This Week in Apps: App Store advertising expands, Google Play plans for safety, Epic v. Apple trial begins

Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.

The app industry continues to grow, with a record 218 billion downloads and $143 billion in global consumer spend in 2020. Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.

Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year.

This week, we’re looking at the Apple-Epic trial, Apple’s App Store advertising expansion, App Tracking Transparency opt-in rates, TikTok’s new SDKs for third-party apps, Google’s plans for its own take on privacy labels, and more.

This Week in Apps will soon be a newsletter! Sign up here: techcrunch.com/newsletters

Apple-Epic Trial kicks off

This was the first week of the Epic Games antitrust lawsuit against Apple over App Store fees, and already it’s yielding some interesting content — mainly thanks to the internal Apple emails that have become part of the trial’s exhibits. So far, we’ve learned how Apple thought about App Store fees in the past, have gotten a peek inside internal conversations, learned of special deals it cut for Hulu and how it thought about punishing Netflix for ditching IAP, among other things.

Here are some of the highlights you may have missed.

Fees

Apple’s App Store head Phil Schiller, previously Apple’s marketing chief, a decade ago questioned if the 70/30 split would last. In an email to Eddy Cue, he suggested that once the App Store reached $1 billion in profitability, Apple should cut its fees to 20-25%.
Despite having said he’s fighting for all developers, Epic CEO Tim Sweeney in court admitted he would have accepted a special deal for a lower commission if Apple had offered one.
Apple is disputing testimony from financial researcher Ned Barnes, which said the App Store had operating margins of almost 78% in 2019. Barnes said he had access to P&L estimates for fiscal year 2020, and statements from 2013-15, which aided in his calculations. Apple rebutted that it doesn’t allocate costs for the App Store so any documents discussing it wouldn’t have included expenses.

Competition

Apple’s App Store VP Matt Fischer was questioned over a 2016 email where an employee said Fischer felt strongly about not featuring competitor apps on the App Store. Fischer said the employee who wrote the email was “very misinformed” and Apple has promoted competitors long before he joined the team in 2010.

App Store rejections

Apple said it rejected 33-36% of apps submitted to the App Store from 2017-2019. Despite the number of rejections, less than 1% of developers appeal Apple’s decision. Most of the decisions about rejections are still upheld.
2017: 5.177 million submissions, 1.69 million rejections (33%)
2018: 4.79 million submissions, 1.7 million rejections (35%)
2019: 4.8 million submissions, 1.74 million rejections (36%)

Juicy emails

Apple offered Hulu and others special deals that gave them App Store API access. In a 2018 email, an Apple exec confirmed Hulu was one of the whitelisted developers that had been given access to the subscription cancel/refund API which they had been using since 2015 to support instant upgrades using a two-family setup before subscription upgrade/downgrade capabilities were built.
Emails revealed Apple tried to convince Netflix not to drop support for IAPs and questioned whether it should take punitive measures when Netflix’s tests were underway.
Apple emails revealed internal conflict over the launch of App Store ads before launch, saying that ads would be at odds with Apple’s statements that it makes products without monetizing users.

Other tidbits

Fischer said he was “blindsided” by the payment update that kicked off Epic’s battle with the App Store, noting the developer and Apple had a good relationship previously. He recalled dropping everything to promote Fortnite’s Travis Scott concert on the App Store, which he described as a “really cool concept.”
Fortnite made more than $9 billion in 2018 and 2019. It made $5.1 billion in 2020.
Fortnite may be returning to iOS through Nvidia’s cloud streaming service GeForce NOW.
It was revealed that Epic paid Sony additional royalties beyond the 70/30 split to compensate for cross-play. Apple’s argument is that it’s being singled out over the 30% cut, when Epic was actually paying more to Sony but didn’t go after the console maker with the same complaint.
Apple and Epic had once planned a subscription bundle that would have offered Fortnite Crew, Apple Music and Apple TV+ in a $20/mo package. The cut of subscription revenue each would take would have been based on whether the user signed up through Apple or through Fortnite.

Google to add a “Safety” section on Google Play in 2022

Months after Apple’s App Store introduced privacy labels for apps, Google says its own mobile app marketplace, Google Play, will follow suit…sorta. The company this week pre-announced its plans to introduce a new “safety” section in Google Play, rolling out in Q2 2022, which will require app developers to share what sort of data their apps collect, how it’s stored and how it’s used.

This includes what sort of personal information their apps collect, like users’ names or emails, and whether it collects information from the phone, like the user’s precise location, their media files or contacts. Apps will also need to explain how the app uses that information — for example, for enhancing the app’s functionality or for personalization purposes — and include their privacy policy, otherwise face “policy enforcement.”

But where Apple’s labels focus on what data is being collected for tracking purposes and what’s linked to the end user, Google’s additions seem to be more about whether or not you can trust the data being collected is being handled responsibly, by allowing the developer to showcase if they follow best practices around data security. It also gives the developer a way to make a case for why it’s collecting data right on the listing page itself. And Google says developers can showcase if their labels have been independently verified.

TikTok Login and more integrations are coming to third-party apps

Image Credits: TikTok

TikTok is expanding its integrations with third-party apps. The company announced the launch of two new SDKs, the TikTok Login Kit and Sound Kit, that will allow apps on mobile, web and consoles to authenticate users via their TikTok credentials, build experiences that leverage users’ TikTok videos and share music and sounds back to TikTok from their own apps. The Login Kit allows an app’s users to sign in quickly using their TikTok log-in credentials, similar to other social log-ins offered by Facebook or Snap. Once signed in, users can then access their TikTok videos in the third-party app, potentially fueling entire new app ecosystems with TikTok content. Meanwhile, the Sounds Kit will let app users share their sounds or music back to TikTok as sounds.

Early adopters of Login Kit include gaming clips apps Allstar and Medal; anti-anxiety app Breathwrk; social app IRL; food reviews app Burpple; dating and friend-making apps Snack, Lolly, MeetMe, Monet, Swipehouse and EME Hive; creator tool provider Streamlabs; video game PUBG; and forthcoming NFT platform Neon. Sound Kits adopters include mobile multi-track recording studio Audiobridge; music creation and collaboration suite LANDR; hip hop music creation app Rapchat; and upcoming audio recording and remix app Yourdio.

Apple expands App Store advertising

Image Credits: Apple

As Apple cracks down on the ad tech industry’s ability to personalize ads using user data, it is expanding its own advertising business with a new App Store ad slot. The new and more prominent ad placement is found on the App Store’s Search tab, which sees millions of visits from Apple device owners every month. The ad will appear in the Suggested section at the top of the list of apps.

Like Apple’s existing Search results campaigns, there’s no minimum spend required for a Search tab campaign, as these ads are called. Developers can spend as little or as much as they want, then start, stop or adjust the campaign at any time, says Apple. Ad pricing is based on a cost-per-thousand-impressions (CPM) model. The actual cost is the result of a second price auction, which calculates what the developer will pay based on what the next closest bidder is willing to pay. Impressions are counted when at least 50% of the ad is visible for one second.

Platforms: Apple

✨ Although a poll indicated iOS 14.5 users may be more willing to allow apps to track them than previously thought, Flurry’s app data shows that few are opting in. After upgrading to the new version of iOS, only 4% of U.S. iPhone users have enabled app tracking. Worldwide, the number jumps to 12%.

Image Credits: Flurry

Apple apologizes and refunds a woman $1,116.32, after her 9-year-old son (who has autism spectrum disorder) racked up charges on mobile games like Roblox and Coin Master. The son said he didn’t understand the games cost money. The son had memorized the mom’s Apple ID password, which he entered when asked to authorize the purchase. Apple had initially refused to refund the money, prompting Global News‘ Consumer Matters to step in and help.

Apple snags a former Google AI research scientist, Samy Bengio, to work on Siri. He will lead a new AI research unit alongside another ex-Googler, John Giannandrea, focused on making Siri more of a Google Assistant competitor.

Apple released iOS 14.5.1, which included a bug fix for App Tracking Transparency, which prevented some users from seeing the ATT prompts.

Platforms: Google

The Google Play Store in India paused auto-renewals and free trials, amid new rules on recurring transactions in the country from India’s central bank and financial regulator, the Reserve Bank of India. Google in an email to developers said the features would be paused while “ecosystem challenges are addressed.”

Some users aren’t happy with the recent Play Store redesign, which now makes it harder to see a list of your recently updated apps or those you’re beta testing.

Google releases Android Studio 4.2 in the stable release channel. The focus areas for this release is an upgraded IntelliJ platform and a handful of new features centered around improving developers’ productivity.

Augmented Reality

Image Credits: Snapchat

Snap will launch a new Creator Marketplace later this month, which will initially focus on connecting AR Lens Creators with businesses and brands who want to run AR ads. It will then expand to support all Snap Creators by 2022. It also announced a new lineup of Originals, including those with TikTok stars Charli and Dixie D’Amelio, Megan Thee Stallion, and others.

Fintech

Top neobanking app Chime was asked by a California regulator to stop calling itself a “bank” in its website URLs and advertising. The app is not actually a bank — it offers front-end banking services to customers, but the accounts themselves are held with Chime’s banking partners, The Bancorp Bank and Stride Bank, both FDIC members. Chime updated its website to make it clear it’s not a bank. Expect other neobanks to follow suit, soon.

WhatsApp Pay is rolling out to users in Brazil on iOS and Android. The P2P payments feature requires the user has a Mastercard or Visa debit card in one of the following banks: Banco do Brazil, Banco Inter, Bradesco, Itaú, Mercado Pago, Next, Nubank, Sicredi or Woop Sicredi. The feature is also live in India.

Social

Twitter expanded its Clubhouse rival, Twitter Spaces, to all users with 600 followers or more. The company says this number will allow users to have a good experience, but it still plans to expand to all users in the future.

Twitter launched a Tip Jar feature on mobile that lets users tip people directly on their user profile. The feature supports payment platforms PayPal, Venmo, Patreon, Cash App and Bandcamp.

Twitter also rolled out an improved version of its “reply prompts” feature, aimed at cutting down on harmful tweets. The feature, which is now globally available in English on mobile, shows a prompt that asks a user to reconsider their language when they were about to tweet something mean.

And Twitter rolled out the new feature that lets you post bigger images on iOS and Android, without having the images cropped. (Busy week!)

Instagram is rolling out a captions sticker for Stories, and soon Reels. The sticker, which only works in English-language for now, can be customized with your preferred style, color and text.

The majority of WhatsApp users have accepted the controversial privacy update and the company continues to grow its user base, Facebook said this week. Combined, Facebook’s family of apps had 3.45 billion MAUs as of March 31, 2021, up from 3.3 billion on December 31 and 3.21 billion on September 30. The company says it now won’t deactivate accounts for not accepting the new policy, but will keep reminding them.

Facebook opens registration for F8 Refresh, which is free to all developers worldwide. Sessions will include Facebook Business Messaging, Research, Open Source, Login, Business Tools, AR, Stories, Gaming, Startups and more.

Facebook is launching its Nextdoor clone, Neighborhoods, across Canada, and soon, the U.S. Unlike with Facebook Groups, Facebook users on Neighborhoods can create a separate subprofile that includes a custom bio and list of interests, which is included in a Neighborhoods Directory. Neighborhoods will also have moderators who review posts and comments and can hide posts that violate guidelines.

Image Credits: Facebook

A court ruled Snap could be sued for its role in a fatal car crash that killed three young adults. The boys were using Snap’s controversial “speed filter” that shows your real-life speed, when the 17-year old driver accelerated the car to 123 MPH and then crashed into a tree. The parents sued Snap saying it knowingly created a dangerous game in the app, and bore some responsibility.

Facebook notes its Workplace business networking service now has 7 million paid subscribers, up 40% YoY. Customers now include Virgin Atlantic, Walmart, Telefónica, BT, Booking.com, Deliveroo, AstraZeneca, Starbucks and Save the Children.

Facebook and Instagram’s prompt that asks its users to opt into tracking on iOS 14.x uses scare tactics that suggests that Facebook could have to start charging for its app, if users didn’t agree to tracking. The pop-up says tracking enables personalized ads, supports businesses and “helps keep Facebook free of charge.”

Messaging

Signal claimed Facebook rejected its ads and disabled its ad account for trying to run an ad campaign that showed the amount of data Instagram and Facebook collected on users. Facebook responded that this campaign was a marketing “stunt” and Signal never actually tried to run the ads. It also claimed Signal was showing off screenshots from a time its account was disabled briefly in March for an unrelated issue. If Signal’s being dishonest here, that’s not a good look for an app asking consumers to trust them.

Instagram adds new chat themes featuring Star Wars characters and Netflix’s “Selena: The Series,” as well as stickers celebrating Asian and Pacific Islanders for Asian Pacific American Heritage Month, and a read receipts feature for DMs. Another new feature available first on iOS allows Instagram users to reply with a photo or video in DMs.

On Messenger, the tap-to-record feature no longer requires users to hold down the button to record the message. It also introduced swipe to archive in Messenger and new a Archived Chats folder on mobile.

Streaming & Entertainment

Google rolls out a new feature to Android tablets called “Entertainment Space,“ which offers a personalized home page featuring the user’s favorite movies, shows, videos, games and books. This saves the user time hopping in between different apps to find something to do, whether that’s play, watch or read. Each user on the tablet can have their own personalized profile, as well, Google notes.

Is Clubhouse’s hype wearing off? App downloads were 900,000 in April, down from February’s 9.6 million. To combat the decline, Clubhouse this week released its Android app to public testing, and announced its “pilot season” of new shows it’s considering funding through its accelerator.

YouTube’s TikTok rival “Shorts” is now rolling out to all creators in the U.S., and will replace the “Explore” tab on the app’s home screen.

Soundcloud partners with Triller on an integration that will add a Soundcloud-curated playlist feature into the short-form video app. Soundcloud has offered curated programs to other platforms, including SiriusXM, Dash Radio and Australia’s Southern Cross Austereo.

Amazon says its free, ad-supported streaming service IMDb TV will have its own standalone mobile app sometime later this summer.

Gaming

Image Credits: Sensor Tower

Twitch’s mobile app hits 22 million global installs in the first quarter of 2021, up 62% YoY, reports Sensor Tower. The app ended 2020 with 80.6 million installs, up 134% from 34.5 million for the year in 2019.

PUBG Mobile will relaunch in India as Battleground Mobile. The mobile game had originally been banned in the country alongside 200 others apps with links to China. Its South Korean developer Krafton didn’t say if it had talked to India’s government or if it had received permission, but will launch with new restrictions to protect minors and their privacy.

Health & Fitness

The Facebook app added a vaccine finder in India and announced a $10 million grant to support emergency response efforts in the country.

Dating

Tinder says it’s rolling out a new 48-hour, in-app event called “Vibes,” that combine the real-time push notifications from Swipe Surge with the on-profile icebreakers from Swipe Night. Vibes will present users with a series of questions ranging from personality traits to pop culture. People’s answers will be displayed on their profile for 72 hours.

Image Credits: Tinder

Tinder parent Match Group also posted better-than-expected earnings for its first quarter and an upbeat revenue outlook, saying it’s seeing stronger recovery in areas with higher vaccination rates.

Government & Policy

China said 33 apps, including a map navigation software from Baidu and Tencent, violated regulations around collecting user data. The app developers were given 10 working days to fix issues or be subject to penalties.

? Music-making app Rapchat raised $2.3 million in funding co-led by Sony Music Entertainment and NYC VC firm Adjacent. The company has around 7 million registered users, some 250,000 songs have been created from a catalog of about 100,000 beats by 500,000 MAUs.

? Twitter acquired distraction-free reading service Scroll to beef up its subscription product. In the future, Premium subscribers will be able to pay to read news without ads or website clutter, via Scroll. Unfortunately, Scroll’s news aggregator Nuzzel, has already shut down.

? Brazil fintech alt.bank, which offers a mobile banking app and debit card, raised $5.5 million in Series A funding led by Union Square Ventures. The app has been downloaded nearly 1 million times but doesn’t disclose how many active users it has.

? Finnish mobile games company Supercell extends a $180 million credit line to fellow Finnish games company Metacore, the maker of the popular title Merge Mansion, which has 800,000 daily players.

? Cosmetic treatment review website and app RealSelf acquired YNS Group, a portfolio of websites that will give RealSelf a more international footprint.

? Fortnite maker Epic Games acquires artist community ArtStation, where many artists upload work made with Epic’s Unreal Engine. The company immediately dropped commissions on sales from 30% to 12% — clearly aiming to make a point about a fair commission structure amid its trial with Apple over App Store fees.

? Sony announced an investment and partnership with Discord to bring the chat app to PlayStation. The investment amount was not disclosed, but gives Sony a minority stake. The news follows reports that Discord walked away from a $10 billion acquisition offer from Microsoft.

? Zynga is acquiring mobile ad and monetization firm Chartboost for $250 million. The deal brings mobile game marketing, advertising and monetization in-house at a time when Apple’s privacy push is making targeting mobile ads more difficult.

? Performance marketplace Perform, which offers technology to online and mobile marketers to help scale customer acquisitions, has been acquired by U.S. equity firm Beringer Capital.

? Virtual chronic condition care app Vida Health raised $110 million in Series D funding from General Atlantic, Centene and AXA Venture Partners. The company connects users with a personal health coach who guides them through programs for a variety of chronic conditions, including diabetes management, weight loss and mental health support.

? Connectcam raises $37 million from Insight Partners, O.G. Tech and others, for its smartphone app that helps employers manage remote, deskless workers.

? Edtech website and app maker Kahoot acquires Clever, a startup that built a single sign-on portal for digital learning classrooms, used by 65% of U.S. K-12 schools. The deal values Clever between $435 million and $500 million.

? Avatar app Genies raised $65 million in Series B funding led by Mary Meeker’s firm Bond. The app, which lets users build their own digital personas, is now expanding into NFTs.

? Canadian fintech Wealthsimple raised $750 million CAD (~$610 million) at a post-money valuation of $5 billion CAD (~$4 billion). The round was led by Meritech and Greylock.

News in Bullets

Image Credits: News in Bullets

This mobile news application lets you set your language and locale, then read through news summaries customized to you. But we wish they’d double down on a news reels feature — which is basically just a TikTok for news videos. Right now it presents a robotic narration of headlines overtop video news footage, that you then swipe through or double tap to like, as you would on TikTok. This could be even more useful, though, if the app would partner with news publishers already producing quality video content and make those the central focus of the video feed.

The Oregon Trail

Image Credits: Gameloft

This new Apple Arcade title refreshes the original 1970s text-based strategy game with 12 playable journeys where your every decision can impact your party and outcome. Players pick their traveling party and stock their wagon with supplies, then try to make it to Oregon by surviving a series of random events, like broken limbs, snowstorms, snakebites and more.