Apple’s annual developer conference ‘WWDC 2020’ is just a few days away. Just like every year, Apple will address developers around the world to invest in the App Store. So far, Apple’s App Store has been a success. In the first quarter of 2020, customers have spent a record $23.4 billion on apps. That stated, not everything is hunky-dory, at least for developers.
Progressing towards the first-ever virtual WWDC 2020, Apple is at loggerheads with a nearly unheard email company called Basecamp. The bone of dispute between the two sides is Apple’s controversial App Store tax policy. Basecamp had newly launched an email service called Hey. Unlike other email services, Hey is a paid app, available for $99 a year.
The controversy erupted when Apple stopped Hey from rolling out a new update to the app as it did not enable users to sign up or pay through the iOS app. Instead, it allows users to pay for subscription directly through its website. Since then, there has been a mini-war of words between the two sides.
Interestingly, the spat between Basecamp and Apple comes at a time when the European Union is examining Apple’s antitrust practices in regard to the App Store. The study will focus on App Store policies that make it compulsory for apps to use the in-app purchase system and restricting developers from informing users of alternative purchasing possibilities outside Apple’s ecosystem. The EU is taking the action after Spotify SA filed a complaint against Apple.
Apple’s App Store tax
Apple claims developers have made over $120 billion globally from selling digital goods and services in apps hosted by its App Store.
While the official website represents Apple’s flexible image, but it does collect 30% commission on with Apple’s In-App Purchase system (for free apps).
There are more tiers where Apple makes money by taking a commission from iOS developers. For instance, for paid apps (ones that ask upfront money for download), it levies 30% commission.
If a developer prefers Apple’s In-App Subscription system, Apple gets a 30% commission for the first year. After the first year, Apple gets a 15% commission.