Netflix Wins Small Victory Over Apple

John Lister's picture

The iOS Netflix app now has a subscribe button. It's a small change that could make a big difference to Apple's bottom line, as well as opening up legal challenges. Since 2018, Netflix has not offered any way to subscribe through its iPhone and iPad app. Instead, users had to sign up on the website, then install the app and sign in.

That wasn't a case of Netflix being deliberately awkward but rather not wanting to pay a commission to Apple, which demands a 30 percent cut of any subscriptions made through an app, falling to 15 percent after the first year.

Companies like Netflix which refused to pay the commission were not only banned from using in-app subscriptions, but couldn't include a link to a payment page on a website. That led to several legal complaints and even antitrust investigations in some countries.

"Reading" Apps Exempt

Now Netflix has taken advantage of Apple relaxing its rules, if only slightly. It now allows "reading apps" include a link to websites for subscription signups, albeit with a warning. In Netflix's case that reads:

"Any accounts or purchases made outside of this app will be managed by the developer 'Netflix.' Your App Store account, stored payment methods, and related features, such as subscription management and refund requests, will not be available. Apple is not responsible for the privacy or security of transactions made with this developer." (Source:9to5mac.com)

The definition of "reading app" is not quite what the name suggests. It covers apps where the primary function is digital content, including text, audio, music and video.

Games Not Included

That's prompted complaints from the head of videogames company Epic Games, who says games should qualify as digital content and allow the external links. (Source: techradar.com)

That's a long-running sore point as it was a lawsuit from Epic Games that may have prompted Apple to relax the rules. Apple lost that case, meaning it can't stop apps from directing people to a third-party payment option. However, Epic was unsuccessful in arguing Apple should be forced to let users pay that way within the app itself.

What's Your Opinion?

Does Apple have any right to take commission from subscription apps? Does customers having to subscribe on a website cause much disruption? Should games be part of the "reader app" category?

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