This week, Elon Musk publicly criticized Apple for charging a “hidden” 30% tax for all in-app purchases made on its iOS platform.
Although Musk is fresh to this particular battle, it is a battle that has been raging in the IT sector for years: Everyone has complained about Apple’s “monopolistic” hold over its Software Store throughout the years, necessitating the use of its in-house payment processing service, from independent app developers to CEOs.
Musk, however, is likely the most well-known public figure to oppose Apple, and his outspoken stance on the matter brings attention to what had previously been a relatively specialized issue for app-dependent firms.
That 30% drop might have a significant negative impact on the company’s performance for Musk, who has announced his plans to make Twitter become a “everything app” that combines social media with online commerce and other forms of payment.
Rick VanMeter, executive director of the industry group Coalition for App Fairness and a vocal opponent of the so-called “Apple Tax,” said:
“It’s a very unique thing to have someone who’s also the richest man in the world to have the same problems that a small app developer — that maybe has one or two employees — is also experiencing.”
Musk’s wealth and clout might not, however, be sufficient to change the course of events and convince Apple to back down. Over the years, Apple has fought off legal challenges, international regulators, and its rivals in the tech sector, all of whom have failed to persuade Apple to change its stance on in-app purchases.
But the new Twitter owner may find that history is not on his side. With little success, large firms, international regulators, and high-profile lawsuits have all attempted to alter Apple’s app payment procedures.
Epic Games went after Apple in a more direct manner
The most well-known opposition to Apple’s fees occurred in 2020 when Epic Games filed a lawsuit after the App Store removed its extremely popular game “Fortnite” because it offered consumers discounts if they used non-Apple payment methods to buy digital products.
Late in 2021, a judge made a ruling in the dispute, generally ruling in Apple’s favor with the exception of a concession that the iPhone manufacturer must permit developers to link to non-Apple payment methods. The judgement is currently being appealed by both sides, therefore the final result and implications of the legal dispute are yet unknown.
Epic’s challenge was, however, successful in advancing the larger cause of putting pressure on Apple to change its ways. Shortly after the suit 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-appointed mission of advocating for a more balanced dynamic between apps and their marketplaces.
The coalition introduced 10 principles that it wants all app marketplaces to follow, including a request to get rid of “unfair, unreasonable or discriminatory fees or revenue shares” and a more basic plea to let developers communicate with their users more directly.
