Developers and platform creators have been engaged in a near-silent battle about how much money they may make from each successful purchase or subscription. Epic Games has brought this issue to light by publicly questioning the established quo and even threatening to sue tech titans like Apple and Google. The consequences of those litigation have so far favored developers and publishers, forcing app shops to adjust their business practices. Apple, on the other hand, may have discovered a loophole that allows it to tax developers even if they don't pay through the App Store.
Few people can recall when or where it originated, but it has already become practically de facto standard for merchants to keep only 70% of profits while distribution platforms keep 30%. Although the Apple App Store and Google Play Store have made this approach famous, it has been utilized by many other businesses, both digital and physical. It is used by most digital game distribution platforms such as Steam, as well as physical stores such as Walmart. It has long been standard practice for stores to levy a tax on business owners who sell their products through those channels, and it makes the most sense in the context of a physical store. Apple and Google, for example, explain their cut by claiming that it goes toward enhancing the store platform, usually by developing tighter security measures. Those reasons, however, are not accepted by everyone.
The order did not state that developers that lead customers away from Apple's platform are entitled to all in-app subscriptions and other digital revenue. Apple might still charge developers a commission, according to the ruling. Apple would just find it more difficult to collect the commission. Apple is legally free to conduct business with anybody they want. Apple may amend the App Store's conditions and tell developers that they owe them 30% of their revenue, regardless of where they get it, and that if they don't pay, Apple is free to de-platform them.
Read next: Apple reveals the list of its top apps and games for the year 2021 in all iPhone, iPad and Apple TV categories
Few people can recall when or where it originated, but it has already become practically de facto standard for merchants to keep only 70% of profits while distribution platforms keep 30%. Although the Apple App Store and Google Play Store have made this approach famous, it has been utilized by many other businesses, both digital and physical. It is used by most digital game distribution platforms such as Steam, as well as physical stores such as Walmart. It has long been standard practice for stores to levy a tax on business owners who sell their products through those channels, and it makes the most sense in the context of a physical store. Apple and Google, for example, explain their cut by claiming that it goes toward enhancing the store platform, usually by developing tighter security measures. Those reasons, however, are not accepted by everyone.
What I’ve come to assume is now in black and white in this filing from Apple: If the injunction goes into effect, Apple seems likely to charge a commission on any transactions that start in the app, even if they are completed on the web. https://t.co/GVoEhiQbFS pic.twitter.com/uyXjAmM1uD
— David Barnard (@drbarnard) December 2, 2021
The order did not state that developers that lead customers away from Apple's platform are entitled to all in-app subscriptions and other digital revenue. Apple might still charge developers a commission, according to the ruling. Apple would just find it more difficult to collect the commission. Apple is legally free to conduct business with anybody they want. Apple may amend the App Store's conditions and tell developers that they owe them 30% of their revenue, regardless of where they get it, and that if they don't pay, Apple is free to de-platform them.
Read next: Apple reveals the list of its top apps and games for the year 2021 in all iPhone, iPad and Apple TV categories