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The court feud with Epic, played out in a federal court in Oakland, California earlier this year, likely poses a greater threat to Apple’s App Store business. Epic wants to force the iPhone maker to allow app developers to avoid App Store commissions entirely, which would be a huge financial blow for Apple. A federal judge is expected to make a decision in this case soon.
While Apple described the changes as a major concession for app developers, critics argued the move was more for show than a major refresh to its business.
“A year ago, these concessions probably could and still might have worked, but legislators have built up momentum that may be hard to stop,” said Paul Gallant, Cowen investment bank analyst.
Critics say the more substantial reforms that Apple hopes to avoid will include significantly reducing or eliminating the 30 percent cut Apple takes from App Store purchases (such as an in-game item) and allowing other companies to install competing app stores on iPhones. He said he would. or allowing customers to download apps directly from the internet.
With a few exceptions, Apple hasn’t compromised on its 30 percent cut over the years. In 2016, it lowered its app users’ subscription commission to 15 percent a year later, and last year agreed to cut its cut for junior app developers to 15 percent.
The change, announced Wednesday, allowed a number of so-called reader apps that provide content for digital media such as books, newspapers, music and video to direct customers to their own websites to purchase subscriptions.
Until then, under Apple’s long-standing rules, apps like Netflix and Spotify weren’t allowed to advertise in their apps, where users could purchase subscriptions on their website. However, Spotify emails new members a link to the website where it advertises their paid subscription, but does not explicitly tell users to bypass Apple.
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