The success of the App Store can be attributed to both developers and Apple. While developers flocked to the App Store with high-quality apps and games, Apple did its part over the years by keeping a tight check on the quality of submissions and ensuring all rules and regulations were adhered to. The success means the App Store has become a major cash cow for Apple in recent years, boosted further by the pandemic and the lockdown worldwide.
Despite the App Store registering record revenues every quarter, Apple has done little to give back to developers. Instead, it has used its position to thwart competitors and push its own apps and services. In many ways, it felt like Apple was trying to squeeze as much money as possible from the App Store, with little regard to developers and the ecosystem.
The App Store itself has become too big, raising concerns about Apple’s tight control over it. No wonder then that the store has been under intense scrutiny from regulators worldwide.
Apple Did Very Little to Address the App Store Issues
Up until mid-August, Apple did the bare minimum to address the concerns related to the App Store. The most notable action being a reduction in the App Store commission from 30 percent to 15 percent for small developers. However, over the last few weeks, Apple has announced a barrage of changes to the App Store regulations to settle lawsuits and close regulatory investigations.
Firstly, South Korea passed a bill that will force Apple and Google to allow alternative payment systems in their respective app stores. The bill is yet to turn into a law, but it’s a matter of time before that happens. This bill will set the precedent that other countries investigating Apple over unfair App Store practices could follow.
This was followed by Apple announcing a string of changes for the App Store, including allowing developers to reach out to their customers directly and inform them about alternative payment systems, all to settle a lawsuit from small US developers.
Additionally, the company will even create a $100 million fund to distribute among small US developers as a part of the lawsuit settlement process. However, these changes felt like Apple did the bare minimum it could to settle the issue.
Then, to conclude another investigation from the Japan Fair Trade Commission (JFTC), Apple announced that it would allow “reader” apps like Netflix, Kindle, etc., to redirect users to sign up for services outside of the App Store.
The biggest blow came late last week when in the Apple v. Epic trial, Judge Yvonne Gonzalez Rogers ruled that Apple cannot force developers to use its proprietary payment system for IAPs. Instead, developers could direct users to any third-party payment system of their device.
The injunction passed by Judge Yvonne Gonzalez Rogers’s court will come into effect in 90 days unless instructed otherwise by a higher court. This is a big deal as Apple tends to charge developers anywhere between 15-30 percent as fees for any IAP transaction. By using a third-party payment system, developers could bypass this fee entirely.
Apple Won the Trial Against Epic, But Lost a Lot in the Process
Apple may have won the trial against Epic, but it is the one that stands to lose the most from this judgment. Yes, Epic will appeal against the judgment, but it is only a matter of time before Apple — willingly or forcefully — needs to allow apps and services on the App Store to use third-party payment systems for IAPs.
These changes and rulings will effectively change the App Store for good. The changes might take some time to come into effect, with Apple doing everything it can in its power to resist and block them. But regulators and governments worldwide have realized just how tightly Apple controls the App Store for its own benefit.
There are always two sides to a coin. Apple allowing third-party payment systems on the App Store can lead to a rise in fraudulent transactions, card details being stolen, and more. However, it will also provide developers with greater freedom and in the likes of Netflix, Spotify, etc., level the playing field against Apple.