Battle over payment interface: apple chief warns against app store-“flea market”

Battle over payment interface: apple chief warns against app store-'flea market''flohmarkt'

Apple CEO Tim Cook has spoken out clearly against a direct payment option in iPhone apps, which is being demanded by several app providers. If developers:inside could offer their own payment options, it would turn the App Store into a "flea market" Cook warned in an interview "And you know the level of confidence you have in a flea market".

Cook: "No one wins" by offing

By such an opening of the payment interface became "no one win", Cook argued to the Canadian newspaper Toronto Star. In such a market there would be fewer people and therefore less innovation for users. For apps only a smaller circle of buyers would remain, which would be bad for developers.

Unbelievably, Cook also said that Apple would lose revenue because the company’s automatic commission is tied to the mandatory use of Apple’s payment interface – in its lawsuit with Epic Games, the iPhone company argued that it had a vested interest in in-app revenue from iOS users.

Digital content must be available for purchase in iOS apps via Apple’s In app purchase (IAP) interface, other payment systems are not allowed. Apple can thus retain up to 30 percent commission from each purchase.

Fight against app store rules

Several companies, including Epic Games, are now up in arms against the rules and the level of commission: The game Fortnite was kicked out of the App Store last year after the clandestine integration of a direct payment option – a deliberate breach of the rules – and can no longer be played on the iPhone and iPad in the current version. The providers also complain that the rule only applies to the sale of digital content, but not to the sale of physical goods in apps – these can be offered for sale through any payment interfaces, commission to Apple does not have to be paid for it.

Apple has also defined exceptions for video services under certain conditions, which allow Amazon, for example, to charge digital video purchases via its own payment interface.

In the interview, Cook again insisted that Apple is not dominant in any market and that there is a "battle" for developers and market share in the smartphone market. The rough court battle with Epic Games begins in May, and several regulatory bodies are already reviewing Apple’s App Store rules in parallel.

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