Apple allows modest concession to Netflix over app store          

However, games apps will still have to use Apple's in-app purchase system, which gives Apple up to a 30% commission on downloads and in-app subscriptions.

Apple said the change will go into effect globally early next year for so-called reader apps spanning content like magazines, newspapers, books, audio, music and video. 

Apple will allow developers of some apps like Netflix to link from its app store to external websites for payments by users, a modest concession to global scrutiny of the 30% cut it typically takes from services and purchases on the iPhone.

The technology giant said the change, settling an investigation by Japan’s Fair Trade Commission, will go into effect globally early next year for so-called reader apps spanning content like magazines, newspapers, books, audio, music and video. 

To date, Apple has forced such applications to use its in-app purchase system, which gives Apple up to a 30% commission on downloads and in-app subscriptions. That rule will still apply to games, the most lucrative class of mobile apps, as well as in-app purchases.

“When it comes to in-game content purchases, which make the bulk of revenues for the App Store, they have kept their walled garden locked to outsiders,” said Amir Anvarzadeh, senior strategist at Asymmetric Advisors. “Nevertheless, Apple is clearly under the spotlight” and “lower royalty fees or handling fees in the case of in-game content purchases are inevitable,” he said.

The announcement comes at a time of rising regulatory scrutiny and criticism of the market dominance of Apple and Google on mobile platforms. 

South Korea earlier this week passed a bill that’s set to force the two leading app store operators to allow users a choice of online payment methods. The first legislation of its kind, the bill will become law when signed by President Moon Jae-in and similar measures are under consideration by US lawmakers.

And India’s competition regulator was also reported to have started an investigation into Apple’s in-app payments.

Apple’s historic resoluteness about maintaining its 30% cut was relaxed in November when the company announced it would reduce its fee to 15% for app makers earning up to $1m a year. 

The latest news helps the company achieve a settlement with Japan’s regulator, which is now closing its investigation into the App Store. 

Apple has committed to improving the transparency of its app reviews and give annual reports to the country’s regulator for the next three years as part of the settlement.

“We have great respect for the Japan Fair Trade Commission and appreciate the work we’ve done together, which will help developers of reader apps make it easier for users to set up and manage their apps and services,” Phil Schiller, who oversees Apple’s App Store, said in a statement.

Companies like Netflix and Spotify have long complained that Apple doesn’t allow them to link to their web portals for users to sign up for their services. 

Apple has previously rejected or removed third-party applications that attempted to steer users to web-based alternative payment methods and Netflix has simply declined to offer an in-app sign-up option as a result. 

Last month, as part of a preliminary settlement of a class-action lawsuit with App Store developers, Apple agreed to pay out $100m and to let US-based software makers advertise outside payment methods to consumers via email. 

The decision appears similarly incremental.

In-game spending accounts for more than half of App Store sales -- $26bn of $41.5bn of consumer spending in the first half of this year, according to Sensor Tower -- but is not affected by this new policy change. 

Apple’s change won’t resolve its legal dispute with Epic Games over in-app purchases in global hit "Fortnite", which alone generated more than $1bn of sales through Apple’s platform in its 30 months on the App Store. Epic wants to be able to handle in-app purchases directly.

Bloomberg