Apple Video Program Partners Like Disney+, Max Can’t Bypass App Store In-App Payment Requirement

Apple is claiming it’s complying with a court ruling to let app developers choose to bill customers of their iPhone or iPad apps directly, rather than be forced to use Apple’s App Store.

But some of Apple’s partners, including Disney+ and Warner Bros. Discovery’s Max, won’t have that option in the U.S. That said, given Apple’s new terms for out-of-app purchases, those partners would be disinclined to circumvent App Store in-app payments anyway.

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The U.S. Supreme Court on Tuesday, Jan. 16, declined to review appeals by Apple and Epic Games of a 2021 district court ruling in the “Fortnite” maker’s antitrust lawsuit against the tech giant. While largely ruling against Epic, the judge in that decision barred Apple from preventing developers from promoting other forms of payment in their iOS apps aside from using the App Store.

In a court filing Tuesday, Apple said it is “complying with this requirement by adopting a new Guideline that expressly permits developers with apps on the iOS or iPadOS App Store U.S. storefronts to include buttons or external links with calls to action within their apps that direct users to alternative, out-of-app purchasing mechanisms.” But it’s hardly an attractive choice: Apple will apply a 27% commission to transactions for digital goods and services that take place on a developer’s website — only marginally less than the 30% cut it takes for in-app purchases through the App Store.

Meanwhile, according to Apple’s court filing, apps participating in the Apple Video Partner Program or the News Partner Program are not eligible use the “link entitlement” option, as spotted by TechCrunch.

The Apple Video Partner program, first launched in 2016, lets premium subscription video providers “participate in a new TV watching experience on the Apple TV app,” per the company. Partners include Amazon Prime Video, Disney+, Max, Starz and Viaplay, according to the Apple site. What’s germane here is that companies participating in the video and news partner programs pay only a 15% fee (whereas any other subscription provider that generates at least $1 million in revenue annually must pay a 30% commission in the first year before dropping down to 15%).

Apple’s critics blasted the company’s move to charge a 27% fee for external payments as failing to conform with the court ruling.

“Once again, Apple has demonstrated that they will stop at nothing to protect the profits they exact on the backs of developers and consumers under their app store monopoly,” Spotify said in a statement, adding that Apple’s move is “outrageous and flies in the face of the court’s efforts to enable greater competition and user choice.”

“Apple’s approach to ‘compliance’ with the District Court’s decision will not benefit developers and consumers,” Rick VanMeter, executive director of the Coalition for App Fairness (CAF), a group whose 70-plus members include Spotify, Epic Games, Match Group, Tile and Deezer. “The new 27% commission on payments [Apple] does not process defies the intention of the District Court’s injunction and undermines competition. These changes do nothing to enhance consumer choice, lower prices for in-app purchases or inject competition into Apple’s walled garden. It is precisely this type of abusive, monopolistic behavior that makes it imperative for Congress to pass the Open App Markets Act.”

Apple did not respond to a request for comment.

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