App Store commission cut: complaints & investigations continue

Apple’s App Store commission cut is a very clever way to reduce the antitrust pressure on the company, but it’s not a magic bullet. Early responses suggest that both complaints and investigations will continue.

Apple has reduced its commission from 30% to 15% for the overwhelming majority of developers – all those earning less than a million dollars a year in net revenue …

However, financial blog Zero Hedge says that the European Union’s antitrust probe into the App Store ‘remains ongoing.’

In itself, that’s not surprising: the EU’s wheels turn slowly, and investigations don’t stop overnight in response to sudden developments. As a minimum, those involved in the probe will need to consider the implications of the move, then determine whether continued work remains justified.

There are also those who think that a purely voluntary move by Apple may not be enough to satisfy regulators. Developer Steve Troughton-Smith, for example, takes the view that while it’s a good move, Apple has acted too late.

Apple reducing its commission to 15% will make a huge difference to small businesses and developers like me, and could have ripple effects across the industry and across other platforms. It’s a gesture of goodwill that arguably could have come sooner, this year being what it was.

Whether this move affects looming antitrust regulation, I doubt it — Apple could just as easily return to 30% tomorrow, or 50%, or 80%, and nothing would be there to stop them. That’s why regulators want to regulate.

Apple dropping its rate from 30% to 15% after twelve years didn’t come out of nowhere, and didn’t come because of the pandemic — to me, it seems clear that Apple is terrified of looming antitrust regulation and thinks it may just lose the battle.

If they had done this a year ago, before the antitrust regulators had gathered incendiary evidence, their investigations may have lost interest. Now, the genie seems to be out of the bottle. Let’s see what happens.

To a large extent, however, that’s irrelevant. This is a very significant move by Apple, and even if regulation does follow, it seems to me that the financial impact is unlikely to be dramatically greater than the one Apple has taken from this move.

Apple’s announcement also won’t put an end to complaints about the App Store commission cut. These have largely come from big companies like Spotify, Epic Games, and Basecamp, who won’t benefit from the new terms. Predictably enough, Basecamp and Hey CTO David Heinemeier Hansson has already weighed-in.

Machiavelli would be so proud of Apple. Trying to split the App Store opposition with conditional charity concessions, they – a $2T conglomerate – get to paint any developer making more than $1m as greedy, always wanting more. As clever as its sick.

The only good thing about this cynical, Machiavellian ploy by Apple to split developers with selective handouts, is that it shows they’re sweating. Even if just a little. But enough to twist Cook into the role of an awful lobbyist, constantly singing his own monopoly hymns.

But just because it’s cynical, just because it’s plainly Machiavellian, that does not mean it won’t work! The final line in that Verge write-up was as depressing as it was plausible. Developers are desperate for relief from Apple’s abuse. Half the whippings might appeal to some.

As DHH acknowledges, Apple’s move is indeed likely to succeed. The company may still face antitrust action, but the likelihood of regulators forcing an across-the-board reduction in Apple’s App Store commission rates is now orders of magnitude smaller than it was yesterday.

Photo: James Yarema on Unsplash

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