Apple Adjusts App Store Policies in the US Following Legal Pressure
Apple has made a significant shift in its App Store policies in the United States, now allowing app developers to use alternative payment platforms outside of Apple’s own system without incurring fees or commissions. This move comes as a response to a recent court decision, marking a major turning point for the company and its relationship with app developers. The change was formally enacted through an update to Apple’s app guidelines, which was published on the company’s website.
The decision to update the policies follows accusations from US District Judge Yvonne Gonzalez Rogers, who claimed that Apple had not complied with a ruling made over three years ago. This ruling theoretically required Apple to open its iPhone ecosystem to alternative app stores that could compete with the App Store. In September 2021, Judge Rogers stated that Apple could no longer mandate that app developers use the App Store and its payment system, which typically charges a commission of 30%.
The exclusivity of the App Store has been a major source of revenue for Apple. The company’s services division, which includes the App Store, music and video streaming platforms like Apple Music and Apple TV, and cloud storage service iCloud, now accounts for 28% of Apple’s total revenue.
This change in policy arrives amid growing pressure from regulatory bodies and legal challenges. In Europe, the Digital Markets Act (DMA), which took effect last year, compels the six largest tech companies globally, including Apple, to open their platforms to competition. Under pressure, Apple had already allowed some developers to use alternative payment systems through a web page, but it still charged a 27% commission. The updated regulations do not mention any commission, indicating that the use of third-party platforms is now free of charge. Currently, this policy change only applies to the United States.
Judge Gonzalez Rogers’ recent order mandates that Apple can no longer collect any commission on transactions conducted outside of the App Store. She also instructs Apple to refrain from sending messages to users who want to use a third-party store or app, except to inform them that they are not using the App Store. Apple stated on its website that the update to its policies was designed to "comply with a court decision in the United States." The company also indicated that it plans to appeal the decision.
The implications of this policy change have been met with enthusiasm from some in the developer community. David Heinemeier Hansson, the technical director of app development company 37signals, posted on X (formerly Twitter) that "Apple’s defeat in court opens a new world for app developers." He added that "entire economic models were impossible under the 30% commission regime," suggesting that this shift could unlock new opportunities for innovation and business models.
Hamza Alsamraee, the founder of AI startup NewForm, echoed this sentiment on X, stating that "the cards are reshuffled." This suggests that the change in policy could lead to a significant reevaluation of the app ecosystem.
Spotify, the audio streaming platform, announced that Apple has authorized it to update its application to offer the possibility of paying outside the App Store.
Despite the potential benefits for developers, some analysts have cautioned about the possible long-term effects of this change. Jin-Hyuk Kim, an economics professor at the University of Colorado, warned that "if Apple loses commissions on the App Store, they could try to increase revenues from other sources, such as fees charged to developers or for advertising, which could create new difficulties" for the company’s customers.
Avi Greengart, an analyst at Techsponential, does not expect the policy change to have a significant impact on Apple’s revenue. "Apple Services is breaking records quarter after quarter," he said, "because there are more and more Apple devices in circulation and people are doing more and more things from their phones." He pointed out that Apple’s services revenue nearly reached $100 billion in the 2024 fiscal year, which ended in September.
Some industry experts believe the App Store will remain the preferred option for smaller developers. Carolina Milanesi, from Creative Strategies, stated that "for small developers, the App Store remains the best way to find consumers without having to invest the sums that Epic Games or Spotify will spend to set up alternative payment methods." She added that "for most consumers, the additional steps (required for payment outside the Apple system) are not worth it if they don’t spend a lot." She concludes that "it’s easier to go through the App Store."
This policy change represents a significant development in the ongoing debate over the control and economic power of app stores. While the immediate impact may be limited, it could pave the way for further changes in the app ecosystem and a more level playing field for developers. Apple’s decision to appeal the ruling suggests that the battle over the future of the App Store is far from over.
