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Apple Updates Commission Policies

August 27th, 2021

Apple Updates Commission Policies
David Bell

by David Bell

CEO at Gummicube, Inc.

Apple announced two major changes to their App Store policies this week. Developers will now be able to communicate payment methods other than Apple’s in-app purchases directly to their users via email. Additionally, Apple will be offering lower commission rates to news publishers who agree to join Apple News.

Apple Class Action Settlement

Apple proposed changes to their App Store policies as part of a settlement with developers who brought a class-action lawsuit against the Cupertino tech giant. This coalition of small developers accused Apple of monopolistic practices, alleging that their "anti-steering” practices disadvantaged developers by not allowing them to offer iOS users lower prices that circumvent Apple’s in-app purchase commission.

Apple has been entangled in numerous lawsuits over the “App Store Tax” imposed on developers that distribute on iOS and iPadOS. Most notably the Epic v. Apple suit that has been dominating the headlines for the better part of two years. Epic, along with numerous other companies and governmental bodies all over the world, have decried Apple and Google for what many are calling their duopoly on the mobile app market.

This new policy was announced late Thursday evening, and when enacted it will allow developers to communicate promotions and discounts to their users via email. Apple’s press release states that developers may use contact information that has been collected from user in their apps, but that users must first consent to the communication and may opt out.

“Apple is also clarifying that developers can use communications, such as email, to share information about payment methods outside of their iOS app. As always, developers will not pay Apple a commission on any purchases taking place outside of their app or the App Store. Users must consent to the communication and have the right to opt out.”Apple Press Release, Aug 26, 2021

In addition to the communication guideline changes, Apple announced other steps they are taking as part of this settlement:

  • Apple agreed to maintain the App Store Small Business Program for at least the next three years. Developers earning less than $1 million USD annually will pay the lower commission of 15 percent, while larger developers will continue to pay the previous standard of 30 percent.
  • Apple has maintained that its App Store Search results will continue to be based on “objective characteristics like downloads, star ratings, metadata relevance, and user behavior” for at minimum the next three years.
  • Apple will allow developers to set prices that are not near whole-dollar for subscriptions, in-app purchases, and paid apps.
  • Apple will be adding content to their App Review website, and has agreed to maintain the option for developers to appeal the rejection of an app.
  • Apple agreed to release an annual app review process transparency report sharing statistics like the number of apps rejected, the number of Apple developer accounts deactivated and apps removed from the App Store, and data surrounding App Store Search queries and results.

Additionally, Apple has agreed to establish a CoVID relief fund for small developers in the US who have suffered losses as a result of the ongoing pandemic. This fund will be available to developers who have earned $1 million USD or less every calendar year across all associated apps since June of 2015.

Apple News Publishing Partners

Apple News Partner Program

Apple has also established an incentivization program to attract news publishing agencies to work with Apple News. The “News Partner Program” will offer lower App Store commission fees, 15 percent, provided they follow a few guidelines.

Participants must publish “original, professionally authored news content” in Apple News Format in the United States, the United Kingdom, Canada, and Australia. Publishers outside of these regions or those who do not wish to publish in Apple News Format must share news via an RSS feed. Additionally, these publishers’ apps must be available on Apple’s App Store and must offer auto-renewing subscriptions through Apple’s in-app purchasing.

Overall

In the first straightforward move to change the policies that have brought Apple into legal hot water lately, Apple has relented to allowing developers a way to circumvent their notorious App Store Tax. As part of a larger settlement to the Cameron et al v. Apple Inc. class action lawsuit, Apple will allow developers to directly contact their users with lower payment options that are outside of Apple’s in-app purchasing system. Alongside this settlement, Apple announced their new “News Partner Program” which will offer lower commission fees to news publishing apps who agree to publish their content to Apple News.

Want to learn more about App Store Optimization? Contact Gummicube and we’ll help get your strategy started.

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