Apple Clamping Down On In-App Purchases

By , Feb 3, 2011

Apple is making the move to have more control over App Store apps that utilize “in-app” purchases. The Sony Reader app was recently declined from App Store approval due to Apple’s new stance on in-app transactions.

Until now, developers were able to sell content with in-app purchases through their own payment infrastructure. Apple has now made the stance that all in-app purchases must go through the Apple payment system, which in turn would give Apple a 30% cut off the top of sales.

This marks a shift from Apple’s previous claim to want a more collaborative relationship with content producers who want to manage in-app purchases through their own backend…

In case you’re unfamiliar, “in-app” purchasing is a feature that Apple added to the iPhone back in 2009. This feature allows developers to charge for extra, optional content in their app.

In Sony’s case, their e-book app was shot down by Apple because it allowed the user to buy a book from Sony’s online store without using Apple’s payment infrastructure.

The New York Times reports,

“Steve Haber, president of Sony’s digital reading division, said on Monday that Apple had told his company that from now on, all in-app purchases would have to go through Apple.

“It’s the opposite of what we wanted to bring to the market,” Mr. Haber said. “We always wanted to bring the content to as many devices as possible, not one device to one store.”

Apple isn’t taking an prisoners with their new stance,

“Apple is now saying the app makers must allow those purchases to happen within the app, not in a separate browser window, with Apple getting its standard 30 percent cut of the transaction. At the moment this applies only to e-book purchases.”

Lots of gaming platforms and news distributors use in-app purchases for paid upgrades and additional content. Apple is not getting rid of in-app purchasing, only enforcing the stipulation that all purchases go through their payment system,

“We have not changed our developer terms or guidelines,” Trudy Muller, an Apple spokeswoman, said Tuesday. “We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase.”

Apple has always been a company that’s about the bottom line. The 30% cut that Apple gets from all App Store sales is a huge part of its revenue. It’s no surprise that the company would eventually tighten restrictions on payment-related features like in-app purchasing.

A quoted reference from the New York Times says it best,

“This sudden shift perhaps tells you something about Apple’s understanding of the value of its platform,” said James L. McQuivey, a consumer electronics analyst at Forrester Research. “Apple started making money with devices. Maybe the new thing that everyone recognizes is the unit of economic value is the platform, not the device.”

Does it bother you that Apple takes such a controlling stance on the way the App Store operates? Shouldn’t develepors have a little room to use their own payment backends for in-app purchasing? The sad thing is that Apple will most likely bulldoze this new policy, and develepors will have to just go along with it like normal.

[via The New York Times]

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  • appletiser

    so i guess this means devs for apps like Hipstamatic will just charge more to download the initial app?

  • Nate

    Say goodbye to all your free farming games and such…. I bet they will start charging .99 instead just to make up the difference!

  • http://yourappleworld.com Scott W

    I assume Kindle would still be allowed because it is just syncing up with “Whispersync” and downloading the books which you have to purchase through Amazon’s own site, outside of the app.