Dandy Cat

Apple will charge 27% commission for app purchases made using alternative payment systems in the Netherlands

Astonishing.

A quick sampling of the most egregious aspects of this new entitlement:

  • This meager dip in commission is a complete negation of the benefits of sending out potential payers/subscribers to external destinations for purchase.
  • There is no ability to also support In-App Purchases using Apple’s payment system.
  • Developers must provide a report to Apple recording each sale facilitated through the App Store within 15 calendar days following the end of their fiscal month.

This all feels childish and despicable, but there’s a clear reason why they’re doing it. Let’s couple this story with a look at the Services revenue from the financial results they published on January 27.

A bar graph of Apple's Services revenue over the last thirteen quarters.

(Image from Apple Q1 2022 Results - $123.95 Billion Revenue by John Voorhees at MacStories.)

Notice how Apple’s Services revenue has only ever gone up, save for the most minor of dips in Q3 2020.1 This is a 26% increase year-over-year. It’s the largest growing part of the company and a booming business all on its own!

Q1 2022 has been their most successful quarter ever. Quite a feat when the world is still stuck in a COVID mess.

I see the motivations behind Apple’s reaction to the order by the Netherlands Authority for Consumers and Markets (ACM) in two ways:

  1. They’re trying to see what they can get away with in the face of mounting regulatory pressure to change how they run their business.
  2. They’re terrified of seeing those bars in their Services revenue start to go down.

A bonus third motivation:

  1. When the chips are down, their money is vastly more important than the developers that helped those bars go up in the first place.

Talk about short-sighted and hostile, but then, no company has ever been accused of being sensible, generous, and kind when they’re working with the sort of money Apple makes. This isn’t surprising—Apple’s long been dragging their feet and expending massive amounts of resources to avoid doing anything that will get regulators off their backs. However, it is a disappointing development.

I’m not interested in sideloading apps onto my phone or any of the other potential demands that regulators may make. I’m on Apple’s side when they say those changes will make their devices less secure. There’s a line in the sand to be drawn somewhere.

On the other hand, it’ll be less painful for all of us if they would extend an olive branch and allow apps to link out to sites where payments can be made, sans required commission. I feel confident that would do wonders to help alleviate their increasing and well-earned problems with world governments, even if it may hurt their bottom line.2

But I guess developers of their apps and users of their products aren’t the most important thing to them, and that’s coming from someone who otherwise values this company.

  1. But wasn’t everything crazy and unusual during the middle of 2020? Regardless, they made up their losses in the next quarter by an impressive amount. ↩︎

  2. But perhaps not as much as they fear? Their In-App Purchase system is well-designed and trusted. It’s far easier to use than any alternative. Maybe they should believe in themselves more. ↩︎