Comment on Apple: The App Store as a Money Machine – Economy

Developers all over the world are likely to look enviously at South Korea these days. The Asian country is the first nation that dares to threaten Apple’s most secure source of income: the app store, or more precisely the fees that Apple collects in this app department store. The law passed by parliament there forces Apple to allow developers to use other payment options than the company’s own system for subscriptions and in-app purchases.

So far, Apple’s business model is reminiscent of that of highwaymen: “You want to go to the city ‘app store’? No problem, all we need from you is a ridiculous 30 percent of your income.” But that’s pretty expensive, thinks the traveling dealer who is confronted with it. No, replies the highwayman, that’s just okay, because we offer unbeatable service, nobody will attack you in the app store, and our customers love it there.

But more and more regulators around the world are wondering whether Apple is using its market power to impose unfair conditions on developers. From the developer’s point of view, the matter is clear. For them, Apple’s rules are an iron law. There is no other way to bring apps for the iOS operating system to Apple devices. If you don’t follow Apple’s rules, you can look for another job.

But the developers complain that with a 30 percent commission there is hardly any money left to live on, let alone to invest. In order to keep as much of the income as possible with Apple, the group even forbids the app makers from notifying customers that they could also take out their subscriptions via the app providers’ website. This may be good for Apple, but bad for developers. And above all, it is expensive for customers.

Apple says the app store is safe, customer data is in good hands there, payment via the app store is easy, so the way via the app store is also the best for customers. Customers should see it differently. In the year 2021 there will be more than one payment provider that will process payments competently and securely, not least thanks to the General Data Protection Regulation, data protection will be taken seriously, at least in Europe. And security is widely marketed at Apple, but research shows that Apple could also take the topic more seriously.

Under increasing pressure from the authorities, Apple has repeatedly made the smallest concessions in recent months. First, Apple lowered its commission for smaller developers to 15 percent. About a week ago, Apple reached an out-of-court settlement with US developers who were suing for class and now allows them to notify their customers of payment options outside of the app store by email. And in Japan, the Fair Trade Commission (JFTC) reached this week that so-called reader apps will be able to place a single link in their apps in the future, which forwards customers from the app to a website, where they can then create an account and take out a subscription . Apple’s press statement leaves no doubt: not two links or three are allowed, but only one.

Europe’s regulators should take South Korea as an example

Wherever the opportunity arises, Apple uses such sham concessions for PR offensives: Apple generously announced this week that it would also allow developers in other countries to make the change from Japan – at the beginning of 2022. That Apple is in favor of a minimal linguistic revision of its app Store conditions want to allow up to six months, is understandable when you consider that the group earns around a billion dollars every month with its app store tax. Everything that threatens this financial blessing naturally needs to be carefully considered and gladly postponed again.

The case is different in South Korea, here it was not Apple who dictated the rules of an agreement, but the legislature took action. Developers will benefit from these changes immediately. The past few months have shown that Apple only moves when it absolutely has to. That’s why Europe’s regulators should follow South Korea’s example, in the interests of developers – and customers.


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