Apple to allow Spotify, Netflix, and others to use payment methods outside the App Store

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Apple has recently received a lot of criticism for collecting a 30% cut from app developers. However, beginning next year, some app developers will be able to avoid paying a 30% fee to the tech giant by adding a link to their website for payments outside the App Store.

The company has stated that in early 2022, it would update the App Store to allow “reader” app developers to add in-app connections to their websites, allowing users to set up accounts and make payments.

According to Apple, applications that “provide previously purchased content or content subscriptions for digital magazines, newspapers, books, audio, music, and video,” are considered reader apps. This means that the new law will apply to streaming services such as Netflix and Spotify.

Following the end of the Japan Fair Trade Commission inquiry, the tech giant released the update. Apple agreed with the commission to allow them to post a single link to their website because such developers “do not offer in-app digital goods and services for purchase,”  The move will affect all reader applications worldwide, but it will take effect on all reader apps worldwide, once Apple updates its rules and review process.

“We have great respect for the Japan Fair Trade Commission and appreciate the work we’ve done together, which will help developers of reader apps make it easier for users to set up and manage their apps and services while protecting their privacy and maintaining their trust.”

Phil Schiller / Executive in charge of overseeing the App Store

Netflix and Spotify have long criticized Apple for collecting 30% of their profits. Spotify filed a complaint with the European Commission in 2019 alleging that Apple is engaging in anti-competitive behavior. It removed customers’ option to pay for premium upgrades from the iOS app because it was unwilling to pay a 30% fee. In 2018, Netflix eliminated the option to pay for a membership from its iOS app.

Since the upcoming update excludes games, it will not be able to settle Apple’s legal dispute with Epic. Since it chose to provide discounts on Fortnite’s V-bucks currency and other cash transactions outside the App Store last year, the game developer has been leading the battle against the tech giant. As a result, Apple pulled Fortnite from the App Store, and the litigation that followed revealed some extremely intriguing facts.

Tim Cook’s evidence in court indicated that many creators are dissatisfied with Apple, while court papers revealed that Epic pays publishers millions of dollars to give their games out for free on its store.

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