Apple digs in over its App Store fees

Apple digs in over its App Store fees

Apple App Store

Apple defended the developer fees for selling its digital products through its App Store.

The iPhone maker claims that a commissioned study shows that content producers offer a cut similar to dozens of other online markets and an even greater share if their products are sold offline.

Apple is facing complaints about both sides of the Atlantic.

The EU launched a competition investigation in June and CEO Tim Cook will testify to Congress on Monday.

It will appear in front of the antitrust subcommittee of the Chamber’s judiciary next to the counterparts of Amazon, Facebook and Google. The tech giants face everyone by claiming to have abused their market leading positions.

It emerged that before the hearing, the president of Microsoft informed the panel that his company had doubts about how Apple operated the App Store.

According to an information report, Brad Smith drew attention to issues including:

  • apps cannot be easily installed on iOS devices by other means
  • moderators’ decisions about approving or rejecting apps sometimes seem arbitrary
  • developers must share a reduction in in-app fees and cannot promote alternative payment methods within their products

Public line

It is the second time in two months that Apple has published an analysis team report on its digital store.

In June, Boston-based consultancy suggested that the App Store had “facilitated half a trillion dollars” in exchanges in 2019.

But that report was quickly overshadowed by the announcement by the European Commission that it was investigating complaints from the Spotify music streaming service and the Kobo e-book store. They claimed that Apple’s rules gave their digital products an unfair advantage.

To complicate matters, Apple has also been involved in a public space with the email app producers Hey, who were refusing to give him a share of their subscription fees.

  • The annual Apple developer showcase obscured by the app line
  • Apple accused pricing policies of “hostile” apps

Apple later announced the changes to its app review process as a concession. But the latest report indicates that he is unwilling to compromise on the charges he imposes.

The analysis team compared Apple’s App Store with 37 other digital and e-commerce markets.

He found that the company’s standard demand for a 30% sales cut was in line with what Microsoft, Google, Amazon and Samsung took.

But there were some exceptions. The group said:

  • Epic Games video game market has a 12% share
  • Freelance work platforms including TaskRabbit and Upwork occupy between 5% and 20%
  • Amazon Prime Video holds a 50% share of the purchase and rental sales
  • Kobo’s audiobook platform has a cut from 55% to 68%
  • Chinese app stores often charge 50% or more

The study also suggested that developers and publishers got a smaller share from the “brick and mortar” offline channels, where stores and other brokers typically take:

  • a 55% share of video game sales
  • a 50% share of newspaper sales
  • a 60% share of magazine sales

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Getty Images

Caption of the image

Leaders of Facebook, Google, Apple and Amazon will testify to a U.S. antitrust hearing next week

The report also highlighted that other e-commerce markets also had rules to prohibit sellers from ordering buyers to pay offsite to avoid commissions. Examples provided are:

  • eBay
  • Etsy
  • Walmart
  • Amazon
  • Airbnb

However, when this last point was insisted, one of the authors of the report admitted that while buyers were aware that they could always go elsewhere to buy physical goods, they did not always realize they could buy subscriptions and other digital products. outside an app.

Developers often offer cheaper deals on their sites as they don’t have to share costs with Apple, but the tech company forbids them to warn users of the possibility within their apps.

The analysis team said it believed that most users would be aware of the possibility of subscribing to Netflix and the bigger brands via a smart TV or website, but acknowledged that this was not the case for small publishers.

Apple is under fire – by big and small developers, politicians and regulators – during the way it manages its App Store.

The firm indicated that this report does not necessarily represent the testimony Cook will provide when questioned by the United States Congress next week.

But if he refutes claims of unfair practices with “we are not worse and sometimes better than Amazon, Google, Uber and Microsoft”, he may not win over politicians.

That argument certainly won’t impress developers like Basecamp’s David Heinemeier Hansson, who came out poorly with Apple on his Hey email app.

Although this controversy has been resolved, Hansson still wants radical changes.

“The power of Apple and the rest of the big tech monopolies is unbearable,” he said, clarifying that he was working with regulators and politicians to change things.

“That’s where permanent relief will come from.”

Apple can expect a long battle, but we have begun to see the form of its defense.

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