Apple Faces New EU Antitrust Complaint Over 30% App Store Commission Rate

[MacRumors]

Apple is facing another European antitrust complaint, this time over its 30 percent cut on ebooks in the App Store. The complaint was made to the European Commission by Rakuten's Kobo subsidiary, which alleges that Apple's commission rate is anti-competitive when it also promotes its own Apple Books service.

According to a Financial Times report, Kobo argues that having to pay Apple 30 percent commission on each ebook that it sells through the App Store via the Kobo app makes it next to impossible to turn a profit, whereas Apple's own Bookstore means it doesn't have to take an equivalent revenue cut.

The complaint is similar to one that Spotify filed with the EC in March 2019. Spotify specifically took issue with Apple's 30 percent fee collected on ‌App Store‌ purchases, which has forced Spotify to charge subscribers through the ‌App Store‌ $12.99 per month for its Premium plan instead of the $9.99 per month fee it normally collects.

Spotify argued that the iPhone maker enforced ‌App Store‌ rules that "purposely limit choice and stifle innovation at the expense of the user experience."

Apple swiftly hit back at the accusation, labeling it as "misleading rhetoric" and arguing that "Spotify wants all the benefits of a free app without being free." Spotify's antitrust complaint is still under investigation.

The EU can force companies to change business practices they deem unlawful and levy fines of up to 10 per cent of a company's global turnover. However, investigations by the European Commission can take years to resolve unless the companies involved offer to settle the probes by making legally binding agreements to change their behavior.

Article Link: Apple Faces New EU Antitrust Complaint Over 30% App Store Commission Rate

 

[fitshaced]

For Kobo it’s pretty simple. Don’t sell books through the app like Amazon don’t. For any subscription service, your hindsight is 20:20. How about sucking it up. It’s a decision you made at the time you released your app.

 

[johnnytravels]

Good, topple that monopoly, where Apple gets a 30% cut for providing nothing other than basic payment management (compared to apps that are generally free) for the sale of services it does not render.
Or, if trying to be consistent, charge Amazon 30% for material goods sold through their app as well.

 

[nikusak]

How many customers has Spotify lost because people need to subscribe outside AppStore if they want to get Spotify for 9,99?

They should come up with a number.

I prefer AppStore billing because I want to minimise the places where my credit card is stored. And it’s so convenient.

But having to register elsewhere to save money is not a dealbreaker for me when it comes to subscriptions.

For one time impulse buys, it can be a dealbreaker. I’ve purchased quite a bit of stuff from AppStore because it’s so easy.

I do think that 30% is too much (15% for subs after one year), but for most developers a single curated AppStore (even with the 30% cut) is probably better than selling your wares on your own website, if that was possible.

 

[gamersevil]

I want to sell my stuff in your store without paying rent.

 

[iPadified]

The EC making a broken market economy work? It is an interesting dilemma for EC as both have a valid standpoint.

 

[nikusak]

Good, topple that monopoly, where Apple gets a 30% cut for providing nothing other than basic payment management (compared to apps that are generally free) for the sale of services it does not render.
Or, if trying to be consistent, charge Amazon 30% for material goods sold through their app as well.

They are consistent.

They take their cut only for digital goods, not physical goods.

30% is too much, but they are providing much more than “basic payment management”.

AppStore curation and running it isn’t free and neither is the R&D for all the developer tooling (which Apple of course needs internally but requirements for internal and external tooling are quite a bit different).

With Android it’s possible to sideload.

Care to mention any sideloading success stories?

 

[Naaaaak]

I want to sell my stuff in your store without paying rent.

No one is asking for free.

30% is ridiculous for what they offer. There's almost no value add from Apple. Just extra hoops and arbitrary nonsense to jump through.

 

[macfacts]

The EU should increase their fine to 30%

 

[dschulian]

The 30% cut is way too high. PERIOD.

 

[fitshaced]

The 30% cut is way too high. PERIOD.

Sure, but then move away from selling on the App Store. Age off existing subscribers with an incentive to move to recurring payment on Spotify’s payment system. Maybe they think they’ll lose customers to a more convenient Apple Music or maybe they think they have the superior product. If they move first, Apple might be forced to change. That’s capitalism isn’t it?

 

[Naaaaak]

30% is too much, but they are providing much more than “basic payment management”.

AppStore curation and running it isn’t free and neither is the R&D for all the developer tooling (which Apple of course needs internally but requirements for internal and external tooling are quite a bit different).

App Store curation sucks. There's nothing I've found in the App Store that I didn't find elsewhere first.

Curators let through numerous scam apps, numerous apps that are straight knockoffs of existing apps with names changed, apps with malware… but if you used a round rect icon that looked like an iPhone for one of your buttons they'll make sure to reject your app lest your violate their trademark iPhone shape (which could be any round rect).

The App Store really is basic payment management with extras I don't want or need. For a 30% cut, devs can't even refund their users. And building for the app store after distributing direct is stage 4 CANCER and sucks the fun out of dev life.

Don't even get me started on the utterly retarded certificate management, which every dev loses hours on at least once a year (before they give in and wipe and re-roll everything because Apple's cert management doesn't work correctly 10 years in).

 

[Glideslope]

Good old EU. Good luck with this one. Perhaps you'll resolve it by 2030. ?

Focus on the internal divisions between you're Nation States and Brussels.

 

[johnnytravels]

AppStore curation and running it isn’t free and neither is the R&D for all the developer tooling (which Apple of course needs internally but requirements for internal and external tooling are quite a bit different).

True but then again, they also add this tremendous [/s] value to apps that are entirely free.
They are only additionally providing payment management to apps with subscriptions or digital goods. No way in hell they deserve a 30% cut for that.

 

[Mac Rules]

If Apple believes the value-add from the App Store is a 30% markup then allow competitor App Stores on iOS; warn people that they are leaving the safe, walled-gardenof the App Store and expose themselves to (potentially) increased risk in return for cheaper apps.
They can still use an app signing process as used on macOS for apps not on the App Store which would go someway to preventing nefarious developers releasing apps freely on the platform.
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[itsmilo]

Good old EU. Good luck with this one. Perhaps you'll resolve it by 2030. ?

Focus on the internal divisions between you're Nation States and Brussels.

you are aware the EU didn’t do this?

—-

either way, Apple knows exactly what they are doing. It’s great marketing actually. Using the whole „we care about your privacy“ agenda to justify not opening up the phone to 3rd party stores. All they would have to do is add a „are you sure you want to allow 3rd party apps. Please be aware that ...“
same reason they don’t let you change the default app. They want you to use their services and buy digital goods with them.

Its just redic that you are not even allowed to simply add a LINK to redirect to their mobile page to buy digital goods.

how come ASOS, amazon etc can sell goods but a digital book store cannot sell their digital books without Apple asking for 30 %? It’s not like the music on Spotify is hosted by Apple ...

 

[hanske68]

I do not mind paying for the Apple services, but personally I do thing 30% is very much. If you want to sell software on the AppStore you also need a (payed) apple developer account. Apple's developer documentation is horrible (if even available), their 'rules' are very strict and developer support is (practically) absent. A 30% tax on all that is not good. Add local taxes and the total tax is way over 50% (here in Europe). That means that it becomes pretty difficult to earn on selling software via the App Store. Developers should up prices for the App Store, which is not beneficial for end users.

 

[chrissomos]

If you don’t like it get an android. It’s that simple.

 

[jlc1978]

No one is asking for free.

30% is ridiculous for what they offer. There's almost no value add from Apple. Just extra hoops and arbitrary nonsense to jump through.

Apple offers sellers access to a large user base essentially for free until they sell something. Apple can charge whatever they want for that access; sellers have to decide if they want access to that market or not; and how to price to make a profit. 30% is not a large cut compared to other retail outlets; Walmart's gross margin is 24%.

If Kobi can't make a p[rofit after a 30% cut they need to reassess their business model; my guess is Amazon is hurting them much more than Apple's 30% but Apple's cut is an easier target.
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That means that it becomes pretty difficult to earn on selling software via the App Store. Developers should up prices for the App Store, which is not beneficial for end users.

Developers are in a hard spot; they've gotten users used to cheap or free apps, so to a certain extent they are responsible for the dilemma they face; and except for a few mega hits there are many apps to chose from that do the same thing. Not all are equally good but users look at price and charging 5 Euros vs 1 Euro is likely to cost sales; so raising prices would lead to lost sales.
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App Store curation sucks. There's nothing I've found in the App Store that I didn't find elsewhere first.

Then why are you still developing apps for the app store?

 

[harrisondavies]

They need to look at Amazon also. They take a cut, and if your book is a certain size then they also charge you for delivering the book electronically. Penny pinching good for nothing company.

 

[swm]

a 30% cut on getting your ebook published is peanuts compared to what you'll have to lose when publishing a paperback. as a writer - who basically can do all the stuff end to end using tools apple provided for free - you will have 70% of the sale price as revenue, versus you might be able to get 10% tops from the price of a paperback.

especially 'regular' sw distribution (buying stuff on media) has even bigger extra costs for the actual creator.

everyone tends to forget that all developers get an unlimited 'lifetime MSDN subscription like' dev environment for free, all the sales tools and access to a worldwide marketplace. sales commission of 30% is peanuts compared to all the investments or out payments to 3rd parties if you'd have to do this alone.

 

[Appleman3546]

Steam and Epic are in competition right now because the platforms are open. Steam takes 30% because it thought it had all the power, but Epic came along and undermined it by taking 12% and offer free games to consumers every few months. Competition created the war, but it has pushed the two companies to innovate to both the customer and the developer. I think the 30% commission would be forced to lower if competition existed, but this EU complaint is the next best thing and may encourage Apple to change its cut before the complaint is even ruled on

 

[nikusak]

There's almost no value add from Apple.

About one billion users (the richest billion on this planet basically) in the ecosystem is a “value add”, if anything is.

 

[ervingv]

If you don’t like it get an android. It’s that simple.

Get off Apple’s nipple. Amazon Kindle and every other book app was able to promote their books within their apps in the early days of the App Store before Apple introduced their own book service. Apple decided to change the App Store rules to suit their own service and forced the others to remove the stores or pay up. It is nonsense and Apple should give these services a pass. It’s not like Apple is hurting for cash here.
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About one billion users (the richest billion on this planet basically) in the ecosystem is a “value add”, if anything is.

Yeah now they do, thanks to developers.

 

[Ciclismo]

I want to sell my stuff in your store without paying rent.

You mean:

„I have no choice put to give you 30% because if I don’t, you won’t let me sell my stuff in the only store. Also, feel free to change the rules any time you see fit and kill my entire business while you’re at it.”

If there were an option to sell apps, and content through those apps, without having to go the Apple, them you’re have a point, but both Apple and Google basically have a duopoly stranglehold and that’s just not healthy.

Imagine there were only two companies in control of all the supermarkets. Then imagine you produced groceries and had to pay 30% to be even able to sell your groceries? You’d be cool with that? Almost sounds like a protection racket to be honest.