ANALYSIS-Apple’s App Store concessions fail to address major regulators’ concerns

ANALYSIS-Apple's App Store concessions fail to address major regulators' concerns

Apple Store on 5th Avenue in New York

by Stephen Nellis

(Reuters) – In the space of a week, Apple has made two sets of changes to the App Store rules, which are the subject of lawsuits, regulatory review and legislation around the world, but the adjustments don’t address the biggest concerns raised.

Lawmakers and regulators are considering dismantling the App Store business model, a result that could cost Apple as much as 6% of its sales — an amount equal to $16 billion in its last fiscal year — and cut as much as 15% of its sales. profit, according to a last year’s estimate from analyst firm Cowen.

One of Apple’s most important concessions is allowing Netflix and other subscription services to provide a link to paid subscriptions outside of the app, which avoids Apple’s commissions. But many of the biggest companies of its kind had long since given up using Apple’s payment systems, so the change shouldn’t affect Apple’s finances.

That’s a sign that any fight over Apple’s rules is likely to continue, even if Apple defeats the closest threat — a US federal judge expected to announce a ruling in an antitrust case brought by Epic Games, maker of the “Fortnite games” ”.

“Mobile technologies have become essential to our daily lives, and now just two app stores have incredible power over which apps consumers can access and how they access them,” said US Senator Amy Klobuchar, Democrat who supported a project for app store law this week.

“When you see this same problem arising around the world, it becomes even more obvious that we need to act.”

Some of the loudest cries are for Apple to allow app stores run by other companies on its iPhone, which would provide a way around the current payment system that gives developers little ability to avoid giving Apple a share.

Critics also want the company to end so-called forwarding rules that prevent developers from telling customers how to pay developers directly for their apps.

Developers could bypass Apple’s rules completely if they were allowed to install software on iPhones without going through Apple’s App Store, but Apple doesn’t allow this, saying it jeopardizes the security of its users. Epic seeks this change in the “Fortnite” antitrust case.


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