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[global times comprehensive report] editor's note: recently, rumors about "wechat may not support iphone 16" have appeared on the internet, making the controversial topic of "apple tax" a hot search. the so-called "apple tax" refers to the commission that apple charges app developers for providing apple app store and in-app payment services. the commission rate varies in different countries and regions, especially in some countries including china, where the commission rate is as high as 30%, which has attracted widespread attention from netizens. in fact, behind apple's relatively low commission rate in eu countries and the united states are months or even years of regulatory and legal disputes. so, what standards does the "apple tax" commission rate follow? why has it caused controversy in many countries? will more countries join the ranks of putting pressure on large technology companies in the future?

apple's commission rate is mainly divided into two levels: 30% and 15%.

from the apple quarterly reports of the past 10 years compiled by german data company statista, it can be seen that although the main component of apple's revenue has always been hardware, the proportion of service revenue, including app store fees, has been on the rise. in the third quarter of this fiscal year, apple's service revenue has reached us$24.21 billion, which is more than its hardware revenue. according to japan's nikkei asia, apple's total revenue in fiscal 2023 was us$383.3 billion, of which app store fees reached us$22 billion, accounting for about 34% of service revenue.

in general, within the apple app store, apple charges a 30% commission on app purchases and in-app transactions, but there are exceptions. first, the commission only applies to paid apps, but even for free apps, as long as the developer lists the app on the apple app store, they need to pay apple a certain service fee (individuals who join the developer program pay $99 per year, and the enterprise version pays $299 per year). second, the commission only applies to digital goods and services, not physical goods, so the commission does not apply to tangible services such as buying food on the shopping app amazon or calling a car on the online car-hailing app uber.

xiang ligang, chairman of the zhongguancun information consumption alliance, told the global times that in terms of commission rates, different companies charge different commissions, and even different platforms and different businesses have different commission rates, and there are no universal rules.

according to the reporter, apple will also provide certain discount arrangements for some situations and some companies. in general, apple's commission rate is divided into two levels: 30% and 15%. first, the 30% commission rate is only for transactions completed in the first year of subscription. if the transaction occurs in the second year of automatic renewal or later, it will be executed at a rate of 15%. secondly, small businesses with annual revenue of no more than $1 million can apply to participate in the apple app store small business program, under which small businesses are eligible to reduce the rate to 15%. however, it should be noted that once the company's revenue exceeds this threshold in a certain year, the commission rate for the rest of the year will return to the standard 30%; but if the company's revenue falls below this threshold in a certain year, it can only regain eligibility to participate in the program in the next year.

"the 30% commission is obviously high, but it is actually comparable to the fees charged by similar platforms such as the google play store." well-known investment institution insight partners said in an article in february this year that its "real uniqueness" lies in apple's strict restrictions on app developers, including apple not allowing app developers to provide payment options other than apple in the program, so there is no way to avoid paying the "apple tax." apple emphasizes that the ios system, safari browser and apple app store are part of the end-to-end system designed by the company. using them and blocking third-party platforms can better protect user security and privacy and provide users with a simple and direct experience.

however, for special companies, the "apple tax" can also be avoided. "for more than 10 years, apple has insisted that all digital goods sold in ios applications must use apple payment methods, but suddenly this rule no longer seems to apply to developers who have the right to reach special agreements with apple." according to the us technology media the verge, apple and amazon announced a "landmark" deal in 2020, that is, users can rent or buy movies on amazon's video website prime video program without apple payment methods. the report speculated that this move is likely due to amazon's influence on apple. apple hopes to gain amazon's support in building its own apple tv program and "get a piece of the pie" from the new users attracted by amazon.

“just like real taxes, how much depends on where you are.”

the article from insight partners states that although the "apple tax" is not a tax, "just like a real tax, the amount depends on where you are." initially, the "apple tax" rate was relatively low in the united states. according to information on apple's official website, apple's two commission rates in the united states are 27% and 12%.

however, american companies are still dissatisfied with this commission ratio and apple's strict restrictions. the most well-known lawsuit is the 2020 lawsuit filed by game developer epic games against apple. at that time, epic games bypassed apple's payment service to provide its own discounted payment channel for game props in its popular games. apple immediately removed its games from the shelves, triggering the lawsuit. the lawsuit has been ruled, and the judge required apple to open other payment options in the application, but apple has appealed and the ruling has not yet been implemented. in addition, there are rumors in the industry that the us department of justice will investigate apple over the "apple tax", but has not yet taken action.

the eu has been dissatisfied with the difference in rates of "apple tax" in different regions. in january this year, apple officially announced that it would change the apple app store rules in the eu to comply with the requirements of the digital markets act (dma). dma is a bill announced by the european commission in 2020, which aims to clarify the responsibilities of digital service providers and curb the vicious competition of large network platforms. six large companies including apple were designated as "gatekeepers" in september last year. these companies will be subject to stricter supervision and need to fulfill certain obligations.

in june this year, the european commission released preliminary investigation results showing that apple's updated app store rules still violated the dma that officially took effect on march 7. apple is facing multiple lawsuits from the eu and may even be fined up to 10% of its global annual sales. breton, the european commission's internal market commissioner, criticized: "for a long time, apple has been squeezing out innovative companies and depriving consumers of choice."

apple then announced in early august that it would implement major updates to its operating system in the eu. german magazine der spiegel reported that the updates included allowing the use of third-party app stores, third-party in-app payments, and third-party web browsers for the first time. at the same time, for the "apple tax", app developers in the eu market only need to pay apple a 17% commission in the first year, and the rate will be reduced to 10% starting from the following year.

however, according to german focus magazine, while reducing the "apple tax", apple has introduced two new fees, one is a 5% "initial acquisition fee" for new users in the eu, and the other is a 10% "store service fee" for any transaction made by users within 12 months after the app is installed. both charging models are controversial, and the european commission is already conducting relevant reviews. in addition, for high-download apps listed on the apple app store and third-party app stores, developers need to pay 0.5 euros for each first annual installation of more than 1 million euros. according to apple's estimates, the core technology fee applies to less than 1% of applications.

in response, epic games ceo sweeney criticized apple's behavior, saying that it "makes competition impossible." he said: "although (game developers) can pay a lower commission rate and they are also reaching new users, apple's new charges will be very expensive and will make them lose more money."

according to japan's asahi shimbun, apple began to be investigated by the japan fair trade commission as early as 2021. in june this year, the japanese parliament passed new legislation in reference to the eu dma, requiring technology companies not to block third-party app stores, third-party in-app payments, and third-party web browsers. the law is scheduled to be implemented by the end of 2025. according to the law, the standard commission rate of the apple app store will be reduced from 30% to 17%, reaching the lowest level in east asia. the associated press reported that the law significantly increased the fines for the illegal act of abusing the monopoly position of the app store. the current fine rate is 6% of japan's total annual revenue. the new law will increase the fine rate to 20%, and the fine rate for repeat offenders will be further increased to 30%.

in 2021, south korea also enacted law requiring app stores not to block third-party payments. since then, both apple and google have stated that they will comply with south korean laws, but apple requires developers who publish apps in the korean app store to submit special third-party payment-related documents.

according to reuters, apple was sued in the uk last year for charging "unfair commissions" to more than 1,500 uk developers. apple argued that 85% of developers using its app store did not pay commissions, and only developers who paid commissions through the uk app store could file a claim. but in april this year, a british judge ruled that apple's rebuttal was invalid and it had to respond to the lawsuit in the uk. currently, the lawsuit is still ongoing.

“it’s also unfair to consumers”

nikkei asia recently published a commentary saying: "after losing major regulatory battles in the european union, japan and south korea, apple is under pressure from global regulators to reduce its 30% app store commission. the focus is now turning to china, apple's second largest market in the world." the article believes that from the perspective of developers and consumers, limiting the "apple tax" can improve fairness in the digital market and promote competition. lowering rates and reducing restrictions on third parties will certainly affect apple's profits, but it will undoubtedly promote innovation, provide users with more choices, and create a better operating environment for developers.

after reviewing apple's commission policy, the nikkei asia article said that its fees in china are among the highest in the world. in other countries and regions, apple is often more flexible and offers more discounts. for example, apple's standard commission rate for small app developers is 15%, but in fact many small developers can get a more favorable rate of 10%, while small chinese developers usually cannot enjoy such a discount.

in an interview with the global times, xiang ligang said that apple's "apple tax" is essentially a monopoly using its app store platform, which not only harms the interests of app developers but is also unfair to consumers. xiang ligang said: "a healthy platform environment should provide valuable services and charge a certain fee, rather than profiting from a monopoly position."

german heise news reported that although apple has made improvements in some aspects, the european commission is not satisfied with the implementation of dma requirements by large technology giants including apple. the european commission believes that many companies still make it difficult for users to have the "digital freedom" stipulated in dma. it is not just apple that needs to deal with this accusation. microsoft, meta and others may also violate dma.

xiang ligang said that the eu's use of dma to force apple to reduce its commission rate is a way of using the power of the state/alliance to intervene in the market, safeguarding the interests of small and medium-sized developers, while also reducing the monopoly of large platforms. he believes that apple's approach is not conducive to the development of the global digital industry, and more countries and regions may follow the eu's approach in the future.

[global times special correspondent in germany aoki global times special correspondent zhen xiang yanyan global times reporter tang ya]