Apple Inc. offers piecemeal concessions to Netflix and Spotify to placate international pressure over its tightly controlled App Store and ‘Apple Tax’?

Apple Inc. Tax FTC Japan Commissions
Apple loosens reins. Pic credit: Jay Rogers/Flickr

Apple Inc. is gradually loosening its tightly controlled reins over the Apple App Store. The company now allows a specific category of apps, called “Reader Apps” to bypass the infamous Apple Tax.

After allowing developers to inform app users about external, third-party payment systems, Apple Inc. is now allowing “Reader Apps” to offer a service without mandating a subscription paid through the iPhone maker.

Apple Inc. allows Reader Apps such as Netflix and Spotify to bring in subscribers through their own payment systems:

Apple Inc. has confirmed that it will allow some apps to provide a link to their websites. These links, within the app, will prompt users to sign up for a subscription.

Needless to mention, Apple strictly denied app makers the permission to direct app users to an external website for logging into subscriptions. Instead, the company mandated developers to direct any and all purchases to take place through Apple’s own internal billing system.

Moving ahead, Apple Inc. will allow a certain category of apps to direct customers to their own websites to make payments. Needless to add, this will directly bypass the Apple Tax, which is either 15 or 30 percent.

Apple Inc. is calling these categories of platforms “Reader Apps”. These apps provide previously purchased content or subscriptions for magazines, newspapers, books, audio, music, and video. Besides Netflix and Spotify, even Amazon Video and Kindle fall under the category of Reader Apps.

Incidentally, Spotify and Netflix once allowed users to pay for services directly from within the app. However, these services stopped that form of billing for new members. The primary reason was their discontent over the infamous Apple Tax.

The European, South Korean, and now the Japanese forcing Apple Inc. to allow developers to bypass the Apple Tax?

The latest relaxation of Apple App Store policies is part of the settlement with the Japan Fair Trade Commission that Apple Inc. confirmed. Additionally, the company will extend the relaxation across the world.

Apple Inc., as well as Google, are amidst a raging global war about anticompetitive behavior. Multiple countries have accused the companies of strongly controlling their respective App Stores by monopolizing payment systems.

Both Apple and Google previously deployed incentive programs by cutting their commissions from 30 percent to 15 percent. However, this incentive is limited to the first million dollars.

Apple Inc. recently reached a settlement with the developers who had sued the company in 2019. As part of the settlement, the company said, “developers can use communications, such as email, to share information about payment methods outside of their iOS app,” as long as users consent to receive those emails and have the right to opt-out.”

Although Apple Inc. appears to be on the backfoot, several legal experts, including Epic Games, claim the company needs to do a lot more. Some have alleged the latest relaxation of policies is merely a divide and conquer strategy.

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