App Store Subscriptions Can Be Auto-Renewed Sans Explicit Consent

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Customers seldom jump for joy when they hear the words “auto-renew” on any of their app subscriptions.

But Apple seems to have ignored this altogether with its recent announcement on the Apple Developer site stating that auto-renew on Apple app store subscriptions can now take place even without the explicit permission of customers and even if the developer has increased its subscription prices. Though the new feature does have limits to prevent abuse by developers, it made us pause and wonder about the existing laws surrounding auto-renew.

According to Apple, the change in their rules will help avoid situations where the subscriber loses access to an app because of a missed opt-in message. Developers may offer auto-renew on subscriptions with price increases without the user needing to take action. Instead of explicitly asking a subscriber, the auto-renew will appear as mere notifications. The conditions for auto-renew with price increase are as follows: “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.”

Keeping Up with Auto-Renew Laws

SaaS vendors rely on subscriptions for income. There are many ways to optimize pricing for SaaS but no matter which pricing plan a customer chooses, the best scenario will always be when they also opt for auto-renew. This, after all, ensures continuous business for SaaS companies.

However, unscrupulous vendors charging hidden fees or increasing prices on succeeding renewals is not unheard of in the industry. Though some cases might be due to errors in the system of the SaaS vendor, seeing an unexpected charge on your account can still be very distressing for customers, especially if you would’ve ended your subscription if you knew the price increase was beyond your business budget or financial capacity.

That’s why we’re anticipating some backlash from subscribers. It can even present legal challenges for Apple and many app providers since laws for auto-renew can vary depending on the state. For example, some of the newest laws to be enacted in the state of Vermont, Washington D.C., and North Dakota require companies to send “clear and conspicuous written notice between 30 and 60 days prior to the end of the current subscription term,” for renewals of a year or more. They should also include in the notice an easy way to cancel their subscriptions or contracts.

Moreover, in the case of Vermont, companies must also clearly present the terms of the auto-renewal in plain and unambiguous language. They must also obtain two consents from the client—the first is for the explicit agreement into the automatic renewal subscription and the second is for the specific automatic renewal provision.

On its website post, Apple did lay out the many ways subscribers will be notified in case there’s a price increase and things they can do to cancel. But there are no details yet on how early customers will receive notices, only that they will be sent an “email, push notification, and a message within the app.” We don’t know how well this approach will work though considering that the very reason Apple made the changes was due to customers missing opt-in messages.