In-app purchase alternative from Paddle will see apps rejected, says expert

“Developers will presumably see their apps rejected when they incorporate the Paddle API, and rightly so.”

What you need to know

  • A revenue platform for software companies has today released a new in-app purchase alternative for iOS.
  • The company claims it will give iOS developers a choice when it comes to in-app payments as a direct response to the Epic Games ruling.
  • However, one expert says the system would see developers’ apps rejected by Apple.

A new in-app purchase alternative from software company Paddle will see developers have their apps rejected by Apple, according to one antitrust expert with knowledge of the matter.

Global revenue platform Paddle today announced a system it says is the first alternative in-app purchasing system for iOS developers, stating in a press release:

Paddle, the global revenue platform for software companies, today announces the first alternative In-App Purchasing (IAP) system for iOS developers. Designed to bring innovation, competition and choice to iOS in-app payments for the first time, Paddle’s new offering is a direct response to the recent ruling in the Apple vs Epic lawsuit. Developers can register their interest in Paddle In-App Purchase from today, with the new service going live on 7th December 2021, in line with the terms of the court ruling

Paddle says the system is a “true like-for-like, drop-in replacement for Apple’s IAP, allowing developers to maintain a seamless user experience, without having to pay Apple 30% of every sale”. Commission is charged at just 10% on transactions of less than $10 and only 5% on those of more than $10. It also features subscription control tools.

Paddle says it has developed the system in “direct response” to the recent Apple vs Epic Games ruling, which secured an injunction against Apple limiting the company’s anti-steering measures. One legal expert, however, says Paddle’s new IAP system won’t fly with Apple or the court.

Speaking to iMore Florian Mueller stated that whilst “it does increasingly look like the injunction will indeed enter into force in December, but it doesn’t have scope for this approach.”

Mueller, a season antitrust and patent litigation expert who has closely followed the trials, said “Developers will presumably see their apps rejected when they incorporate the Paddle API, and rightly so.” Mueller has developed his own game for iOS and Android and has a legal complaint filed against Apple, but states that Paddle’s solution might not be the answer. He continued:

There’s, unfortunately, an urban legend making the rounds about the injunction, but it irresponsibly ignores the detailed judgment as well as the legal principle that a defendant violates an injunction only by taking an unreasonably restrictive view. The injunction is merely meant to enable app developers to tell customers that, for example, they could make the same in-app purchase at a lower cost if they play the same game on a Samsung phone and download the app there via the Galaxy Store.

In response to today’s announcement, some developers have expressed skepticism at using Paddle’s IAP alternative. One stated:

No, UX always comes first. It’s easier for the user to pay with Face/Touch ID than going on an external website and manually enter the card details. Many users bought an iOS device for little things like that and they expect them to be available

Another noted they had used Paddle before and described them as trustworthy, handling licenses and regunds “effortlessly”, but that they would have to compare costs on iOS to see if it was worth it. Others were less enthusiastic:

iMore has reached out to Apple for comment on the announcement. In September a judge ruled mostly in favor of Apple following a lengthy court battle with Fortnite maker Epic Games. However, the developer did secure one injunction against the company designed to lessen Apple’s anti-steering provisions, allowing developers to tell customers that they can get digital goods for less elsewhere, and even including links to such offerings:

[Apple is] permanently restrained and enjoined from prohibiting developers from including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and (ii) communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.

Apple celebrated the ruling at the time and said “Today the Court has affirmed what we’ve known all along: the App Store is not in violation of antitrust law. As the Court recognized ‘success is not illegal.’ Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world.”

Apple did not acknowledge at the time the injunction or the changes it might foster, and we’ve yet to see anything public from the company about how the ruling might impact the App Store.

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