Apple's new rule allows app subscriptions to be auto-renewed at higher prices without informing the user

Apple's new App Store rule may not be welcome amongst users. The company has decided to allow app subscriptions to be auto-renewed without requesting the user's permission.

There are many apps that require a subscription, Disney+, Amazon Prime, Netflix, Spotify, are just a few of the popular examples. Apple currently requires the user to opt in to any changes made to the subscriptions. When a user does not opt in to the new price, the subscription gets cancelled.

Apple claims that this has led to unintentional interruptions of the services, and that the user had to resubscribe to it. That's why it wants to allow auto-renewals for subscriptions, even if the developers have increased the price for it. How hard is it to resubscribe to a service? Is this convenience worth it?

For example, maybe you are using a VPN or a streaming service, and they decide to hike the prices. They tried to notify you about the change via email or an app notification banner, but if you ignored those or chose not to opt in to the new terms, the subscription would end after the current plan expires. That seems reasonable, and that's how it should be.

Apple's new rule allows app subscriptions to be auto-renewed at higher prices

Apple's controversial auto-renewal rules come with a couple of caveats. The announcement reveals that the subscription fee charged by developers cannot be increased more than once per year. If an app wants to raise its fee from $5 a month to $10, and wants to increase it further, it will not be allowed to do so until 12 months have passed since the previous hike.

App developers cannot increase the price of auto-renewing subscriptions beyond $5 and 50% of the original fee. E.g. If a subscription that normally costs $20 gets a price creep, it would have to cost less than 50% of the base fee, i.e. < $10. But regular subscriptions have a $5 cap, so the maximum price that it can charge the user would be $20 + $4.99. Technically, all apps with a non-annual subscription would have a $4.99 cap to comply with the new rule, but you'll see why I used the above example in just a bit.

Annual subscriptions have a slightly higher ceiling, a price increase for these mustn't exceed $50 and 50% of the subscription fee. That is actually a lot worse, let's say an app's subscription fee is $50 a year. If the developer decides to change its price, they could charge users up to 50% extra (of the base fee). So, the new amount would be $75. That's a significant price increase.

Let's take another look at the terms and conditions defined on Apple's website. It states that the user's content is required if,

The price increase is: More than 50% of the current price; and

The difference in price exceeds approximately $5 United States Dollar (USD) per period for non-annual subscriptions, or $50 USD per year for annual subscriptions.

The first two clauses are, as The Verge points out, not very clear. It's the word "and" that's important here. Taking the rules at their face value, an app developer could just raise the prices up to $4.99 for regular subscriptions, or $49.99 for annual subscriptions. That would not violate either of those clauses, hence they don't have to inform you about it. You may not notice the change until you find out your credit card or bank account has been charged a higher fee than normal, and by then you may not be able to get a refund, though this largely depends on the service's terms and conditions, and refund policy.

Apple mentions that these conditions would depend on local laws, and I'm pretty sure these would be considered as hidden fees and illegal in some Countries. There are plenty of scammy apps on the App Store that require in-app purchases for useless stuff, these apps could exploit the loopholes in the new rule to earn more money. And given that users may forget to cancel subscriptions, or may not know how to cancel them easily if the option is hidden under various menus or pages, this may prove to be a huge mistake by Apple.

If you're using PayPal, you can manage your auto-pay settings, to pause any automatic charges made to your card. Even if you forget that a subscription is coming up, you won't be charged for it, because you blocked it. That can be very useful, but could disrupt services on a rolling payment plan. I also recommend you consult your bank or check the internet banking website, to see if there are ways to block automatic payments, or require additional authorizations for approving the transaction, like a virtual credit card service that can be customized with a maximum spending limit.

What do you think about auto-renewals for subscriptions with increased prices? Should they be allowed?

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