Apple eases App Store payment policy for ‘reader apps’ in deal with Japan

By Amirtha P S, Desk Reporter
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The US-based technology giant Apple would relax the strict rules on its App Store that have restricted companies like Netflix from providing customers a link to create a paid account to bypass Apple’s in-app purchase commissions.

Apple collects commissions between 15 percent and 30 percent from in-app purchases and creates barriers to keep developers from steering users toward payment alternatives. One such rule had barred “reader apps”, where users consume content that they purchased elsewhere, from providing a link to sign up for a paid account.

Last day, Apple stated it would remove that rule starting early next year in line with the conclusion of an investigation by the Japan Fair Trade Commission (JFTC).

Apple said it agreed with the JFTC to let developers of those apps share a single link to their websites to help users set up and manage their accounts. Even though the change is following an agreement with the JFTC, Apple said it would be applied globally.

In less than a week the iPhone maker is giving its second concession to companies as the company faces legal, regulatory and legislative challenges to the App Store, which forms the core of its $53.8 billion services segment.

Last week, Apple reached a deal with a group of developers in the US in a class-action lawsuit as it awaits a ruling by the same US judge in a separate App Store dispute brought by Epic Games. In that agreement, Apple ended a ban on developers’ telling users in email messages outside an app about payment alternatives.

However, the company said that it will still ban developers from taking other forms of payment inside apps on the iPhone, the key practice that “Fortnite” creator Epic Games, Spotify Technology and Match Group have said they want to end.

“A limited anti-steering fix does not solve all our issues,” Spotify, which is pursuing an antitrust complaint against Apple with European Union competition authorities, said in a statement.

In a media briefing, the JFTC said that it had ended a five-year investigation into Apple and the company’s App Store guideline revision eliminated the suspicion of antimonopoly practices. Apple will be able to reject apps it doesn’t judge to be “reader” apps.

Previously, Apple had allowed a link for account creation but only if creating the account did not involve entering payment information. That meant companies like Netflix, which has no free tier of service and requires payment at sign-up, could not provide a link. But the changes will not apply to gaming companies, which are the largest category of moneymakers for Apple on its App Store.

Apple said in a statement that reader apps can safely offer other ways to pay because the shows or songs they offer access to are not “in-app digital goods and services.” Apple has the ultimate say over whether an app qualifies as a “reader app” or a game.

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