Apple App Store Concessions Fail to Address Top Concerns of Regulators, Lawmakers: An Analysis

Over a one-week period, Apple made two sets of changes to its App Store rules, which have been the subject of lawsuits, regulatory probes, and legislation around the world, but the changes This change does not address the biggest concerns raised.

Lawmakers and regulators are considering scrapping the App Store business model, an outcome that could cost Apple about 6% of revenue — the equivalent of $16 billion (about 1,16,890 crores). in the last fiscal year — and down to a 15% drop in profits, according to last year’s estimates from analytics firm Cowen.

Among Apple’s most famous concessions is allowing Netflix and other subscription services to provide links to paid subscriptions outside of the app to avoid Apple’s commission. But many of the largest such companies have long since abandoned using Apple’s payment system, so the move is unlikely to affect Apple’s finances.

It’s a sign that any battle over Apple’s rules is likely to continue even if Apple wins the closest threat – a US federal judge will go to court any day. to announce the verdict in an antitrust lawsuit brought by Fortnite game maker Epic Games.

“Mobile technology has become essential to our daily lives, and now only two app stores hold incredible power over the apps consumers can access and use. how they access them,” said US Senator Amy Klobuchar, a Democrat sponsoring an app store bill, this week. “When you see this same problem emerging around the world, it’s more obvious that we need to act.”

Some of the biggest calls have been for Apple to allow app stores run by other companies on its iPhones, which would provide a conduit around the current payment system, helping developers development is less likely to avoid being cut by Apple. Critics also want the company to repeal so-called guiding rules that prevent developers from telling their customers how to pay developers directly for their apps.

Developers can completely bypass Apple’s rules if they’re allowed to install software on iPhone handsets without going through Apple’s App Store, but Apple doesn’t allow this, arguing that This makes it unsafe for users. Epic seeks change in Fortnite antitrust case.

Global surveillance

A bill introduced by US Democratic Representative David Cicilline and Republican Representative Ken Buck in the US House of Representatives in June would also force Apple to open up its iPhones to third-party stores if the measure This law becomes law.

Virtually every regulator that examines Apple around the world – including competition regulators in the UK, European Union, and Australia – is scrutinizing Apple’s rules for payments. in-app payments and commissions for digital goods ranging from 15-30%. This is also key to the legal claims Spotify and Epic filed against Apple.

South Korean lawmakers this week passed a bill banning both Apple and Google’s Alphabet from requiring the use of their payment systems.

That was at the top of Spotify’s wish list, whose CEO, Daniel Ek, tweeted that Apple’s changes so far “didn’t solve the problem.”

The “code of direction” issue was partially resolved by Apple last week when it ended a ban on communicating with users via email about alternative payments, and this week said that a small portion of apps Using a “reader” that accesses media content purchased elsewhere may now provide a link to a paid subscription page.

But game developers that generate most of Apple’s App Store revenue still can’t direct their users to a paid subscription page or instruct them to make payments to avoid Apple’s commissions.

“Apple’s latest announcement appears to be another attempt to protect its App Store exclusivity by dividing developers into winners and losers,” a statement from the Alliance for App Equity, a team including Epic Games, said.

© Thomson Reuters 2021


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