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App StoreAppleTech

Apple’s new payment option draws criticism for maintaining high fees

Apple's attempt to open up its App Store with outside payment links has failed to attract interest from major developers, who balk at the 27% fee and additional processing costs.

By
Shubham Sawarkar
Shubham Sawarkar's avatar
ByShubham Sawarkar
Editor-in-Chief
Shubham Sawarkar is a technology journalist at GadgetBond, covering Apple, AI, consumer technology, software, gadgets, and product launches. His work explores emerging technologies, industry developments, product...
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May 12, 2024, 12:46 PM EDT
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Apple logo in Apple Store in Hongkong
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In a recent hearing before US District Judge Yvonne Gonzalez Rogers, Apple faced harsh criticism over the lack of uptake on its outside payment options introduced earlier this year. The initiative, aimed at addressing anti-competitive concerns, allowed third-party apps to include links to external payment portals. However, Apple’s own figures revealed a dismal response: out of an estimated 65,000 app developers, only 38 applied for the program.

The main deterrent? The hefty fees associated with the scheme. Apple disclosed that developers opting for the outside payment links would face a steep 27% fee, on top of payment processing charges. Shockingly, this total surpassed the longstanding 30% cut that Apple traditionally takes from in-app purchases.

Judge Rogers didn’t mince her words, suggesting that Apple’s primary aim seemed to maintain its revenue streams rather than genuinely address anti-competitive practices. She questioned why Apple, despite involving a significant number of individuals in the decision-making process, failed to consider the financial burden on developers.

Apple’s defense seemed feeble in the face of such scrutiny. Testimony from company executives revealed that none of the major app developers had shown interest in the new payment program. The absence of industry heavyweights raised doubts about the effectiveness of Apple’s remedy.

Even Epic Games, embroiled in a long-standing legal battle with Apple, argued that the tech giant’s revisions to the App Store rules fell short of meaningful change. The judge echoed these sentiments, pointing out the lack of empirical data supporting Apple’s claim that the changes would lead to lower prices for users.

Indeed, the hearing underscored a glaring oversight on Apple’s part: the absence of thorough analysis to support its assertions. Judge Rogers expressed skepticism about the decision-making process, emphasizing the need for data-driven policies.

As the hearing concluded, it became evident that Apple’s attempts to appease regulators and critics fell short of expectations. With the proceedings set to continue, the spotlight remains on Apple’s App Store policies and their implications for developers and consumers alike.


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