Surprise, surprise. Apple has announced a compromise with the developer community over the tight grip it wields on the App Store. The company will now allow third-party developers to appeal violations of App Store guidelines and even challenge specific rules if they think those rules are unfair. Apple will also allow app updates to continue being released even as disputes work their way through the review process.
The announcement was dropped quietly during Apple's annual WWDC conference where it showed off the latest versions of iOS, macOS, tvOS, and more.
Apple has come under intense pressure in recent weeks after the developer of the subscription-based HEY Email, Basecamp, publicly lambasted the company on Twitter for trying to force it to offer in-app subscriptions. Doing so would mean giving Apple a 30 percent cut of each subscription sale in the first year, and 15 percent every year afterwards. Basecamp offers its $99 per-year subscriptions to HEY Email over the web in order to avoid paying the Apple tariff — but Apple threatened to remove HEY Email if it didn't starting offering those subscriptions through the App Store. The company is relying more on services revenue as growth of iPhone sales slows.
Apple hasn't made it clear what will happen with in-app subscriptions, or whether HEY Email will be able to continue offering subscriptions exclusively through the web. It's also not clear what will happen with appeals and how often Apple might concede to developers.
Developers rallied against Apple — Besides Basecamp, companies including Microsoft and Spotify have been outspoken in their disdain of Apple's control over the App Store, the only place where iOS users can download apps. Apple effectively controls the rails and can decide the fate of any company that relies on offering its app through iPhones and iPads. Microsoft's own president Brad Smith last week said publicly that mobile "app stores" — without naming Apple specifically — have more monopoly control than it did during the 1990s, when the Department of Justice sued it for the control it wielded over Windows. Microsoft eventually settled by allowing PC manufacturers to install their own software on new computers.
Facebook's new Gaming app has struggled to get into the App Store in recent months, facing its fifth rejection last week as Apple says it violates App Store guidelines by trying to bypass the store and offer its own mobile games marketplace. Facebook Gaming allows users to watch live streams of games and play some casual mini-games.
Apple is front-running regulation — Coincidentally enough, the European Union announced last week that it's investigating Apple's behavior in regards to the App Store. Spotify had pushed the EU to go after Apple, arguing it favors its own Music subscription service by making it a default app on iOS and because it's not subject to the 30 percent tariff that Spotify would be. Spotify currently does not allow customers to subscribe through its iOS due to the fee — something Basecamp has pointed out as evidence that Apple uses its guidelines to target only the weakest companies that will cave under pressure.
Apple also revealed today that in iOS 14 it will for the first time allow users to change their default browser and email apps; music hasn't been mentioned.
It was expected that Apple would front-run any EU investigation with these types of changes to placate developers following intense pressure, though today's updates don't address the fees that Apple charges. The company has long said the fees are necessary to maintain a safe App Store with a team that vets every piece of software; developers argue the fees in combination with tight rules are burdensome and excessive. If a company like Spotify doesn't have an iOS app they basically don't exist, yet Apple gets to decide whether or not they're allowed to be in the store.
Apple generated about $50 billion in App Store revenue in 2019, though $35 billion of that went to developers. At only 5 percent of Apple's overall revenue of $260 billion, commissions from the App Store aren't huge — but it is increasingly relying on services to grow its overall business.