The Apple shop on Fifth Avenue, New York. Source: Reuters.
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  • Apple will change rules on its App Store early next year to allow in-app links to external websites for the purpose of signing up for or managing an account
  • The update will close an investigation by the Japan Fair Trade Commission
  • The inability of app developers to redirect users has long been a source of frustration for subscription-based companies such as Netflix or Spotify
  • In Thursday’s session, shares in Spotify, Netflix and Apple all rose

Apple has flagged changes to App Store rules for what it calls ‘reader’ apps, bringing an investigation by the Japan Fair Trade Commission to a close.

The changes agreed with the commission will also have broader implications, with the tech giant announcing it would roll out a global update early next year.

The rule change

The update will allow app developers to include a single link in an app, redirecting users to their website to manage or set up an account. 

The rule change will apply to ‘reader’ apps, which Apple defines as providing previously purchased content, or content subscriptions for digital magazines, newspapers, books, audio, music and video. 

The inability of app developers to redirect users has long been a point of contention among subscription-based companies such as Netflix or Spotify. 

When users make payments for subscriptions on the App Store, Apple takes a 30 per cent cut. To avoid losing a significant portion of subscription payments, Netflix displays the following message in its app: “You can’t sign up for Netflix in the app. We know it’s a hassle.”

Screen capture of Netflix app downloaded via the App Store. Date: September 3, 2021.

Head of Global Affairs and Legal Officer at Spotify Horacio Gutierrez welcomed the update on Twitter, but said it didn’t go far enough. 

Spotify Founder and CEO Daniel Ek went further, calling for more broad-reaching changes.

Shares rise

On Thursday, Spotify’s New York Stock Exchange-listed shares climbed 6.5 per cent to US$254.03 (A$343.22).

Netflix shares, listed on the NSADAQ, rose 1.1 per cent to US$588.55 (A$795.20).

NASDAQ-listed Apple also enjoyed a 0.75 per cent boost to US$153.65 (A$207.60).

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