Apple Extends In-App Purchase Exemption for Developers

Apple Extends Covid-Related App Store Rule Deferrals

According to Apple, the global pandemic has not yet reached a point where previously implemented accommodations can be rescinded. The iPhone manufacturer has once more postponed the reinstatement of an App Store regulation that permitted application developers to circumvent Apple’s standard in-app purchasing protocols for designated services.

Background on the Deferral

This deferral specifically concerns services that transitioned to virtual formats due to the continuation of Covid-19 outbreaks. Apple will maintain the deferral of App Store Review Guideline 3.1.1, which mandates that applications providing “paid online group services” process transactions through in-app purchases.

Developers whose initial business models centered on in-person interactions, rather than virtual ones, have benefited from this exemption during the pandemic. They were able to avoid utilizing Apple’s in-app purchase system.

Initial Scope and Subsequent Criticism

Initially, Apple’s adjustment only applied to direct, person-to-person services. Examples included medical consultations, tutoring sessions, real estate showings, and fitness training. However, Apple faced public criticism from Meta (Facebook) for continuing to levy commissions on group service events.

Meta argued that these commissions could negatively impact small businesses during the pandemic. This criticism, however, was motivated by Facebook’s desire to gain permission to integrate Facebook Pay, its own payment platform, and waive associated fees.

Apple’s Response and Temporary Measures

Rather than concede to Meta’s request, Apple temporarily suspended its fees for online group services, encompassing both one-to-few and one-to-many formats, such as online seminars and group fitness classes. This addressed concerns about profiting from struggling businesses without providing a competitive advantage to Facebook Pay.

Repeated Deadline Extensions

As the pandemic persisted, Apple repeatedly extended the deadline for the deferral’s conclusion and the return to Apple’s in-app payment system. The initial deadline was moved to June 2021 in November 2020.

Further extension occurred in April 2021, pushing the deadline to December 31, 2021. Developers were reminded of the approaching deadline last November.

Impact of the Omicron Variant and Current Status

The emergence of the omicron variant prompted another postponement. Impacted developers now have until June 30, 2022, to resume utilizing Apple’s in-app purchase system.

Apple anticipates this revised timeframe will be more suitable for resuming revenue collection. The company also extended the deadline for implementing account deletion functionality within applications, citing the complexity of implementation.

Broader Context: Legal and Regulatory Challenges

These extensions coincide with increasing scrutiny of Apple’s in-app purchase business model. The company is currently involved in an ongoing legal battle with Epic Games, which is under appeal.

Furthermore, Apple was recently penalized by a Dutch regulator for non-compliance with antitrust regulations related to its in-app purchase infrastructure. Similar regulations regarding in-app payments have also been implemented in South Korea.