Apple Signals New Enforcement Strategy to Companies Distributing Applications at the App Store

Companies distributing applications on the Apple App store should take note:  multiple companies today have stopped selling content from their applications sold on the Apple App store,  suggesting that Apple is taking steps to enforce its new rules to collect its royalty on direct sales from applications being sold on the App Store.

The Financial Times
reported that Apple began notifying companies last week that it intends to enforce its new policy and to collect its standard royalty rate on direct sales made even through a mere link in the application to the app owner’s website.

The Wall Street Journal reported its decision to no longer sell content directly from its application to customers and also reported that Kobo, Inc., a Canadian e-book retailer, made a similar announcement, and that Google Books was no longer in the App Store as of  Sunday night.  Today’s iPhone likewise reported that Amazon discontinued sales of e-books from its Kindle e-reader as of today, and  The Financial Times added Spotify and Rhapsody to the list of companies who had removed features to sell products from their applications.

The reports suggest that many of these companies had previously included a link within their applications to a separate store on their websites and had not been paying the Apple royalty on direct sales that had been redirected to their websites from their applications.

Based on the actions just taken by these large companies, it seems clear that all companies who are distributing applications from the App store need to take note of these signals coming out of Apple and from large companies doing business with Apple and anticipate future enforcement activity against their companies if they are selling products through their applications on the App store without paying Apple its royalty on the sales.   Apparently just having a link within the application to a store outside of the application may be enough to trigger the Apple royalty.

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Kristie Prinz