On 26th August, Apple Inc. the leading American corporation announced that it will allow iPhone or iOS app developers to use alternative payment options to the App store. The new advertising policy will help the developers to promote alternative pricing, excluding the apple cut.
However, the catch to this is that the app makers are not allowed to buy or add subscribe button that will lead to a webpage to complete the transaction. This is why app manufactures can promote alternative pricing plans and share other payment information only on their website or by sending their users an email.
According to Apple's statement in the press release, the users of the apps must give their consent to the communications and must also have the right to opt-out. The tech giant has also expanded from lesser than 100 price options to over 500 different price options for subscriptions, in-app purchases and paid apps.
The reason behind the new policy
For many years, Apple has been surrounded by controversies about its practices and treatment of developers on the App Store. Apple has made this change because many small app developers were filing a lawsuit against the company. This move is said to be the biggest and the most effective change the company has made in response to the accusations made by small app developers saying Apple uses monopolistic tactics on its App Store.
The company has finally decided to include new concessions and a new fund that will help small developers in America instead of settling the lawsuits. Up until now the iOS developers had to pay a share of their total revenue that was generated on the Apple app store, which was called the Apple Tax. Earlier Apple had said that it will try to resolve a class-action suit from the American app developers.
How can iOS users avail other payment options?
Since the App developers are not allowed to advertise payment methods within the apps themselves and can advertise other payment options only through email or their website, the users of the apps can sign up for alternate payment options on the app's website. Besides payment options, Apple will also allow App developers to make over 500 alternative pricing options for subscriptions, in-app purchases and paid apps, among others.
Apple's statement on the new policy
According to the statement by Phil Schiller who oversees the App Store said that, “From the beginning, the App Store has been an economic miracle; it is the safest and most trusted place for users to get apps, and an incredible business opportunity for developers to innovate, thrive, and grow.” He also added that, “We would like to thank the developers who worked with us to reach these agreements in support of the goals of the App Store and to the benefit of all of our users.”
Other concessions made by Apple
Apple will also continue to take its revenue cut but will allow a reduced commission to app developers that earn lesser than $1 million through the app store between June 2015 and April 2021. This is known to account for over 99% of the Apple app developers. This business can pay a reduced commission for the next three years as a part of Apple's App Store Small Business Program.
Apple will also be publishing an annual App Store transparency report that will include important information and statistics about the app review process. It will also contain significant data such as the number of apps rejected and the reason behind it, number of customers, data based on search queries and results written in detail.
During the difficult times of the Covid 19 pandemic, the tech giant had pledged its support to small businesses by offering over $100 million to the app developers. Over the years Apple has made many concessions in order to keep boundaries such as not allowing third-party apps. There was also no mention of the third-party app stores or page loading of apps in the press conference.
Frequently Asked Questions
What is the new apple policy for app developers?
Apple is allowing its app developers to advertise external payment methods through their website or email.
What is Apple Tax?
Apple tax is the share of the total revenue generated on the app store that is paid by iOS developers to Apple.
What are the other concessions Apple toward the app developers?
During the difficult times of the Covid 19 pandemic, the tech giant had pledged its support to small businesses by offering over $100 million to the app developers.