Apple Introduces New App Store Policy Following Supreme Court Ruling—Spotify Not Happy

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Apple introduces App Store policy changes following Supreme Court ruling

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Photo Credit: James Yarema

Following the Supreme Court ruling, Apple has updated its App Store policies to allow developers to link to outside payment methods. But developers like Spotify will still pay a 27% cut for those out-of-app payments.

Apple updated Section 3.1.1(a) of its App Store Review Guidelines to clearly outline the new rules for developers who want to use an alternative payment method. Those rules outline that developers must apply for an “entitlement” to link to outside payment methods—and must still offer an in-app purchase system using Apple’s App Store.

The 27% fee does not significantly reduce the ‘Apple Tax’ that has vexxed third-party services like Spotify and Epic Games. Epic Games CEO Tim Sweeney called the decision ‘anticompetitive’ and says his company will continue to contest Apple’s “bad-faith compliance plan in District Court.” As Sweeney rightly points out, third-party payment processors typically take between 3-6%, making the 27% cut that Apple takes not a reduction of all.

Spotify has long protested the Apple Tax, stating that competing with Apple by paying out 15-30% of its commission makes it hard to offer its services to iOS users without charging more for the subscription. It also restricts the amount of pay-as-you-go features that Spotify can add as it explores podcast subscriptions and audiobook purchases in its quest to become a one-stop shop for audio.

What’s clear is that Epic Games isn’t happy with the ruling as it stands, so expect more legal action in the Epic. vs. Apple case. Apple’s Services division generated $22 billion in revenue during the company’s last fiscal year, ending September 2023.

Even with the ruling that it must allow outside payment methods—Apple has imposed a fee to maintain that revenue flow. Now even if someone signs up for a Spotify Premium subscription via the App Store but through an outside payment method—Apple will still receive a cut of that sale.