For years, app developers have voiced concerns about the high costs associated with doing business in Apple’s App Store—the tech giant charges a 30% commission on all in-app purchases. Legal action against Apple spurred the company to revise its policies in January. Developers can now apply to include outside links to their websites within the App Store.
These external links were touted as a way for customers to bypass the App Store and its fees, enabling them to pay developers directly. But since the beginning of the year, only 38 out of the 65,000 app developers supporting in-app purchases have applied for outside links. Notably, none of the significant players in the industry were among those 38.
The reluctance stems from Apple charging 27% for app developers to use the link entitlement program. When factoring in payments processing fees, using outside links ends up costing developers more than the 30% commission.
Legal Battles
One of the major challengers to Apple’s App Store policies is Epic Games, creator of the popular Fortnite game. The latest development in the ongoing legal battle between the two companies, which has been ongoing since 2020, sees Epic pursuing contempt of court charges against Apple. Epic believes the tech giant’s revisions in January not only proved ineffective but also violated an earlier injunction.
Epic’s leadership noted: “Apple’s goal is clear: to prevent purchasing alternatives from constraining the supercompetitive fees it collects on purchases of digital goods and services.”
Antitrust Issues
Apple has long been in scrutiny of antitrust regulators due to its ecosystem. The European Union fined the company $2 billion after Spotify alleged that Apple restricted the music streaming service from promoting its platform and offering discounts.
However, Apple did just pass a critical hurdle to get it’s tap-and-go payments tech approved in the EU. To do so, the company had to demonstrate that it made its technology available to its competitors.
While Apple managed to sidestep that issue, it may face a tougher challenge in its court battle with Epic.
