In-app purchases in the App Store: Apple wants 30 percent commission

The Apple App Store is undoubtedly the most successful online store for smartphone applications alongside the Google Play Store. However, the service has been criticized for quite some time, especially by developers. This is primarily due to the horrendous commissions that the company now charges for in-app purchases. The Californians want a whopping 30 percent of every purchase price paid. There is only one exception to the rule. And this concerns dating apps in Holland. We take a closer look.

Horror for app developers

Rumors have been circulating for several weeks that Apple’s new payment interface would bring severe financial disadvantages for app developers. This now seems to be coming true. If the purchases are processed directly via Apple, then the tech company retains a whopping 30 percent commission for itself. However, the situation is somewhat different when the purchases are processed via the developer himself. In this case, the commission is lower, but Apple does not refrain from clearly pointing out possible dangers. Potential buyers are warned that “This app does not support the private and secure payment system of the App Stores” on the display of the iOS device. This is what experts have gleaned from the current state of development of the new App Store.

Less commission on direct sales

From the on the part of Apple certainly desired rule, there is already a first exception. For example, the responsible competition regulator in the Netherlands has determined that there would be no compulsion to use Apple’s in-house payment system for dating apps. Instead, providers would be allowed to charge for purchases within the app itself. If a company settles the purchases directly itself, not only does the unpleasant warning message from Apple appear, which we mentioned at the beginning. On top of that, the commission drops from 30 percent to 27 percent. According to Apple, the reduction of 3 percent results from the cost savings that arise from the omission of the purchase processing. From a developer perspective, Apple’s overall commission system is anything but welcome.

Competition watchdog has commission in its sights

Especially when you are actually trying to sell additional content yourself, it is difficult for many providers to understand why the Californians want to keep such a large piece of the pie. This is not only causing frowns among developers. In the meantime, competition authorities have also become aware of the questionable commission policy. One of them is the Authority for Consumers and Markets (ACM) in the Netherlands. Their task is to ensure functioning and, above all, fair competition. The overturning of the obligation to use the Apple payment system was their first official act. The reduction by only 3 percent along with the questionable warning notice should be the next target. However, Apple sees itself in the right and thinks that a commission is appropriate regardless of the payment system.

Apple circumvents competition regulations

But that should probably not be it for a long time. After all, if the Dutch competition watchdog has its way, the App Store still violates competition law. For example, the Apple App Store does not make it possible to pay for purchases via the app itself or externally. According to the authority, this is not allowed. But whether a fine of 5 million euros will change Apple’s procedure so quickly is more than questionable. After all, this is peanuts compared to the billion-dollar business that Apple has built up with its App Store. In 2021, the U.S. company is expected to have generated almost 20 billion U.S. dollars in revenue. Although developers have been railing against Apple’s commissions for a long time, they have no choice. After all, this is a gigantic market that you simply cannot avoid if you want to be successful with your own app.