Ruling Against Apple Allows Alternate In-App Payment Options for App Creators
District Court Judge Yvonne Gonzalez ruled that Apple Inc. may not restrict developers from using external links that direct users to third-party payment services outside of their apps on the iOS platform. This is a considerable win for developers, but Apple Inc. may still have a chance to appeal the ruling.
The ruling as it stands reads, “Apple Inc., and its officers, agents, servants, employees and any person in active concert or participation with them (“Apple”), are hereby permanently restrained and enjoined from prohibiting developers from (i) including in their apps and their metadata buttons, external links and other calls to action that direct consumers 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 obtained within the app.”
From a financial perspective, the portion of Apple’s revenue derived from transaction processing—payment services required of users for any in-app purchases—is likely to take a significant hit. This redistribution of revenue to developers and other payment services could also fuel the creator economy and further boost social platform investment in creators. This change is set to take effect December 9, unless the ruling is overturned following an appeal.
Facebook Halts Instagram Kids Project
Facebook has paused the development of an Instagram app for kids amid rising concerns from parent groups and lawmakers. The new version of the popular image-sharing app would be intended for preteens, with restricted content and better parental controls than those on the existing Instagram app. Children often find ways to get around the age restrictions to sign up for these social media platforms, so the logic is to provide a more suitable option that would deter kids from using the flagship app.
Lawmakers and parents are concerned about the irreversible mental health effects that the photo-sharing platform may have on children, especially with regard to body image. Adam Mosseri, the head of Instagram, said they are pausing their development to listen to these concerns and do more to demonstrate the value a kids’ version of the ad-free platform will have for both parents and kids. Mosseri also mentioned that other social media platforms already have kids’ versions of their flagship apps, including YouTube and newcomer TikTok. There is a senate hearing on the subject scheduled for October.
Rising E-Commerce Opportunities for Brands on TikTok
TikTok is increasing its e-commerce appeal by trying to position itself as a product hub and shopping destination in time for the upcoming 2021 holiday season. The platform has provided more revenue potential for content creators and brand partnerships that may increase advertising activity on the platform, as they are developing their unique blend of “Community Commerce,” or creator-driven word-of-mouth marketing.
TikTok touts that its platform offers marketers the ability to maximize engagement with their products through entertainment. TikTok studies claim that around a third of people want commerce to be more entertaining. Another way the platform could be useful to marketers is their hyper-relevant “For You” page, which uses the algorithm to recommend content based on user engagement rather than followed user accounts’ content. This allows the platform to provide relevant content deep within a niche to fuel discovery. The platform has also streamlined the purchasing funnel by facilitating product discovery, engagement, and purchase all without leaving the app.