Apple digs in over its App Store fees

BBC Technology 22 Jul 2020 05:00
By Leo Kelion Technology desk editor
Apple App Store

Apple has defended the fees it charges developers to sell their digital products via its App Store.

The iPhone-maker says a study it commissioned shows content makers give away a similar cut to dozens of other online markets, and an even bigger share if their goods are sold offline.

Apple is facing complaints about the matter on both sides of the Atlantic.

The EU launched a competition probe in June, and chief executive Tim Cook will give testimony to Congress on Monday.

He will appear before the House Judiciary Antitrust Subcommittee alongside counterparts from Amazon, Facebook and Google. The tech giants all face claims that they have abused their market-leading positions.

It has emerged that ahead of the hearing, Microsoft's president briefed the panel that his firm had concerns about the way Apple operated the App Store.

According to a report in the Information, Brad Smith has drawn attention to issues including::

Public row

In June, the Boston-based consultancy suggested that the App Store had "facilitated half a trillion dollars" of trade in 2019.

To compound matters, Apple also got involved in a public spat with the makers of email app Hey, who were refusing to give it a share of their subscription fees.

Apple subsequently announced changes to its apps review process as a concession. But the latest report indicates it is not willing to compromise over the charges it imposes.

It found the firm's standard demand of a 30% cut of sales was in line with what Microsoft, Google, Amazon and Samsung took.

  • Epic Games video games marketplace takes a 12% share
  • Freelance work platforms including TaskRabbit and Upwork take between 5% and 20%
  • Amazon Prime Video takes a 50% share of purchase and rental sales
  • Kobo's audio book platform takes a 55% to 68% cut
  • Chinese app stores often charge 50% or more
  • a 55% share of video games sales
  • a 50% share of newspaper sales
  • a 60% share of magazine sales

The report also highlighted that other e-commerce marketplaces also had rules to prohibit sellers from directing buyers to pay offsite in order to avoid fees. Examples given are:

However, when pressed on this last point, one of the report's authors conceded that while shoppers were aware they could always go elsewhere to buy physical goods, they did not always realise they could buy subscriptions and other digital products outside an app.

The Analysis Group said it believed most users would be aware it was possible to subscribe to Netflix and the bigger brands via a smart TV or website, but acknowledged this was not the case for smaller publishers.

The firm has indicated this report doesn't necessarily represent the testimony Mr Cook will offer when quizzed by the US Congress next week.

That argument certainly won't impress developers like Basecamp's David Heinemeier Hansson, who fell out badly with Apple over his email app Hey.

"The power of Apple and the rest of the big tech monopolies is insufferable," he told me, making it clear he was working with regulators and politicians to change things.

Apple can expect a long battle, but we've begun to see the shape of its defence.

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AppleApp StoreHouse Judiciary Antitrust SubcommitteeTim Cook
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