How Apple has been criticized for imposing new online payments penalties on dating apps? The U.S., Korea, and South Korea are warnings to developers
Other Apple critics responded quickly. Spotify’s Moran says Apple’s latest move “is outrageous and flies in the face of the court’s efforts to enable greater competition and user choice.” The new tax is a recreation of Apple’s fees, and Moran is calling for the European Commission to prevent similar policy changes.
Regulators aren’t very happy with how Apple has implemented similar policies elsewhere. Apple made it possible for dating app developers in the Netherlands to use alternative payment options with the same 27 percent tax. However, Dutch regulators fined Apple $55 million for failing to comply. A new law in South Korea bars Apple and others from forcing developers to use first-party payment processors. South Korea warned both Apple and GOOGLE that they could be fined for breaking the new payment rules.
For any consumers brave enough to keep going and make a purchase, Apple will collect up to 27 percent of the revenue, via a newly created fee that extends the much-loathed levy that previously had been placed only on in-app purchases. Developers will have to provide “periodic accounting of qualifying out-of-app purchases” and allow Apple to audit their records, though it acknowledges that “as a practical matter … collection and enforcement will be exceedingly difficult and, in many cases, impossible.”
In order to link from their apps to purchase pages on their own websites, developers in the United States need a tweak from Apple. This practice was once banned because of it paying up to 30 percent of revenue to Apple. To link out to other purchase choices on their websites, developers must apply for permission and offer in-app purchases through Apple’s billing system. And they have to certify that they have processes for handling billing complaints and that their payment processors meet what Apple calls “certain industry standards.” Apple then has to approve the wording used to link the alternative purchase options. Users will see a full screen warning when they click on those links if they go into a world where Apple’s protections don’t apply.
That outcome adds to a glum picture for developers like Fortnite maker Epic, consumers, and governments from around the world that have been trying for years to loosen the restrictions Apple and Google maintain over downloading, paying for, and using apps on mobile devices. A handful of small victories in the US, Netherlands, and elsewhere have forced policy changes at Apple and Google and cost the companies some revenue. But overall Apple’s App Store and Google’s Play Store function much as they always have and retain their hold over businesses that want to reach customers on mobile devices.
What can $83 million in legal defense fees buy? In Apple’s case, billions of dollars in annual App Store revenue that had been under threat until this week.