Apple bans using NFTs to circumvent App Store fees

Apple bans using NFTs to circumvent App Store fees
Ryan is a senior editor at TechForge Media with over a decade of experience covering the latest technology and interviewing leading industry figures. He can often be sighted at tech conferences with a strong coffee in one hand and a laptop in the other. If it's geeky, he’s probably into it. Find him on Twitter: @Gadget_Ry

Apple has updated its rules to ban developers from using NFTs to circumvent App Store fees.

Regulators and developers are becoming increasingly critical of Apple for blocking third-party app stores and payment options. With no alternative, this leaves Apple to abuse its market position to take high cuts.

“The fundamental problem for us is the lack of choice,” Basecamp CEO Jason Fried once wrote in a letter. “And [Apple Fellow] Phil Schiller’s suggestion that we should raise prices on iOS customers to make up for Apple’s added margin is antitrust gold.”

NFTs (Non-Fungible Tokens) are one of the darling use cases of blockchain technology. Once associated with just limited edition artwork, NFTs are beginning to gain traction for tangible uses like event tickets, in-game items, verifying accreditations, digital identity, and more.

Some developers offered unlocks in their apps and games if users proved they purchased the relevant NFT. Due to the purchase taking place away from the App Store, it allowed the developer to keep the entirety of their profits.

Apple did not like that.

In an update to its App Store rules on Monday, Apple wrote:

“Apps may use in-app purchase to sell and sell services related to non-fungible tokens (NFTs), such as minting, listing, and transferring.

Apps may allow users to view their own NFTs, provided that NFT ownership does not unlock features or functionality within the app.

Apps may allow users to browse NFT collections owned by others, provided that the apps may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than in-app purchase.”

The policy dissuades Apple developers from offering anything but the ability for users to view their NFT collections.

For NFT purchases, developers are going to want to point users to marketplaces like OpenSea and Magic Eden – which charge less than three percent commission – instead of suffering Apple’s up to 30 percent cut.

Elsewhere, Apple has once again caught the ire of Meta for requiring iOS developers to use in-app purchases for ‘boosts’ of posts in social media apps like Facebook and Instagram.

“Apple continues to evolve its policies to grow their own business while undercutting others in the digital economy,” said a Meta spokesperson.

“Apple previously said it didn’t take a share of developer advertising revenue, and now apparently changed its mind.”

Earlier this week, Apple began payouts from its Small Developer Assistance Fund. The fund was established as part of a settlement for a lawsuit brought against the company over its “profit-killing” App Store commissions.

Related: Apple is now facing an antitrust investigation in Germany

Want to learn more about blockchain from industry leaders? Check out Blockchain Expo taking place in Amsterdam, California and London. The event is co-located with Digital Transformation Week.

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