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Apple releases study that says it has the same commission rate as that of Google, Amazon, Microsoft app stores

Apple has released a new study justifying App Store's commission structure ahead of antitrust hearing on July 27

twitter-logoYasmin Ahmed | July 23, 2020 | Updated 20:42 IST

Highlights

  • Apple’s App Store policies have been criticised for some time by third-party apps and developers.
  • Apple is facing antitrust investigations from the US Antitrust probe and the EU for its commission rate.
  • Apple released a new study which states that its commission rates are similar to the commission rate of other app stores.

Apple is facing antitrust investigations from the European Commission (EC) and US Antitrust Probe over its app policies and commission rates. Other tech giants facing antitrust investigations are Google, Amazon, and Facebook. Apple CEO Tim Cook is ready to testify before the House Judiciary Antitrust Subcommittee on July 27, as per reports.

Apple, 5 days ahead of the antitrust hearing, has released a new study detailing the App Store's commission structure. The new study aims to draw a comparison between the commission structure of Apple App Store with other app stores.

The new study stresses on the fact that Apple's commission rates are similar to the commission rate of other app stores which is around 30 per cent or more.

"All these app stores--Google PlayStore, Amazon Appstore, Samsung Galaxy Store, Microsoft Store, Apple App Store, charge the same standard commission rate as Apple (30 per cent). Each has its own exceptions, particularly with respect to subscriptions. Commission rates of 15 per cent for subscriptions after 12 months are on the low end of commission rates. For instance, similar to the Apple App Store, Google Play's commission rate for subscriptions is 15 per cent after 12 months, and Amazon's commission is 20 per cent for video streaming subscriptions. While the Galaxy Store charges a 30 per cent standard commission rate, it explicitly states that this rate may be negotiable," the study noted.

Apple's App Store policies have been criticised for some time by third-party apps and developers. This has mainly been because of the 30 per cent cut that Apple takes from third parties in the first year of listing on the App Store. In the second year, the commission rate is reduced to 15 per cent. The commission rate is applied to paid apps, in-app purchases of digital content and services on the iOS App Store.

Moreover, Apple also releases its own apps on the App store which do not require a commission unless there is a purchase and increases competition for third party apps. Like in the case of Spotify and Apple Music.

"We believe competition makes everything better and results in the best apps for our customers," Apple's website reads.

Other contentious rules that Apple is being criticised for are forcing developers to use Apple's in-app purchasing technology and prohibiting them from notifying customers of alternative ways to purchase or subscribe to content. This, according to the third parties, gives Apple the upper hand.

Apple charges a commission when device owners download paid apps and make in-app purchases of digital content, services, and subscriptions. The authors have noted in the study that developers do not necessarily have to monetize the third-party apps and can list them outside the app store. "Developers can also monetize digital content and services on their apps in ways that do not involve transacting directly through the App Store, in which case Apple collects no commission," the study noted.

The study also noted commission rates for select video game digital marketplaces. It has noted that the commission rate for Xbox, Nintendo, and Playstation is 30 per cent.

The study stated that some digital platforms and marketplaces charge more than 30 per cent commission. These include Amazon, eBay, Etsy, Walmart, Poshmark, Airbnb, Uber, Lyft, etc. Other digital platforms that go higher than 30 per cent are YouTube, Amazon Prime Video Direct, Spotify's Anchor, Nook, Audible, Patreon, and others.

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