This is how Apple swallows its Dutch medicine

From Killian Bell's "Absolutely vile: Devs react to Apple’s 27% cut of third-party payments" posted Friday on Cult of Mac:

Apple on Thursday confirmed it will charge developers in the Netherlands a 27% cut of sales revenue when they use third-party payment systems. And, just as expected, that has not gone down well with developers.

Steve Troughton-Smith, creator of apps like Broadcasts and Pastel for iOS, called the move “absolutely vile” and said Apple executives “should be ashamed.” Here’s what others are saying.

    • “This says everything about Tim Cook’s Apple and what it thinks of developers,” Troughton-Smith said. “I hope the company gets exactly what it deserves. Everybody on their executive team should be ashamed, and some of them should not be here when it’s all over.”
    • “They’re making non-App-Store payments as painful, expensive, and clunky as the regulators will tolerate,” said Instapaper creator Marco Arment. “Come on, THIS is comedy. Amazing, ridiculous comedy. I’d be surprised if a single app ever took them up on this. (And that’s exactly by design.)”
    • “Wow, Apple is going to fight dirty all the way,” said independent developer Frank Reiff. “Never mind the damage it does to its reputation.”
    • “Apple is going to fight this tooth and nail instead of adjusting its services business model from being that of a rent seeker,” said Dare Obasanjo. “They’ve created enemies among developers and regulators with their shenanigans.”

My take: I've read most of Apple's 3,000 word support document "Distributing dating apps in the Netherlands" and it's as forbidding, mean-spirited and loathsome these guys say it is.

26 Comments

  1. Kenny Kruger said:
    No one puts Baby in the corner!

    3
    February 4, 2022
  2. John Konopka said:
    I think it was Tony Randall who said something to the effect of we learn most of our important lessons in the early years of grammar school.

    This story reminds me of children’s book, The Little Red Hen. No one wants to contribute to the production of making the bread but everyone wants a free slice of bread to eat.

    12
    February 4, 2022
  3. Kirk Burgess said:
    Seems like all these people had incorrect expectations that “alternative payment system” equalled “no apple commission” which absolutely 100% has never been the case – the two are not correlated. All these laws countries are implementing explicitly state that Apple is allowed to continue to implement a commission model for iOS apps.

    5
    February 4, 2022
  4. Michael Goldfeder said:
    The consequences of being a “freeloader” has its downside and cost. Everyone pays for the overhead costs upon walking into a Costco, Walmart, or a grocery store. Nothing unusual about that at all. The entitlement program many of these App Developers have become accustom to expecting isn’t going to be their lifetime free everything journey they dream about.

    2
    February 4, 2022
  5. Duane Bemister said:
    So I guess Apple only actually charges three percent for their transaction service. Seems pretty fair to me.

    1
    February 4, 2022
  6. Horace Dediu said:
    The terms are conditions are for the regulators to savor and enjoy. There was never going to be any impact one way or another on developers, users or Apple. The regulators can now celebrate their hard-won victory.

    14
    February 4, 2022
  7. Steven Philips said:
    I don’t like how things got to this point, but I do think Apple should just capitulate, rethink its App Store charges and move on. That doesn’t mean making it open season for devs outside of the App Store.
    Old “poem” (Burma Shave sign?) from childhood seems appropriate:
    “He was right – dead right – as he sped along.
    But he’s just as dead as if he’d been wrong!”
    Too many people gunning for Apple to hand them ammunition.
    (And I’m not saying they shouldn’t charge a fair rate for services.)

    0
    February 4, 2022
  8. Daniel Epstein said:
    Philip, You mean it reads like a contract and insists on the developer following the rules. I think the real hoot or complaint is Apple only giving the developer’s 3% off Apple’s usual fee. Of course this is Apple playing hardball. Of course in my business when a client says I should give them a break on the price for a job because they are providing part of the equipment or service I usually provide I often value their addition for less than I would charge for it. For example I have to monitor their portion in addition to maintaining my own. That takes up more time which I would normally have to charge for. etc. My overhead doesn’t decrease unless I can completely abandon my own system. Clearly not the case here. Let’s think of it like a utility paying less for energy returned to their grid from a homeowners system than they charge to deliver same amount to someone else. Apple doesn’t want to be paying for the privilege of the third party system by giving up fees it thinks it is entitled to.

    5
    February 4, 2022
  9. Darren Grayson said:
    Go build on Android. Problem solved.

    13
    February 4, 2022
    • Robert Paul Leitao said:
      Darren: Sarcasm appreciated!

      3
      February 4, 2022
  10. Robert Paul Leitao said:
    If the App Store didn’t exist there would be zero flow to developers. The App Store was years in development and Apple took the risk of investing tens of billions to develop the digital storefront and that investment continues today. The reason why developers have benefited from the App Store is because it’s built well, it’s secure and privacy is protected. In other words, consumers have a high degree of confidence shopping inside the store. For the record, I’m not a fan of the 30% distribution fee. I’d like to see it reduced. Side-loading and allowing outside payment systems isn’t the answer.

    7
    February 4, 2022
  11. Dave Ryder said:
    I wonder why the ACM (the Dutch regulator) chose to focus on dating apps.

    1
    February 4, 2022
    • Robert Paul Leitao said:
      Are you sure you want the answer?

      1
      February 4, 2022
    • “I wonder why the ACM (the Dutch regulator) chose to focus on dating apps”

      Because that’s who filed the complaint.

      2
      February 5, 2022
      • Robert Paul Leitao said:
        @PED As you pointed out in your blog post on 12/25/21, the Dutch authorities took into consideration the issue of “multi-homing” and the “network effect” which they consider important to users of dating apps due in part to the unique advantages of using mobile devices and apps versus, for example, a mobile web browser for the expressed purpose of successfully finding a match. In my view, choosing the Netherlands may have been an effort at “venue shopping” to find the most friendly regulatory environment to make a case against Apple to gain a victory to support more actions in other jurisdictions. To my knowledge, the complaint wasn’t brought exclusively by owners of dating apps solely operating in the Netherlands.The links in the December blog post provide more information.

        1
        February 5, 2022
  12. Fred Stein said:
    It seems Apple says, the transaction fee is 3% and the fee to access iOS and Apple’s customer is 30%. (30% – 3% = 27%)

    No where have I seen a robust case that Apple’s fees are out of line. There are comparisons with higher and with lower fees. Very few valid comparison have lower fees.

    Does Coke complain that movie theaters, sport franchisee’s, Disneyland, etc have gross margin well above 50% for selling Coke? Absolutely not. Coke is delighted to have their products and logos accessible to their customers.

    2
    February 4, 2022
    • Robert Paul Leitao said:
      @Fred In my view, another case of European profit envy. Apple is a US-based enterprise perceived to be making big profits and at most levels, government agencies in Europe what a cut of the profits either for their home-based enterprises or to fund government operations. In general, members nations in the EU are not seeing the robust levels of profit growth enterprises in the US are generating and there’s a sense of being left behind as US-based tech sector enterprises innovate and innovate quickly. Of course, this is just my view.

      7
      February 4, 2022
  13. Fred Stein said:
    Somehow, some folks believe that Apple does not own iOS, or that it should be considered a public commons, or treated as a regulated utility.

    Analogy. 40 miles west of Apple Park, lies a beautiful Ritz Carlton on a large portion of our California coast. It has a golf course, restaurant, gift shops, all the upscale goodies. Anybody and his dog (literally dogs are allowed) can access the beach. The Ritz even offers access, free parking and well maintained staircases for the public (better than public beaches in the area.) No one can set wine bar or dog grooming kiosk on the beach though.

    3
    February 4, 2022

Leave a Reply