Apple’s In-App Purchase Monopoly.
Hi, my name is Luca, and I’m a bit crazy. Because I make apps and give Apple 30% of all my earnings, since those are the rules, right.
This is an opinionated article about the App Store guidelines and the in-app purchase system written by an app developer. As many facts as possible support it, but there might still be some bias.
Let’s begin with the inspiration for this article…
An Epic Saga about Epic Games.
As you might have heard, Epic Games decided to launch a new payment system for their game Fortnite. Their new system would circumvent Apple’s in-app purchases entirely. This way, they don’t have to pay Apple the 30% cut that us developers are all too familiar paying.
Smart idea, you would say. However, Apple strictly prohibits anyone from using third-party payment processors in any app. Unless you sell physical goods, that’s the only exception. So quickly after having published the update to the game through their servers and not the App Store, Apple removed Fortnite from their prestigious Eden for software. Google also did the same and deleted the game from Google Play.
Madness, but with a method.
A short while later, it became apparent there is a method behind this madness. Because Epic Games quickly published a tweet stating they would be premiering a new short called “Nineteen Eighty-Fortnite.” Which later turned out to be a straight shot at the Apple commercial from the 1984 Superbowl for the Macintosh. The short also contains many Easter eggs featuring the App Store guidelines. You can see the short below and the original commercial by Apple too.
Time for some legal matters
Then about an hour after having posted the teaser for the video above (not the video itself), they tweeted on their Fortnite twitter account. The tweet is a retaliation against the removal of the game from the App Store. It even included the legal papers they were filing against them. Showing they were most definitely prepared for this whole drama.
To keep a 62-page document short, they are accusing Apple on ten counts. First, they lay out all the facts about both the App Store and Epic. Then they get into the allegations. The counts boil down to the following:
Apple has a monopoly and is restricting trade and competitiveness by being the gatekeeper to a market.
Just to clarify, this is me paraphrasing and not Epic Games saying that.
Comparing fees to other payment processors
Epic Games also compares the in-app purchases to other payment processors such as Paypal, Stripe, Braintree, and Square, which all have around a 3% fee. Which, in my opinion, seems like a much more legitimate percentage.
Apple’s response to Epic
Today, Epic Games took the unfortunate step of violating the App Store guidelines that are applied equally to every developer and designed to keep the store safe for our users. As a result their Fortnite app has been removed from the store. Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines regarding in-app payments that apply to every developer who sells digital goods or services.
Epic has had apps on the App Store for a decade, and have benefited from the App Store ecosystem — including its tools, testing, and distribution that Apple provides to all developers. Epic agreed to the App Store terms and guidelines freely and we’re glad they’ve built such a successful business on the App Store. The fact that their business interests now lead them to push for a special arrangement does not change the fact that these guidelines create a level playing field for all developers and make the store safe for all users. We will make every effort to work with Epic to resolve these violations so they can return Fortnite to the App Store.
Let’s address some statements Apple has made right there. First of all, let’s start with the fact that the App Store guidelines are applied to all developers equally; this is a point I would like to debate is not the case. One of the most well-known examples is Amazon putting Prime Video on the App Store in 2017 in return for a more mild 15% fee. These facts are clearly shown in the email exchange found below. And it shows how they don’t create a level playing field for all developers, which is fine, just don’t act otherwise.
“Epic agreed to the App Store terms and guidelines freely”
I also want to take a closer look at that very statement and remove Epic from it and in place put any other developer out there. The fact is, if you want to make an app, you either need to go to Apple or Google; that’s just how it is. So you are kind of being forced to agree with the guidelines, aren’t you? You could make the point just don’t make an app then, but that’s not right either. That’s kind of like stealing all the flour in the world, then giving it to the baker under strict conditions and telling them they can also just not make bread.
My Experience with the App Store.
Just this year, I had an incident with an app of mine called Panora, yes, a shameless self-promo I know. It’s an app that makes it easier for people to post their panoramas to Instagram.
After having had the first version of it up for more than two years, I thought it was time for a revamp, and I started building a second version. This took me about a month of work, which is not insignificant. But it was quite a successful app for me and definitely worth the effort since it was a decent part of my living.
However, then I ended up in a three-month-long cycle of sending updates to address an issue that shouldn’t even be there. I could not use the term “Instagram” in my app, even though my previous version had used the name, and many other apps were using it too. The best part of it is that Instagram states on their website that other apps can use the term “for Instagram,” and this ended up being my savior after typing up a big letter stating all the little legal facts, etc. After sending the letter multiple times with multiple updates they finally gave in and allowed the update to go through, I hadn’t changed a single line of code in all these updates and just resubmitted.
This proves that not only do they not apply the same rules across apps, they also don’t use the same ones across different versions of the same app.
The app also features some in-app purchases since I need to make a living after all, but I am forced to use the system provided by Apple. I continuously get messages the in-app purchase did not work. Meaning I’m missing out on revenue because the system they are forcing me to use doesn’t even work.
Final Thoughts
While Apple has indeed built an incredible and thriving marketplace, it’s evident that some things are not the way they should be. I’m not asking for the guidelines to be abolished, just that they are tweaked in small ways, especially when it comes to in-app purchases.
In my honest opinion, they should allow other payment processors to be used and just compete with them like any other payment provider. I’m sure if they offer Apple Pay in such a way that it’s easy for developers to implement, that they would choose that without hesitation. Apply Pay also has much lower fees, which would immediately solve that problem too.
Finally, they should also hold everyone to the same standard. Perhaps it’s a good idea to start regulating all app stores since they are much more than one company’s property these days. They are at their very essence markets, and every market in the world has regulations, and so should these.
