Antitrust Committee Chairman Calls App Store Fees 'Highway Robbery'

[Sheppard]

I’m in two minds on this one. On the one hand, giving over 30% of your revenue gained within the app seems high; you are not locked into only using that method. A drop to 15% after the first year is, I think, good value for money. It does depend on how you quantify value of your subscribers In terms of tenure.
The sheer amount of investment Apple must put into Software R&D And developing their Infrastructure must be eye watering. However, this information is not available and would probably go some way to rationalise the argument.

Edit: % Typo

 

[TVOR]

Tbh, I threw the numbers out there just as an example and didn't mean "Tax the poor less than the rich". My point was that there could be a system that can benefit both sides of the spectrum. My example was poorly written. Sure, flip the scale tax the smaller guys less, and as they grow hit them harder. I still think 30% is excessive. Tax the small guys 10% and the large ones 20%.

But then all the guys who argue that rules should be applied consistently would be up in arms...

 

[NickName99]

It’s worth mentioning that Apple charges 30% for apps, and 15% for long term subscription fees. The Google Play store charges the same.

Google used to charge more for subscriptions, but lowered it to 15% after Apple did.

 

[NoImDirtyDan]

But then all the guys who argue that rules should be applied consistently would be up in arms...

Catch-22, can't make everyone happy! I also forgot that Apple reduces to 15% after the first year so I don't see the purpose of the argument anymore LOL.

 

[The Phazer]

Not what I was asking. I want to sell a book FOR A KINDLE. Just like I want to sell an app FOR AN IOS DEVICE. I'm talking about hardware. I want to sell a book for a Kindle, and I can only do that via Amazon's system that charges at least 30%.

How do I sell a book for a Kobo? I use Kobo Writing Life. I can't use some other store. I have to use Kobo Writing Life. 70% royalties.

How do I sell a book for a B&N Nook? I use &N Press. I can't use some other store. I have to use B&N Press. 65% royalties.

How do I sell an app for an iOS device? I use Apple's App Store. I can't use some other store. I have to use Apple's App Store.

What is the difference?

As already noted, this is false information. I buy ebooks from Humble Bundle all the time, and a one time copy and paste of my email address into a box means the books appear on my Kindle.

 

[mariusignorello]

Apple gives you everything in a package deal; access to millions of devices, guidelines for ensuring a good app experience, payment processing, sales reports and more. You want it all for free? Most BI-related SaaS companies charge for each one of those features separately.

Also, if your app is free with no in app purchases (like Netflix) you pay NOTHING for the above.

Everybody loves taxing and charging someone else until the bill is in their hands. Pay the fee or don’t use the service, AKA don’t develop paid apps/IAPs on Apple platforms

 

[rtomyj]

I disagree, charging 30% for all the work Apple has done for developers to provide an amazing ecosystem is completely fine. I'm a developer (not iOS) and all the marketplaces for web templates, plugins etc. are charging similar fees. It's a part of the game. You feel you should earn more? Make better app!

Exactly. Users will pay for good products. Also, the fact that devs don’t want to pitch in on what Apple engineers have built should make their own OS and framework. I guarantee the people bitching don’t know enough to get started. Most prolly abuse the new Swift UI and/or use bare bones components they make pretty. You know, essentially doing nothing.

 

[jonblatho]

I want to sell a book for a Kindle, and I can only do that via Amazon's system that charges at least 30%.

My understanding with a quick Google search is that Amazon itself doesn’t directly allow putting unauthorized books on Kindle devices, but it’s possible. They certainly don’t actively prohibit doing so like Apple does for iOS apps.

 

[JoshBoy]

Look at my tax rates. I pay nearly 50% on part of my income. Look at my credit card, I pay nearly 22%. 30% I’d not that bad considering the work they do around it and how big the market place is.
people are just entitled these days and expect everything for nothing.

 

[TiggrToo]

You know what, here, have an example scenario:

1. A developer uploads a free app to App Store Connect for review. The app is actually stored on AWS. This costs Apple money because Amazon charges a nominal fee for AWS storage.
2. The free app is approved and becomes publicly available on the App Store. Users download the app from the App Store, but really it’s being downloaded from AWS. This costs Apple money because Amazon charges a nominal fee for AWS egress traffic.

The person to whom you were replying was suggesting that instead of Apple collecting nothing other than the annual Apple Developer Program fee from a free app then repeatedly treating developers of free apps like ingrates and oppressing them, Apple should bill the developer based on what AWS charged them for storage and traffic related to that developer’s activity on the App Store.

Does that make sense to you now?

No, it makes no sense.

Again, the fact that Apple use AWS for its internal architecture and. as part of iCloud is 100% irrelevant.

Apple will sooner allow sideloading before using AWS as an alternative app mechanism.

 

[Doug Gainous]

Although I think Apple's fees are very high and hurt the changes developers can be successful with apps that aren't unicorns, I can't help but think that Apple built the company, the products, the ecosystem, and the developer tools for making apps.

Nobody is forcing developers to build App Store apps just the same way is that nobody is forcing anyone to buy iPhones. I think Apple has earned the right to charge what they want for their proprietary services and app store, even if I think it's high.

I don't really think this is a government issue. If you don't like it, vote with your wallet.

 

[Jgreg00]

I disagree, charging 30% for all the work Apple has done for developers to provide an amazing ecosystem is completely fine. I'm a developer (not iOS) and all the marketplaces for web templates, plugins etc. are charging similar fees. It's a part of the game. You feel you should earn more? Make better app!

As Schiller pointed out. All of Basecamp's other apps have brought nary a penny to Apple...because they follow the rules. There are very clearly other ways to get around having Apple take 30% of your sales. Hey/Basecamp is just being lazy and whiny.

 

[urnotl33t]

As someone who had friends in the software business in the 90s, this cracks me the hell up. Giving Apple a 30% cut to handle all distribution and sales would have been a fairytale of a good deal back in the day.

And it was. It still is.

 

[TVOR]

Have a look at Envato as well...a similar "Marketplace" approach. Here is there current business model:

1) A fixed fee of anywhere between $1 and $192 depending on what category of product and what license is granted and
2) A "commission" based on total sales volume for a given item which ranges from 37.5% when you start out down to 12.5% if you have over $75,000 in sales.

What's interesting is that the $192 fixed fee is for items/licenses that are generally around the $400 mark...so that's close to 50%...and THEN an additional percentage which could be up to 37.5%...so in theory the commission could be close to 90%...or could be as little as 13% or so. But I would wager that most authors on there are paying around 30% in total for most of their products.

Just for context, their historical rates are here (including paying out only 25% at one point for items which were "non-exclusive" to their store!)

Historical and Special Payment Rates

Summary: This article outlines our historical payment fees and rates, as well as our special rates policy. Historical Rates Special Rates Policy Historical Rates Over the years Envato Market has c...

help.author.envato.com

[automerge]1592516716[/automerge]

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.

What did Google charge for the Play Store while you were developing for Android for many years?

 

[ouimetnick]

I disagree, charging 30% for all the work Apple has done for developers to provide an amazing ecosystem is completely fine. I'm a developer (not iOS) and all the marketplaces for web templates, plugins etc. are charging similar fees. It's a part of the game. You feel you should earn more? Make better app!

Uhh that’s why developers have to pay a $99 a year fee to have their app hosted on the App Store. Even free apps require the developer to pay $99 a year to join the program.

 

[Rogifan]

Schiller responds. Basically Apple is sticking by their stance.

vhttps://twitter.com/panzer/status/1273720133471498240?s=21

 

[odonnelly99]

If he really believes that, then he must find the concept of taxes ridiculous.

I mean, what’s wrong with being able to sell an app outside of the App Store? It’s worked fine on classic Mac OS, OS X and now MacOS again for how many decades?

If they don’t want the exposure that the App Store provides them, that’s their choice. Personally, I think Hey is a stupid app and it needs all the exposure it can get. But if the developers want it to get lost on the Internet and downloaded 4 times from their websire before they have to shut it down, fine, that’s their choice to make.

Apple isn’t going to win this one. If anything, this stuff will drag on in courts for the next decade and a ton of money will be spent on lawyers. And the further it drags on, the worse Apple will look in the court of public opinion.

Apple should just implement the system that macOS uses where it has to be signed or whatever, and make it seem like it’s their idea. We all know they’ll never concede defeat, and in this case, they won’t have to, if they fix this soon enough.

(The same goes for Google and other app stores that work similar to Apples. I haven’t owned an android phone in a few years now, though, and I’m not sure how their App Store works. So, I’m in no position to offer commentary on Google, or amazons app store, etc.)

*apologies for any typos, iOS and iPadOS autocorrect despises me.

 

[TVOR]

Schiller responds. Basically Apple is sticking by their stance.

vhttps://twitter.com/panzer/status/1273720133471498240?s=21

Good...glad to see somebody in the world showing that they have some backbone!!

 

[odonnelly99]

Why would you want that? Downloading through the App Store gives you peace of mind the app has been checked and is safe. The odd one will always slip through but that’s much much better than having all sorts of apps doing things in your phone you don’t know about.

And most people will continue to buy through the App store, for that “peace of mind.” Fine. That’s absolutely fine.

But don’t act like being able to download apps outside of the App Store will turn iOS into a malware/suspicious app cesspool. It’s worked fine on Macs for decades.

edit: forgot two words

 

[discuit]

Also, if your app is free with no in app purchases (like Netflix) you pay NOTHING for the above.

That's not true. Apple will ban your app, like they are threatening to do with Hey, unless you give them 30%, even if the app is free and makes no mention of having to go elsewhere to get your subscription.

The only way out of it is to be as big as Netflix so Apple can't bully you.

 

[rudigern]

Why don't they just do a bracket system where the more you sell the less of a % is taken...

Example:
$0 - $10,000 30%
$10,001 - $100,000 - 25%
$100,001 - $1,000,000 -20%

ETC...

IMO this would be fair and create incentive to grow...

That would actually hurt startups and sole developers. I agree there are some problems with 30% of subscriptions for something like Hey (they really pisses me off, I don't think they've made a good app but they're riding this publicity) but having all companies on the same tier levels the playing field.

 

[InnocenceMyth]

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.

You honestly think that’s all Apple is doing for this 30%? Please go open a business. I need a laugh, and that would provide it.

 

[himanshumodi]

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.

the issue isn’t the “hosting charges”. The 30% covers all the fees. And I am sure hosting will be a minimal component. Assuming they make the profits of hardware from the users, the profit for the entire iOS and iPadOS development and App Store regulation will come from these charges.

There simply can’t be a win-win situation how some developers seem to want it - skirt paying Apple any (or lesser) money while also getting access to all their customers.

I don’t see how anyone can pass any regulation to give choice to users of downloading applications from anywhere while at the same time making Apple liable for any issues side loaded apps cause on the phone.

That said, I am not sure if Apple’s reasons for making App Store the only source of apps is sound. Honestly I don’t get why the rules of installing apps on a computer don’t apply on iPhones. We do install apps there all the time. If something messes up our laptop. We reformat and start again.

 

[I7guy]

...
Apple isn’t going to win this one. If anything, this stuff will drag on in courts for the next decade and a ton of money will be spent on lawyers. And the further it drags on, the worse Apple will look in the court of public opinion....

I disagree. On MR where Apple is micro-scrutinized maybe, but the MR justice system has already condemned Apple.

My belief is most consumers don’t care. The policies for big guys like Netflix won’t be changed. The policies for small guys wont be changed. Maybe devs would get a slightly bigger cut in the long run...but who knows.

 

[Jakewilk]

I actually agree, 30% is way too high, but it’s a mistake to think that hosting apps is a free service that apple owes developers