Apple on Wednesday tried to buy goodwill in the face of public outrage over big tech’s monopolistic tendencies. Don’t be fooled.
The company announced that it will cut its commissions on App Store sales for smaller companies. Right now, Apple takes 30% of all sales in the App Store. Starting in 2021, developers and content providers that have less than $1 million of App Store revenue will pay only 15%.
Apple doesn’t release details about total App Store revenue, but one venture capital firm estimates the change could cost the company $1.6 billion.
One analyst estimates that about 98% of App Store providers could qualify, but they accounted for less than 5% of all App Store revenue last year.
The local free press will be among the beneficiaries. Many local newspapers have their own apps or sell digital subscriptions on iPhones and other Apple devices. The boon to them won’t be as big as for app developers because newspapers already were paying only 15% after a subscriber renewed past the first year. Still, keeping more money in the first year is nice.
What the local publishers do with the modest windfall is up to them. They could keep their subscription rates the same and use the difference to hire reporters. Alternatively, they could drop their subscription rates to share some of the savings with new digital subscribers.
Apple’s taking such a huge slice of the revenue was one of the many cuts that have been bleeding the local free press dry. And as the local free press struggles, government accountability erodes and a healthy democracy suffers.
This isn’t unique to Apple. Google takes a cut in its Android App Store. The developer of the popular game Fortnite is suing both companies over App Store polices and rate. Both companies also have been roped into congressional hearings with other big tech companies.
Google performed public penance a month ago when it announced it would spend $1 billion on news content. Now it’s Apple’s turn.
These efforts by Apple and Google are little more than public relations efforts. They want headlines — both got them — and they want lawmakers and regulators to believe they are playing nice. Look at the billions of dollars and move along.
Apple said it will release more details about rules to qualify for the savings next month. Let’s give the company the benefit of the doubt that it won’t come up with labyrinthine requirements that exclude a lot of publishers and app developers.
Therein lies the problem. We shouldn’t have to give Apple the benefit of the doubt. Apple hopes to show how generous and fair it is. What it’s really illustrating is just how completely it controls the marketplace on devices running its operating systems.
If publishers want to reach people on smartphones, they need to pay the tolls and follow the rules that Apple and Google set. There’s no negotiation unless you happen to be Amazon or Netflix.
Apple deigned to grant this indulgence, and it can unilaterally take it away once the heat of public scrutiny shifts elsewhere. Meanwhile, the company can quietly impose policies that make using the market less valuable to publishers. Maybe Apple will try to withhold information about subscribers, denying publishers the ability to reach out with their own marketing. Maybe Apple will demand that publishers share their content on other Apple platforms if they want access to the iPhone.
Then again, maybe Apple won’t do any of those things. People are watching right now. No need to squander the good PR it just bought.
Right now, all eyes are on big tech monopolies. There’s a very real chance for reform and regulation. The local free press is counting on it.
One good deed doesn’t undo years of abuse.