Global Economy

Apple makes another concession on App Store fees


Apple CEO Tim Cook delivers the keynote address at Apple’s annual Worldwide Developers Conference at the Bill Graham Civic Auditorium in San Francisco, California, onJune 13, 2016.

Gabrielle Lurie | AFP | Getty Images

Apple said on Monday that companies that offer digital classes or virtual events through iPhone apps won’t have to use Apple’s App Store in-app purchases through June 2021, enabling them to charge their customers directly without Apple’s 30% commission fee.

Apple said the extension was to help businesses by giving them more time to transition in-person events to digital events during the Covid-19 pandemic.

“Although apps are required to offer any paid online group event experiences (one-to-few and one-to-many realtime experiences) through in-app purchase in accordance with App Store Review guideline 3.1.1, we temporarily deferred this requirement with an original deadline of December 2020,” Apple wrote on its developer blog. “To allow additional time for developing in-app purchase solutions, this deadline has been extended to June 30, 2021.”

An Apple spokesperson did not have a comment beyond Monday’s announcement.

The move is the latest olive branch from Apple to critics of the App Store, which say the iPhone giant’s control over the platform and fees are anticompetitive. Apple also announced earlier this month that it planned to reduce its commission to 15% for app developers making under $1 million on Apple’s platforms in 2021.

Apple originally waived the in-app purchase requirement for group classes and events in September, after Facebook introduced a paid events feature and tried to include copy inside its apps warning that a cut of transactions for paid events would go to Apple. But at the time, Apple only suspended its fees through December. Monday’s announcement extended it for 6 more months.

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Apple requires iPhone apps to use Apple’s App Store payment processing, which takes 30% of total payments, and has been an antitrust focus of policymakers around the world. However, in-person goods, like ordering a ride through Uber or buying something from an online retailer, are not required to use App Store payments.

In September, Apple clarified that one-to-one person classes through an iPhone app could be billed directly, but any virtual classes where an instructor or group works with multiple people were required to use App Store payments.

The New York Times reported in July that some app makers, such as Airbnb and ClassPass, were switching business models to include more digital classes as in-person experiences were negatively affected by the pandemic, and Apple had asked them to use in-app purchases which entitled them to 30% of the sale.

Apple CEO Tim Cook was asked about the company’s policies around virtual classes and events at a congressional hearing in July by House Judiciary Committee Chairman Rep. Jerry Nadler.

“The pandemic is a tragedy and it’s hurting Americans and many people from all around the world and we would never take advantage of that,” Cook said. “I believe the cases that you’re talking about are cases where something has moved to a digital service, which technically does need to go through our commission model.”



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