Apple is not a stranger to the court system, as the big company it is. However, the electronics giant is fighting the same battle in two different continents, as it is dragging the Russian federation to court over a ruling that would force it to change its popular App Store business model. The Russian Federal Antimonopoly Service had decreed that Apple allowed developers to show alternative payment methods within their apps, a move that Apple expressly forbids.
Apple has had a lucrative source of income from taking between 15 and 30 percent off all revenue flowing through the App Store on both the iPhone and iPad.
It has always been a sticky point for developers as the fee applies to even subscription services like magazines and streaming platforms. In businesses where Apple competes with the developers like Spotify, it creates a situation where the app has to increase the subscription cost to account for Apple’s cut. This makes their services less competitive. The developer may also choose to absorb the cut by offering the same subscription prices as Apple, making them get less profit.
Per a report from FT, Apple seeks a judicial review of the ruling by the FAS, which was delivered in August and gave the American company a September 30 deadline to comply. Apple would face a fine that would be calculated based on its revenue.
Apple did not comply with the ruling, and the FAS has commenced legal actions against the company. Apple is fighting back by dragging the FAS to court to reverse the verdict.
The Russian case started after both developers and consumers complained to the regulator that it was sometimes cheaper to buy a product on the seller’s website than through iPhone and iPad apps due to the markup placed by Apple.
It came after FAS fined Apple the equivalent of $12 million for breaching antitrust rules when it restricted Kaspersky’s parental control app, a decision Apple is fighting in a separate lawsuit.
The Cupertino-based company has faced a host of antitrust investigations on whether it is breaking anti-monopoly rules in countries worldwide.
Apple had spent a good part of 2021 embroiled in a lawsuit brought by Epic, a top game-making company in its home country. While Apple is appealing the case, it still has to abide by the court ruling that mandates it to allow app makers to show links to external payment methods within their apps. It has until December 9 to comply with the ruling.
However, going by Apple’s attitude toward the FAS ruling in Russia, it remains to be seen if it will follow the court ruling in the US.
It is to be noted that the US court decision does not stop Apple from taking a cut on payments made through the external links, although it will have to find a way to track such payments. But from the CEO’s submission earlier this year, it seems Apple will try to get a cut on these alternative payments.
Apple has tried to push back the date the ruling is set to take effect by citing the substantial engineering required to accommodate the ruling. It says it has to update its policies and APIs to implement features like Parental Controls.
Back in August, the company agreed to back down on its App Store developer policies, but the changes it effected have been minimal.
Apple developers are now allowed to email app users about alternative payment options. But developers are still neither allowed to include an alternative payment link nor mention the alternatives within their apps. Even when requesting users’ emails, the developer must not mention that it wants to inform them of another payment method.
These policies mean Apple is still refusing to stop its anti-steering policy and has made only feeble attempts to address antitrust concerns.
One of Apple’s main rivals, Google, is also in the same position. Still, it has announced it will allow links to other payment methods in apps in its Play Store but will also charge developers for the payment, at 4 percent lower than when the payment goes through its Play payment system.