Apple to enable external payments for apps

The company intends to allow all third-party apps sold in the US to include an external link to a developer website to process payments for in-app acquisitions. Through this, Apple’s payment system is set to be bypassed, and developers are charged a commission of either 15% or 30%. However, Apple aims to collect a 12% or 27% revenue share from developers who withdraw from the Apple system.

The Supreme Court decision was based on a 2023 appeals court ruling that identified Apple’s business model as not violating antitrust laws, however, it did break California’s Unfair Competition Law by limiting the developers' ability to communicate about alternative payment systems that may come at a reduced cost. Both Apple and Epic Games asked the court to hear an appeal related to the case, but the judges rejected the appeals without explanation. As per the information detailed in the press release, developers are required to apply for an entitlement to leverage outside payment systems. Previously, Apple allowed reader apps to guide users to the web to sign up for subscriptions. The company intends to now warn customers when they press a link to conduct purchases outside the App Store before allowing them to proceed.

According to a social media thread from Epic’s officials, as of the announcement, developers can start exercising their court-established right to tell US customers about better prices on the web. Epic plans to contest Apple’s compliance plan in District Court, as representatives took issue with the company’s plan to charge high taxes on web transactions. The post mentions that if app developers are required to pay the above-mentioned fee to Apple and a 3% to 6% part to third-party payment processors, they cannot afford to provide lower costs to consumers.

Furthermore, in 2023, the ninth US Circuit Court of Appeals affirmed a lower-court judge’s 2021 decision rejecting claims made by Epic in which the company said that Apple’s online marketplace policies violated federal antitrust law as they ban third-party app marketplaces on its operating system. Additionally, the appeals court sustained a federal judge’s ruling that the company’s practices did not violate federal antitrust laws, rejecting most of Epic’s case against Apple’s App Store. The decision was on hold while the Supreme Court appeals were pending and the high court’s decision ended a temporary stay in the case.

In addition to the Epic case which was one of the first to challenge Apple’s App Store system, the company was under pressure globally, including in Europe where competition enforcers currently have two antitrust cases pending against it. Authorities from the EU are projected to fine the company later in 2024 for allegedly leveraging its App Store rules to prevent music-streaming rivals such as Spotify.

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