Elon wants to go to war with Apple.  History suggests that it probably won't change anything.

Elon wants to go to war with Apple. History suggests that it probably won’t change anything.

Elon Musk

Elon Musk sent a note to Twitter staff on Thursday confirming that job cuts would be announced on Friday.Carina Johansen/Getty Images

  • Elon Musk isn’t the first – or necessarily the most powerful – to take on Apple’s App Store fees.

  • Industry insiders from developers to CEOs have long denounced the 30% fee, dubbed the “App Store tax.”

  • Lawsuits, regulators, companies and many others have failed to enact many changes.

Elon Musk publicly launched a tirade against Apple this week, denouncing the iPhone maker’s “secret” 30% fee for all in-app transactions on its iOS platform.

While Musk is new to this particular fight, it’s part of a war that’s been going on in the tech industry for years: Over the years, everyone from indie app developers to CEOs has spoken out against the tech industry. Apple’s “monopoly” hold over its App Store, requiring the use of its in-house payment processing service.

Still, Musk is arguably the most common public figure to challenge Apple, and his very public stance on the issue sheds light on what had been a relatively niche issue for app-dependent companies. For Musk, who has said he plans to turn Twitter into a “multipurpose app” that combines social media with online shopping and other forms of payment, the 30% cut could represent a significant drag on the company.

“It’s a very unique thing to have someone who is also the richest man in the world who has the same issues that a small app developer – who may have one or two employees – is experiencing. as well,” said industry executive director Rick VanMeter. Coalition for App Fairness group, a frequent critic of the so-called “Apple tax”.

At the same time, Musk’s wealth and influence may not be enough to turn the tide and make Apple give in. Over the years, Apple has fended off lawsuits, regulators around the world, and peers in the tech industry, none of whom have been successful in getting Apple to change its approach to in-app payments.

But history may not be on the side of Twitter’s new owner. A high-profile lawsuit, global regulators and big companies have all tried to change Apple’s app payment systems with little success.

Epic Games challenged Apple even more directly

Apple’s most high-profile fee challenge came in 2020, when Epic Games sued after its mega-popular game “Fortnite” was pulled from the App Store for offering users discounts. if they used payment methods other than Apple to purchase digital goods.

A decision in the lawsuit came in late 2021, when a judge ruled largely in favor of Apple, except for a concession that the iPhone maker must allow developers to connect to payment methods. not Apple. Both sides are currently appealing the decision, leaving the final outcome and impact of the legal clash uncertain.

Epic’s challenge, however, succeeded in furthering the larger cause of pressuring Apple to change its ways. Shortly after the lawsuit was filed, a group of companies including Spotify, Tinder parent Match Group, Tile and Blockchain.com formed the Coalition for App Fairness, with the self-proclaimed mission of advocating for a more balanced dynamic between apps. and their markets. .

The coalition outlined 10 principles it wants all app marketplaces to follow, including a call to remove “unfair, unreasonable, or discriminatory fees or revenue shares” and a more fundamental plea for developers to communicate more directly with their users.

Apple has largely resisted regulation

Apple CEO Tim Cook.

Apple CEO Tim Cook.REUTERS/Eric Gaillard

VanMeter of the Coalition for App Fairness said the renewed focus on the App Store’s 30% transaction fee re-emphasizes the problem and the need for legislative solutions.

Regulators in the United States, Australia, Japan, South Korea, Russia, and other countries with large iPhone users have also set their sights on the app’s payment structures. Apple store. The European Union, Japan, South Korea and the Netherlands are just a few of the jurisdictions that have successfully passed laws targeting the “Apple tax”, others like the UK are expected to follow suit soon. not.

The United States, however, has so far not joined – although a bill called the Open App Markets Act has languished in the Senate since its introduction in February.

“If the United States doesn’t act, it really risks falling behind those other jurisdictions that are moving forward to address competition issues in the app market,” VanMeter said. “The United States has a real opportunity here to be a leader in this discussion.”

Even in places where Apple faces new laws that limit some of its power, the tech giant hasn’t always demonstrated full compliance. Dutch and South Korean regulators have clashed with Apple, which has so far made little to no changes to the way it does business in those countries.

All of this means Musk and his supporters are joining a fight that’s been raging in public and private spheres for some time now, and it’s not clear he’ll be successful in pressuring Apple to rethink the things. But Evercore ISI analyst Mark Mahaney also says the weight of his influence is at least changing things somewhat.

“I don’t know if it’s different,” Mahaney said. “I don’t know if he’ll get a quick resolution on this anytime soon, but his voice will matter.”

Read the original article on Business Insider

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