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Apple points out that the App Store’s imitators copy its fee structure

The company’s third-party study shows that Apple’s 30% commission set an industry standard. But it doesn’t answer bigger questions.

Apple points out that the App Store’s imitators copy its fee structure
[Photo: Morgan Housel/Unsplash]
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Ahead of Tim Cook’s testimony next week at the Senate’s antitrust hearings,  Apple has commissioned a third-party study about the fees charged by various marketplaces—from Apple’s own App Store and similar download services to used-car sellers to Sotheby’s. Its overriding conclusion is that Apple’s fee of 30% (cut to 15% for subscriptions after the first 12 months) is in line with that of many other intermediaries who help sell something and collect a fee in return.

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And it is, especially for the marketplaces that are most similar to the App Store. Google’s Play Store, Amazon’s Appstore, Samsung’s GalaxyStore, and the Microsoft Store all charge a 30% fee, with discounts in certain circumstances. However, that presumably has something to do with the fact that all those services cloned the business model that Apple established in 2008 with the App Store’s introduction. If Apple had set a different fee back then—say, 25% or 35%—it’s possible that it would be the standard across the industry to this day.

It’s useful to have all the study’s data in one place, and it doesn’t seem to be skewed to make Apple look good.  For instance, the study mentions the Epic Games Store’s aggressively modest 12% cut, which Epic CEO Tim Sweeney has said is fairer to developers than much larger fees typically charged elsewhere.

But there are plenty of other reservations you might have about Apple’s App Store policies, many of which involve its arbitrary application of rules relating to apps that charge fees outside of Apple’s purchasing system and ones in certain categories that Apple feels are overpopulated. If you’ve been following these issues and don’t love what Apple has been doing, the study probably won’t make you feel any better.

The study notes that many marketplaces enforce “free rider” policies designed to prevent sellers from avoiding fees; eBay, for example, doesn’t want merchants to list items on its platform but cut deals with buyers elsewhere. That doesn’t address the fact that Apple has a monopoly on iOS and iPadOS app distribution, whereas eBay has plenty of competition. And eBay’s fees are its principal source of income, whereas Apple’s hardware sales are boosted by the fact that there’s so much good stuff in the App Store. That ensures that the company does well regardless of its direct App Store profits. (Thought experiment: How successful would the iPhone have been if Apple had stuck to its original “sweet solution” plan to deny third-party developers access to the platform?)

Apple is capable of listening to its critics and adjusting in response: A new policy that allows developers to challenge App Store rejections is welcome proof of that. But I hope this new study isn’t a sign that the company is stubbornly unwilling to consider any fundamental changes to the App Store’s policies and business model. Developers would like to keep more of the money that people pay for their wares. And if that encouraged them to build more ambitious apps that made iPhones and iPads even more useful, it would be good for Apple’s customers. It might even boost Apple’s bottom line.

About the author

Harry McCracken is the technology editor for Fast Company, based in San Francisco. In past lives, he was editor at large for Time magazine, founder and editor of Technologizer, and editor of PC World.

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