app purchases and subscriptions.
- Despite these changes, Apple will still receive a 27% cut of the revenue generated by an in-app purchase if an outside payment platform is used. This drops to 12% if the developer is part of the App Store Small Business Program.
- Epic Games CEO Tim Sweeney criticized the changes, calling the 27% cut that Apple receives on payments processed by a third-party platform “anti-competitive”. He plans to contest the compliance plan in District Court.
Full Story
The U.S. Supreme Court made a significant decision today. It chose not to hear Apple’s appeal in relation to the Epic v. Apple court case.
This decision has significant implications for Apple. Now, they have to comply with Judge Yvonne Gonzalez Rogers’ 2021 ruling.
The judge’s ruling was all about in-app purchases and subscriptions. It stated that Apple must allow developers to send their customers a link. This link would lead them to a third-party platform to pay for these services.
Previously, Apple had a different policy. They didn’t allow developers to share such a link. Why? Because it would enable them to bypass Apple’s 30% cut of in-app purchases.
But now, things have changed. With the judge’s ruling in effect, Apple has tweaked its App Store Guidelines in the U.S. The goal? Compliance with the Epic v. Apple trial results.
So, what’s the new deal for developers? They can now link to alternative payment platforms. But there’s a catch. Their app must also offer payments through Apple’s in-app payment platform.
Apple has detailed this in section 3.1.1(a) of the App Store Review Guidelines. It states, “Developers may apply for an entitlement to provide a link in their app to a website the developer owns or maintains responsibility for in order to purchase such items….”
This entitlement agreement has some specific conditions. For instance, the link may inform users about where and how to purchase those in-app purchase items. Plus, it can reveal that such items may be available at a lower price elsewhere.
However, this entitlement has its limitations. It’s only valid in the iOS or iPadOS App Store on the United States storefront. In all other storefronts, apps and their metadata can’t include buttons, external links, or other calls to action that direct customers to alternative purchasing mechanisms.
Now, let’s talk about some issues. Apple has introduced a new 27% tax on web purchases. This is a first for Apple and it’s being seen as anti-competitive. It’s a blow to price competition as developers can’t offer digital items more cheaply on the web after paying this tax.
But don’t fret about Apple losing out on its Apple Tax. Apple still gets a 27% cut of the revenue from an in-app purchase if an outside payment platform is used. If the developer is part of the App Store Small Business Program, this drops to 12%.
Epic Games CEO Tim Sweeney is not pleased with these changes. His lawsuit against Apple began after Fortnite, a popular game, was removed from the App Store (and the Google Play Store) for offering a link to its own in-app payment platform inside the game. Sweeney took to Twitter to express his dissatisfaction. He called Apple’s 27% cut on payments processed by a third-party platform “anti-competitive”. He also announced his plans to “contest the bad-faith compliance plan in District Court.”
