If Apple Wants to Break the Law, It Should Just Do That
Benjamin Mayo, reporting for 9to5Mac:
Apple is introducing a two-tiered system of fees for apps that link out to a web page. There’s the Initial Acquisition Fee, and the Store Services Fee.
The Initial Acquisition Fee is a commission on sales of digital goods and services made by a new app user, across any platform that the service offers purchases. This applies for the first 12 months following an initial download of the app with the link out entitlement.
On top of that, the Store Services Fee is a commission on sales of digital goods and services, again applying to purchases made on any platform. The Store Services Fee applies within a fixed 12-month period from the date of any app install, update or reinstall.
Effectively, this means if the user continues to engage with the app, the Store Services Fee continues to apply. In contrast, if the user deleted the app, after the 12 month window expires, Apple would no longer charge commission…
However, for instance, if the user downloaded the app on their iPhone, but then initiated the purchase later that by navigating to the service’s website independently on another device (including, say, a Windows PC or Android tablet), the Initial Acquisition Fee and the Store Services Fee would still apply. In that instance, Apple still wants its cut as it sees the download of the iOS app as the originating factor to the sales conversion.
If this sounds confusing, that’s because it is. Let me explain:
The Initial Acquisition Fee applies for 12 months after a user downloads an app, regardless of if they continue to use it. For a year, Apple gets 5 percent of every transaction that person makes anywhere they make it, whether on the web, through the app, or any non-Apple device. If someone purchases something — anything — from a developer within those 12 months, Apple gets 5 percent. Period.
The Store Services Fee applies after those 12 months if the user continues to use the app and purchases products from the developer. Again, Apple takes a cut of every transaction the developer conducts as long as that user has the app installed on their iOS device. If they don’t, and it’s past 12 months since the download, Apple isn’t owed anything anymore — no Initial Acquisition Fee and no Store Services Fee. But as long as they have the app on their iOS device, Apple is owed either a 5, 7, 10, or 20 percent cut depending on the business terms the developer has accepted and if they are a member of the App Store Small Business Program.
Most readers would logically assume they’ve misunderstood something because this makes no sense to even the most astute Apple observers. Again, let me reiterate: Apple will take a cut of any purchase any person makes on any device with a developer who accepts these terms as long as that user has downloaded or updated the app on an iOS device at least once. If someone downloads App A on their iPhone, opens it, and immediately uninstalls it, then goes to their PC, downloads App A on there, and then makes an in-app purchase through it, Apple will take at least 10 percent from that purchase. After a year, if the user decides to reinstall the app on iOS, Apple will take at minimum 5 percent of every purchase they make — including on the PC — in perpetuity until they uninstall the iOS application.
I’m unsure of how to even digest this information. What a predatory fee; it almost reads like a parody. Apple thinks that its platform and App Store are so important to take a cut of every single transaction a developer conducts with a user purely because a user has downloaded an iOS app once. Even the most diehard Apple fans can admit this policy is born out of complete lunacy. Seriously, the people at Apple who conceived this plan should get their heads examined, and the executives who approved it should be taken to court. I won’t even ask, “How is this not illegal?” because there is no world where this is not illegal.
Let me put this in simpler terms: Say someone buys a package of Oreos from a Kroger grocery store in New York. Then, in six months, they go to Los Angeles and buy another package of Oreos from a Safeway store there. Kroger tells Nabisco, the company that makes Oreos, to give it a 5 percent cut of the Oreos bought in Los Angeles six months after the initial purchase because it is possible the customer learned of the existence of Oreos at Kroger. Keep in mind that the second package was bought on a completely different coast of the country, half a year later, from a different store owned by an unrelated company. Finally, Kroger demands a list of every single person who has ever bought Oreos from any store because there is a possibility Kroger deserves its cut more than once. No, that isn’t just senselessness — it’s surely illegal.
There is no possible excuse or justification for this behavior. I’m a strong believer in Apple’s 30 percent cut, and I don’t think it should be forced to remove it when it is offering a service by way of In-App Purchase, its custom payment processor. Apple is doing none of the processing in this scenario — this entire policy is blatant thievery. It doesn’t protect people’s privacy, help developers get more business, or even make Apple any more successful since no developer in their right mind would ever accept this offer. That would be Apple’s rationalization of this fee structure: “Why would any developer choose this? We’re not forcing them to.” And Apple is right: Nobody is forced to adopt these terms. That’s why Apple shouldn’t offer them at all. If Apple really wants to disprove the European Commission and Spotify, it should just violate the law and offer no external linking option. This behavior is criminal and will land the company in hot regulatory water — and the pain is entirely unnecessary.
If Apple wants to break the law, it should just do that. These games aren’t fun to write about, live with, or even think about. Instead, they simply paint a picture of a greedy, criminal enterprise — more so than if Apple violated the European law most straightforwardly.