But even as he ranted furiously about Apple’s actions, Heinemeier Hansson said he was worried about the repercussions.
If we can’t have Hey on iOS, he said,we’re nowhere. We have to be on the biggest platform in this segment, and Apple knows that.When he tweeted about the app’s initial rejection last week, he got a number of responses from developers who would privately rail against Apple's policies but publicly make excuses for the company.You listen to some of these app developers, and they sound like hostages, Heinemeier Hansson said.They sound like they’re reading a prepared statement, because otherwise Apple could hurt their business. Which is true!Apple’s somewhat confusing app-review policies are an open secret in the developer industry: No matter how many times you’ve submitted an app, you still hold your breath every time, because who knows what could have changed? Heinemeier Hansson said it’s possible that someone at Apple might change their mind and unilaterally decide to approve Hey. But that won’t solve his problem. The guy who loves picking fights on behalf of the greater internet good has found a new one.
David PierceEven if it goes away for us, this is still a systemic story of abuse, he said.I think this is where we need this kind of systemic reform that hopefully the EU is pushing.
Antitrust action against Big Tech was a hot topic of debate in 2019, starting from Elizabeth Warren’s proposal to break up these big companies – including Apple. One year later, most of the world has other, more pressing things to worry about, while Big Tech is consolidating their power over competitors. Apple itself easily fits what Warren describes as ‘Using Proprietary Marketplaces to Limit Competition’ with its iOS App Store, the cause of controversy for the above article.
The are several problems here, several ways in which Apple is constraining competition and extracting monopoly profits from its iOS app marketplace. The more problematic is the discrimination between physical goods and services, which are not subject to the 30% tax on in-app purchases (ordering on Amazon or hailing an Uber ride for example), and digital goods, like purchasing e-books or paying for monthly subscriptions. One could draw the conclusion that Apple is exempting markets where it has no presence, while taxing its direct competitors in digital services like Netflix and Spotify – in doing so, Apple gains an unfair advantage by controlling the marketplace. Spotify publicly complained about this disadvantage multiple times, before filing an antitrust complaint last year, which led to an ongoing investigation by the European Commission.
On top of this, there are multiple inconsistencies and loopholes in these rules, making it harder for smaller app developers to build sustainable businesses in the App Store. Of course, Apple is more than happy to circumvent the rules in certain cases, as long as they get something in return: earlier this year they allowed Amazon Prime Video to bypass the standard 30% App Store fee, in exchange for deeper integration of core Apple services into Amazon products. Good luck getting that type of deal if you’re not a behemoth like Amazon!
The best way to get thru App Review is to treat it like crossing the border into a foreign country:
— Nikita Bier (@nikitabier) June 17, 2020
Keep your mouth shut, nod in agreement, do the minimum that is asked.
Once you’re in, crack open the beers & party.
Never be the guy who shouts, “Officer—am I being detained?!” https://t.co/JsBTfBiidE
One of the possible ways I see to make the system less biased is to replace the fixed 30% cut with a variable fee based on transaction volume or the number of paying users. This way, the developers pay for the App Store infrastructure, but their costs are more manageable. Maybe let developers pay once a year, give them discounts for higher numbers of subscriptions, because this incentivizes them to grow their business and continue to use the App Store. This might even convince big companies that have stayed away from in-app purchases until now to switch to this payment method.
Considering the possibility of a breakup, many have argued it is hard to do in the case of Apple, since the software is tightly integrated to the hardware. But I would argue there is no need to break up all Apple software from the hardware: make the iPhone come pre-installed with the App Store, but none of the Apple apps (maybe with the exception of a free iCloud tier, to enable basic cloud infrastructure). The software and services branch would be separated into a different company that would provide Apple software, both free and paid: from the Mail and Calendar apps to iCloud subscriptions, Apple Music, News, TV+, and everything else Apple decides to offer in the future. This entity would then be subjected to the same rules as everyone else in the App Store, making the costs and revenues of Apple’s services business clearer and forcing Apple to compete on a more level field with other companies. Ideally, during the initial set up of a new Apple device, people would be allowed to choose cloud services and media subscriptions from other companies, having more transparency about the costs and benefits compared to Apple’s digital products. It is unlikely for Apple to do this voluntarily, given their tight control of this distribution channel and recent focus on service revenues, but under combined antitrust investigations from the US and EU, things might change in the coming years.
Update: Jason Fried, the CEO of Basecamp, responded to Apple’s statements:
But personally, as the owner of a business, this isn’t just about money. Money grabs the headlines, but there’s a far more elemental story here. It’s about the absence of choice, and how Apple forcibly inserts themselves between your company and your customer.
Does the world’s largest company really get to decide how millions of other businesses can interact with their own customers? In fact, Apple’s policy distances you from your customer.
When Apple forces companies to offer In App Purchases in order to be on their platform, they also dictate the limits to which you can help your customer. This has a detrimental impact on the customer experience, and your relationship with your customer. It can flat out ruin an interaction, damage your reputation, and it can literally cost you customers. It prevents us from providing exceptional customer service when someone who uses our product needs help.
Jason Fried
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