South Korea Passes Bill Banning Apple From Requiring Developers to Use App Store In-App Purchase System

[Marbles1]

I strongly suspect this push to change Apple's App Store is not coming from Apple product users. It is coming from people on competitive platforms who want to take away Apple's competitive advantage. Despite that, Apple cannot just pull out of territories because more of these laws will be passed in other places. What they need to do is start trialing some of their countermeasures they have been working on for this eventuality. Developers believe they have won a free ride. I rather suspect they are in for a very different kind of ride.

Apple should give developers and consumers compelling reasons to continue to use apple's payment service.

E.g. loyalty points to be redeemed against apps/products, ease of use in payment management (e.g. a better 'cancel my subscriptions / pause my subs process), better data on spend, price guarantees, and so on.

 

[bobbie424242]

I want to see Schiller and his app store mafia exec clique fume in rage, as this will extend to other countries.

 

[ian87w]

Uh oh, what now Tim?
Technically Apple can just allow this without changing anything. I mean Netflix and Spotify already take money externally, not using IAPs. The trick is, will Apple allow developers to advertise it within their apps.

 

[q64ceo]

I see nothing about when this soon-to-be law goes into effect in this or the WSJ article. If the timing is too aggressive then Apple may simply shut down all app purchases and subscriptions in South Korea.

Heck, Apple may do it anyways to play a game of chicken with the government and send a message to other countries. I don’t think they should, but they might.

Apple doesn’t really need app revenue. They could take just 3% or whatever to pay the credit card fees and pay the server cost out of pocket. It would still be worth it because it’s a major driver of iPhone sales, which are their bread and butter.

If I were Tim Cook, I would drop the cut to something much lower, maybe 10%, ASAP and encourage Google to do likewise. That would take the force out of most of the anti-trust stuff globally. And it would still allow Apple to have their control. Given the results here in South Korea, shareholders would be less upset because the threat of lost App Store revenue is now very real.

It’s better to keep your walled garden and charge lower admission then let the government tear down the walls!

South Korea is one of the largest markets for electronics sales. Apple would not want to give their competitor usershare by not complying with the law.

 

[ian87w]

Apple should give developers and consumers compelling reasons to continue to use apple's payment service.

E.g. loyalty points to be redeemed against apps/products, ease of use in payment management (e.g. a better 'cancel my subscriptions / pause my subs process), better data on spend, price guarantees, and so on.

I have a feeling Apple's solution will be like Apple arcade, a subscription. Something like Google Play Pass.

 

[Headrush69]

Then only purchase apps that use Apple's infrastructure. If you never had a problem being forced to Apple's pay system, you still don't have a problem because you wouldn't be forced to use an alternative pay system or App Store. Just keep doing what you're already doing. Problem solved.

Which initially sounds great until developer decides to only offer their app on a different store so I’m forced to use an unknown 3rd party biller.
I wouldn’t put it by any corporation if they can make a few more $$$
Basically it boils down to is who do you want to pay? Apple, developer, google through ads.

 

[q64ceo]

Which initially sounds great until developer decides to only offer their app on a different store so I’m forced to use an unknown 3rd party biller.
I wouldn’t put it by any corporation if they can make a few more $$$
Basically it boils down to is who do you want to pay? Apple, developer, google through ads.

Sucks to be you. Things are changing. Learn to live with it or buy a Windows phone where you can have only one store and one payment method (no security updates, tho, because Windows phones are no longer produced. So choose wisely.)

 

[Kierkegaarden]

Sanctions. The trade authority can bar the importation of the iPhone until it complies with local law.

I’m saying that this will have negligible effect on Apple because I believe most users will reject any options outside the App Store.

No more use of Touch ID/Face ID for transactions, built-in security, and the plethora of developer tools that Apple provides. I don’t think users want this, and I don’t think most developers want this. This is something only politicians with no concept of the technology could dream up.

 

[Timster83]

What is perhaps often overlooked is the number of ways in which developers could be incentivized to use Apple's payment system.

If you pay Apple 15% or 30% of revenue depending on your business situation, then you get to use Apple Maps, Apple's notification server, Apple's in-app purchase mechanism and perhaps other things.

If you want to roll your own payment solution, then you also get to integrate your own mapping provider, build a notification server, develop your own in-app shopping experience.

 

[AndiG]

In your face, Apple. Now it is time for competition - just offer a better experience and a better price point than competing payment providers and you are ready to go!!!

 

[DelayedGratificationGene]

Then only purchase apps that use Apple's infrastructure. If you never had a problem being forced to Apple's pay system, you still don't have a problem because you wouldn't be forced to use an alternative pay system or App Store. Just keep doing what you're already doing. Problem solved.

And highly likely they will

 

[SBlue1]

Bye-bye, South Korea.
Now this virus has been released, let's see if other countries catch it.
As a customer, I don't want a hundred shops and pay-systems, I need one that has everything.
I nerver had a problem to be "forced" to Apple's in-App-System.
More chaos forced by lawmakers, silly.

You wouldn't even have noticed that other people pay with a different payment method! LOL. Just use whatever makes you happy.

 

[Janschi]

In your face, Apple. Now it is time for competition - just offer a better experience and a better price point than competing payment providers and you are ready to go!!!

'better experience', for whom?
Apple couldn't have build a better experience for either the customer or the developers as everything is unified in one place. But people like you, without any UX knowledge wouldn't get that.

 

[69Mustang]

Which initially sounds great until developer decides to only offer their app on a different store so I’m forced to use an unknown 3rd party biller.
I wouldn’t put it by any corporation if they can make a few more $$$
Basically it boils down to is who do you want to pay? Apple, developer, google through ads.

You aren't forced to do anything. You can choose to not use the app. Developers are going to go where the money is. If it's outside the App Store, that's where they will go. If it's not, they'll stay inside. You as the consumer make the choice to use "outside" apps or Apple supported apps. Nowhere in that situation are you forced to do anything.

 

[Benjamin Nabulsi]

Surprise surprise, Samsung..
Apple should pull out 🤷🏻‍♂️

 

[Marshall73]

Shut the APP store in South Korea then?

 

[Middling]

Apple should give developers and consumers compelling reasons to continue to use apple's payment service.

E.g. loyalty points to be redeemed against apps/products, ease of use in payment management (e.g. a better 'cancel my subscriptions / pause my subs process), better data on spend, price guarantees, and so on.

Apple charge literally 10x what other payment processors do, so I don't think any of the incentives you listed are going to help.

They're going to have to compete on price and drastically drop their fees. At 5% everyone but the very largest of companies would stick with Apple's system for simplicities sake. Any higher than that and I think even small developers will start to look into alternative payment systems.

 

[Marshall73]

Nothing is stopping you continuing to use Apple's payment system.

Just like nothing is stopping you using Safari, Pages, Calculator or any other app/service offered by apple.

Well, other than app developers not using it in their app that you use.

 

[mrochester]

They already do. Google’s fee is $25 one-time and Apple’s is $99/year.

That won’t up for the loss in revenue though. I wonder if the developer fee will be hiked to make up the difference?

 

[mrochester]

You aren't forced to do anything. You can choose to not use the app. Developers are going to go where the money is. If it's outside the App Store, that's where they will go. If it's not, they'll stay inside. You as the consumer make the choice to use "outside" apps or Apple supported apps. Nowhere in that situation are you forced to do anything.

But that’s a worse situation than already exists for consumers. Instead of the consumer being able to use the store they want and the app they want, the user now has to compromise.

 

[AndiG]

'better experience', for whom?
Apple couldn't have build a better experience for either the customer or the developers as everything is unified in one place. But people like you, without any UX knowledge wouldn't get that.

I - for myself - had one of the best selling business apps in Germany and even Apple was delighted.
So - honestly - I just don't care about you my friend.

Australia, EU? Next please! Turn this company down, it has become to large, to gready and evil. But maybe it helps Apple to understand why CSAM is such a dangerous feature. It will just need a law and CSAM will scan for Chinese tanks rolling over students.

 

[acgmph]

Developer fees will change. Apple will not lose a dime on this. Got a free app in the store? Keep paying $99 a year. Got a paid app that’s using an Apple API? We’ll need you to pay X% of app revenue across all payment methods, of which we can track because we own the phone and can see everything.

 

[mrochester]

Developer fees will change. Apple will not lose a dime on this. Got a free app in the store? Keep paying $99 a year. Got a paid app that’s using an Apple API? We’ll need you to pay X% of app revenue across all payment methods, of which we can track because we own the phone and can see everything.

I think it’s more likely Apple will front load the fees if the commission % goes down. I’m sure they’ve done all sorts of analysis to work out how they would need to tinker with the figures to make up for lost revenue.

Sadly, front loading the developer fees will make it harder for small time developers to ever get started. It would effectively be the de-democratisation of the App Store.

 

[Abazigal]

Apple charge literally 10x what other payment processors do, so I don't think any of the incentives you listed are going to help.

They're going to have to compete on price and drastically drop their fees. At 5% everyone but the very largest of companies would stick with Apple's system for simplicities sake. Any higher than that and I think even small developers will start to look into alternative payment systems.

The thing is that these payment processing companies don’t have an App Store to manage. They don’t vet the apps, they don’t provide the SDKs, and they don’t pay for the infrastructure used to host them either.

They are literally riding on billions of App Store infrastructure for free. Apple pays for all this out of its own pocket, which is where that 30% goes. Offsetting the costs of running the App Store.

It’s easy to charge less, when you are also doing less and providing less for the money.

 

[dvanwinkle]

I don’t think that Apple has to allow OTA side-loading. This could mean that Apple just needs to add a way for developers to be able to offer their app as a download. Then, users will have to connect their devices to a computer to transfer.

The barrier to entry could be high enough that most users will still use the App Store for the same apps that they currently use it for.