Daniel Ek, chief executive officer and co-founder of Spotify AB, stands for a photograph after a news conference in Tokyo, Japan, on Thursday, Sept. 29, 2016.
Akio Kon | Bloomberg | Getty Images
On Wednesday, Apple said that content subscription apps, like Spotify, can provide a link out to a website in their apps to sign up for a subscription, allowing the developer to bypass Apple’s 15% to 30% cut of gross sales.
The new rule will allow streaming businesses to have higher margins on subscriptions from iPhone users and will enable these companies to more efficiently convert potential iPhone customers to subscribers without ceding billing and other support to Apple. Apple’s App Store is the only way to install software on an iPhone and Apple reserves the right to reject apps over violations of its guidelines.
“Apple’s selective tweaks to its App Store rules are welcome, but they don’t go far enough,” Spotify chief legal officer Horacio Gutierrez tweeted on Thursday.
Spotify’s complaint against the rule against linking out goes back to at least 2016, when the company complained to Apple in a formal letter after a version of its app was rejected over efforts to link to sign up customers directly. Spotify said at the time the rule caused grave harm to the company and its customers.
Spotify was not the only stock up on the news. Netflix, which would also qualify under Apple’s new rules, was up about 2%. Match Group, which has complained about Apple’s App Store and offers a “Tinder Plus” subscription in its Tinder app, was up nearly 5%. Bumble was up over 4% during trading on Thursday.
Currently, when downloading Netflix’s app, it presents a message for users who haven’t signed in yet, without a link: “You can’t sign up for Netflix in the app. We know it’s a hassle.”
Under Wednesday’s change, services should now be able to provide a link in the app to sign up on the service’s website. Previously, that was prohibited and developers were encouraged to use Apple’s App Store billing system.
Apple’s concession, made as part of a settlement with the Japanese Fair Trade Association, does not affect all apps on the app store. Gaming transactions, the bulk of App Store revenue, will not be allowed to link out to bypass Apple billing.
Which companies gain the benefits of the rule change will also depend on which apps Apple deems as “reader apps,” which are apps that provide content subscriptions, as well of the details of how Apple will change the wording of its guidelines.