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

Ashwin
May 17, 2022
Apple
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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.

Apple auto-renewing app subscriptions

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?

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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.

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

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?

Summary
Apple will allow app developers to increase prices for auto-renewing subscription without informing the user
Article Name
Apple will allow app developers to increase prices for auto-renewing subscription without informing the user
Description
Apple has announced that it will developers to hike the price of auto-renewing subscriptions, and users won't be informed if the price difference is within a certain threshold.
Author
Publisher
Ghacks Technology News
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Comments

  1. John G. said on May 17, 2022 at 1:13 pm
    Reply

    Another reason to not purchase any Apple app. Android is quite better in this sense. Thanks for the article! :]

    1. Me said on May 17, 2022 at 2:10 pm
      Reply

      And only in that sense…

      1. Khanate of Sibir said on May 18, 2022 at 9:20 pm
        Reply

        @Me, +1.

  2. Me said on May 17, 2022 at 2:09 pm
    Reply

    Ridiculous and criminal behavior. I hope the European Union will block this.

    1. TelV said on May 17, 2022 at 3:30 pm
      Reply

      In the Netherlands at least which is one of the six EU founder members, users have the right to terminate a subscription without added fees if the cost has been increased without prior notification.

      I would imagine the same would apply to other member states. The EU Consumer Rights Directive should have more details on the subject: https://ec.europa.eu/info/law/law-topic/consumer-protection-law/consumer-contract-law/consumer-rights-directive_en

  3. David said on May 17, 2022 at 2:37 pm
    Reply

    Thanks for alerting me. I have one subscription. It was an “introductory offer” so I have no idea how much it may go up next year. If this doesn’t violate interstate commerce regulations, then it should be investigated by all state Attorneys General. Not cool.

  4. Matti said on May 17, 2022 at 4:07 pm
    Reply

    IAAS: Inflation as a Service.
    We’re well and truly at late stage capitalism now.

  5. Alex said on May 17, 2022 at 6:28 pm
    Reply

    > 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

    What part of “Apple always notifies users of an increase in advance, including via email, push notification, and a message within the app. Apple will also notify users of how to view, manage, and cancel subscriptions if preferred” was unclear?

    1. Tony said on May 17, 2022 at 8:48 pm
      Reply

      @ Alex

      That’s what I was thinking. Apple clearly states that they will always notify the user of the increase.

      It’s an annoying change and I don’t care for it, but what I really don’t like is deceptive articles from Ghacks.

    2. Sol Shine said on May 18, 2022 at 4:32 pm
      Reply

      @Alex
      Agreed. The title of the article and some of it’s content is misinformation.
      The user does get informed of the change in advance.

      Apple clearly states (Uppercase by me):
      ‘With this update, under certain specific conditions AND WITH ADVANCE USER NOTICE, developers may also offer an auto-renewable subscription price increase, without the user needing to take action and without interrupting the service. The specific conditions for this feature are that the price increase doesn’t occur more than once per year, doesn’t exceed US$5 and 50% of the subscription price, or US$50 and 50% for an annual subscription price, and is permissible by local law. IN THESE SITUATIONS, APPLE ALWAYS NOTIFIES USERS OF AN INCREASE IN ADVANCE, including via email, push notification, and a message within the app.

  6. Alex said on May 17, 2022 at 6:30 pm
    Reply

    How is it different from Netflix raising prices of existing subscriptions?

  7. Anonymous said on May 17, 2022 at 11:52 pm
    Reply

    Anyone with sense would never use anything Apple.

  8. Yanta said on May 18, 2022 at 3:43 am
    Reply

    The lesson: Don’t use subscription services. If it’s only available on a subscription, find an alternative, which in many cases could be free (not talking about streaming services).

    Until Windows goes subscription I have not and have never used a piece of software that required periodical renewal. I’ll be on Linux well before Windows does subscription.

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