Apple Threatens to Remove Email App 'Hey' From App Store Over Lack of In-App Subscription Option [Updated]

[EfratBarTal]

You don't think that's a normal cut for businesses? That's the same that Google charges.

Service fees - Play Console Help

Apps and in-app products sold through Google Play’s billing system or an Alternative Billing System (as defined below) in accordance with the Payments policy are subject to a service fee.

support.google.com

Apple, Google, Steam.. they all take the same cut, A piece almost third the size of the pie. There is nothing normal about this. Nothing. Nosireebob. And the fact we’ve become accustomed to this should be a big red warning flag.

 

[vmistery]

So this is one of those things that Apple should really just let slide or change their own ways. Apple do deserve to be compensated for managing and running the App Store so taking a proportion of IAPs or subscriptions to maintain their services is totally fair. Taking near enough 1/3rd however seems at least on the surface purely greedy. As it is a monopoly of store fronts for iOS they need to be far more transparent about how much they are making on this and what the actual cost in running the store is. Sure they deserve to make a decent profit but it shouldn't be an obscene markup. Personally I'd see a 10% take as the maximum they should look to take, this should give them well above the 3-4% supermarkets make in profit on sales which is the nearest comparable thing I can think of.

 

[ian87w]

Many people use the grocery stores as comparisons.

In a sense, it is. Take Walmart. If you are a company trying to have your product on Walmart shelves, you will know that is not easy. Walmart have certain requirements for items to be available on their shelves, and you cannot just sell whatever you want. If you are a big FMCG company, you can negotiate for better contracts with Walmart. Is it anti-competitive? Well, who knows, it's still in practice, and the same goes for any retailers out there.

So I'm not going to say who is right or who's wrong, but the practices is not novel, it's not new. Both sides should've known better. Apple is now admitting fault of approving the app. That begs the question on Apple's own SOP then. The developer ranting on tweeter is PR stunt at best.

Imagine if Jobs was still around today. We would have an emergency keynote about it, and maybe free iPhone cases for developers...

 

[mrochester]

So this is one of those things that Apple should really just let slide or change their own ways. Apple do deserve to be compensated for managing and running the App Store so taking a proportion of IAPs or subscriptions to maintain their services is totally fair. Taking near enough 1/3rd however seems at least on the surface purely greedy. As it is a monopoly of store fronts for iOS they need to be far more transparent about how much they are making on this and what the actual cost in running the store is. Sure they deserve to make a decent profit but it shouldn't be an obscene markup. Personally I'd see a 10% take as the maximum they should look to take, this should give them well above the 3-4% supermarkets make in profit on sales which is the nearest comparable thing I can think of.

You are conflating issues. How much profit Apple makes from the store isn’t relevant here. It’s a free market and apple can charge whatever it likes and it is up to the market to decide whether that is too much, too little or just right.

The only issue we are talking about here is whether Apple Music has an unfair advantage in comparison to Spotify etc, and the answer is clearly YES to that, but an expected YES since Apple Music is apples service!

The question is whether Apple is or is not entitled to favour their own services above those of competitors. In a free market economy they most certainly can. It would only become a problem if apple had a monopoly on app distribution on all smartphones (note I don’t think iOS apps is a separate market to all apps because it is too narrow a market definition - it would be like saying google has a monopoly on gmail; well of course it does).

 

[amaze1499]

Hey's developers do not intend to comply with Apple's request for in-app purchase options. "There is never in a million years a way that I am paying Apple a third of our revenues," Heinemeier Hansson told Protocol. That is obscene, and it's criminal, and I will spend every dollar that we have or ever make to burn this down until we get to somewhere better."

Article Link: Apple Threatens to Remove Email App 'Hey' From App Store Over Lack of In-App Subscription Option [Updated]

Hey Developer, so you are happy to use the ecosystem with all its advantages short and longterm, but you want it for free? Didn't the the guidelines exist before and by the time the app was submitted or before the app development even started?

 

[ian87w]

Do you guys think this will be a reverse Streisand effect? I mean Apple now admitted they shouldn't have approved the app in the first place. And with the constant rant on tweeter by DHH, what if Apple simply decided to re-review many apps that "slipped through the cracks" before? Can be devastating to another developer out of the blue.

Meanwhile DHH is proably doing alright, and got some minute of fame. Other developers might not be in the same position.

 

[Puppuccino]

Apple is really stupid if they think this will work out for them in the long run.

The EU will come down super hard on anti-competitive grounds if they don't do a U-turn on this one because ultimately there's no other iOS store to download from anyway so Apple aren't losing money to another provider, they just not getting it.

Apple need to be smarter than this if they're going to keep things the way they are. It may stay the same in the US and the European App Store will see change.

 

[Alan Wynn]

Nobody is asking Apple to distribute their apps (well, some might but that's not the point). You could have sold your guitars on Craigslist or in many other ways and pay no fee. App developers do not need Apple to sell their apps. What you are arguing for is the system where you could sell your guitars only at one consignment store and pay a 30% fee.

Again, this is just in correct. Apple's ecosystem is just one part of a large mobile phone market. In just the same way as one could sell guitars on eBay or Craig's List, one can sell one's apps in the Google Play Store and any other App Market place. Putting an ad in a local Craig's List market place will not have the same reach as selling the item on eBay. If one does not like Apple's rules, one is free not to sell on their platform. If one does not like iOS's restrictions, there are many other mobile phones one can buy. The argument you and others keep making is that you, not Apple should get to decide what is best for Apple's customers. Most of Apple's customers are quite happy with their platform as evidenced from both "Intent to buy" surveys, and Customer Sat scores.

If you are not one of them, move on and stop trying to force your will on those of us who are quite happy with the current situation and want it to be this way.

 

[vmistery]

You are conflating issues. How much profit Apple makes from the store isn’t relevant here. It’s a free market and apple can charge whatever it likes and it is up to the market to decide whether that is too much, too little or just right.

The only issue we are talking about here is whether Apple Music has an unfair advantage in comparison to Spotify etc, and the answer is clearly YES to that, but an expected YES since Apple Music is apples service!

The question is whether Apple is or is not entitled to favour their own services above those of competitors. In a free market economy they most certainly can. It would only become a problem if apple had a monopoly on app distribution on all smartphones (note I don’t think iOS apps is a separate market to all apps because it is too narrow a market definition - it would be like saying google has a monopoly on gmail; well of course it does).

I am not confusing anything at all. What I am stating is Apple could be abusing their monopoly position on the app store and even if it isn't it is being greedy which I find unpalatable, I didn't even mention their own subscription services so you seem to be putting words into my mouth.

 

[Ubuntu]

It is like saying you don't want your product distributed through any supply chain like Walmart, Costco and etc., because you don't want to give them their cut. Believe me, some supply chains's cuts are more than 30%.

Solution: open your own supply chain.

Software != physical goods.

 

[Andy-V]

My problem with Apple taking 30% of subscription fees is that a lot of the time, the subscription isn't for access to the *app*, it's for access to a service that Apple has contributed nothing to.

Take Netflix for example. Their service is access to video content that Apple has provided nothing towards. But if Netflix wanted to sell a subscription for that content via their app, Apple wants a 30% of that entire subscription fee. The app is just a means of accessing the service they provide. It's absurd to suggest Apple contributes anything close to 30% of a Netflix subscription's value. This applies to many services that people builds apps for.

We can talk all day about whether Apple has a monopoly. But I'm sure that their rules on subscriptions are anti-competitive & anti-consumer. Maybe not in a legal sense, but it sucks for everyone aside from Apple.

 

[Substance90]

The EU would be happy to know more about this.

 

[mrochester]

I am not confusing anything at all. What I am stating is Apple could be abusing their monopoly position on the app store and even if it isn't it is being greedy which I find unpalatable, I didn't even mention their own subscription services so you seem to be putting words into my mouth.

My point was mainly about the definition of the market we are talking about.

You are defining the market as ‘iOS app market’ and I am defining the market as ‘app market’.

Apple very naturally has a monopoly on the ‘iOS app market’ but I’d argue that definition is too narrow and would be like saying google has a monopoly on the gmail market.

Apple does not have a monopoly on the ‘App market’ because there are many competing app stores out there.

 

[Merode]

Good. We will make Apple suffer. The EU now has even more arguments against Apple. Time to break up the iOS App Store. Apple can decide to not offer their devices in the EU

Maybe build your own mobile operating system, build your own App Store, then put your own app in it. Boom! There’s a solution. Then you don’t have to pay anyone, except yourselves

Let's combine those two ideas! Apple could make its own country, create its own laws, recruit or breed its own citizens (achoo-customers). I think I see a few people willing to migrate in this thread already.

/s

 

[BarbaricCo]

You are not Netflix and that's it.
If rules are rules, Apple is totally right, but of course many developers know rules aren't the same for everyone.
Have been trough all of this 7 years ago with 2 apps rejected for using the Skillz plugin, in the absolutely same way as the app from Discovery channel superstar, which of course was approved on the AppStore.
In the end I quit but it's still terrible to read about this stuff.

 

[Propine]

Hey Developer, so you are happy to use the ecosystem with all its advantages short and longterm, but you want it for free? Didn't the the guidelines exist before and by the time the app was submitted or before the app development even started?

If a developer uses in-app subscription - yes, he does get many advantages, such as a market exposure, payment processing, taxes, etc. But in this particular "Hey" case the developer gets bare minimum - an ability of his app to be used on mobile devices. He manages taxes and payments himself, he does not get any new customers from App Store, since there are no way to buy subscription or even open the website. All he gets is a review from App Store team, but that's an obligation, not a privilege.

 

[TVOR]

In 5 years the EU will make this law a thing of the past. Companies like Apple and Amazon may be worth much much less 10 years from now.

In 5 year the EU will be a thing of the past...hopefully...and looking more likely every day fortunately!
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Apple is really stupid if they think this will work out for them in the long run.

The EU will come down super hard on anti-competitive grounds if they don't do a U-turn on this one because ultimately there's no other iOS store to download from anyway so Apple aren't losing money to another provider, they just not getting it.

Apple need to be smarter than this if they're going to keep things the way they are. It may stay the same in the US and the European App Store will see change.

If I were Apple, I would simply withdraw iOS devices from the EU market. The EU is the ultimate "Nanny State". It makes all of this ******** legislation up to "protect the consumer" while it seems quite clear from the comments on this site that many consumers are against Apple doing this so, presumably, would boycott Apple anyway. So why not let those who don't agree boycott Apple and let those who are OK with it have the choice?

 

[Pizzakoerier]

That argument isn't really valid because Apple FORCES you to distribute your app in their store. If you could sideload iOS apps, then Apple would have a valid argument if you wanted your app in their store.

To provide another Apple example, if Hey wanted to distribute a Mac app they'd be able to do so without having to implement in-app purchases, outside of the app store.

I wish people would stop the excuse that "Apple is letting you use your store; you should compensate them for that." Apple isn't LETTING you use their store, they're FORCING you to use it just to have access to a significant portion of the market.

If Apple would allow side loading of iOS apps, the whole platform would be a different kind of experience, from a security and a usability standpoint. It would be more of an Android experience, and we already have that.

I agree that 30% is maybe too high, they should lower this percentage. But the principle stands for me, allowing sideloading would dramatically reduce the number of App Store apps, reducing its usefulness and therewith a key part of the Apple experience.

By the way, Apple is not forcing anyone to use its App Store, you can choose an Android device and sideload as much as you want. It's another experience, and therefore another product. It's comparing Apples and... androids.

 

[senttoschool]

In 5 year the EU will be a thing of the past...hopefully...and looking more likely every day fortunately!
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If I were Apple, I would simply withdraw iOS devices from the EU market. The EU is the ultimate "Nanny State". It makes all of this ******** legislation up to "protect the consumer" while it seems quite clear from the comments on this site that many consumers are against Apple doing this so, presumably, would boycott Apple anyway. So why not let those who don't agree boycott Apple and let those who are OK with it have the choice?

That's like asking Apple to withdraw from a market the size of the U.S. and let Android take 100% of the customers. That's silly.

And by the way, when Apple takes a 30% cut, it makes services more expensive for consumers like us.

 

[Pizzakoerier]

Good. We will make Apple suffer. The EU now has even more arguments against Apple. Time to break up the iOS App Store. Apple can decide to not offer their devices in the EU

And leave European customers with no choice but Android? That's very anti-competitive and bad for consumers.

I think you'd be very happy with an android device. You can sideload as much as you want. That's called choice.

 

[senttoschool]

And leave European customers with no choice but Android? That's very anti-competitive and bad for consumers.

But two can play that game right?

People say if they don't like the app store, they have a choice to not publish it there. If Apple doesn't like the EU, they have a choice to exit the market too.

But really, developers have to abide by Apple's rules. Apple has to abide by EU's rules too.

That's all I'm saying.

I'm generally pro-business but Apple is abusing its platform and stifling competition.

I like Epic Games' Unreal Engine licensing terms. The first $1 million in revenue is no charge for developers. After that, it's only 5% of the revenue.

Does Apple really provide value to Spotify justify 30% of all their subscriptions? The difference in time needed to approve a free app made by a 15-year-old and Spotify is minimal.

Apple is also competing with Spotify. You should not be both a platform and compete against your customers in my opinion. I think anti-trust laws targeting Apple, Amazon, Microsoft, Google, and Facebook will one day make it illegal for them to compete against their customers on their platforms.

 

[kerr]

It's long overdue that Apple treated devs better. They would be wrong to assume their future is guaranteed.

 

[Pizzakoerier]

I think that’s the point of the EU investigation - you can’t open your own supply chain for iOS.

I don't see why you're supposed to be able to do that. The commodity is not iOS apps. It's apps. You can distribute apps via another existing supply chain, the Play Store, and try to make some money there. Or Huawei app gallery, etc.

If you just don't like to provide customers with the choice of at least one walled-garden platform, which has obvious advantages, say so.
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**** Apple and Tim Cook. Hope they get slammed by the EU for this.

Have fun with your android of Huawei device

 

[senttoschool]

I don't see why you're supposed to be able to do that. The commodity is not iOS apps. It's apps. You can distribute apps via another existing supply chain, the Play Store, and try to make some money there. Or Huawei app gallery, etc.

If you just don't like to provide customers with the choice of at least one walled-garden platform, which has obvious advantages, say so.

If every iOS developer takes down their iOS app and moves it over to Android or only have Android versions of their app, you don't think Apple would get on its knees to beg the developers?

Please.

The only reason Apple has this much power is because the developers haven't unionized.

Apple needs the app developers as much as the app developers need Apple.

The app developers want three things:

1. Apple should not abuse its platform to compete against their customers. IE. Apple Music vs Spotify.
2. The 30% cut is not justified
3. Fair rules for everyone. You can't make one set of rules for Netflix and Uber and another set of rules for smaller, less powerful developers.

 

[mtrm]

I’d side with Apple on this if it wasn’t for the fact, as mentioned, that there are apps already in the AppStore that don’t comply with this, and Apple just doesnt care. App Store guidelines appear to only apply to small developers, if you’re a big name app (like Spotify, Netflix or Google) Apple will just bend their rules to let you in because, let’s face it, Apple needs Spotify, Netflix or Google (iOS wouldnt be that compelling for most users without those big name apps) and Spotify, Netflix and Google need Apple‘s ecosystem (and it’s installed user base). Since both parties profit from this, they’ll both just ignore the problem. The issue is that the message that it sends to other developers is that there are double standards depending on how big you are and there’s really no consistency on whether your app is allowed in or not (depends on whether Apple considers you as a big asset to the AppStore or not).
Regarding whether Apple should be entitled to a 30% cut on a service provided by a 3rd party app, using 3rd party servers and infrastructure, that’s a whole different subject (to which I’ve already expressed my view).