Apple and South Korea have no say in loosing the Android App Store or Google’s walled garden: An analysis of a new court ruling in dating app developers

The Coalition for App Fairness is a group of companies founded bySpotify,Epic Games, Tile and other that are attempting to loosen the grip of Apple and Google on the mobile app industry. Rick VanMeter, the executive director of the California AIDS Foundation said that Apple will not benefit developers or consumers from the District Court’s decision. “These changes do nothing to enhance consumer choice” or to “lower prices for in-app purchases or inject competition into Apple’s walled garden.”

Apple has implemented similar policies in other countries, but regulators aren’t too fond of it. In 2022, Apple started letting dating app developers in the Netherlands use alternative payment options with the same 27 percent tax. Apple was fined $55 million for failing to comply. Apple also implemented a similar policy for all app developers in South Korea, where a new law prevents Apple and Google from forcing developers to use first-party payment processors. South Korea warned both Apple and Google over the possibility of fines for breaking the new payment rules.

For any consumers brave enough to keep going and make a purchase, Apple will collect up to 27 percent of the revenue, via a newly created fee that extends the much-loathed levy that previously had been placed only on in-app purchases. In order for Apple to audit their records, developers will have to provide a “periodic accounting of qualifying out-of-app purchases.” Collection and enforcement will be difficult and, in many cases, impossible.

Apple’s tweak allows developers selling apps in the US to link from their apps to purchase pages on their own websites. It was previously banned, as developers were locked into using Apple’s payments system and paying up to 30 percent of revenue to Apple. But to link out to alternative purchase options on their websites, developers must apply for permission and also offer in-app purchases through Apple’s billing system. And they have to certify that they have processes for handling billing complaints and that their payment processors meet what Apple calls “certain industry standards.” The wording used to link the alternative purchase options needs Apple’s approval. Users will receive a full screen warning when they click those links, when they enter a world where Apple’s protections do not apply.

That outcome adds to a glum picture for developers like Fortnite maker Epic, consumers, and governments from around the world that have been trying for years to loosen the restrictions Apple and Google maintain over downloading, paying for, and using apps on mobile devices. A handful of small victories in the US, Netherlands, and elsewhere have forced policy changes at Apple and Google and cost the companies some revenue. But overall Apple’s App Store and Google’s Play Store function much as they always have and retain their hold over businesses that want to reach customers on mobile devices.

What can $83 million in legal defense fees buy? Billions of dollars in Apple’s App Store revenue was under threat until this week.