Apple and Unfair Competition
I have been hearing the same complaint from many developers that develop apps for Apple Store lately! I know that thousands of developers not just in Turkey but from around the world are troubled with this issue.
Unfortunately, Apple Inc acts hypocritical and monopolistic when it comes to their own developers. If you can’t meet the standards set by Apple for developers, your app gets rejected by Apple review team.
What does Apple require from its developers?
The images below show the standards which developers providing in-app purchases / subscription services must meet:
As you can see, everything is pretty transparent. You see the price on the landing page and then you continue with purchasing or subscription.
Does Apple’s own services meet these standards?
Of course they don’t! Apple has always been an extremely monopolistic company that is hypocritical and has double standards.
In the images below, you can see the landing pages of Apple’s own digital services:
These are landing pages that Apple uses for its “Apple Arcade” and “Apple Music” services. When a user taps “Start Playing” button, their Apple Arcade subscription is activated. But this isn’t actually a ‘purchase’ button, it is an action button. These buttons should have “Start subscription” written on them, while in reality a misleading phrase like “Start Playing” is written. So, you don’t tap this button with the intent of subscribing, you tap it to take action or start playing the game. And the pricing is hidden under mountains of words and coloring methods. When you tap this button you are charged $4,99 every month.
In the other image, the same thing applies: You mistakenly believe that you are tapping the “Start Listening” button to start the action of ‘listening the music’. But in reality, the only action that is taken when you tap these buttons is to start a paid subscription to Apple Music service. In the landing pages “Try for Free” is written in huge font sizes but the payment information is written in complicated sentences and hidden with much smaller font sizes. When you tap this button your trial subscription starts, and you are charged $9.99 every month. But you are lucky! At least you are charged $9.99 and not $10 :)
- As I mentioned, Apple is also an extremely competitive company. Here is a simple example for this: Apple forced Spotify to adhere to its own standards but sold more than 50 million subscription in short time for its own service Apple Music with these kinds of methods.
- These methods that Apple use are known to increase sales potential up to 4 times. So, if we suppose that 10 out of 100 people that indirectly end up in these pages subscribe to the service, this number reaches to 40 with Apple’s method.
Why is Apple doing this?
I think Apple has seen the bigger picture. Some of the services it has developed so far are: Apple Music, Apple TV+, Apple Arcade and many more digital services… Apple has reached hundreds of millions of subscribers with these services and managed to generate revenues of millions of dollars. And there’s more to come! With iOS 14 set to be released this year, Apple will release a new fitness app that will be installed on our iPhones ready to be used like Apple’s other services. Fitness applications have a market size of more than 3 billion dollars yearly. Then, they will release meditation, education, photo editing apps and dozens of new digital services and shape the application market’s future for the next 10 years. This way, they will be able to make up for the billions of dollars they lost as a result of decreasing device sales.
How can developers overcome this problem?
First of all, all app developers should create their own ecosystem. Some game changer companies like Spotify and Netflix have already found their own solutions. They moved in-app purchases to web completely. They are managing their own subscribers with alternative payment methods like credit cards. This move has increased their market value significantly. The day Netflix announced that it would no longer pay Apple 30% commission and that its subscriptions could be started from its website only, its market value increased by nearly 10%..
Why hasn’t this happened yet?
Apple can’t speak up against big players like Netflix and Spotify. Because each negative action and attitude taken against these giant companies can make it to worldwide news in the next day. We have seen this happen many times. But if you are an ordinary developer and try to use alternative payment methods for your app, you will receive an extremely harsh response from Apple. Unfortunately, if you are not a big developer like Netflix or Spotify or if you don’t have a media power, this is nearly impossible.
Apple vilely doesn’t want to give up the 30% commission it gets from developers. It never lets the game to change. It can raise incredible difficulties in application’s approval process. And as a result, your app gets rejected.
So, this is how things are now! Apple can’t do anything to big players but hinders the works of small players incredibly. If it showed the tiniest bit of toleration; big payment solution companies like Stripe and Paypal would integrate into in-app purchasing world very quickly and the game would change! Apple is aware of this and keeps a firm control over it. It never lets the game to change by using its dominance. That is why an alternative payment method ecosystem for apps hasn’t formed yet.
But I’m hopeful. Even though Apple creates difficulties, it is possible to do this with different methods. Lately, I have been seeing a few developers that managed to do this. Also, I try to encourage the start-ups that I am an investor of to do this. I believe that in the next 5 years a game changing effect will be created.
What else can be done?
In my opinion, this situation causes a serious unfair competition! While many digital service providing companies / individuals aren’t bothered by this ‘for now’, in just a few years the ‘big picture that Apple is aware of’ will come true and Apple will make the unfair competition unbearable by providing dozens of more digital services and with its thousands of developers.
A developer community needs to be formed!
The industry needs universal institutions or communities that can protect the mobile application developing companies’ or individual developers’ rights. It could be really effective that such an institution has its headquarters within the borders of the European Union. A strong institution will be a solution to many of the developers’ problems, particularly Apple’s oppressive approach to alternative payment methods.
If there was an institution that defended the rights of developers, it would be fighting for this: Apple shouldn’t develop digital services for itself. If it does, these services shouldn’t be preinstalled to devices. And more importantly, it should lower the 30% commission rate it gets from application markets’ developers.
So, what should we do?
In the end, if you somehow found this article and read it completely, that means you are part of this ecosystem :) At least be aware of this issue and help spreading awareness. Your awareness of this issue could help change some things in the future.
My best regards.
