Recently, iPhone apps have changed. The Kindle app now allows people to purchase books directly from the site. Spotify offers users a free trial. And Patreon, a subscription service, is making people pay more for creators.
The change is early on how recent court rulings can change the iPhone shopping experience. Last week, a federal judge ordered Apple to allow the app to offer promotions and collect payments directly from users. This decision allows the app to offer new conveniences to people, such as buying books directly from the website. This decision could lower consumer prices bypassing the fees Apple collects up to 30% on all app sales.
For more than a decade, Apple has requested that the app use payment systems for purchases and collect committees on sales.
Now it's all open to changing. It may differ in the future, and here's why:
What did the judge rule?
Judge Yvonne Gonzalez Rogers, who began working on the case after Epic Games sued Apple in 2020, determined that Apple could no longer take commissions from sales that it linked through the app. She also said she can't write messages (known as warning screens) that prevent developers from creating buttons and links to allow people to pay their apps directly for products and services, and that prevent users from leaving the app store.
How will the iPhone app be changed?
For years, Kindle has not sold books on the app to avoid Apple's 30% commission. Now it has added a “Get Book” button to instruct users to the website and purchase the book. Similarly, Apple has prevented Spotify from offering a free trial to new customers, but Spotify has a button on the app for a three-month trial.
Other apps can now offer links to purchase directly from stores online. This will eliminate the need for businesses to pay 30% Apple fees. Without paying these fees, the app can offer users a lower price and reduce your monthly subscription to $7.
Does this cost Apple?
Morgan Stanley estimates that Apple earns $11 billion a year from selling apps in the US. While we won't lose all of that, the bank estimates that $2 billion is currently at risk.
How much an apple is losing is what makes people motivated to change their behavior. The 10-year-old process for purchasing software and services in an app is not only familiar, but also quick. People trust Apple with their credit card information. And the company makes it easier for people to cancel subscriptions and allow them to be kept all in one place. Many people may be reluctant to leave the app store to make a purchase, and the app may prefer to maintain its current system.
What does this mean for other parts of the world?
Because Apple needs to allow apps to collect payments directly without paying a committee to the company and asking for similar concessions in the US. European, Japanese and South Korean regulators, who Apple is asking them to loosen their grips on the App Store, wouldn't want their citizens and developers to have to pay more than Americans.
Can Apple roll back changes?
Apple said it plans to appeal the ruling, but it would be difficult for the company to overturn the decision. In 2021, the judge wrote a non-normative ruling. Apple skirted the rules by introducing a 27% commission for the sale of the app. Mark A. Lemley, a Stanford antitrust professor, said the US Court of Appeals for the Ninth Circuit will be responsible for the judge's first ruling from 2021 and is unlikely to change his position. “They have to take their licks and let them do that,” he said.
