App Store Leading Executive Phil Schiller originally raised concerns about the 27% fee that the iPhone manufacturer planned to buy app developers outside the App Store, according to the company on Monday. He testified in court. In addition to being a potential compliance risk, he suggests that the fees create a “hostile relationship” between Apple and the developer, and Apple Money is a source of transactions made outdoors. It appeared to require the audit rights to verify whether they were owed or not. App Store.
Apple typically charges a 30% fee for in-app purchases, but the 27% discounted fee was the result of the epic Game Apple ruling. In 2021, the courts need to stop app developers from linking to other ways to pay beyond Apple's own in-app purchases (IAPs) while the tech giant is not a monopoly I decided that.
Apple technically complied with this ruling by modifying its App Store guidelines to allow developers to link to their websites from the iOS and iPados apps to provide alternative methods to customers.
However, Apple has reduced the fees by 3% on these purchases.
At the time, Fortnite Maker Epic Games CEO Tim Sweeney said the Tech Company undermined the 2021 order from US District Judge Yvonne Gonzalez Rogers. In addition to Apple's IAP, other purchasing mechanisms.
Apple and Epic Games have since returned to federal court to determine whether Apple violated her original order that forced the App Store to compete.
According to Schiller's testimony, he initially opposed these external purchase committees.
“…I had great concern about the collection of funds from developers,” he said.
He chased after developers who didn't pay the committee and “has rules about how to handle non-wages and whether they ultimately mean us” that “some sort of collection agency “I said I was worried about what I had done. You must audit the developer. ”
Schiller said he was worried about “how all of these things will change the relationship between Apple and the developer in the way I found harmful.”
The hearing unearthed the extensive process that Apple has undergone, discussing the benefits of still charging fees. Using a host of documents and emails, lawyers detailed the before and after that took place internally at Apple as executives considered different options when it came to compliance with court orders.
Despite the initial concerns raised by Schiller, the pricing committee, which includes Apple CEO Tim Cook, former CFO Luca Maestri and Apple's legal team, along with Schiller, will ultimately be on the committee on these external purchases. We have decided to charge the developer.
The company also determined that the same 3% fee reduction would apply to developers of small business programs, reducing fees from 15% to 12%, which were already reduced for transactions outside the App Store.
Documents referenced in the court showed that Apple analyzed the financial impact on developers who chose to link to their website.
For example, in one model, Apple worked to determine how a “seamless experience” using non-IAP methods would allow customers to abandon transactions. By modeling where this tipping point is, Apple was able to determine when links would stop them from becoming an advantage for developers. This will return to using IAP.
Apple also discovered that more restrictive rules regarding the placement and formatting of the links themselves can reduce the number of apps that have decided to implement these external links. The company has considered the economic impact of excluding other partners, such as video and news programs, from the new program.
The company also weighed various options on when to charge a commission. We once thought we would charge a 27% fee for external purchases made within 72 hours of the link being clicked. However, when the new guidelines were released, the time frame had extended to seven days.
The lawyer suggested that Cook himself was involved in how the App Store customer warnings would appear, and recommended that he update the text that appears when an external link is clicked. In one version, the link warned customers that they “no longer traded with Apple.” The link was then updated, subtly suggesting that there could be privacy or security risks in purchases purchased online.
At another meeting on the committee, people also expressed concern about Apple charging for web transactions.
“This may be perceived as if you are trying to charge what happens on the internet,” one of the meeting notes said.