Spotify, Netflix and Match Group stocks rise after Apple eased App Store rules

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Daniel Ek, CEO and co-founder of Spotify AB, stands for a photo after a press conference in Tokyo, Japan, on Thursday, September 29, 2016.

Akio Kon | Bloomberg | Getty Images

Spotify shares rose more than 6% on Thursday after Apple announced it was relaxing the App Store rules that the streamer previously said had hurt its business significantly.

On Wednesday, Apple said that content subscription apps like Spotify can provide a link to a website in their apps to sign up for a subscription, allowing the developer to bypass Apple’s 15% to 30% cut in gross sales.

The new rule will enable streaming companies to generate higher margins on subscriptions from iPhone users and enable those companies to convert potential iPhone customers into subscribers more efficiently without releasing billing and other support to Apple. Apple’s App Store is the only way to install software on an iPhone, and Apple reserves the right to refuse apps if its policies are violated.

“Apple’s selective adjustments to the App Store rules are welcome, but they don’t go far enough,” tweeted Horacio Gutierrez, Spotify’s chief legal officer, on Thursday.

Spotify’s complaint about the linking rule dates back at least to 2016, when the company complained in a formal letter to Apple after a version of its app was rejected for efforts to directly link customers. Spotify said at the time the rule did serious damage to the company and its customers.

Spotify wasn’t the only one stocking up on the news. Netflix, which would also fall under Apple’s new rules, gained about 2%. The Match Group, which complained about Apple’s App Store and offers a “Tinder Plus” subscription in its Tinder app, grew by almost 5%. Bumble was up over 4% during Thursday’s trading.

Currently, when downloading the Netflix app, a message with no link appears for users who haven’t signed up yet: “You can’t sign up for Netflix in the app. We know it’s a problem.”

Following Wednesday’s change, services should now be able to provide a link in the app to log into the service’s website. Previously this was banned and developers were encouraged to use Apple’s App Store billing system.

Apple’s concession, which was made in the context of a comparison with the Japanese Fair Trade Association, does not affect all apps in the App Store. Gambling transactions, which make up the bulk of the App Store’s revenue, cannot be linked to bypass Apple billing.

Which companies will benefit from the rule change also depends on which apps Apple regards as “reader apps”, that is, apps that offer content subscriptions, and on how Apple will change the wording of its guidelines in detail.