Business News Digital Legal Media Top Stories

Apple to allow Spotify and Netflix to link app users to payment websites from next year

By Chris Cooke | Published on Thursday 2 September 2021

Apple has announced a concession in its App Store rules that will allow companies like Spotify and Netflix to include a link within their iOS apps directing people to web pages where they can sign up for a subscription. The rule change is the result of action taken by the fair trade regulator in Japan. Though a new law just passed in South Korea might end up having a much bigger impact.

The rules enforced by both Apple and Google over companies that make apps for use on iOS and Android powered devices have been criticised for years, of course, but have come under ever increasing scrutiny in the last couple of years. The rule most opposed by app-makers is that in-app payments have to be made via Apple and Google’s commission-charging transaction platforms.

Regulators in multiple countries have been scrutinising these rules of late, including in the European Union on the back of a formal complaint by Spotify, which accuses Apple of anti-competitive conduct. Meanwhile, lawsuits have also been filed in multiple courts around the world, with the litigation pursued against Apple by Fortnite maker Epic Games probably getting the most press.

The big rule change announced by Apple yesterday was the result of an investigation by Japan’s Fair Trade Commission. One of the big gripes for Spotify and Netflix has often been that – not only are they obliged to take in-app payments via Apple’s platform – but they can’t even signpost alternative payment options outside of the app, such as on their websites.

From next year Spotify and Netflix will be able to add a link within their apps to alternative payment options of that kind. Although the rule change will only apply to so called ‘reader apps’, which are basically apps that allow people to access digital content like books, podcasts, music and videos that has either been previously purchased or which is accessed via a subscription. So none of this helps Epic Games.

Apple said in a statement yesterday: “To ensure a safe and seamless user experience, the App Store’s guidelines require developers to sell digital services and subscriptions using Apple’s in-app payment system. Because developers of reader apps do not offer in-app digital goods and services for purchase, Apple agreed with the JFTC to let developers of these apps share a single link to their website to help users set up and manage their account”.

It added: “While the agreement was made with the JFTC, Apple will apply this change globally to all reader apps on the store. Reader apps provide previously purchased content or content subscriptions for digital magazines, newspapers, books, audio, music, and video”.

Meanwhile, Apple’s Phil Schiller said: “Trust on the App Store is everything to us. The focus of the App Store is always to create a safe and secure experience for users, while helping them find and use great apps on the devices they love. We have great respect for the Japan Fair Trade Commission and appreciate the work we’ve done together, which will help developers of reader apps make it easier for users to set up and manage their apps and services, while protecting their privacy and maintaining their trust”.

It’s the second change to Apple’s App Store rules announced in recent days. Last week Apple confirmed that it would also amend its rules to explicitly confirm that app-makers can directly email their users and signpost them to alternative payment options. That rule change was part of a proposed settlement to one of the lawsuits that has been filed over the App Store rules, an American class action referred to as Cameron et al v Apple Inc.

Apple explained last week: “To give developers even more flexibility to reach their customers, 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”.

Although these rule changes do address some of the issues previously raised by Spotify, the streaming firm was keen to stress yesterday that some issues remain. A spokesperson said, simply, “a limited anti-steering fix does not solve all our issues”.

Meanwhile on Twitter, Epic Games boss Tim Sweeney said: “In Apple’s carefully-worded statement on safety, it’s hard to discern the rationale that [the rule change for ‘reader apps’] is safe, while Fortnite accepting direct payments remains unsafe”.

He added: “Apple should open up iOS on the basis of hardware, stores, payments, and services each competing individually on their merits. Instead, they’re running a literally day-by-day recalculation of divide-and-conquer in hopes of getting away with most of their tying practices”.

All of which means Spotify, Netflix, Epic and the wider app-making community will continue to watch closely the ongoing regulator investigations in Europe and elsewhere, and the ongoing litigation, in particular the outcome of the Epic v Apple case in the US.

Alongside all that, they’ll also be monitoring the implementation of a new law in South Korea which out-right bans Apple and Google from forcing all in-app payments to be taken through their proprietary platforms. Passed by the country’s national assembly earlier this week, that law will come into effect once signed off by President Moon Jae-in, whose party very much endorsed the move.

Although obviously only applicable within South Korea, app-makers will be hoping this new law will ultimately be replicated elsewhere in the world. Needless to say, on this development Sweeney approves. He tweeted: “Korea has rejected digital commerce monopolies and recognised open platforms as a right. This marks a major milestone in the 45 year history of personal computing. It began in Cupertino, but the forefront today is in Seoul”.