The App Store has been in the news for all the wrong reasons in recent months. This is despite the App Store’s popularity and usage soaring among iPhone users, with the store posting its best-ever quarter recently. App developers are clearly not happy with Apple and they have become increasingly vocal about the 30 percent commission that the company takes for App Store transactions.
Apple has been charging developers a flat 30 percent commission on App Store transactions right from the store was first launched. For subscription services, Apple takes a 30 percent cut in the first year which is then reduced to 15 percent in the second year. Apple has also been in the news for forcing companies to include IAPs in their apps. The company did this with Basecamp’s Hey email app and wants Airbnb to do the same thing. Apple argues that it is just implementing the App Store rules fairly but it comes across as being greedy in many cases.
App Store rules state that Apple will not take any commission for any physical service or product sold via iOS apps, but it is eligible for a 30 percent commission for digital services. This is actually in line with other mobile app stores including the Google Play Store, though Apple is regularly criticized because of its more stringent rules and not allowing iPhone users to sideload apps from other app stores. This would have allowed developers to bypass the commission they are otherwise required to pay Apple. Even Amazon takes a commission from sellers in exchange for providing them access with their platform and other tools.
While the 30 percent commission was fine back in the day when the App Store was new, in recent years, developers feel that Apple is ripping then off. Major companies and developers like Spotify, Epic Games, and Telegram have all filed an antitrust complaint against Apple in the EU which has already led to a formal investigation against Apple for its App Store policies. At one point in time, Apple was even considering charging 40 percent commission from App Store sales, though it ultimately settled on 30 percent.
In my opinion, both Apple and app developers are correct to a certain extent. Apple should rightfully get a commission for App Store sales as without the store, apps created by developers will never reach billions of people all over the world. Running the App Store requires a lot of effort that Apple has invested in over the year. The company even released a study last month to justify the commission it charges.
Apple is also right in asking apps like Airbnb and Hey to implement IAP support in their apps as other smaller developers are also subjected to the same rules so creating exceptions for such big corporations would be unfair to them. However, I also feel that Apple is not doing enough for app developers. The company is raking in billions of dollars every quarter via App Store fees and yet, developers are not getting proper replies and feedback on app rejections from the App Store editorial team. Surely Apple can afford to spend a few more millions every month on the App Store to help improve the experience for app developers.
What do you think about Apple charging a 30 percent commission on App Store sales? Do you think this is fair on Apple’s part? Or is the company being too greedy?