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A Broken Marketplace
For most purchases made within its App Store, Apple takes 30% of the purchase price. No other transaction fee — in any industry — comes close.
For most purchases made within an app store, or through in-app payments, Apple and Google take as much as 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 tax 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 competing with one of Apple’s apps — like Music, Mail, or Books — the situation becomes even more complex.
Apple first introduced the 30% fee on apps in 2011, which forced many apps to go entirely 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 and Google to open its Google Play 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 or Android 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 aspect of the web economy is open to competition, every part of the app economy needs to be available to competition.
Because of the market power that Apple has, it is charging exorbitant rents — highway robbery, basically — bullying people to pay 30 percent or denying access to their market.
Nobody gets a vig on content on the Internet today.
Apple Charges:
0%
App tax that Apple applies to every single purchase
The upper limit for fees charged by other payment providers for purchases. Credit card networks average 3%. Square charges between 2.65% and 3.4%.
We have data that proves that customers don’t particularly like using in-app purchases to buy subscriptions (they prefer PayPal/credit card) and the 30% fee that Apple takes is insane when you compare it to the standard 2-4% charge that literally any other payment provider takes.
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The App Store Limits Consumer Freedom
If consumers want to use a modern mobile device, Apple and Google levy taxes that no one can avoid. No competition, no options, no recourse. The Apple App Store and Google Play Store policies are prisons that consumers are required to pay for and that developers cannot escape.