Antitrust Committee Chairman Calls App Store Fees 'Highway Robbery'

[aakshey]

Right, because Apple has no operating expenses whatsoever. Everyone who works for Apple is a volunteer and the data centers are paid for with tax money. 🙄

They can bill 2x AWS fee. They also get USD 100/yr per developer. That’s more than AWS gets for doing a lot more.

Apple will still get 30% on App Store purchases.

Alternately, do nothing. Just allow apps like Hey to sign up users offline. And skip paying Apple. No changes needed.

 

[gaximus]

About time. Apple deserves what’s coming. Hopefully they force Apple to allow loading apps outside the App Store.

I would never want this. Some sided loaded app could add a virus that spreads the virus to other iPhones through iMessages or some other way so that a careful person, not side loading apps, gets infected. There are other solutions that could be done to allow apps to not have AppStore benefits and still go through the AppStore approval process.

 

[Pupi]

2007: wow I can freely publish my apps and if I want to sell them Apple only takes a 30% cut!
2020: THIS IS A HIGHWAY ROBBERY

I think it's ridiculous that a private company can't make and control a product the way they want to do it. You don't NEED an iPhone. It's not a public good. If they make it so good people think they need it, that's through talent and work and not through governmental influence on how the product should be done or managed.

PS-I wonder how any major decision in this field will impact other software digital fronts and gatekeepers such as consoles manufacturers, Steam, etc, which basically rely on the very same model, or if the legislators are just plain ignorant and just want to target Apple.

 

[Bokito]

Is the 30% tax too high? Definitely! Should Apple be allowed to tax devs at all? Sure as it allows promotion and no questions asked worldwide distribution. For a small dev setting up worldwide distribution and sales would go into 5 or 6 figures just to set it up alone, so Apple may certainly take something.

When the App Store launched the 30% was used to cover costs and that was justified back then. Apple is now generating billions a year from this 30% cut, it’s an entirely differs situation. The tax can be lowered to somewhere between 5 and 10% and Apple might still be able to take a small profit and I think that is always justified. But not the 30% anymore.

 

[PickUrPoison]

And that’s what I said. They should be allowed to charge whatever. But they need to allow non App Store apps too. Give people a choice. If the 30% isn’t insane, people will stay.
[automerge]1592512436[/automerge]


Great idea.
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So the fees is public and not insane. People pay based on hosting usage by their app.

Yes, you did say 30% was insane, and you just said it again.

And no, they do not need to allow non-store apps. 30% is a completely reasonable fee. Period.

 

[aakshey]

30% is fine. Just enforce rules consistently. Either bill Spotify. Or don’t even bill Hey.

 

[Rogifan]

IMO Apple should be allowed to charge whatever they want through the App Store.

However, they should be forced for apps to be allowed to be downloaded outside the App Store. Apple will still need to sign them and host them on AWS and bill developers AWS fees for these apps. This ensures safety. And also ensures developers don’t pay insane fees if they don’t want to be on the App Store.

30% isn’t insane. Tens of millions of iOS developers willingly to pay that fee 🤷‍♂️

Why not make it easier and allow developers to offer their own payment option in-app? Big names like Netflix and Spotify currently aren’t offering IAP so Apple isn’t getting a cut of those subscriptions anyway. Smaller developers would probably continue to use Apple’s payment system. Apple could also drop the cut from 30% to 15% or have some sort of scale where where it‘s 30% for the first x number of revenue and then drops as the revenue increases.

For everyone who throws around privacy and safety...people are buying non-digital goods in iOS apps all the time and those do not use Apple’s payment system. They use whatever card you have on file with Amazon, Kohl’s, Target, Walmart, Uber, Panera etc. or Apple Pay if the company supports it. Also Apple can’t prevent anyone from subscribing to services or buying other goods via the browser. This isn’t about privacy or safety it’s about Apple believing it’s entitled to a percentage of 3rd party developer revenues because Apple believes they‘re offering the developer a rich base of customers with disposable income that these developers wouldn’t otherwise have access to. If Apple is really putting the screws to developers (which Ben Thompson and others seem to indicate) what that tells me is Apple’s own services revenue from Apple News+, Apple TV+, Apple Arcade etc. aren’t doing as well as Apple hoped and so they’re looking elsewhere to make up services revenue deficit. I mean does anyone remember the last time Tim Cook or anyone at Apple mentioned any sort of subscriber figures for these services? If people were signing up like crazy Apple would be crowing about it.

 

[PickUrPoison]

They can bill 2x AWS fee. They also get USD 100/yr per developer. That’s more than AWS gets for doing a lot more.

Apple will still get 30% on App Store purchases.

Alternately, do nothing. Just allow apps like Hey to sign up users offline. And skip paying Apple. No changes needed.

Apps like Hey can already sign up users online.

 

[Rogifan]

Heh, Apple not backing down over rejecting the Hey app.

https://twitter.com/x/status/1273718506287099904

And then there’s this...

https://twitter.com/x/status/1273618361725812736

 

[NoImDirtyDan]

This doesn’t help Apple. It’s unfair to them.

Please explain to me how it is unfair to Apple? I think it is unfair to developers to get taxed $3mm for each $10mm brought in.

If you're bringing in $100mm a year on the App Store, you should not be robbed for 30mm of that. Even if Apple took 10% that is still a significant amount. Furthermore, their 30% doesn't include company tax expenses.

 

[jonblatho]

So, will Representative David Cicilline be in touch with Amazon about their fees?

Probably not, because you don’t have to sell on Amazon to sell goods into any market. You do currently have to sell through Apple to sell software and digital goods and services to iOS users, though.

Judging by Rep. Cicilline’s comments, it would sound like they intend on changing that if Apple doesn’t do it first.

 

[Kabeyun]

Whether or not Apple is culpable of anything, this whole process seems a little smelly. First, the whole opinion solicitation process creates bias towards people with an axe to grind. Anybody with even rudimentary business education knows that one disgruntled customer is orders of magnitude more powerful than a satisfied customer. And now, the chairman of the committee comes out with comments like this? Imagine a judge giving one-sided press conference before a verdict is read. Instant mistrial.

I’m wondering what a fair solution would be. No App Store at all? I wouldn’t want that. I like the filtration process over the wild west that is Google Play. Is it really better for customers to let any malignant developer have the ability to install any malignant code on any iPhone? (And you know who gets the call when it screws something up. Hint: It ain’t the dev.) So if the solution is not to abolish an App Store entirely, what is a fair cut? What would be a fair price to pay Apple for the privilege of appearing in front of the most iPhones, to pay for maintaining app reviews and the App Store infrastructure, to have access to that sales avenue? If 30% is criminal (and it drops to 10% after the first year) and 0% is unfair to Apple, what’s the magic number? Or is the right answer to deny Apple a cut of only subscription revenue, not initial licensing revenue? That doesn’t seem fair either, as apps all seem to moving towards a subscription model (which is complete horsecrap, but that’s another thread).

I’m sure everybody around here has a simple and obvious answer, just like internet forum answers to all the world’s complicated questions, but I don’t see it.

 

[PickUrPoison]

30% is fine. Just enforce rules consistently. Either bill Spotify. Or don’t even bill Hey.

Problems with inconsistent application of Apple’s rules are addressed when brought to apples attention, right? For example, Hey was pulled after being incorrectly approved.

 

[aphotechre]

Even though i really think there are many valid points from both sides (devs and apple), it is kinda hillarious that there may be developers that are complaining for high fees per sale, while they offer apps with anecdotal functionalities for a 2.99 dollars per month..

On the other hand someone could argue, that the consumer has a choice to not buy such apps, while they developers don't.

That's why i think there should be some kind of reform on app fees or charging system..

 

[TVOR]

Why not make it easier and allow developers to offer their own payment option in-app? Big names like Netflix and Spotify currently aren’t offering IAP so Apple isn’t getting a cut of those subscriptions anyway. Smaller developers would probably continue to use Apple’s payment system. Apple could also drop the cut from 30% to 15% or have some sort of scale where where it‘s 30% for the first x number of revenue and then drops as the revenue increases.

For everyone who throws around privacy and safety...people are buying non-digital goods in iOS apps all the time and those do not use Apple’s payment system. They use whatever card you have on file with Amazon, Kohl’s, Target, Walmart, Uber, Panera etc. or Apple Pay if the company supports it. Also Apple can’t prevent anyone from subscribing to services or buying other goods via the browser. This isn’t about privacy or safety it’s about Apple believing it’s entitled to a percentage of 3rd party developer revenues because Apple believes they‘re offering the developer a rich base of customers with disposable income that these developers wouldn’t otherwise have access to. If Apple is really putting the screws to developers (which Ben Thompson and others seem to indicate) what that tells me is Apple’s own services revenue from Apple News+, Apple TV+, Apple Arcade etc. aren’t doing as well as Apple hoped and so they’re looking elsewhere to make up services revenue deficit. I mean does anyone remember the last time Tim Cook or anyone at Apple mentioned any sort of subscriber figures for these services? If people were signing up like crazy Apple would be crowing about it.

You do realise that Apple have been charging this 30% since LONG before Apple News+ etc. were even a thing...right? The 30% figure wasn't set to make up for any kind of services revenue deficit...it was probably the maximum number that their very experienced financial team thought the market would tolerate in order to maximise profits like all businesses do (except charities or not-for-profits).

 

[GermanSuplex]

I don’t get it. It’s a fee. Pay it or don’t. You could make this argument about the price of anything.

 

[I7guy]

IMO Apple should be allowed to charge whatever they want through the App Store.

However, they should be forced for apps to be allowed to be downloaded outside the App Store. Apple will still need to sign them and host them on AWS and bill developers AWS fees for these apps. This ensures safety. And also ensures developers don’t pay insane fees if they don’t want to be on the App Store.

It might take some of the sting out of this, but I agree Apple needs to review and sign every app for download...even if they were forced to open up the app store.

I believe transparency is key !

Would love to see AAPL release specific, per-Category, per-Qtr, Financial Numbers for both the iOS App Store & the Mac App Store !!

Specifically, how much Revenue per-Qtr, per-Category in both App Stores !

If AAPL were to Release that data covering the past ten years, that would help App Devs ALOT !

It would ALSO force AAPL to do a much better job OUTSIDE of Game & Streaming Media sub apps, which probably accounts for 85% OR more of the iOS App Store Revenue !

Apple is under no obligation to disclose those financials.

Seems to me there are more pressing issues in the country, but this probably won't get any traction.

 

[Orson Farris]

I guess I should have known that over 90% of the responses would be taking Apple's side. I think we all agree that Apple deserves a fee from developers. But 30%? Really? I am new to Apple (many years of android) but at least at first glance the fees seem excessive and the rules seem arbitrary.

 

[konqerror]

Unlike the credit card analogy another person posted, storefronts can decide not to accept credit cards, and do so when rates get too high. Ever been to a take out restaurant that only accepts debit and cash? That's precisely why.

Actually, that's only because of antitrust lawsuits and government regulations. Prior to a 2003 antitrust settlement, Visa and Mastercard both tied debit and credit cards together, so you had no choice in accepting one or the other.

After that, Visa and Mastercard gave banks lucrative rebates for exclusively signing on to their expensive signature debit networks, which led to the 2010 Durbin amendment to require two independent networks on all debit cards.

Further, many other countries, particularly the EU, have stepped in and capped credit card interchange rates at a small fraction (~1/10th) of that in the US. In fact, the Durbin amendment caps debit card rates for big banks.

So really, the antitrust and fee situation around credit and debit cards is not settled, and in most cases is not a free market situation with government regulation of costs.

 

[oneMadRssn]

I'm a developer (not iOS) and all the marketplaces for web templates, plugins etc. are charging similar fees.

Apple charges essentially 30% to process credit card transactions. Most other payment processing companies charge under 5%. So, not similar at all. I don't think this is defensible.

 

[Rogifan]

You do realise that Apple have been charging this 30% since LONG before Apple News+ etc. were even a thing...right? The 30% figure wasn't set to make up for any kind of services revenue deficit...it was probably the maximum number that their very experienced financial team thought the market would tolerate in order to maximise profits like all businesses do (except charities or not-for-profits).

I’m referring to more apps being scrutinized and/or updates being rejected for not offering IAP. From what I‘m seeing on Twitter it seems numerous SaaS apps are getting this treatment now. The issue with Hey seems to be Apple does not consider them a “reader” app and thus is requiring IAP. But base on App Store guidelines how in the world can Dropbox be considered a reader app? Yet Apple does and doesn’t require Dropbox to offer IAP. Madness.

 

[Macropanda]

Please explain to me how it is unfair to Apple? I think it is unfair to developers to get taxed $3mm for each $10mm brought in.

If you're bringing in $100mm a year on the App Store, you should not be robbed for 30mm of that. Even if Apple took 10% that is still a significant amount. Furthermore, their 30% doesn't include company tax expenses.

If you have an app that is making $100m a year then apples servers will be taking an absolute battering. Plus a large proportion of that money will be due to people know they can get an app that’s safe and works well.
If you host it yourself you have to worry about maintaining the download source, informing users of updates, potential DDOS attacks, more marketing as you’re not in the search results.
If that same app wasn’t in the App Store people wouldn’t be able to find it as easily and even if they could, are much less likely to trust it.
I’d rather get 70% of $100m than 100% of $10m.

 

[drewyboy]

IMO Apple should be allowed to charge whatever they want through the App Store.

However, they should be forced for apps to be allowed to be downloaded outside the App Store. Apple will still need to sign them and host them on AWS and bill developers AWS fees for these apps. This ensures safety. And also ensures developers don’t pay insane fees if they don’t want to be on the App Store.

Or, just do what they do for the Mac. A simple solution, shocker I know. Remember the iPhone started out as a web app only platform.

 

[TVOR]

Please explain to me how it is unfair to Apple? I think it is unfair to developers to get taxed $3mm for each $10mm brought in.

If you're bringing in $100mm a year on the App Store, you should not be robbed for 30mm of that. Even if Apple took 10% that is still a significant amount. Furthermore, their 30% doesn't include company tax expenses.

OK...in your opinion...would it be OK for Apple to "tax" $30 for $100 in revenue? If so, what about $300 on $1000? What about $30000 on $100000? I have a feeling that you would say OK to the first example but be progressively more against it as the numbers rose. Probably on the basis that Apple has no way to justify the increasing amount they are earning.

But does that not mean then that the "rich" are getting "taxed" less than the "poor" (proportionally speaking of course)? In that case, I think that Apple should pay a lower percentage of Corporation Tax than the Mom and Pop store in your town...because there is no way that Apple is using millions (or even billions) of times more public resources than a small business...so how does the government justify charging them so much in tax???

And before all the Apple haters start vomiting out complaints that Apple avoids tax wherever it can...that's another question entirely...the point still stands...substitute Apple with any other mega-corporation and the argument is still the same. You are arguing for progressive "taxation"...but on a reducing sliding-scale as income increases.

 

[oneMadRssn]

I'd like to sell a book on a Kindle. How do I do that? Ah, I go to Amazon - and only Amazon

But you can sell a book on about a dozen other places - both digital and tangible. For digital, there is Barnes and Noble, Kobo, Apple, Google, and a few others. For brick-and-mortar, there are thousands of stores.

You can sell a mobile app ONLY on the Apple App Store and Google Play Store. That's it. There are literally only 2 options. And there is 0 competition between those two options because to reach >50% of the market your app must be on both stores. No matter what Google does, Apple doesn't have to match them because Apple knows the developers need to sell on the Apple App Store no matter what.