November 23, 2020 at 9:04 p.m.
- Apple’s App Store monopoly is the target of lawmakers, third-party developers, and consumer advocacy groups over its thirty percent cut on apps and subscription services.
- Recently, Apple allowed small third-party developers earning less than one million dollars a year to apply for a 15% discount on App Store commissions.
- Today, Apple extended its commission suspension for online events, education, and counseling apps until June 30, 2021.
- The extension provides third-party developers more time to create their own in-app billing solutions.
Apple Suspends In-App Commission for Online Events and Counseling Apps
Developing an in-app purchasing solution isn’t easy for every small business. Today, Apple announced the extension of a program to forgo commissions on in-app purchases for select apps. Apps featuring one-to-many or one-to-few video interaction may bypass Apple’s in-app purchasing system until June 30, 2021.
The commission suspension program applies to live event apps, such as concerts, comedy shows, or similar entertainment. Educational apps, such as tutoring and live, online classes, are also covered. Telemedicine, mental health counseling, physical fitness training, yoga, and other similar apps may also bypass Apple’s in-app purchasing.
Developers Must Create A Billing System to Avoid Commission
On the surface, Apple’s commission suspension seems like a great deal. Developers, however, must create their own billing systems to avoid paying commissions to Apple. This typically means using one of many online payment resources; however, the iOS app must integrate with the external payment system.
Integrating iOS with other payment systems is tricky, as Apple doesn’t permit these technologies. There aren’t handy Application Programming Interfaces (APIs) to handle this task, as Apple doesn’t usually allow developers to bypass the App Store.
Of course, many software engineers can develop simple billing infrastructure for their app. It takes effort, but some smaller, less talented developers won’t figure it out in time to realize savings.
Is Apple Bending to Satisfy Anti-Competitive Inquiries?
Apple recently adjusted App Store billing practices twice in the past week. Just last Wednesday, Apple announced its App Store Small Business Program, cutting the commission to fifteen percent for developers earning under a million dollars. Today, an extension of payment deferral for online event, education, and counseling apps signals another minuscule capitulation to lawmakers, developers, and consumer advocates.
The moves generate good public relations; however, it’s unlikely to appease Apple’s growing opposition. Both commission adjustments amount to small reductions in App Store profitability. Only two-percent of developers account for 95% of App Store revenues. Reducing commissions on small developers helps; however, it’s largely a symbolic gesture, as few underdogs prosper in the App Store.
Apple’s recent App Store reforms come as state and federal lawmakers investigate aggressive and anti-competitive tactics of Big Tech. With its closed ecosystem, Apple tops the list of corporations under scrutiny.