After the dust settles from the developer class-action settlement, the South Korean law, the JFTC announcement, and the Apple v. Epic decision, I think the most likely long-term outcome isn’t very different from the status quo — and that’s a good thing.
Allowing external purchases
Here’s what I think we’ll end up with:
- Apple will still require apps to use their IAP system for any qualifying purchases that occur in the apps themselves.
- All app types will be allowed to link out to a browser for other purchase methods.
Most apps will be required to also offer IAP side-by-side with any external methods.1
Only “Reader apps” will be exempt from this requirement.2
- Apple will have many rules regarding the display, descriptions, and behavior of external purchases, many of which will be unpublished and ever-changing. App Review will be extremely harsh, inconsistent, capricious, petty, and punitive with their enforcement.3
- Apple won’t require price-matching between IAP and external purchases.
These few but important corrections reduce Apple’s worst behavior and should relieve most regulatory pressure.
The result won’t look much different than the status quo:
Most big media apps (qualifying as “reader” apps) won’t offer IAP, but will finally be allowed to link to their websites from their apps and offer purchases there.
Many games will offer both IAP and external purchases, with the external choice offering a discount, bonus gems, extra loot boxes, or other manipulative tricks to optimize the profitability of casino games for children (commissions from which have been the largest portion of Apple’s “services revenue” to date).
Most importantly, many products, services, and business models will become possible that previously weren’t, leading to more apps, more competition, and more money going to more places.
External purchase methods will evolve to be almost as convenient as IAP (especially if Apple Pay is permitted in this context), and payment processors will reduce the burden of manual credit-card entry with shared credentials available across multiple apps.
The payment-fraud doomsday scenarios argued by Apple and many fans mostly won’t happen, in part because App Review will prevent most obvious cases, but also because parents don’t typically offer their credit cards to untrustworthy children; and for buyers of all ages, most credit cards themselves provide stronger fraud prevention and easier recourse from unwanted charges than the App Store ever has.
I don’t expect side-loading or alternative app stores to become possible, and I’m relieved, because that is not a future I want for iOS.
When evaluating such ideas, I merely ask myself:
“What would Facebook do?”
Facebook owns four of the top ten apps in the world. If side-loading became possible, Facebook could remove Instagram, WhatsApp, the Facebook app, and Messenger from Apple’s App Store, requiring customers to install these extremely popular apps directly from Facebook via side-loading.
And everyone would.
Most people use a Facebook-owned app not because it’s a good app, but because it’s a means to an important end in their life. Social pressure, family pressure, and network lock-in prevent most users from seeking meaningful alternatives. People would jump through a few hoops if they had to.
Facebook would soon have apps that bypassed App Review installed on the majority of iPhones in the world.
Technical limitations of the OS would prevent the most egregious abuses, but there’s a lot they could still do. We don’t need to do much imagining — they already have attempted multiple hacks, workarounds, privacy invasions, and other unscrupulous and technically invasive behavior with their apps over time to surveil user behavior outside of their app and stay running longer in the background than users intend or expect.
The OS could evolve over time to reduce some of these vulnerabilities, but technical measures alone cannot address all of them.
Without the threat of App Review to keep them in check, Facebook’s apps would become even more monstrous than they already are.
As a user and a fan of iOS, I don’t want any part of that.
No alternative app stores
Alternative app stores would be even worse. Rather than offering individual apps via side-loading, Facebook could offer just one:
The Facebook App Store.
Instagram, WhatsApp, the Facebook app, and Messenger could all be available exclusively there.
The majority of iOS users in the world would soon install it, and Facebook would start using leverage in other areas — apps’ social accounts, stats packages, app-install ads, ad-attribution requirements — to heavily incentivize (and likely strong-arm) a huge number of developers to offer their apps in the Facebook App Store, likely in addition to Apple’s.
Maybe I’d be required to add the Facebook SDK to my app in order to be in their store, which they would then use to surveil my users.
Maybe I’d need to buy app-install ads to show up in search there at all.
Maybe I’d need to pay Facebook to “promote” each app update to reach more than a tiny percentage of my existing customers.
And Facebook wouldn’t even be the only app store likely to become a large player on iOS.
Amazon would almost certainly bring their garbage “Appstore” to iOS, but at least that one probably wouldn’t go anywhere.
Maybe Google would bring the Play Store to iOS and offer a unified SDK to develop a single codebase for iOS and Android, effectively making every app feel like an Android app and further marginalizing native apps when they’re already hurting.
Media conglomerates that own many big-name properties, like Disney, might each have their own app stores for their high-profile apps. Running your own store means you can promote all of your own apps as much as you want. What giant corporation would resist?
Don’t forget games! Epic and Steam would come to iOS with their own game stores. Maybe Microsoft and Nintendo, too.
Maybe you’d need to install seven different app stores on your iPhone just to get the apps and games you already use — and all without App Review to keep them in check.
Most developers would probably need to start submitting our apps to multiple app stores, each with its own rules, metadata, technical requirements, capabilities, approval delays, payment processing, stats, crash reports, ads, promotion methods, and user reviews.
As a user, a multiple-app-store world sounds like an annoying mess; as a developer, it terrifies me.
Apple’s App Store is the devil we know. The most viable alternatives that would crop up would be far worse.
The way Apple runs its business isn’t perfect, but it’s also not a democracy.
I loved this part of Judge Yvonne Gonzalez Rogers’ decision in Apple v. Epic, as quoted by Ben Thompson’s excellent article that you should read:
Apple has not offered any justification for the actions other than to argue entitlement. Where its actions harm competition and result in supracompetitive pricing and profits, Apple is wrong.
I interpret “entitlement” without a negative connotation here — Apple is entitled to run their platform mostly as they wish, with governmental interference only warranted to fix market-scale issues that harm large segments of commerce or society.
As a developer, I’d love to see more changes to Apple’s control over iOS. But it’s hard to make larger changes without potentially harming much of what makes iOS great for both users and developers.
Judge Gonzalez Rogers got it right: we needed a minor course correction to address the most egregiously anticompetitive behavior, but most of the way Apple runs iOS is best left to Apple.
If the South Korean law holds, IAP may not be required — but only in South Korea. With this exception, I expect the rest of these rules to be enforced the same way globally. ↩︎
Apple defines “reader” apps as “[allowing] a user to access previously purchased content or content subscriptions (specifically: magazines, newspapers, books, audio, music, and video).”
This includes many apps that Apple’s services compete with, such as Netflix, Spotify, and Kindle, that raise anticompetitive concerns among regulators and legislators when forced to give Apple 30%. ↩︎
App Review has higher-level queues for managerial review of controversial rules or edge cases, typically identifiable from the outside by an app stuck with “In Review” status for days or weeks, and often ending in a phone call from “Bill”.
I’d expect any app offering external purchases to have a very high chance of being escalated to a slower, more pain-in-the-ass review process, possibly causing it not to be worthwhile for most small developers to deal with.