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The App Store Isn't Just Anti-Competitive, It Sucks
I have read probably too many things about the Epic vs Apple trial, a legal battle that could end up having significant ramifications for the future of how these stores charge users and function. To summarize the case at hand:
Apple has a completely walled-garden approach to apps on the app store, in the sense that they are the sole company that can control what goes on said store.
Apple also controls all payments on the store - meaning that if you sell something on the app store and want to make money off of it on the app, you must do so through Apple’s payment rails, and kick them 30%. Edit: there is a lot of nuance here - there’s a 15% split before $1m in revenue, and starting year 2 of a subscription, but in the case of Epic this is their problem.
Epic, makers of the incredibly popular game Fortnite, sells an in-game currency called “vBucks,” and decided to implement a way around Apple’s payment rails. Apple responded by kicking them off the app store, as this was a violation of the app store’s terms of service.
This court case is Epic suing Apple in federal court as a result.
The 30% commission is a potential antitrust problem as Apple continually gives its own apps and services a leg up as a result. They don’t pay the toll, they get more access to features on devices, and so on.
Full disclosure: I have a client that works specifically in the management of in-app subscriptions (RevenueCat), and as a result I am influenced somewhat by their views, but at the same time have debated with and disagreed with the incredibly smart David Barnard about this subject multiple times. Nevertheless, these are my views and not those of my client.
This is a real “assholes versus dickheads” situation. Epic willfully broke the guidelines of the app store and then acted surprised when they were kicked off of it, but Apple also capriciously applies their own guidelines to their store, and the mandatory use of their IAP system only exists to skim 30% off of anything bought on the store. When Spotify yanked the ability to create new paid accounts on iOS, Apple responded with a vague letter about “community” and “job creation, referring to the app store as “safe” and “secure,” claiming that Spotify “used” the app store to grow their business (as if the app store was the core reason people signed up for Spotify, rather than it simply being the only way to get Spotify on your phone) and “keep the benefits” of the store.
These benefits are questionable at best. Apple’s discovery is a total mess, and justifying a 30% chunk of revenue (yes, I know that after a year of subscribing it goes down to 15% on a per-user basis, assuming they don’t unsubscribe at any point, and the <$1m 15% side) based on a toll road and calling it a “benefit” is offensive.
And, honestly, I think the app store has got to a point that it just plain sucks.
The CrApp Store
Apple’s app store theoretically exists in the way it does to promote high quality apps that don’t mislead users. To be a little more specific, Steve Jobs once said that “we don’t need any more Fart apps,” and “if your app looks like it was cobbled together in a few days….please brace yourself for rejection.”
Oh, is that right mister Jobs?
Apple is as full of shit about the quality of the app store as the App Store is full of apps that allow you to make a fart come out of your phone. The store has become an absolute nightmare to navigate, with too many apps doing too many similar things, and an extremely low barrier to entry that suggests that Apple cares about quantity and making as much money as humanely possible. A search for “flashlight” brought up a half-screen sized display ad for Google’s app, and three of the first five results for flashlight apps included in-app purchases. Apple has categorically failed to keep scam apps off of the store, and Apple continually promotes free-to-play games that are heavy-handed with microtransactions over other games, using the misleading “get” button to avoid claiming that they’re “free.”
Apparently, “because [Apple cares] so much about privacy, security and quality, [they] do look at every app before it goes on. Those rules apply evenly to everyone,” referring to how the App Store is the only way onto iPhones. Except Apple only recently added privacy transparency to what apps collect, and as I’ve expressed, the quality of the app store is bad. While Apple generally promotes good-quality apps, they have an addiction to promoting those that monetize with in-app-purchases, and once you search for something there is significantly less (if any) quality control. Glitchy, ugly games and apps plague the store, and when they do work, there are many that are plagued by dark patterns, tricky ways in which apps convince you to pay for stuff, such as obfuscating how to leave a popup that asks you for money, or misleading you on the ongoing cost of a subscription.
The argument of getting an iPhone “for better apps” is significantly harder to make in 2021, and Apple’s refusal to allow third party installs is flimsy, other than “we like to make money.” It’s laughable to say that Apple protects us from scams, or bad apps, or operates in any way that guards the iOS experience from anything other than those that might compete with their services. The existence of the app store as the sole delivery mechanism for iPhone apps was to, and I quote Walter Isaacson, stop developers from “[creating] applications for the iPhone that could mess it up, infect it with viruses, or pollute its integrity.” I would argue that the app store has no integrity anymore - reviews do not feel like they protect anyone but Apple, and definitely failed to keep a fake Trezor app from appearing on the app store, wiping out a guy’s crypto account. While one could argue these are anecdotal, the aforementioned scam apps seem to continually pop up.
And all of this is before you face the extremely low bar to entry for apps. Apple acts as if they’re the Neiman Marcus of apps, when they’re more like a Target on Black Friday. If there’s curation and care going on behind this, it’s beyond insufficient - it’s irresponsible. The app store no longer introduces me to cool new apps, because Apple has become so utterly focused on squeezing revenue from each user that their core mission appears to be “how can we convince someone to pay $10 a week to see Disney characters fight?”
The argument is that Apple makes sure that apps do not fiddle with the internal parts of our phones or have access to things they shouldn’t, which to me feels like a cop-out. Apple lets me install whatever I want on my Mac, even if it’s downloaded from AppsThatStealYourSocial.Biz or VirusApp.Ru, and it’s just as pleasant an experience as my phone (if not more so). The app store provides no functionality other than being the only place I can download the app I want, and I do not see it as a net benefit as the sole provider of apps.
What Apple Should Do
It will take time for Apple to eventually realize that they are fighting a losing war. I don’t know if an anti-trust ruling will come for them, but it feels inevitable that they will have to eventually allow other app stores, or other app installs, onto the iPhone. I ain’t no coder, but I assume there are also safeguards they can install on what can and can’t be installed or used on a phone - in the same way that I don’t believe every app on Android gets root access (I may be wrong, not gonna check, email me on firstname.lastname@example.org if you know).
What they should do is begin courting other app stores proactively. Go to them and tell them that they want Amazon, or Epic, or Steam, or something on there and make it clear that they want to be friends and make this happen. There’s likely a revenue share model to be had - after all, I imagine there is going to be a cost to setting something like this up - even if it’s a really small percentage that mostly just covers costs. Make it clear there are specific things that will never fly - viruses, and the like - and work out some way to greenlight app stores that abide by very specific and security/safety-level guidelines.
And then let anyone install whatever they want anyway, with the express explanation that it could be a security risk and be very clear whenever an app asks for permissions. It’s how all other computers work.
As an aside, Apple should also invest in more developer relations. This is always a good idea, but from a lot of what I’ve seen there is regularly extremely poor communication with developers as to why certain things are rejected, or why certain things won’t work for the store. Combining a relatively guarded and confusing experience with a totally walled garden is extremely punitive to developers.
The reason Apple should do this is because it will make Apple money in the long-term. More developers having a reason to develop for the iPhone means more people having a reason to buy an iPhone. More and better apps on the iPhone means more people tell their friends they use an iPhone. That 30% cut - which I am 100% sure will be chopped at some point - cannot be worth the app store’s latent corruption.
It also isn’t worth stopping people from buying Spotify or Netflix on their phones - why not make it a smaller cut depending on the level of revenue? Instead of making zero dollars and having people still buy these apps, why not seek to actually do something nice for the companies and make more than $0?
The Epic situation is one where I have absolutely no skin in the game. I don’t care if Epic is able to make more money selling character skins to children, nor do I care if Apple makes that money either. That being said, there are many smaller developers losing 30% to Apple simply because there’s no other way to deliver their service to consumers, with very little done for them in exchange for the cut.
I love my iPhone, and I use almost all of Apple’s services. I really like Apple’s stuff. There is likely no way I’d ever stop using an iPhone because of how bought in I am to the Apple ecosystem. I do not believe it is a net negative for this company to start making more things available to users. I just wish they’d see that before some sort of weird regulation comes into existence that makes them have to do it in an extremely contrived, annoying, user-unfriendly way.