Apple: Fighting to preserve the App Store tax

Apple: Fighting to preserve the App Store tax

A battle between Apple and the creators of a new $99-a-year email app has put a spotlight on the fees that developers are forced to pay to Apple, said Kara Swisher in The New York Times. The app, called Hey, was kicked out of Apple’s App Store for not including a button that would let users subscribe inside the app—a feature that comes with a 15 to 30 percent fee for software makers. “Apple and Google are the two tollbooths for us all,” insisting they should get “rent” from the application designers who use their platforms. One of the developers of Hey, David Heinemeier Hansson, testified before Congress last year, “excoriating Apple” and asking legislators to rein in the tech giants. No swift action has come—and now he’s stuck on what he calls Apple’s “wheel of misfortune.”

Apple’s interpretation of its own App Store terms “seems capricious at best and at worst seems like it’s motivated by selfdealing,” said Dieter Bohn in App Store rules state “that if you want to sell digital goods, you have to use Apple’s payment system.” Fine. But there are exceptions for services such as Netflix—yet, inexplicably, not for Hey. Apple finally approved an update to the Hey app this week, and Hey’s next release seems to offer a compromise. But even if one is reached, Apple has demonstrated how it uses arbitrary rules to maintain its power.

Hey has a point, said Sarah Perez in “Apple’s policies are confusing, appear to be inconsistently applied, and are anticompetitive.” Hey has to compete with Apple’s own free Mail app—then pay Apple if it succeeds. That said, “the whole debacle serves as a nice bit of high-profile marketing” for a new and otherwise obscure app. Whether or not Apple gets a cut, the Hey app suffers from some crucial misses, said Natasha Lomas, also in There is no free option (and two-letter vanity Hey .com addresses can cost as much as $999 a year). It is “not end-to-end encrypted,” so Hey holds the keys to your data. And it “gives the middle finger to standard email protocols,” so if you shift over your email, “you’re tethered to using only Hey’s apps forever.”

This is one case that proves “the underdog isn’t always the hero,” said Samuel Axon in Apple is fulfilling a promise to its users. It has staked its $1.5 trillion brand on “maintaining a minimum level of quality for apps” and spent “unfathomable sums” marketing its phones to millions of desirable customers. If Apple wants to define a “price of entry” for “joining the lucrative platform that it built with its blood, sweat, tears, ingenuity, and dollars,” it is well within its rights.