Apple's 'shakedown' of Hey has blown up Twitter

"I will burn this house down myself, before I let gangsters like that spin it for spoils." — Basecamp co-founder David Heinemeier Hansson

From Protocol's "Shortly after Basecamp debuted its email service, HEY, it says its next iOS app update was rejected because Apple wasn't getting its cut of subscription revenue" the lead item on Techmeme Wednesday morning:

Just the tweets:

@dhh: Wow. I'm literally stunned. Apple just doubled down on their rejection of HEY's ability to provide bug fixes and new features, unless we submit to their outrageous demand of 15-30% of our revenue. Even worse: We're told that unless we comply, they'll REMOVE THE APP.

@dhh: There is no chance in bloody hell that we're going to pay Apple's ransom. I will burn this house down myself, before I let gangsters like that spin it for spoils. This is profoundly, perversely abusive and unfair.

@dhh: But this is preposterously false and inconsistent. The Basecamp app has been in the App Store for YEARS offering access to a subscription bought elsewhere. The store is FULL of apps doing just that. Even other email apps! A few examples we compiled:

@dhh: Like any good mafioso, they paid us a visit by phone. Stating that, firstly, that smashing our windows (by denying us the ability to fix bugs) was not a mistake. Then, without even as much of a curtesy euphemism, said they'd burn down our store (remove our app!), lest we paid up.

David Pierce / @pierce: I just updated my story with comment from Apple, which said it shouldn't have allowed Hey into the App Store in the first place

@dhh: This is how we plan to pay down the mortgage required to acquire 🤑😂

M.G. Siegler / @mgsiegler: Between the new GIGANTIC Meet Bar in mobile Gmail and Apple's ridiculous shakedown of the new Hey email service, it's enough to make anyone want to quit email 🙂

Max Lynch / @maxlynch: So maybe Apple fanboys are now realizing why we consider PWAs so damn important? It's about so much more than technology.

Steve Troughton-Smith / @stroughtonsmith: Narrator: it wasn't an accident. Apple has a position of power it can't help but push to and beyond its limits, because they think it's their platform, their store. Thus far, nobody has given them real reason to think otherwise. Without threat of consequences, they abuse

Ben Thompson / @benthompson: I have now heard from multiple developers, both big and small, that over the last few months Apple has been refusing to update their app unless their SaaS service adds in-app purchase. If this has happened to you please email me blog @ my site domain. 100% off the record.

@dhh: Here's the rejection letter. I love how they frame their shakedown as “offer customers the option”. Not a single mention of the fact that Apple will take 15-30% of our business through this. THIS IS ALL JUST FOR THE CONSUMER GOOD, YOU SEE.
Ben Thompson / @bent

hompson: Welcome @basecamp to the “Actually Apple's App Store is by far the biggest antitrust problem in tech” coalition! It has been an at-times lonely 7 years, but all are welcome.

Nick Statt / @nickstatt: Seems like a bad idea for Apple to pick a fight with @basecamp and @dhh over an inconsistently applied App Store rule for a relatively niche, new email service just a week before WWDC and on the same day as an EU antitrust investigation getting announced.

@dhh: This certainly does not get any better by the fact that we're technically competing with Apple head-on now. Apple sells email services as part of their iCloud bundle. So not only are they running the only shop in iPhone town, they're also selling their own competing service.

John Susek / @jsusek: @SpencerDailey @dhh @chrismessina @audible_com I really wish @dhh were using a more nuanced argument right now by acknowledging the existence of these “Reader” apps and pushing for that policy to apply to *all* apps.
Alex Hern / @alexhern: This is total bullshit and every one of Apple's arguments that it isn't are themselves total bullshit

@amyhoy: relevant reporting on the app store dustup w/ hey — also comment underneath this tweet point out that apple makes no such distinction between consumer and biz audiences in their agreement (as if that would work anyway)

Ben Thompson / @benthompson: UPDATE: I have made this 2018 Daily Update that expressly addresses many of the arguments that what Apple is doing isn't rent collecting free for anyone to access (no subscription required)

@romaindillet: The App Store sucks, but criticizing Apple when you've turned email (a beautiful open protocol!) into a closed platform also sucks 🙄 You can't be an open web and open internet champion and then give up on open protocols.

@dhh: On the day the EU announced their investigation into Apple's abusive App Store practices, HEY is subject to those very same capricious, exploitive, and inconsistent policies of shakedown. It's clear they feel embolden to tighten the screws with no fear of regulatory consequences.

Benedict Evans / @benedictevans: Just to be really clear: I think is no justification for Apple's policy on Spotify and Kindle. I do think you can make a very strong case for requiring Fortnite to use IAP. And there's a big grey area in the middle.

@dhh: This is scary. Apple is doubling down on the threat to forcefully remove us from the App Store, unless we pay the ransom. If you think you might ever want to use HEY, you might want to download the app now. HOW IS THIS HAPPENING?! 😩💔😱

Jack Nicas / @jacknicas: The founders of HEY, the flashy new email app, say Apple threatened to remove their app from iPhones because it couldn't take a 30% cut of sales. Apple effectively competes with HEY. This comes on the day the EU announced it's investigating Apple's power over the App Store.

@dhh: Apple has been capriciously, inconsistently, and in a few cases, cruelly, enforcing their App Store policies for YEARS. But most of the abuses were suffered by smaller developers without a platform and without recurse. Apple saw that it worked, and that it paid. Now moving up.

Simon Dawlat / @virtualgoodz: Marketing 101, a lesson. → Build product → Pick high-profile bully (everyone love to hate Apple) → Create predictable fight → Take loud stance → PR-PR-PR → Ideologically-motivated customers. →Traction/sales. Disingenuous but brilliantly executed.

Brianna Wu / @briannawu: This sure seems like grounds for an anti-competition lawsuit. Apple is rejecting Hey from the App Store unless they give up 30 percent of the revenue. I pay for Gmail through Google's website, and Apple doesn't demand a cut if I use their iOS app. So why is Hey asked to?

Stu Maschwitz / @5tu: How is what @basecamp is doing here any different than Google G Suite, which includes gmail for business. You pay Google for that service, not through Apple, and you download the client app for your device and log in.

Owen Williams / @ow: This is a *bad* look on the exact day that Europe announces an antitrust investigation into Apple's practices, and a good demonstration of why they need to be forced to change this:

Em Lazer-Walker / @lazerwalker: Apple's rules have always been selectively enforced. I once had an app rejected for having “not enough features”. I added a “rate the app” prompt and they approved it. It's also clear that making a stink on Twitter doesn't matter. Nothing's changing unless the gov steps in.

James Ball / @jamesrbuk: This is a weird one: Apple's policy seems unfair, but Hey is a new startup who say they have no business model if they're not on iOS, while trying to deny Apple revenue for that. Both sides will bluster, but it's clearly more a commercial than a moral dispute.

Tim Bray / @timbray: The case for breaking up Big Tech is becoming such a no-brainer. The offerings from Microsoft, Google, Facebook, Apple, and Amazon should come from somewhere between 20 and 100 smaller companies.
Sahil Lavingia / @shl: Apple's 30% is probably the main thing holding back the creator economy.

Benjamin Mayo / @bzamayo: Okay maybe I gave Apple too much credit here. This ‘business app’ distinction isn't written in the guidelines and is stupidly subjective.

@dhh: Yesterday was such a happy day. We've worked so diligently for over two years to make HEY. The press and customer reactions were making me euphoric. To have Apple, of all companies, be the ones to piss in our puree, and ruin that moment, is just personally heartbreaking 💔😩

John Gruber / @gruber: @thecoldriver @dhh If that was the case, Apple would have told them they objected to that sentence over the phone. And it clearly is a pain!

@dhh: It's clear that Apple feel like they're now so far above the trifling concerns of antitrust law that even while under the scrutiny of regulators and justice departments on TWO CONTINENTS, they can still afford to tighten the screws. Gotta make that pivot to services pay!!

@dhh: And frankly, it's hard to see what they have to fear. Who cares if Apple shakes down individual software developers for 30% of their revenue, by threatening to destroy their business? There has been zero consequences so far! Most such companies quietly cave or fail. We won't.

@dhh: @chrismessina @audible_com THERE'S NO SUBS AT ALL IN HEY FOR iOS! No billing, no signups, no nothing. It's a you-have-to-login-to-existing-account- to-continue app, just like Netflix or a million other services that have a free iOS app.

Alex Kantrowitz / @kantrowitz: As I write Always Day One, you can grow a company in two ways: 1) Milk your assets 2) Build new ones. Apple's culture ensures ideas for new products don't move across the company. So it lives in Category 1: Squeezing money out of iPhone just as Microsoft did with Windows.

@dhh: This is while @RepCicilline is literally preparing another hearing on big tech antitrust where @tim_cook might be asked to appear! While the DOJ is taking to witnesses of App Store abuses! While @vestager and her team is investigating. HOW BRAZEN CAN YOU GET?!

Matthew Keys / @matthewkeyslive: I love Apple. Their stuff just works. But I hate the tax they impose on developers.

Sar Haribhakti / @sarthakgh: We need this but for whether Apple will approve paid apps without in-app payment option

Tae Kim / @firstadopter: The Protocol story is eye-opening: “Waugh was told that Apple would like a commitment and a timeline for implementing the payment system, or Apple might be forced to remove Hey from the App Store entirely.”

The Macalope / @themacalope: People seem to believe I think Apple can do no wrong. For the record, this is Apple doing wrong.

@protocol: Jason Fried and David Heinemeier Hansson spent two decades telling anyone who would listen that remote work really could work. Now that a pandemic proved them right, they're shouting about email instead.
Farhad Manjoo / @fmanjoo: it's weird how they go to the troubled to create rules that are also completely arbitrary

@dhh: We've been in the App Store with Basecamp for YEARS. We know the game. It was always rigged. It was always customer-hostile, deeply confusing, but the unstated lines were reasonably clear. Now Apple has altered the deal, and all we can do is prey they don't alter it further.

Quinn Nelson / @snazzyq: Not only is the App Store clearly an anti-trust issue that needs to be investigated but Apple's own inconsistency in moderation is wildly frustrating, economically damaging, and downright cruel.

Steve Troughton-Smith / @stroughtonsmith: The 'it's Apple's store, they can set the rules' argument would be totally fine if iOS was just one player in a wider market. But as @dhh says, if you're not on Apple's platforms, you may as well not exist. They control the future of software, unregulated, and they know it

Ben Thompson / @benthompson: Multiple emails, several of which will only communicate via Signal. I'm of course happy to do that, but also think it is striking just how scary it is to even talk about the App Store.

@akitaonrails: Yep, one of the reasons I left the Apple ecosystem years ago and never looked back. It's acting more and more like Microsoft in the late 90's.

@dhh: But while I'm sure Apple's attempt to cut off the air supply to the likes of @spotify is board-room stuff, I think what we're facing is simply the banality of bureaucracy. Apple has publicly pivoted to services for growth, so KPIs and quarterly targets trickle down.

Casey Newton / @caseynewton: In hindsight we never should have allowed anyone to compete with us

Jason Fried / @jasonfried: Apple's pirate flag used to mean rebellion. Now it just means looting.

Nathan Baschez / @nbashaw: Apparently Apple allows “business” and “reader” apps to not use IAP but not anything else. What is the justification for those exemptions but not consumer software?

@dhh: It's the same trap Microsoft fell into in the late 90s. Being predatory was just too easy, with too few consequences, so it became the default mode. Apple 2020 smells a lot like Microsoft 1998. But MS became better. Fresh leadership, fresh ideas, STILL WORTH A TRILLION!

@brian_henderson: The white elephant in Apple's AppStore approval process. New apps often hit with revenue restrictions by Apple that are allowed on more popular iOS apps. A form of discrimination, as there is no regulation nor 3rd party oversight.

Dieter Bohn / @backlon: Apple's subscription policies are like the No True Scotsman fallacy only instead of it being a fun philosophy exercise it's taking money away from new businesses using monopoly power over a platform.
@dhh: Remember the Apple pirate flag? When being a pirate meant being a rebel? Countering the navy, the establishment? Now this flag is a better symbol for Apple plundering small, independent software developers. ...

Jordan Dea-Mattson / @jdeamattson: Spent 13 years working at Apple. Poured my life into it. Disgusted by what I am seeing here. @tim_cook
Rene Ritchie / @reneritchie: How would you handle current App Store complaints? - Give up all rev-share, turn it into a loss-leader to fuel hardware sales? - Give up security concerns, allow side-loading from alt stores? - Keep App Store as is, divest all competing products/services? - Something else?

Nilay Patel / @reckless: I think ⁦@dhh⁩ is making a strong argument here - but even if you buy Apple's legalistic argument, how is “we made a list of apps that are okay and email apps aren't on it” good for anyone?

David Pierce / @pierce: As for questions like “What if I pay for G Suite on my personal email, isn't that the same thing,” or “What about all the other subscription email services that work kinda the same way,” the answer seems to be

Steven Aquino / @steven_aquino: I usually don't comment on App Store policy, but here's one re: the Hey brouhaha. Nobody should rush to defend Apple, the $1.5T behemoth. They can and should do better. Yes, it's their platform and their store. That doesn't mean they can antagonize developers. Change policy.

Chris Messina / @chrismessina: Better grab it before it's pulled or they fall back to Testflight!

Mike Volpe / @mvolpe: This is not new news. All of the App Store providers (both b2c and b2b) shake companies down like this. Kudos to the team at Hey for being smart enough to turn it into a PR win for them!

Benedict Evans / @benedictevans: I don't think Apple's payment terms are sustainable. But sandboxed apps and curated app stores are changes in the model that are as essential as E2E encryption or open source. /end

Murray Webber / @mynameismurray: @tomwarren Yeah, it's crazy how Apple demands a cut of subscriptions ordered through an app, that Apple didn't develop, and for a subscription Apple doesn't manage. It's crazy wrong. TBH, I'd like to see them be forced to offer user choice of default apps (how about a browser ballot?).

Harry McCracken / @harrymccracken: I pay Google outside of the App Store for my Gmail, and am not sure how this is different.

Casey Newton / @caseynewton: This is not your typical developer hyperbole. Apple's behavior here is truly inexplicable and I imagine it will have implications for the various antitrust investigations now underway

Shira Ovide / @shiraovide: “I will spend every dollar that we have or ever make to burn this down until we get to somewhere better.”

Russell Ivanovic / @rustyshelf: In the lead up to WWDC, Apple would like all developers to know that you need to pay the protection money or GTFO. Or in their own words “Nice business youse gots here, be a shame if...”

@dhh: This is exactly the issue I gave testimony in front of congress earlier this year! We hadn't yet launched HEY, but I said it worried me, what Apple might do, if you're in direct competition with them. And now we know what they'd do. Attempt to crush us.

Nilay Patel / @reckless: This is... actually insane. Why get into this war just days before WWDC?

Will / @ws: so you're telling me vendor lock-in is a... bad thing?
Ben Thompson / @benthompson: We have now moved into the “genuinely sad” part of this saga where I am learning about apps that have been in the store for years serving the most niche of audiences being held up for what, a few hundred dollars a month?

Jason Fried / @jasonfried: If you want HEY on your iPhone, even if you don't have an account yet, I would *highly recommend* downloading it right now before Apple decides to pull it because of their predatory, onerous rules —>

Eli Grey / @sephr: Hey's tracking pixel blocker is fundamentally flawed. A blocklist gives you a false sense of security. The best way to defeat email tracking pixels is for email providers to auto-request and store all external resources embedded in an email on-delivery instead of on-read.

Julian Lehr / @lehrjulian: Good example of Signaling-as-a-Service¹ ― ¹ (h/t @sariazout)

Dave / @davewiner: I heard that Hey doesn't support standard email protocols and is not file format compatible with GMail. Is this true? What is their protocol like? How do you get your data out if you decide to switch? Can you? PS: If I were to compete I'd go for Heh.

My take: Cupertino, you've got a problem here.


    • Rodney Avilla said:
      Amen. I do not use twitter. Ever. For the same reason. I believe this country would be a lot better off if everyone deleted their twitter app. It gives a megaphone to people whose voices have a right to be heard, but do not need to be magnified. How many times I have read an article where the author justifies their position by quoting comments on Twitter just because the comments support the author.

      June 17, 2020
      • Rodney Avilla said:
        speaking of megaphones, from Mac Rumors:
        “Twitter today announced the launch of a new feature that’s designed to allow people to tweet with their voice, sending voice-based messages instead of text.”

        June 17, 2020
  1. Jerry Doyle said:
    “…. When Waugh and Basecamp pointed out that there were many other apps — even email apps like Spark or Edison — that allowed users to log in to their existing accounts without signing up through Apple, the reviewer (Apple) told them they wouldn’t discuss other apps. And that was that.”

    I don’t understand the nuances of this issue fully, and it is confusing to me. I support Apple’s right to generate income from developers who want to piggyback off Apple’s iOS platform of 1.5B installed base. That makes sense to me. Where I get confused by Apple is their failure to treat all developers in a “fair & equitable” manner. Amazon often is used as one glaring example where Apple fails to treat the company similarly.

    Can someone explain to me why Apple seemingly applies its rules disproportionately to certain companies? I’m fairly intelligent, have multiple academic degrees, but I’ve never been able to wrap my head clearly on understanding this issue. If I can’t understand it clearly, then I fear someday a jury of my peers will not be able to do so, and this will place Apple at a disadvantage.

    June 17, 2020
  2. Ross Richardson said:
    Wait … you’re saying people still use email?

    June 17, 2020
    • Ralph McDarmont said:
      Hey lol. I send out a ton of emails every day and communicate with my clients with email incessantly. Better than texting and supersedes usps by a light year.

      June 17, 2020
  3. Ralph McDarmont said:
    Hey! Pun intended. This clown sure does sound righteous and arrogant while exploiting Apple’s success. Cook and company do not owe this guy anything, except an invoice.

    June 17, 2020
  4. Fred Stein said:
    I’m waiting to hear Apple’s response.

    Please note: 2 million Apps in the App store; 23 million developers in Apple dev program; Only 15% of the $500+B revenue through the App Store generates App revenue for Apple.

    Note also: @dhh urges readers to “download now”.

    June 17, 2020
  5. Jonny Tilney said:
    $100 for an email client. Who do they take for suckers? App Store can do without them. And besides, show me a business that will do your billing, your marketing, your access to a billion users, all for free? Loud-mouthing, aggressive and using the EU announcement yesterday to get some traction.

    June 17, 2020
  6. Fred Stein said:
    Great point Jonny. Let’s rephrase dhh.

    “Download my app and pay me $100 now, before ‘I burn this house down myself’.”

    “My channel partner is a thug because they want me to pay what everyone else pays.”

    June 17, 2020
  7. Grady Campbell said:
    I’d like to see somebody lay out this problem in all its complexities (e.g., requirement that the App Store is the only allowed source for apps (originally a teleco requirement?), paying the cost of said store, developers getting free hosting if they don’t charge, developers wanting to charge but still get free hosting, Apple having their own apps (which I don’t want to give up), etc.). Has anybody done this? The issue is not simple.

    June 17, 2020
    • Jerry Doyle said:
      @Grady Campbell: Amen brother!

      June 17, 2020
  8. Steven Philips said:
    Confusing! As David Emery says, “shouting sound bites“. None clarifies anything.
    It seems clear from Gruber’s referenced article that there are a ton of subtleties beyond my mental model of Nordstroms. But for all the grousing – as Rene Richie’s twit implies – no one seems to offer a solution.
    Maybe Apple should have a section of their store that is just for ADVERTISING. Like a magazine. Just pay a monthly fee based on the size of the ad – whether you get any sales or not – and they can set up and maintain their own sales. They would also need to pay for click-throughs like with other sites.
    This clearly just a random thought, not offered as a real solution.

    June 17, 2020
  9. Bart Yee said:
    I haven’t read all the tweets nor any of the PED3.0 comments so here’s my biased take:

    Hey “Hey” You want in on iOS and Apple users through the App Store? Then you play by whatever Apple rules there are. And if Apple isn’t terribly consistent and wasn’t with you at first, and now is enforcing the rules it had, good for Apple for finally getting to you and too bad for you. And all the other apps you likely will call out that now will come under the same scrutiny.

    Even with literally an entire army of Apple software and App reviewers, with 2+ million apps and developers (and growing) to contend and interface with daily, plus user feedback, there are just going to be some inconsistencies in application and enforcement of the rules, always has been with any organization. You (Hey) are one so you see it from your perspective, Apple is many and they see it from their perspective. You want all the profit for being able to access the iOS and Apple user universe, but you don’t want your host (and hardware platform for which you wouldn’t exist) to get compensated for providing said hardware AND software platforms and store (at the cost of billions of dollars of R&D, production, and years of sales) where you can play, then you’re going to get called on that.


    June 17, 2020
  10. Bart Yee said:

    Don’t want to comply, your choice. As I’ve said many times before, Apple is just a niche player in the total world of smartphones. It only has about 1 Billion active users compared to Android’s 2.5 Billion. Apple sells a paltry 12-17% of total smartphones each year compared to Android’s overwhelming numerical superiority of 83-88% per year. I’m sure you noticed that most Android’s are totally affordable, offering very high numbers of user you can access each year, while Apple’s product are labeled “overpriced junk that no one can buy or should buy”. Why go with a loser like Apple iOS, iPhones, and the App Store where there is so much restriction, rules, and oversight. Android is obviously the better place to play and you should concentrate your resources on monetizing that much bigger user base. I’m sure Android users are clamoring to spend $99 per year for your services compared to “free” email that MSFT, Yahoo, AOL and, oh look, Google provide today (with ads). If your business idea of great uptake is 100,000 users, Android’s your easy target market. (Also the Windows crowd too!)

    You don’t need Apple and Apple doesn’t need you if you’re not going to comply with the rules.

    Rant off.

    June 17, 2020
  11. Kirk DeBernardi said:
    Like Jerry D., I cry out for a clear understandIng of all of this.

    Fact: It’s Apple’s store and marketplace.
    Fact: It’s a marketplace opportunity, not a right.
    Fact: It’s curated, operated, funded, maintained and controlled by Apple.
    Fact: The stakes on the table for developers are obviously Apple’s users — and their money.

    Argument: I want to distribute/sell my app/service for Apple’s users.
    Argument: I want the app available for free, if I deem it necessary.
    Argument: I want to charge a separate subscription rate unfettered by policy.
    Argument: I have a right to expect this free distribution to make unfettered sales/services income.
    Argument: If Apple can’t provide all the above, Apple must allow the OS to install apps from an independent, non-curated app store.

    This is what I’ve gleaned so far on this issue.

    Anybody? Am I wrong on any point here? The above tells an ironic tale, yes? The bigger cat IS Android. He’s just not as fat.

    Aye — there’s the REAL rub.

    June 18, 2020
    • Bart Yee said:
      KDB I believe you’ve nailed it. Side loading of apps to avoid allowing Apple to manage, vet, ensure privacy and security of user info, plus avoiding acknowledging Apple’s costs and highlighting Apple business model of making some profits (imagine that) on its investments is the whole issue.

      These “developers” want unfettered access to Apple users while breaking down Apple’s structures and carefully layered approaches to privacy and security. They want a separate place where they can operate without severe scrutiny. They want a place where they can mingle amongst much more malevolent developers who wish to extract and sell the info they ask for/take/steal.

      Do I trust a fledgling App developer with my CC info? Hell no! Do I trust Apple with same info? Hell yes!

      dhh, here’s your match and kindling. Now that you’ve outed yourself on Twitter, you can decide what you’re going to with your traveling house of straw and sticks. I’ll go live in Apple’s well built walled garden fortress with a moat and standing army, ground penetrating sonar and early warning radar.

      June 18, 2020

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