If you are interested in tech news — and I assume you are, since you are reading this — prepare to have your news feeds dominated by Apple announcements this week and next. At the time of writing we don’t yet have a confirmed date for Apple’s latest products reveal, but the rumour mill is churning overtime, with predictions that it could be as early as next week, probably September 14. During said event Apple is expected to unveil the iPhone 13, Apple Watch Series 7 and AirPods 3.
Online you can already find an array of unconfirmed leaks and decent hunches about what these new devices will offer.
The biggest news is the significant changes Apple has confirmed for App Store policies to the commission it takes for certain app purchases and the channels that users can use to pay for subscriptions.
Apple has been under serious scrutiny over these practices for years, but it is in the last two years or so that Spotify, Epic Games and other vocal and powerful critics have turned up the heat in this debate.
In 2019, Spotify — which is headquartered in Sweden — complained to the European Commission, prompting it to open an antitrust investigation in 2020 into Apple’s rules for app developers and whether these violated EU competition rules by forcing developers to use Apple’s proprietary in-app system for purchases. Apple’s policies at the time also prohibited these developers from promoting cheaper purchase options — which would bypass the App Store — to its iPhone and iPad users.
Most famous and influential, I would argue, was the August 2020 lawsuit brought against Apple by Epic Games, makers of one of the world’s most popular games, Fortnite. It filed in the Northern District of California after much public sniping over the 30% commission Apple charges on in-app purchases.
In September 2020 Japan’s Fair Trade Commission promised to keep an eye on App Store practices. This was due to agitating voices from the Japanese government and several game makers in Japan.
CNBC argues that there is a pattern of Apple setting tough and expensive policies only to ease them back slightly, creating the feel of magnanimity
Though the Japan Fair Trade Commission approach was much softer in style, it is this deal that Apple cites in its announcements, assuring people that it will now allow certain categories of app makers and companies to be subject to lower commissions or potentially skip commission-owing altogether. Naturally, it does not explicitly state this, but realistically this is the result of the collective and cumulative pushback, as the new rules will be implemented worldwide from early 2022.
So what exactly has Apple conceded? It has created exceptions for categories of apps, rather than making blanket changes. News outlets have in effect been incentivised to participate in Apple News, the company’s own news app that functions like an aggregator. Here Apple is saying “deliver us your content in a format that can be used for Apple News, and you’ll pay 15% commission, rather than the hefty, historical, and hated 30%”. (I’m paraphrasing, obviously.)
Then there are “reader apps” such as Spotify: in Apple’s statement it defines these as those that “provide previously purchased content or content subscriptions for digital magazines, newspapers, books, audio, music, and video”. These apps can now link out from within the app, directing users to set up or manage their accounts with the provider directly, rather than running their subscription via Apple.
Broadcaster CNBC argues that this is not the historic concession it appears to be, characterising it rather as “a clear continuation of strategy going back to 2008”. Apple’s App Store, CNBC says, “grossed $64bn or more in total sales in 2020, according to analysis based on Apple disclosures”. It argues that there is a pattern of Apple setting tough and expensive policies only to ease them back slightly, creating the feel of magnanimity.
Bare minimum
Still, we are likely to see even more changes to this policy, which in the end could add up to something that finally makes the critics happy. After all, we are expecting the decision from the Epic Games case soon, and the EU is still examining its proposed remedies and penalties.
There is also a South Korean ruling on out-of-app purchases and a new Indian antitrust investigation that was launched on the same day as the Japan deal was announced. Reuters reports that the latter focuses on alleged abuse of dominance — based on the filing of a small, nonprofit group that says Apple’s fees constitute a barrier to market entry and keep small players out in the cold.
In some ways this is a huge win for those angry app developers who felt bullied by the power and reach of Apple. With continued pressure they have in effect carved out a huge cut in commission fees, and upended a sort of founding principle of the App Store — access via us exclusively. Through another lens, though, Apple has conceded just the bare minimum of what is fair.
That is certainly Spotify’s take. CEO Daniel Ek tweeted in response: “Our goal is to restore competition once and for all, not one arbitrary, self-serving step at a time.”
Epic Games CEO Tim Sweeney called it a policy of divide and conquer — the tactic of breaking these rules and concessions for applicable categories only, in effect prioritising some types of developers but not all. Ouch!
• Thompson Davy, a freelance journalist, is an impactAFRICA fellow and WanaData member.
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