In some markets outside the U.S., Apple is being forced to make changes to its long-time policy that prevents developers from promoting third-party in-app payment platforms. This policy has enabled Apple to collect its 15% to 30% cut of in-app revenue generated by the App Store. A big change to Apple’s policies took place on March 30th when the company announced that “reader” apps can send subscribers links to membership sites where customers can sign up for service or otherwise manage their accounts.
Apple is being forced to make changes to its App Store policies by overseas regulatory agencies and watchdogs
Another legal battle that is forcing Apple to change its policy is coming from the Netherlands. There, an antitrust watchdog ruled that Apple’s decision to prevent dating apps from using alternative payment platforms is anti-competitive.
The bottom line is that the JP Morgan analyst says that Apple will not hurt its profits by changing its payment policy for reader apps. Chatterjee says, “This suggests that in a worst case scenario where all reader app consumers circumvent App Store payments altogether, which we see as highly unlikely, the impact would be limited to 1-2% of EPS.”
The translation? Apple should not fear having to give up its 15% to 30% cut on those apps and neither should investors. In fact, if Apple were to suddenly allow developers to promote alternative App Store payment platforms, the stock might get a boost since the uncertainty over legal action in various countries (including the U.S.) would be removed. And if there is one thing Wall Street hates, it is uncertainty.
Should Apple make big changes to the App Store avoid U.S. and foreign government involvement?
Should Apple continue to fight in order to keep its current policies in place, or should it give developers the option to promote alternative payment platforms in order to stop domestic and overseas investigations? Let us know what you think by dropping your comment in the box below.