Apple's New Commission Policy: A Controversial Step Beyond the App Store

Posted by Christopher Farm on January 24, 2024 · 2 mins read

In a move that has sent ripples through the tech and business communities, Apple implemented a policy that redfines the boundaries of its financial power. The policy imposes a 27% commission on out of app purchases, provided the purchase occurs within a seven-day window from clicking the link. While seemingly a natural progression of Apple’s monetization strategy given recent rulings for allowing 3rd party commerce processing, this decision raises significant questions about the balance between platform maintenance and overreach.

  1. A Shift in Revenue Attribution: Traditionally, Apple’s 15-30% commission on in-app purchases was confined to transactions occurring directly within the App Store’s ecosystem. The new policy extends this reach, allowing Apple to claim a portion of the revenue from transactions that technically occur outside of its immediate platform. This blurs the lines of revenue attribution Apple can claim, potentially claiming income that isn’t rightfully Apple’s. Imagine a scenario where a customer clicks a link to a website but doesn’t come back for 6 days. Then on the 7th day they go directly to the website to make the purchase. Apple is going to claim revenue from that direct purchase that arguably isn’t theirs.

  2. Implications for User Experience: Developers are concerned this policy complicates the user experience. By monitoring and taxing purchases made outside the app environment, even if only for a week after the link is clicked, Apple is seen as infringing on the autonomy of app developers and the choices of consumers. Not only that, the worse user experience influences developers to give up the additional 3% of rev share to build purhcases directly in app.

As regulators grapple with the implications of Apple’s new policy, the broader consequences for the digital ecosystem remain uncertain. The controversy is less about the App Store revenue share, and more about the principles of fair competition, innovation, and the rights of businesses and consumers in the digital age.