Apple was quick to defend against allegations that it had been secretly buying ads for third-party apps, with the intention of funnelling users through the App Store and taking a 30% cut off subsequent purchases. It further stated that it has been placing ads to promote third-party apps for the past five years. The iPhone maker went so far as to claim that many developers express their appreciation for this “support”.
We recently reported on Forbes’ investigation alleging that the company buys Google ads for other apps to pocket a 30% commission on every subscription.
According to MacRumors, the Cupertino-based firm dismissed this is as a mischaracterization while claiming developers were aware of the ads it runs for them. It also stated that these ads are clearly marked that they’re from the App Store.
The iPhone maker clarified that this is no different from retailers advertising their wares. Apple is essentially trying to make the case that what it has done is similar to your local Walmart advertising that PS5s are in stock via email or online ads. The company even noted that developers appreciate the “support” it provides.
Seems like a standard business model, doesn’t it?
But does your local Walmart also take a 30% cut over every product it sells? In fact, it can’t get way with that business model. Unlike Apple, which has imposed a de facto monopoly on app sales for all users in its product ecosystem, companies always have the option of taking their business to a host of other competitors (such as Kroger, Costco, Best Buy etc.) if they’re unhappy with Walmart’s hypothetical 30% cut.
On the other hand, how many competing app stores exist for Apple users? The answer is zero. Apple rules the roost with its monopoly over app sales.
Apple’s tactics to advertise third-party apps on Google, which go to the App Store instead of the app’s site, is not shady in itself. But add a hefty 30% cut that it makes off App Store purchases, and then you have a massive conflict of interest.
Let’s not forget that Apple was only forced by the courts to allow app creators to implement external payment links in their apps to bypass Apple’s 30% cut on in-app purchases. That renders the timing and intent of these advertisements, designed to route unsuspecting users back to the App Store, disingenuous at best.
Do you think the Forbes piece was a clickbait-y smear on Apple? Or is Apple trying to hurt app makers by leveraging its App Store monopoly? Let us know in the comments below.[Via MacRumors]