Apple Inc AAPL says app creators will be able to charge hiked subscription fees to users without the need for an opt-in.
What Happened: The Tim Cook-led company issued an update on Monday saying that “uncer certain specific conditions” and “with advance notice” developers will be able to offer an auto renewable subscription price increase without the user needing to take any action.
The iPhone maker laid out the specific conditions which induce a price increase that doesn’t exceed $5 and 50% of the subscription price, or $50 and 50% for an annual subscription price. The price increase should also be permissible under local law.
Apple said it will notify users of the hike in advance through email, push notifications and a message within the app. The company said it will notify users on how to go about managing and canceling a subscription.
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Why It Matters: Apple said under the current policy, when auto-renewable subscription prices are increased, subscribers must necessarily opt in and the subscription doesn’t renew for users that don’t take action. This has led to service interruption for users.
The tech giant said that for price increases exceeding its thresholds or for those that take place where the law requires it, subscribers will need to opt in before the price increase is applied.
Apple was testing a feature last month where users were only intimated of subscription price hikes and no further opt-ins were necessary. At the time, a developer had shared a screenshot of the feature which involved Walt Disney Co’s DIS streaming service Disney+.
Previously, Apple’s guidelines required subscribers to agree to price increases.
Price Action: On Monday, Apple shares closed 1.1% lower over 24 hours at $145.54 in the regular session and rose 0.3% in the after-hours trading.
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