App Store Fee Cut Attracts Criticism From Major Developers Like Spotify and Epic

A number of industry players, including Spotify, Epic Games CEO Tim Sweeney, and Basecamp CTO David Heinemeier Hansson, have today criticized Apple's move to launch a new App Store Small Business Program that will halve App Store fees for small business owners and independent developers (via The Verge).

app store 15 percent feature

After Apple announced the new program, Spotify released a statement saying that it proved the ‌App Store‌ policies are "arbitrary and capricious."

Apple's anti-competitive behavior threatens all developers on iOS, and this latest move further demonstrates that their App Store policies are arbitrary and capricious. While we find their fees to be excessive and discriminatory, Apple's tying of its own payment system to the App Store and the communications restrictions it uses to punish developers who choose not to use it, put apps like Spotify at a significant disadvantage to their own competing service. Ensuring that the market remains competitive is a critical task. We hope that regulators will ignore Apple's "window dressing" and act with urgency to protect consumer choice, ensure fair competition, and create a level playing field for all.

Spotify has repeatedly sparred with Apple in recent years, accusing the company of anti-competitive behavior. The accusations peaked with Spotify's formal complaint to the European regulators that Apple used the ‌App Store‌ to deliberately disadvantage other app developers, which lead to an EU Commission antitrust investigation.

‌Epic Games‌ CEO Tim Sweeney also released a statement, arguing that Apple is "gerrymandering the community with a patchwork of special deals" by setting up the Small Business Program.

This would be something to celebrate were it not a calculated move by Apple to divide app creators and preserve their monopoly on stores and payments, again breaking the promise of treating all developers equally. By giving special 15 percent terms to select robber barons like Amazon, and now also to small indies, Apple is hoping to remove enough critics that they can get away with their blockade on competition and 30 percent tax on most in-app purchases. But consumers will still pay inflated prices marked up by the Apple tax.

Apple and Epic have been embroiled in a legal battle since August, when Apple removed Fortnite from the ‌‌App Store‌‌ after ‌‌Epic Games‌‌ introduced a direct payment option in the app, defying the ‌‌App Store‌‌ rules. ‌‌Epic Games‌‌ promptly filed a lawsuit against Apple, accusing the company of anti-competitive actions.

Basecamp CTO David Heinemeier Hansson, who is also responsible for the "Hey" email app which Apple threatened to remove from the App Store in June for breaching its rules, shared a large number of tweets criticising Apple's decision to launch the program, saying that "Machiavelli would be so proud of Apple. Trying to split the ‌App Store‌ opposition with conditional charity concessions, they – a $2T conglomerate – get to paint any developer making more than $1m as greedy, always wanting more. As clever as its sick."

Hansson also said that the "only good thing" about "this cynical, Machiavellian ploy to split developers" is that "it shows they're sweating. Even if just a little."

In September, Spotify, ‌Epic Games‌, and Basecamp joined forces to form the "Coalition for App Fairness," which aims to highlight developer issues with Apple. The organization set out a number of demands, including the assertions that "no developer should be required to use an app store exclusively," "every developer should always have access to app stores," and "no developer should be required to pay unfair, unreasonable or discriminatory fees or revenue shares."

While Spotify, ‌Epic Games‌, and Hey have each taken issue with Apple's ‌App Store‌ policies in the past, research by app analytics firm Sensor Tower does highlight an interesting observation about Apple's Small Business Program. The research, cited by The New York Times, states that the ‌App Store‌ fee change "will affect roughly 98 percent of the companies that pay Apple a commission... But those developers accounted for less than 5 percent of ‌App Store‌ revenues last year..." This means that Apple is retaining its 30 percent commission on the two percent of companies that generate 95 percent of its ‌App Store‌ revenue.

Apple says that it expects the ‌‌App Store‌‌ Small Business Program to generate more digital commerce, support new jobs, and provide more funds for small businesses to invest back into their apps as they work to create software for Apple's users.

Popular Stories

New Things Your iPhone Can Do in iOS 18

10 New Things Your iPhone Can Do in iOS 18.2

Thursday October 31, 2024 9:42 am PDT by
Apple is set to release iOS 18.2 in December, bringing the second round of Apple Intelligence features to iPhone 15 Pro and iPhone 16 models. This update brings several major advancements to Apple's AI integration, including completely new image generation tools and a range of Visual Intelligence-based enhancements. There are a handful of new non-AI related feature controls incoming as well. ...
best early black friday deals

The Best Early Black Friday Apple Deals

Friday November 1, 2024 8:21 am PDT by
We're officially in the month of Black Friday, which will take place on Friday, November 29 in 2024. As always, this will be the best time of the year to shop for great deals, including popular Apple products like AirPods, iPad, Apple Watch, and more. Note: MacRumors is an affiliate partner with some of these vendors. When you click a link and make a purchase, we may receive a small payment,...
M4 Pro on Blue

M4 Pro Chip Benchmark Results Reveal an Extremely Impressive Performance Feat

Thursday October 31, 2024 7:06 pm PDT by
The first Geekbench 6 benchmark results for the M4 Pro chip surfaced today. Impressively, the results that are available so far show that the highest-end M4 Pro chip is faster than the highest-end M2 Ultra chip in terms of peak multi-core CPU performance. Here is a comparison of the results: Mac mini with M4 Pro (14-core CPU): 22,094 multi-core score (average of 11 results) Mac Studio...
Apple iPhone SE 4 5G Modem 1

iPhone SE 4 First to Get Apple-Designed 5G Modem, iPhone 17 Pro to Add Custom Wi-Fi 7 Chip

Friday November 1, 2024 4:04 am PDT by
The iPhone SE 4 that's set to come out early next year is expected to debut Apple's first in-house 5G modem, according to Jeff Pu, an analyst who covers companies within Apple's supply chain. In a research note this week with Hong Kong-based investment firm Haitong International Securities, Pu said Apple is expected to roll out its custom-made 5G modem starting with the next-generation...
ios 18 2 chatgpt plus

iOS 18.2 Beta 2 Shows Siri ChatGPT Limit, Offers 'Plus' Upgrade Option

Monday November 4, 2024 10:54 am PST by
With the second beta of iOS 18.2 that's available for developers today, Apple has further fleshed out the ChatGPT integration that's available with Siri. In the Settings app, there's now a section that shows the ChatGPT daily limit, and offers an option to upgrade to the paid ChatGPT Plus plan. The beta includes an Advanced Capabilities section with a "Daily Limit" reading that shows up as...
M3 Pro Max vs M4 Pro Max Feature

Here's How Much Faster M4 Pro/Max Are for Graphics vs. M3 Pro/Max

Friday November 1, 2024 8:04 am PDT by
Apple's new M4 Pro and M4 Max chips are impressively fast in terms of CPU performance, topping the M2 Ultra, but what about graphics performance? The first Geekbench 6 results for GPU performance are now available for the M4 Pro and M4 Max, and the Metal scores reveal some impressive year-over-year gains. Based on the Metal scores that are available so far, the M4 Pro and M4 Max are up to...
imac video apple feature

What to Expect From Apple This November

Friday November 1, 2024 9:40 am PDT by
After a busy October in which Apple announced new Macs and Apple Intelligence launched, the calendar has now turned to November. Below, we outline what to expect from Apple this month as the slower-but-still-busy holiday season approaches. After seeding the first betas of iOS 18.2, iPadOS 18.2, and macOS Sequoia 15.2 with additional Apple Intelligence features last month, Apple will likely...

Top Rated Comments

Runs For Fun Avatar
52 months ago
How did I know Spotify would be whining about this?
Score: 52 Votes (Like | Disagree)
hansmoleman Avatar
52 months ago
What's that old saying... "Let no good deed go unpunished"? $150k for advertising, distribution, instant access to a gigantic customer base and payment processing on $1m in sales is a damn bargain, no matter how you slice it.

Apple could be standing on a street corner handing out $100 bills and these people would complain.
Score: 45 Votes (Like | Disagree)
dannyyankou Avatar
52 months ago
Get out of here Epic. You never cared about the small developer. You only cared about your own profits.
Score: 37 Votes (Like | Disagree)
archer75 Avatar
52 months ago
blah blah blah. Every online store and physical store charges a 30% fee. Quit your whining.
Score: 32 Votes (Like | Disagree)
eulslix Avatar
52 months ago
Ok that's just getting ridiculous. Before that, I kind of got Epics point, that small developers get squeezed out of their critical profit margins. But now that EXACTLY that point has been addressed, they're still complaining? Shows where the real priorities are...
Score: 25 Votes (Like | Disagree)
itsmeaustend Avatar
52 months ago
Cry me a river. I feel no sympathy for multi-national corporations.

however, I can totally get behind a fee cut for small businesses.
Score: 24 Votes (Like | Disagree)