
Apple is facing rage from developers over the commission on the App Store - afkqs
https://www.businessinsider.com/apple-developer-rage-30-percent-app-store-tax-2020-6
======
swerling
When people look at this issue they tend to fixate on the 30/15% 'tax'. Is it
fair? Is it not?

The commission is not nothing, obviously, but misses a larger point.

Apple did to Hey what they did to our company. One day we submitted a minor
upgrade for an app that had been on in the app store _for years_, a bugfix
release, and they told us they would not publish it or any subsequent
submission unless we add IAP to the app.

We would be happy to pay apple some fair fee to place our app in their store.
We all understand that it's not a charity. But that's just not what apple is
doing here, or not the whole story.

They took an app that was _already_ in their store for years, and froze
updates on it. That approach forced much of our company to stop whatever it
was they were working on and implement IAP _now_. Mobile devs, backend devs,
accounting, marketing analytics/funnelling were all affected. There would be
no bugfix releases until that feature was added.

The implementation of recurring payments in Apple's IAP is quite different
from that of other payment processors like Braintree or Stripe. As such it has
added a lot of complexity to our backend services, and has sucked a huge
amount of time from our developers, accounting, and from our analytics team.
All so we can implement a feature we _already had in our products_ and were
happy with, just their version of it.

We incorporated IAP in the fall of last year, but we are _still_ trying to
digest it into our company, still refining how we handle their subs, still
mitigating some mistakes we made in the our initial implementation. And their
remain some unresolved question for us on the how best to do accounting and
market funneling.

The media continue to fixate on the 30% commision, as do must of the comments
in this thread. But the issue is that Apple does this by imposing the
commission on apps that _already_ have huge sunk costs on there platform,
going back years, that already have tens of thousands of users (at least in
our case), and then one day send back a bugfix release with a letter that says
'if you want to put an update to this app on our platform, add IAP to it.
Now.'

~~~
falcolas
Unpopular opinion: What else do you expect Apple to do with applications that
are no longer in compliance with their rules and regulations for the platform?

They could make you happy and grandfather applications in, but then that
creates a different "rage" inducing scenario for new applications.

Regardless of whether you agree or disagree with their platform rules changes,
the change was made, and now needs to be enforced.

~~~
jacobr1
Question on the background: did Apple announce this change long in advance and
this start enforcing it (as advised) after the window for remediation elapsed?
Or was it sudden?

A sudden change is just bad form if that was the case.

~~~
swerling
Apple announced it way back in about 2011 or 2012.

Here is the sequence of events for our company:

2012-ish: apple requires IAP be an option if you have payment subscriptions.
This date might be slightly off, I think it was way back then.

2014-ish: We launch an app that has no recurring subs. So we are still in
compliance with their terms.

2017: We add a concept of membership, with braintree managing the
subscriptions. Unbeknownst to us, we are now in violation of their terms.

2019: Apple notices the subs, and freezes our app updates

So we were indeed in violation of their terms, ones they had made known long
before. We did not know it, but we were. Apple let us know 2 years after the
fact by preventing us from publishing a bug fix release.

------
ReticentVole
The single best move Europe could make would be to limit any digital stores to
maximum 12% commission. That would truly reign in the monopoly power of these
platforms (typically American) and dramatically boost the revenues of content
creators (many of whom are European).

12% covers the overhead costs of the stores and still allows a healthy profit
for the monopoly owner.

I hope that next on the target list is Valve, who charges a 30% regressive tax
on Indie games but allows big-budget AAA games to get by with only 20% tax:

[https://variety.com/2018/gaming/news/valve-revenue-split-
cha...](https://variety.com/2018/gaming/news/valve-revenue-split-
changes-1203078700/)

~~~
zpeti
Why 12%? Seems like a completely arbitrary number, with 0 market input. Why
shouldn't it be 40% for that matter, if a bureaucrat is going to set it?

This is the major issue in cases like this, who sets the number? How do they
calculate it? How do you know if Apple will be able to sustain an app store
with that number? I'm not saying they can't, but will that mean, for example
that their approval process for apps won't be as vigorous and we get lots of
scam apps?

The worst possible thing here is if some random number is set by some random
person who thinks they're _very clever_.

~~~
dundercoder
Maybe he tossed out a number he feels comfortable paying in taxes. I worked a
bunch of overtime last year as a favor and ended up getting bumped into the
~30% tax bracket for income. I’m feeling pretty ragey about it myself.

~~~
kingofpandora
Tax systems are progressive ... being in a higher bracket is nothing to be
angry about.

~~~
silvat
That's arguable. You could say, not everybody loves is delighted that the
value(to themselves) of their work goes down, the more they do it. I think
most people accept some form of taxation but annoyance at idea of diminishing
returns is very understandable.

------
pembrook
While I sympathize with the idea of losing 30% of your revenue just paying to
play, I struggle to see Apple as being somehow "extortionate" as others have
suggested.

While they didn't invent the App Store as a concept, they did popularize it,
and built the software platform (iOS) that allows the apps to run, as well as
built the tools and frameworks (swift, Xcode, etc) for building said apps, as
well as built the hardware that the software runs on (iPhone), and then spent
billions in marketing to popularize the idea of using "mobile apps" in the
first place (ie. Remember _there 's an app for that_?).

In addition, when you sell on the App Store, you get free distribution in
front of the highest income, most desirable segment of smartphone buyers--
because that's the customer base Apple has invested billions in building and
cultivating over 40+ years.

Given the above, how is 30% extortionate vs. 20%? It is _their_ platform.
Anybody can choose to only create apps for Android instead.

~~~
matheusmoreira
> Given the above, how is 30% extortionate vs. 20%?

The percentage is irrelevant. The fact is they don't have a choice.

> It is _their_ platform.

No, it is people's computers. Why should Apple be allowed to monopolize iPhone
consumers? People should be allowed to run whatever software they want on the
hardware they bought. The fact Apple created the phone shouldn't give them the
right to establish harmful monopolies around it.

Apple gets away with these rates because they restricted the freedom of their
users in order to prevent competition. Revenue generated by creating and
leveraging monopolies are always objectionable, even if it was 1%. It would be
fine if Apple's store offered enough value to justify a 30% cut even in the
face of competition.

~~~
Terretta
> _People should be allowed to run whatever software they want on the hardware
> they bought._

They didn't buy hardware, they bought an ecosystem experience.

And anyway, we don't hold that principle across all devices with code in them.

\- Including microwaves or refrigerators?

\- What about game consoles?

\- What about the emissions control systems in our automobiles where bad code
causes cancer?

The iPhone and iPad are in a new "What's a computer?" category: appliances.

~~~
mjburgess
> They didn't buy hardware, they bought an ecosystem experience

Repeating the propaganda of one of the largest corporations in the world, I
think, does little to advance the argument.

In any sane modern system of property rights, people bought the hardware. That
entails ownership of the device.

Presently there is a disconnect between hardware purchase and ownership that
does not occur with non-software goods. This is a legal oversight.

The "right to repair" and "right to modify" etc. did not need to be explicitly
granted historically because there was no disconnect. Today they do, and so
they should.

> What about the emissions control systems in our automobiles where bad code
> causes cancer?

The _law_ prevents pollution, not EULAs.

~~~
Terretta
It’s not propaganda. It’s the early steps to “I, Robot”.

Italian for soul is ‘anima’, that which brings the body to life.

The human mind, body, and soul are one, so too the mind, body, and soul of the
machine — for machines that benefit from soul.

------
samdung
With Reference to this: [https://developer.apple.com/app-
store/review/guidelines/#mul...](https://developer.apple.com/app-
store/review/guidelines/#multiplatform-services)

    
    
      3.1.3(b) Multiplatform Services: Apps that operate across multiple platforms may allow users to access content, subscriptions, or features they have acquired in your app on other platforms or your web site, including consumable items in multiplatform games, provided those items are also available as in-app purchases within the app.
    

Can i offer a differential pricing choice within my app. In other words if
user buys on my 'website' the price is $100 and if user decides to make an in-
app purchase, the price is, say, $130 (100 + 30% Apple Tax)?

~~~
jedieaston
Yes. Spotify did this for a while, as I recall.

~~~
w0utert
It would appear to me this is the perfect solution for Hey then. Put a
purchase option in the app with a clear statement you can get 30% off the
subscription price just by going to the website. It could even look like a
great offer to prospective customers: 'hey I just needed to go to the website
to get a 30% discount!'.

Any reason why they wouldn't just do this instead of trying to fight Apple on
their (in this case IMO pretty egregious) rules?

~~~
chrisshroba
Apps are not allowed to advertise other ways of subscribing when in-app
subscriptions are an option. From section 3.1.3(b) of the guidelines:

"You must not directly or indirectly target iOS users to use a purchasing
method other than in-app purchase, and your general communications about other
purchasing methods must not discourage use of in-app purchase."
([https://developer.apple.com/app-
store/review/guidelines/](https://developer.apple.com/app-
store/review/guidelines/))

------
Jeremy1026
Apple has been facing rage from developers over the commission structure of
the App Store for years.

~~~
mfer
I don't have it handy but DHH, when he went off on this on twitter yesterday,
noted that in March Apple decided to be much more strict with enforcing this.

Also, DHH is now using his megaphone on this issue.

~~~
res0nat0r
Here it is:
[https://twitter.com/dhh/status/1272968382329942017](https://twitter.com/dhh/status/1272968382329942017)

------
seven4
Echos of the anti-trust post that went to frontpage earlier today. Seems to be
building to some sort of crecendo.

Linking as i think the comments apply peripherally
[https://news.ycombinator.com/item?id=23548674](https://news.ycombinator.com/item?id=23548674)

------
jawns
Couldn't the behemoth apps, some of which get a pass from the subscription
rules -- Netflix, Slack, Spotify, and others that are too big for Apple to not
support -- end this practice pretty easily by insisting they will leave the
platform unless Apple agrees to a change in terms?

Honestly, if it comes down to a game of chicken, who has more to lose?
Netflix, Slack, Spotify, and other subscription apps who still get a ton of
revenue from non-Apple sources? Or Apple, who now has to deal with a deluge of
irate iPhone owners who want their popular apps?

Almost seems like it would be appropriate to have a union of iPhone app
developers and collectively bargain.

~~~
bagacrap
who gets a pass from subscription rules?

And no, Spotify (market cap $36B) is not going to win a game of chicken
against Apple (market cap $1533B). Apple users aren't going to switch to
Samsung, they'll switch to apple music or w/e.

~~~
kall
Some video streaming apps do [1], and countless SaaS companies like slack get
a pass for the issue hey.com faced. You cannot subscribe through the app but
access your premium service through it.

[1] [https://www.theverge.com/2020/4/1/21203630/apple-amazon-
prim...](https://www.theverge.com/2020/4/1/21203630/apple-amazon-prime-video-
ios-app-store-cut-exempt-program-deal)

------
zepto
It’s worth noting that ‘force Apple to allow other stores’ is equivalent to
‘force indie developers to support other stores’.

And also paradoxically allowing other stores with fewer restrictions actually
means more restrictions for developers.

This is because if you are forced to support all the stores, your app must
comply with the superset of the restrictions.

Apple must improve the store policies to support developers, otherwise the web
will just win in the end.

However requiring them to support multiple stores will just kill off indie
development even more.

------
LatteLazy
I don't know whether 30% is fair or not. But I'd be very very hesitant to
develop software where I'm reliant on a mega Corp with monopoly power AND that
Corp view me the way whales view krill. That's what both the Android and Apple
markers are. 30% would be a lot fairer if there were a guarantee that you
wouldn't be dropped from the platform with no appeal by an algorithm...

------
perryizgr8
Can apps charge 30% extra if you subscribe within the IOS app? Can they show
the breakup? If yes, this should be a non-issue.

~~~
ballenf
Yes. No.

Youtube Premium is one high profile example of this. They charge more on iOS
but can't tell you that you're overpaying for convenience of using IAP.

A breakdown or mention of Apple's cut is prohibited.

~~~
zwily
I’ve knowingly paid the premium in the past, just because I know can easily
cancel. (Like NYTimes)

~~~
Terretta
Yes, and costs of churn also explains why it's 30% in the first year of your
recurring subscription and only 15% after.

------
emsy
Why even demand a percentual rate and not a flat fee per item? This discussion
should go beyond the App Store and into payment processor and similar
“platforms”. I’m aware that businesses use these platforms to conduct their
business but at a certain point these platforms become inevitable and you’re
basically at their whim.

~~~
dkarras
If they were forced to a flat fee, that flat fee (that would give store owners
similar margins) would be unaffordable to most little players.

------
quotha
The real problem here is that the App Store is a monopsony.

[https://www.investopedia.com/terms/m/monopsony.asp](https://www.investopedia.com/terms/m/monopsony.asp)

~~~
chrisshroba
How so? That link describes a Monopsony as a situation where there is only one
buyer; are all iOS device users "buyers" from the App Store?

~~~
arvinsim
Developers are the sellers

Apps are the goods

App Store/Apple is the buyer

------
crazygringo
This is a genuinely hard problem that capitalism doesn't give _any_ kind of
easy answer to.

Obviously Apple is allowed to charge a fee. The App Store costs serious money
to run -- to develop, maintain, support.

But when the App Store is the _only_ place apps can be published for iOS, and
more than half of worldwide mobile app revenue is made there, there's no
competition.

Nobody else can go and create their own separate iOS App Store with lower
commissions. But the kicker is, there is a real consumer benefit to that --
the entire iOS world is built on a premise of security and privacy that only
comes from having everything locked down and controlled by Apple, from a
secure enclave to approved apps.

There are really only two solutions here:

1) Legislation to define this as a special kind of monopoly situation (a new
definition of monopoly, at least in the US) and create some kind of profit cap
where Apple isn't allowed to charge more than x% over revenue. But which feels
pretty icky -- the government stepping in to tell you you're not allowed to
maximize profit like any other business. And what's the legal basis for
deciding whether the "allowed profit" is 5% or 50%? 10% or 12%? 0% or 100%?
You can invent an argument for any number you want, but ultimately it's
entirely arbitrary.

2) Legislation to require Apple, Google, Microsoft, and all OS's generally to
allow third-party fully-integrated app stores. But which will obviously do
serious damage to the reputation of the iPhone (and mobile devices generally),
when people start to associate them with buggy malware apps that drain your
battery and use dark UX patterns to trick you into giving them all your
location, microphone, etc. permissions.

But both seem pretty gross, totally non-market, government-intervention. But
Apple's 30% cut is also pretty gross at this point.

It sucks there's just no obvious, elegant, good solution here.

~~~
spott
I think that there are some half-measures that can help, especially with the
in app purchase 30%:

1) Make it required to be transparent about where the pricing goes: All in app
purchases must break out Apple's share and the developers share. The idea
being that it becomes more difficult for Apple to sell such profiteering to
the general public... who actually have the ability to vote with their wallet
and move to another platform.

2) Make it illegal for apple to force subscriptions to external services be
available using the in app purchase framework. This allows developers to avoid
the fee (at the cost of the convenience to their users).

3) Make it illegal for apple to prevent the disclosure of cheaper options
elsewhere, perhaps while allowing them to prevent directly linking to such
options. (Allow the statement "Go to our website for 30% off!", but actually
linking to the website within this statement is ok for apple to prohibit)

4) Require the same fee and enforcement for all developers.

The combination of these puts downward pressure on Apple's fees by forcing
transparency and putting the cost of high fees on Apple, rather than on the
individual developers. It also evens the playing field by preventing
sweetheart deals with large companies.

~~~
stock_toaster
I think #2 would only work if no apps were freemeium, or if dev licenses were
more expensive (like playstation sdk licenses).

Otherwise, I assume, apps would just skirt all fees as standard practice.

~~~
spott
I think there is a line that is pretty easy to define there: if the app is an
add on to a subscription (the subscription is useful without the app) and
someone would actually purchase the subscription without the app, then the app
can point to the subscription page. If the subscription isn't useful without
the app, then apple deserves their share.

------
apple4ever
Apple has been so customer hostile with these decisions on the App Store.

Offering IAP isn't a problem. Heck forcing IAP isn't a problem, IF there is a
way avoid it - and the best way is to force them to charge .99 but allow
outside IAPs.

But they choose the worst possible method: forcing a customer to go outside
the App Store.

------
sheeshkebab
I think these Apple App Store review practices are the main reason why its
filled now mostly with bullshit lifestyle and spammy garbage games. No serious
developers that I know want to deal with this crap by their choice anymore,
it’s all Apples little kingdom there cultivating nothing but spammers that pay
to play in it.

~~~
dnh44
Well that's the free market at work. If users are unhappy they can move to
different platforms and Apple will have be forced to make things more
attractive for developers and users.

------
mistrial9
the most careful, thorough, high-design value Apple iPhone app developer I
know of, whose product was widely praised in the media with high-profile
customers, went broke and now works for a local city government. Basically,
even his living expenses in this part of the world, were not met with the
income from the App Store.

~~~
kshacker
Since the topic up top is Apple commissions, would an extra 10% or an extra
20% changed his life?

Sometimes the Problem is the business model not as much the overhead costs.

~~~
zepto
Exactly - the 30% is a complete red herring, as is the desire to sell outside
the App Store.

What is not, is the inflexibility of then App store’s pricing models, and the
single storefront for all kinds of App.

------
stock_toaster
How does it work for game consoles? Don’t developers have to pay for an sdk
license _and_ a percentage of sales too?

------
m3kw9
Am I the only one here that thinks they deserve a cut for building such a
platform?

~~~
jxub
A cut, yes. But a business-threatening third of the pie for essentially zero
work on their part is extortionate and chokes the innovation in the whole app
ecosystem.

I'm sure that App Store creators can chime in and expand more on that with
real numbers on their balance sheet and what they mean in terms of being able
to afford rent on a monthly basis.

~~~
bearjaws
Not to mention them bullying out competing products like Spotify.

------
bsaul
The only reasonable anti-trust regulation would be to allow competing app
stores to be installed on ios devices. there is absolutely no reason why a
device should be locked down to a single software purchase system.

------
somurzakov
the obvious solution would be to breakup monopoly - force Apple to divest
AppStore as a separate company and allow Apple to accept third-party appstores

~~~
caogecym
why consider Apple/AppStore a monopoly given that consumers have the freedom
to choose an Android device?

~~~
somurzakov
same logic as in MSFT+IE. MSFT lost that lawsuit as far as I remember, despite
there being alternative desktop OSs based on linux.

Apple+Appstore is actually a repeat of MSFT+IE monopoly and should be broken
up as such

------
villgax
Bigger concern is the consumer/business lines they draw on IAPs as listed by
DaringFireball & DHH over Hey email client.

------
MobileVet
Let's be honest, this is a publicity stunt by Hey.

The terms of the App Store haven't changed (outside of the 1yr sub provision)
in years. They knew this before making their app.

The founders of Hey are seasoned professionals. They knew they could
manufacture a scandal and it would put their new company in the news.

There is no such thing as bad press... especially when it freely promotes your
app launch.

<slow clap>

~~~
ElFitz
The terms haven't changed, but their enforcement has evolved recently. That's
the merit of having vague enough rules; you change the interpretation over
time without changing officially changing the terms.

Also, said enforcement isn't equal across apps offering similar services (ie
Basecamp vs Hey)

~~~
MobileVet
I didn't say the Apple wasn't in the wrong... my focus was on why Hey was
bringing this to the forefront now.

They went into this with eyes wide open.

------
pcdoodle
I really hope this get's traction. Apples app store is modern day slavery.

~~~
MobileVet
This is not an accurate analogy and extremely insensitive in any time, let
alone right now.

------
rdez6173
Agreed that Apple should be consistent in their enforcement of their rules.
However, you can opt not to use the App Store. If you think that will impact
your product, then this confirms that the App Store provides value - value you
will need to pay for.

~~~
adrianmsmith
> However, you can opt not to use the App Store.

You cannot really opt not to use the App Store if you want to create apps for
that platform.

> If you think that will impact your product, then this confirms that the App
> Store provides value

I'm not sure it necessarily confirms that. You might want to use it because it
adds value. You might need to use it just because it's essentially a monopoly
(if you want to reach iPhone users, that is).

If users could directly download apps without going through the store _or_
they could use the store, and people chose to publish their apps on the store
then, yes, I would agree, that demonstrates it provides value, and it's
reasonable to Apple to charge for that.

