30% “App Tax” on Creators and Consumers
For most purchases made within its App Store, Apple takes 30% of the purchase price. No other transaction fee — in any industry — comes close.
This app tax cuts deeply into consumer purchasing power and stifles developer revenue. This is especially unfair when this tax is imposed on apps competing directly with similar apps sold by Apple. This puts businesses at a distinct competitive disadvantage and thus drives up the prices for consumers.
Developers note that a 15-30% fee in the Apple App Store represents an enormous portion of their revenue, in many cases an untenably large one. They argue that when they’re competing with one of Apple’s apps — like Music, Mail or Books — the situation becomes even harder.
Apple first introduced the 30% fee on apps in 2011, which forced many apps to go completely out of business. Treehouse, an online training platform, developed a reading-based app, iFlow Reader, which was one of many that fell victim to the imposed new tax. “Apple just dropped a nuclear bomb on all of us,” Treehouse declared publicly, stating that the “draconian new rules” had made it “impossible for anyone but Apple to sell books at a profit on iOS.”
Apple co-founder Steve Jobs, in an internal email showed little sympathy for the small developer. He told other Apple executives: “Bottom line — we didn’t have a policy and now we do, and there will be some roadkill because of it. I don’t feel guilty.”
Developers and creators want Apple to open its App Store platform so that any company can build software on their own terms and release it to people freely. Users should also have the ability to to install software, for free, from anywhere so that there is an even playing field and genuine competition in the realm of software development and distribution.
A fair and balanced marketplace would mean that every software supplier and every component vendor can compete for business on iOS without being constrained by terms and limitations that have been crafted by the company that just happened to program the operating system of a user’s device. Just as every part of the web economy is open to competition, every part of the app economy needs to be open to competition.
The App Store Limits Consumer Freedom
If consumers want to use a modern mobile device, Apple levies a tax that no one can avoid. No competition, no options, no recourse. The Apple App Store policies are prisons that consumers are required to pay for and that developers cannot escape.