After the courts break Apple’s grip on the App Store… what’s next?

“Apple’s payment system simply pivots to becoming Apple’s payment product.”

From Jonny Evans’ “Triumph in adversity: Apple’s payment system opportunity” posted Tuesday on Computerworld:

Apple will want to ensure that given a choice, consumers will still prefer its own payment systems to the alternatives. In this context, the most obvious strategy is to provide a payment system that’s simply better than any alternatives.

The secondary challenge is that in doing so, the company cannot be seen to exploit its control of the software and platform in such a way as to give its payment system a substantial advantage, as that would be anti-competitive.

However, competition law cuts both ways, which also means third-party systems must work hard to become just as seamless as whatever Apple does provide.

After all, simply offering a better service based on the same available opportunity is precisely the advantage of free markets competitors say they want. Apple’s payment system simply pivots to becoming Apple’s payment product.

My take: Tim Cook’s army of lawyers will fight to the death, but if Evans is correct and the App Store will inevitably be cleaved from the mothership, this is exactly what they will do.

5 Comments

  1. David Emery said:
    This should cause Apple to take a close look at the business, and figure out how it does it cheaper and better. I think “better” is the winning strategy, Apple should double-down on “a uniform way to manage all subscriptions.” (And wave a central digit at NY Times and their unconscionable problems with subscription cancellation…) Tim has been clear that Apple enters businesses when they can make money and differentiate their product.

    From my user perspective, I’d rather see open payments than multiple app stores.

    1
    January 12, 2022
  2. I don”t see major changes across many nations in App Store payments coming this year. Korea will be more of a proving ground for a 3rd party payment link, perhaps. Some App developers may think Korea will lead to lower or no app store commissions everywhere but that goal will prove elusive. There will be costs to create an alternative, profit to the developer/banker responsible for the alt payment path and likely delays in app owners getting their cut from a new system.
    All those involved cannot match the expertise, efficiency & finances Cupertino brings to the table. Furthermore, ongoing legal costs will drain the coffers of challengers like Mr. Sweeney. Apple will not cease & desist, ever.
    Wal-Mart, EMART, Lotte Mart, Sainsbury’s, and Amazon won’t sit back and let their payments & commissions get decimated by 3rd parties either. Store owners, virtual or physical, reach for big guns when somebody sticks a hand in their cash register.

    5
    January 12, 2022
    • Michael Goldfeder said:
      @Thomas: I agree 100% as every brick and mortar store has been charging manufacturers “shelf fees” forever as a cost of having their products inside the stores they operate. Why should the online platforms be handled any differently?

      At the end of the day, my prediction is that the “consumers” who aren’t the voices complaining, will choose to keep paying through the seamless Apple transactional system.

      3
      January 12, 2022
  3. Robert Paul Leitao said:
    No matter what Apple provides as a pathway for alternative payment systems, the company will not give up primacy in the relationship with its customers. It would be very hard to construct a payment option that’s more seamless and beneficial to Apple customers than the system that’s in place now combined with the Goldman Sachs Apple Card. Developers can dream, but dreams don’t create better systems on their own. Apple is entitled to a distribution fee for purchases through the App Store. In other words, Apple will collect a fee no matter what payment system is used. Personally, I would be hard pressed to use any payment option other than Apple’s own payment system. When reality sets in, most developers would be best served using Apple’s payment solution.

    1
    January 12, 2022
  4. Kirk DeBernardi said:
    Robert Paul L. —

    “When reality sets in…”

    Might that be asking too much?

    😉

    1
    January 13, 2022

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