Apple designs a new 27% fee

Hey y’all, it’s Austin Carr in Boston. Apple finally delivered a long-desired change to its mobile store, and app makers are angrier than ev [View in browser]( [Bloomberg]( [by Austin Carr]( Hey y’all, it’s Austin Carr in Boston. Apple finally delivered a long-desired change to its mobile store, and app makers are angrier than ever. But first... Three things you need to know today: • Google DeepMind scientists [discuss forming AI startup]( • OpenAI’s CEO wants to [create chip factories]( • Apple will open tap-to-pay to rivals [in EU antitrust case]( ‘User confusion’ Apple Inc. is now taking requests from app developers who want to [process customers’ payments]( in the US using a system other than the one offered by Apple. Software makers were eager for the change, hoping the alternative channel would at long last let them avoid Apple’s 15% to 30% fees on app transactions. The iPhone maker quickly dashed those hopes: Even with such internet-based purchases, Apple said it’d take as much as 27% of each outside transaction. The change only came about because of Epic Games Inc.’s high-stakes legal war with Apple over claims of anticompetitive practices. Apple mostly proved victorious in the lawsuit, except with regard to its [policy that barred Epic and others]( from directing app users to external means of buying digital goods or subscriptions. Yet, in following the court’s ruling against the so-called anti-steering provision, Apple devised a set of restrictions for web purchases that’ll probably reduce the likelihood of app developers ever bothering to try an alternative. And Apple did it in the most Appley way: using carefully considered software design. In order for developers to include a website link in their apps to an outside payment system, they’ll first need to submit a request form to Apple. If approved, the link can only be displayed once within the app. It must look like a text URL — meaning it can’t be a candy-colored button that says “Use PayPal” — and the text itself must match one of seven templates (e.g., “For special offers, go to [www.example.com](”). When clicked, the link will surface a warning from Apple about the risks of transacting with third-party websites, with “continue” or “cancel” buttons. The website has to open in the device browser, rather than from a pop-up within the app, where, depending on the type of service, a user can sign in or register for a new account. In other words, even if you were already logged into that site, you’ll likely have to log in again. On top of all this, developers must still offer in-app purchases through Apple — with the higher fee — and cannot “discourage users” from paying that way. This maze could serve as a blueprint for how Apple might open up its [tap-to-pay technology]( to other mobile wallets in an attempt to appease European regulators, as it offered Friday. Even if PayPal Holdings Inc. or another provider were granted access to the iPhone’s contactless payments tool, one could imagine certain rules making it far less seamless than Apple’s own wallet. Epic Chief Executive Officer Tim Sweeney [called the app link process]( a “bad-faith ‘compliance’ plan” that was full of “glaring problems.” In a statement, Spotify Technology SA said Apple’s latest move is “outrageous and flies in the face of the court’s efforts to enable greater competition and user choice.” If you want to get a sense of the flow, download the Netflix app on your iPhone or log out of your account. To settle an investigation by Japan’s Fair Trade Commission in 2021, Apple [carved out an exception for a category]( of “reader” apps — e-book services, video streaming — to link to external web accounts instead of using Apple’s purchasing system. But Netflix and its ilk got a better deal. They can link to their website on multiple pages, don’t have to offer payments through Apple and aren’t required to pay Apple a commission. For the new rules, Apple spelled out its plan in great detail in a notice of compliance to the court. The company’s legal team said the new rules and fee structure abide by the court’s injunction and are modeled after frameworks resulting from [similar regulatory pressures abroad](. In the filing, Apple also said the developer requirements for using external links are necessary to “avoid user confusion.” Now it’s just the developers who are confused. —[Austin Carr](mailto:acarr54@bloomberg.net) The big story One of New York’s top bankers said young people should [focus on critical thinking rather than coding skills]( in the age of AI. As economists and executives continue to understand the risks and opportunities arising alongside new AI tools, a shift in priorities might be necessary. One to watch [Watch the Bloomberg Technology TV coverage]( of our scoop on OpenAI’s chipmaking effort. Get fully charged Telefonica was awarded rights to [broadcast Spanish football for $1.4 billion](. The Israel Innovation Authority’s CEO said the country’s high-tech sector is [“unfazed” by war in Gaza](. Shein’s IPO plan continues to [face scrutiny in China](. 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