Pixel Envy

Written by Nick Heer.

Farhad Manjoo on Apple’s App Store Commission

Farhad Manjoo, New York Times:

But for how many years should Apple get to milk billions of dollars of almost pure profit from an invention first released back when George W. Bush was president? What justification is there any longer for Apple’s severe restrictions on how users and software makers can do business with each other, other than that it has the market power to impose them? Isn’t it time we were all given a break from the Apple tax?

Apple’s tax is a great boon to its bottom line. It is a costly drag for the users who spend enormous sums on its products and for developers looking to create apps to add tricks to your iPhone. And it can no longer be defended with a straight face.

It is hard not to see the rules around App Store commissions and payment mechanisms as opportunistic avenues of nearly pure profit. Yet, I have to wonder if those who support looser rules are prepared for Apple’s response should it lose to Epic Games, and if antitrust regulators step in. Does anyone imagine that Apple will just kiss a chunk of its App Store profits goodbye?

While we’re in that news dead zone between the trial ending, WWDC beginning, and the verdict of the trial, here’s a dumb little thought exercise: what responses can you imagine if the iOS app marketplace is radically changed by this ruling and further antitrust action?

Let’s imagine that anti-steering rules are dropped, alternative payment mechanisms are allowed, and — as Manjoo wishes — the 30% commission is either drastically reduced or eliminated altogether. I imagine users will be able to subscribe to Netflix and Spotify from within their apps, buy Kindle books directly through the app, and purchase Fortnite skins from within the game. But I would bet against companies with iPhone apps passing along their commission savings by significantly dropping prices to consumers.

Apple’s response is what I am most curious about. It would have to keep its payment mechanism more competitive, perhaps through more features or lower costs to developers. But I also imagine that Apple will want to recoup some of its lost revenues. It could raise its developer program fee. It could begin charging users for software again. It could charge developers for all sorts of App Store features, like per-app costs or hosting fees.1

I am not for one minute arguing that the status quo is acceptable. I do not think these speculative repercussions should dissuade regulators and lawmakers from taking a closer look at restrictions like those in the App Store and the Google Play Store. I understand why many commentators are focused on the exciting opportunities an Epic Games win may mean for the App Store. But let’s not pretend that these big changes will come for free, nor without many adaptations by users, developers, and platform owners.


  1. The only way any of these consequences are mitigated is if the App Store-only model of iOS and iPadOS is prohibited so they must be treated as general computer platforms. ↩︎