Comment: 27 percent App Store commission is Apple treating regulators with disdain again

Apple’s latest response to antitrust regulation is to announce a 27 percent App Store commission instead of the standard 30 percent for apps that offer alternative payment systems.

Not worldwide, of course. Apple is still reacting on a country-by-country, regulation-by-regulation, lawsuit-by-lawsuit basis – so this specific policy relates only to dating apps, and only in the Netherlands…

As we noted earlier, this is clearly the least the company thinks may be needed to comply with the law – and imposes an additional administrative burden on developers too.

A 27% commission does not exactly seem like a compelling option — when Apple’s own In-App Purchase system is easy to use and deeply integrated into the system. Apple says that the 27% cut is based on the price paid by the user, net of value-added tax. It says “this is a reduced rate that excludes value related to payment processing and related activities”.

Each month, developers will have to send a report to Apple that lists their sales. Apple will then send out invoices for its commission, that must be paid within 45 days.

Not only that, but the reduction of just three percentage points is smaller than the four points Google offered in South Korea, and that has been received with disappointment and concern.

The official said the KCC was aware of concern over Google’s planned policy of only reducing its service charge to developers by 4 percentage points when users choose an alternative billing system, and the regulator is waiting for additional information from Google.

Apple is, once again, doing the absolute minimum it thinks it can get away with. I’ve argued before that Apple could have headed off this whole antitrust avalanche by being proactive at an early stage, and emerged looking like the good guy instead of the guy who grumbles as he does the smallest things required of him.

I can only echo my earlier amazement at the incompetence of the company when it comes to protecting its most valuable asset: its brand image.

For a company whose business is “skating to where the puck will be,” it’s astonishing to me how badly the company does this when it comes to reputational issues.

For each of the big issues that have brought the company bad publicity this year, Apple has taken its usual “We know best” approach. When it has made changes, it has been dragged kicking and screaming to its revised position, rather than taking a lead.

I mean, I get it, the company wants to protect as much of its Services income as possible, and it wants to avoid setting precedents that will hurt it in other countries. But that train has not only left the station, it’s halfway to its destination and its passengers are settling down to dinner.

For as long as Apple maintains its miserly approach to concessions, it will continue to face ever more additions to the mountain of antitrust pressure, legislation, and lawsuits it faces around the world. It is utterly insane to try to respond to each new development with a rushed and minor change to policy in one country at a time.

Apple needs to behave like a global company, and like a responsible one that cares about its reputation. It needs to make meaningful change; it needs to do so globally; and it needs to do it proactively, rather than waiting to be forced into compliance.

Photo: Priscilla Du Preez/Unsplash