Apple pulled a move on Friday that made some furious and made others laugh. Well, other. Okay - me. It made me laugh. Out loud. I’ll explain why in a bit. First, let me tell you what the company did.
TechCrunch says Apple has come back to authorities in the Netherlands saying to what level the company plans to drop its App Store commission for developers who use third-party payment processors. You probably remember this story. Over the holidays, Dutch regulators ruled that Apple would have to give developers behind dating apps the option to use payment methods besides Apple’s own in-app payment mechanism. Apple eventually said, “sure thing,” though the company did make it clear that it still planned to collect a commission, albeit at a reduced rate.
We’ve now heard the rate, and you could practically put reduced in quotes. The TechCrunch piece says Apple has set the “reduced” rate at 27%, down just a tiny bit from the 30% developers would pay if they stayed with Apple’s in-app payment system. On Friday, the piece says, Apple updated its documentation page. The part that covers commission says:
Consistent with the [Netherlands Authority for Consumers and Markets] order, dating apps that are granted an entitlement to link out or use a third-party in-app payment provider will pay Apple a commission on transactions. Apple will charge a 27% commission on the price paid by the user, net of value-added taxes. This is a reduced rate that excludes value related to payment processing and related activities. Developers will be responsible for the collection and remittance of any applicable taxes, such as the Netherlands’ value-added tax (VAT), for sales processed by a third-party payment provider.
Onerous as that might sound to some, there are even more hoops through which developers would have to jump. In short, Apple is making it a pain for developers to employ third-party solutions.
Developers Not Amused by Apple’s 27% Solution
That’s not the part that made me laugh. We’ll get to that. First, let us hear from angry developers. Developers like Steve Troughton-Smith. A piece from Cult of Mac had the “creator of apps like Broadcasts and Pastel for iOS” calling the move “absolutely vile” and saying that Apple executives “should be ashamed.” In a post on Twitter, Troughton-Smith said:
Absolutely vile. This says everything about @tim_cook’s Apple and what it thinks of developers. I hope the company gets exactly what it deserves. Everybody on their executive team should be ashamed, and some of them should not be here when it’s all over. We all see you
Instapaper and Overcast developer Marco Arment posted a short Twitter thread. He also called it funny, but I don’t know whether he genuinely laughed the way I did. Quoting his short Twitter thread:
Even if you’re not a dating app in the Netherlands, this is worth a read.
This is almost certainly how Apple plans to comply with ALL external-purchase regulations, until and unless they’re forced to be more permissive:
[link to Apple’s documentation page]
You can just FEEL how much they despise having to do any of this. They’re making non-App-Store payments as painful, expensive, and clunky as the regulators will tolerate.
It’s so, so good.
It can be summarized perfectly with a single character: [middle finger emoji]
Dare Obasanjo had an interesting couple of comments on Twitter, the first being:
Apple will comply with the law in Netherlands to allow dating apps to use alternative payment systems but will still charge 27% commission. After Stripe fees of 2.9%, it will cost developers money to not use Apple IAPs.
This defeats the purpose of the law
His second comment:
I’m truly impressed that Apple is just going to give the middle finger to every regulator that tries to get in the way of their 30% cut.
The Punchline
Okay - now I’ll tell you what made me laugh. Actually, first I’ll tell you why I sympathize with the developers. My podcast, “Mac OS Ken” is funded a few different ways. It is funded by advertisers, and by supporters who sign up through Patreon. For every person who signs up through Patreon, Patreon takes a cut. They have never written a story for “Mac OS Ken” and they have never gotten me an interview. What they’ve done is built a trusted platform that takes care of everything and for that they take a fee.
Advertisers come to me through Backbeat Media. For every advertiser, Backbeat Media takes a commission. Backbeat Media has never written a story for “Mac OS Ken” and they have never gotten me an interview. Actually, that’s not completely true. I’ve interviewed one of them several times. What Backbeat has done is set up relationships with ad agencies and clients. They’ve built trust. They’ve built a process.
Would I like for Backbeat’s commission to be smaller? Sure. Would I like Patreon to take none of the money supporters pledge to me? Sure. Are these the deals that I signed up for? Yes they are. I do my work. They do their work. Their work makes my work possible. Because 100% of the sales I made on my own kept coming out to zero.
We’ll finally now get to the part that made me laugh. Apple is going to make the U.S. Government tell Apple how much money the U.S. Government thinks Apple should be allowed to make. Assuming that Marco Arment is correct and that this is “how Apple plans to comply with ALL external-purchase regulations,” Apple is going to make the U.S. Government tell Apple how much money the U.S. Government thinks Apple should be allowed to make. And that to me is hilarious. And I can’t say why exactly. But it’s made me laugh a few times.