U.S. Developers Can Now Offer Non-App Store Purchasing Option, But Apple Will Still Collect Commissions

[MacRumors]

Apple is making major changes to its U.S. iOS App Store policies, and developers are now able to direct customers to a non-App Store purchasing option for digital goods. Apple is allowing apps to feature a single link to a developer website that leads to an in-app purchase alternative, but Apple plans to continue to collect a 12 to 27 percent commission on content bought this way.

Apple's update and the backstory that led to it are a bit complicated, but what iPhone and iPad users need to know is that some apps in the U.S. storefront will soon feature a link to their website where subscriptions and other content can be purchased outside of the App Store in-app purchase system, likely with a discounted price.

Developers who want to offer this option will need to apply for a StoreKit External Purchase Link Entitlement, as Apple has outlined in both updated App Store Review Guidelines and the statement of compliance submitted to the Northern California U.S. District Court. With a Link Entitlement, a developer is able to direct a user to an out-of-app purchasing mechanism using an external purchase link. From Apple's modified App Store rules:

Developers may apply for an entitlement to provide a link in their app to a website the developer owns or maintains responsibility for in order to purchase such items. Learn more about the entitlement. In accordance with the entitlement agreement, the link may inform users about where and how to purchase those in-app purchase items, and the fact that such items may be available for a comparatively lower price. The entitlement is limited to use only in the iOS or iPadOS App Store on the United States storefront. In all other storefronts, apps and their metadata may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than in-app purchase.

If your app engages in misleading marketing practices, scams, or fraud in relation to the entitlement, your app will be removed from the App Store and you may be removed from the Apple Developer Program.

There are several requirements that developers need to adhere to maintain the privacy and security of the App Store ecosystem, and notably, Apple will collect a commission on purchases made using these Entitlement Links. Rather than 30 percent, Apple will collect a 27 percent fee on user purchases or year-one subscriptions made through the link. On the second year of a subscription, the commission fee drops to 12 percent, which is three percentage points lower than the 15 percent fee that Apple collects from second-year or longer subscriptions made through the in-app purchase system. Apps that participate in the App Store Small Business Program will be charged a 12 percent commission rate.

The commission will apply to transactions for digital goods and services that take place on a developers website within seven days after a user taps through an External Purchase Link to an external website.

Several key points about Entitlement Links are listed below.

• All links to outside purchasing methods must use the Entitlement Link system, and developers must apply and get Apple's approval.
• Developers are permitted to have a single plain link on one screen of an app. The link can be at a sign-in screen, in user settings, or elsewhere, but it can only be in one place. The single location may not be an interstitial, modal, or pop-up.
• The link can mention the specific price of content on a website, or that content is discounted on the website from the App Store price. Comparisons are allowed.
• Links cannot be placed directly on an in-app purchase screen or in the in-app purchase flow.
• Developers need to certify that the third-party payment service provider they are using for out-of-app purchasing meets industry standards for payment processors, and that they will offer users processes for managing subscriptions, requesting refunds, and disputing unauthorized transactions.
• Apps that participate in Apple's Video Partner Program or News Partner Program are not eligible for Link Entitlement.
• Apps that use the StoreKit External Purchase Link must continue to offer in-app purchases as an option.
• App Store pages are not able to include information about purchasing on a website or a link to a website.
• Digital purchases that are sold on an app's website through the Entitlement Link must be available for use in that app.
• The StoreKit External Purchase Link cannot discourage users from making in-app purchases or mimic an in-app purchase.
• Links must open a new window in the default browser of the device, and are not able to open a web view.
• No redirecting, intermediate links, or URL tracking parameters are allowed.
• Developers are required to provide a periodic accounting of qualifying out-of-app purchases, and Apple has a right to audit developers' accounting to ensure compliance with their commission obligations and to charge interest and offset payments.
  

The Link Entitlement process and the App Store changes are applicable only in the U.S. App Store. Apps for all other storefronts are not able to include buttons, external links, or calls to action that direct customers to alternative purchasing options.

Examples of how Entitlement Links can be used in apps​

Apple will provide an in-app warning to customers to let them know that they are leaving the App Store ecosystem to make a purchase on an external website and that App Store protections will not be available.

According to Apple's statement filed with the court, the requirements surrounding links are aimed at minimizing "fraud, scams, and confusion," while also providing developers with an opportunity to "entice users to other platforms" and give customers a choice between non-App Store purchasing and in-app purchases.

The changes today stem from Apple's 2021 legal battle with Epic Games. Apple won the dispute and the court did not find that Apple had violated U.S. antitrust law, but Apple was at the time ordered to remove "anti-steering" rules preventing developers from informing customers about alternatives to in-app purchases. That order has been on hold during the appeals process, but the appeals process ended today.

Both Apple and Epic Games had appealed to the United States Supreme Court,... Click here to read rest of article

Article Link: U.S. Developers Can Now Offer Non-App Store Purchasing Option, But Apple Will Still Collect Commissions

 

[erikkfi]

This sounds like the most minimal, almost trollish, form of compliance with anti-steering. I hope it gets challenged and that the US iOS app market is much larger and more open soon.

 

[contacos]

The F. Sorry but it’s non of Apples business what I am doing outside of the ecosystem once I click on a link!

 

[Fraserh02]

Via Apple Pay only would be funny!

 

[iOS Geek]

In the same article, we have these two statements: "likely at a discounted price" and "Apple will still collect commissions".

Because of one...I doubt the other.

That part out of the way...a developer won't see a single cent out of me outside of the App Store. As long as the App Store remains a purchasing option, then that's not a problem. If it stops being an option...sorry, no money from me anymore!

 

[chewbaka]

On the second year of a subscription, the commission fee drops to 12 percent, which is three percent lower than the 15 percent fee that Apple collects from second-year or longer subscriptions made through the in-app purchase system.

12% is 20% lower than 15%.

 

[Nickerbocker]

"Apple will collect a 27 percent fee on user purchases or year-one subscriptions made through the link."

This is such nonsense considering at this point the money processing is not handled by Apple anymore. By the time you pay the 3rd party processor and Apple's 27%, you are doing far far worse than just paying Apple 30%, and my guess is that is the point.

 

[Nickerbocker]

12% is 20% lower than 15%.

Percent difference compared to absolute percent.

 

[Rogifan]

So Apple is admitting the 30% was always about them believing revenue a developer earns is because of Apple and therefore they deserve a cut. Even though many developers say Apple is not steering customers to them, doesn’t promote them on the App Store, etc. You could maybe make this argument for apps that are iOS only but apps that are cross-platform and available on the web…why does Apple deserve a cut of their business?

 

[kildraik]

Ah, yes. A customer seeking purchasing privacy from a tech giant must now be a part of a purchasing audit by said tech giant. Cook's grip is the tightest it's been it seems.

 

[swiftapplefan]

Gosh, I jumped out of my seat because I misread the headline as Apple allowing third party app purchase and install. Not yet, not yet…

 

[I7guy]

This sounds like the most minimal, almost trollish, form of compliance with anti-steering. I hope it gets challenged and that the US iOS app market is much larger and more open soon.

Considering the current court case along with apples $1B in yearly attorney fees, I think apple has done some homework.

 

[Pitogyro]

I guess it kind of makes sense because the app was discovered on the App Store, therefore they feel entitled to charging commission, even if it was purchased elsewhere. It's kind of an attribution model, albeit it comes across as ghastly money grab. It's causing devs to resent them but they simply don't care - they prioritise reporting revenue growth whatever it takes.

 

[contacos]

Ah, yes. A customer seeking purchasing privacy from a tech giant must now be a part of a purchasing audit by said tech giant. Cook's grip is the tightest it's been it seems.

I wonder how that is even legal (I don’t think it would be legal here) like if I am paying with my credit card or PayPal or whatever outside of the AppStore, how can Apple even know that, what I bought or that it’s actually been processed unless they gain access to the developers revenue streams for some reason.

I guess it’s basically like a Google Ads affiliate link under the disguise of privacy? Pay per Conversion so to say

 

[a m u n]

 

[DelayedGratificationGene]

Apple still collecting its deserved commissions even for side loading for hosting the world’s greatest platform was never in doubt. Why didn’t epic or any others see this? It’s because the media fabricated this “side loading no commission scenario” lol.

 

[Analog Kid]

There we go, problem solved.

 

[Rogifan]

"Apple will collect a 27 percent fee on user purchases or year-one subscriptions made through the link."

This is such nonsense considering at this point the money processing is not handled by Apple anymore. By the time you pay the 3rd party processor and Apple's 27%, you are doing far far worse than just paying Apple 30%, and my guess is that is the point.

Because it was never about payment processing. Back when the App Store first launched Steve Jobs said they intended to run it break-even. But once IAP launched and Apple realized how much money they could make taking 30% of every IAP (plus hardware sales growth slowing), running the App Store at break even was no longer the goal. If you have an app and make any money off it Apple believes it’s responsible for that and thus you owe them 30%. Even if they’re not steering any customers to you or promoting you in the App Store. When’s the last time you downloaded an app because Apple promoted it?

 

[Mrkevinfinnerty]

Like Microsoft in the 90s, but worse.

 

[mdriftmeyer]

The F. Sorry but it’s non of Apples business what I am doing outside of the ecosystem once I click on a link!

That commission has to do with registered 3rd party developers and the contracts they sign. None of these companies has a business without either the Apple or Google platforms. The fact people believe $100/year is too steep but will go blow thousands of dollars per year on frivolous purchases then complain about a contract between an Application Developer and the company by which makes it possible to even have a business is the height of entitled and arrogance.

Wake me when all these third party developers start investing millions upon millions in global targeted advertising because that is what it will take to create even a modicum of interest.

The world knows the smart phone has two major platforms. Those points of presence guarantees third party OEMs billions of potential clients.

The fees they pay are pittance to what it would cost to develop what Google and Apple invested over several decades to achieve.

 

[Analog Kid]

View attachment 2337369

Apple is 15% for their bulk customers and Epic is losing money at 12% as documented in their court case.

 

[klasma]

The F. Sorry but it’s non of Apples business what I am doing outside of the ecosystem once I click on a link!

No, but the app developer agreement with Apple effectively states that apps may not link to sites that allow purchases without Apple getting a commission, so Apple will remove apps that link to such sites because they violate the developer agreement.

Apple wants you to come up with the idea on your own to google for the commission-free payment site and not have the app lead you to it and spell it out for you.

 

[Chuckeee]

View attachment 2337369

Stop confusing my outrage with facts.

 

[AlexESP]

The F. Sorry but it’s non of Apples business what I am doing outside of the ecosystem once I click on a link!

Exactly, it shouldn’t; but since they’re forced to open their products outside their ecosystem, they need to put a giant banner saying that there will be no refunds. Of course, it doesn’t matter, we all know no one will read it and we’ll hear complains and more complains.

 

[mannyvel]

You can pay outside of the store with no charge, but if you tell people they can pay outside the store and put a link you'll pay.

Hmmm.