App Store: cornered, Apple changes strategy and makes historic concessions to developers

Sometimes, by dint of determination, the little ones succeed in making the big ones fold. In the modern David vs. Goliath remake that has pitted coalitions of app developers around the world against Apple for years, the web’s thumbs are on the verge of a historic victory. Under the threat of several lawsuits in the United States and Europe, the Cupertino giant has offered to give up the automatic annuity that it was granting itself on applications hosted on its App Store.

Concretely, applications will be able to send an email to their mobile users, informing them that they can buy a subscription or pay a purchase through their website rather than directly in the App Store. For consumers, this does not change much: they will simply be informed that there is a second payment option for their purchases, in addition to Apple’s platform. But for the developers of applications, it is a small revolution, because they would then finally be able to bypass the famous “Apple tax” on “in-app” purchases, which captures up to 30% of their income.

Apple vs Epic Games: three things to know about this crucial trial for the app economy

Cornered on all sides, Apple changes strategy by offering concessions

This historic move by the American firm is not yet set in stone, as it has yet to be approved by uA California court, which would end a lawsuit brought in 2019 by a coalition of small developers united in class action. The agreement that Apple is proposing to avoid the courts also provides for giving developers more leeway to set the prices of their apps, their subscriptions and the purchases they offer “in-app”. Apple finally intends to create a fund of 100 million dollars to help small American publishers, earning less than one million dollars per year for all their apps in the United States.

These concessions reveal a balance of power that no longer leans in favor of Apple, and a Tim Cook forced to change strategy. Until now, the multinational maintained firm pressure on application publishers, but it now seems to want to ease tensions to avoid the courts and above all, to give a signal of cooperation to politicians.

Because the giants of the Net are no longer in the odor of sanctity and Apple is cornered on all sides. EIn addition to this collective action, its commercial practices on the App Store are also in the sights of the European Commission and American regulators, who have each opened investigations that could lead to massive fines.

Above all, Apple fears new regulations, in particular the Digital Markets Act in preparation in Europe, and new anti-competitive laws in the United States, which provide, among other things, to attack the Apple-Google duopoly in the economy of applications. The bitten apple brand is also being sued in Europe by the world’s number one music streaming company, Spotify, and is also awaiting, in the coming days, the verdict of a crucial lawsuit between it and Epic Games, the Fortnite game editor. Always for the same reason: its practices considered abusive and anti-competitive on its app store.

Apple: Apps on the App Store Spend $ 643 Billion in 2020

Apple’s omnipotence on the application economy questioned

The situation imposed for years by Apple is as follows: application publishers who want to access users of iPhones – which accounts for 20% of the global smartphone market – are forced to use only the payment system of the App. Store for each purchase made in their mobile application. By the way, Tim Cook’s firm grants itself a non-negligible commission of 30% on each transaction, reduced to 15% in certain specific cases such as the first year of life. of an application if its turnover does not reach the million dollars.

Publishers are thus faced with a dilemma: either they accept the pricing conditions set by Apple, or they are excluded from the App Store. Except that this platform is the only application store authorized on its smartphones: in other words, refusing to give 30% of its income on iPhone to Apple means no longer having any income at all since it is impossible to download the application. elsewhere than on the App Store. For its part, the giant of “Big tech” justifies its practices because it considers itself the best ally of developers. In 2020, applications hosted on its space generated $ 634 billion in spending according to the company. But this line of defense is becoming more and more difficult to maintain while the European Union and the United States want to supervise the activities of so-called “structuring” platforms, that is to say which are essential for their ecosystem. are both judge and party.

Apple: Apps on the App Store Spend $ 643 Billion in 2020