The European Commission launched an investigation into Apple Inc. (NASDAQ:AAPL)’s a contentious rule limiting the amount of information available to app developers about payment options beyond the App Store.
Apple prohibits developers from including buttons, external links, or any other call to action, which directs customers other payment options other than in-app purchases. In particular, antitrust regulators are concerned that developers are forced to Apple’s App Store payment service, which deducts most app subscriptions and in-app purchases.
The complaint is not new but was renewed after Apple rejected app updates from Basecamp’s newly launched subscription-based email app called “Hey.” The email app allows subscribers to access its nouveau email service across web, Windows, Mac, Linux, iOS, and Android but not via standard email protocols. Initially, Apple approved Hey iOS app before putting it on pause and limiting Basecamp from sending updates or bug fixes until it allowed users to subscribe to Hey’s service through an in-app purchase.
In a statement, the European Commission said Apple’s competitors have been forced to either disable the in-app subscription possibility or increased their subscription fee in the 6the app and passed Apple’s fee to consumers. In both cases, Apple did not allow developers to give alternative subscription possibilities outside of the app.
Increasing Backlash against app stores run by Apple and Google
There has been growing backlash against app stores run by Google and Apple, with many developers complaining about the high fees collected to access consumers’ mobile devices. The European Commission is the first major regulator to launch an investigation into the matter formally. As opposed to Apple, Google’s Android offers more choice for payment methods. Apple consumers can only use App Store to install apps on the iPhone, and in many cases, Apple deducts between 15% and 30% from developers offering the subscription. Many are not allowed to offer purchase options outside the App Store, a move that ensures that Apple gets the cut. Although some apps are allowed to function without a subscription bought through Apple, they cannot direct users to purchase the service outside of Apple’s digital walls.