'apple tax' sparks outrage
2024-09-29
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"china economic weekly" reporter zheng xue
the almost never-ending "apple tax" controversy has made waves again.
since may this year, apple has successively issued warnings to tencent and byte, demanding that loopholes in the "apple tax" be plugged, otherwise product updates will be refused. the rumor that "iphone 16 will not support wechat" has attracted wider attention.
in august this year, tencent responded to the "apple tax" for the first time, saying that it was negotiating with apple; on september 6, the apple app store released an updated version of wechat. byte has not publicly responded to the matter. as of september 25, douyin’s version update in the app store was stuck two months ago.
this is not the first time that the “apple tax” has attracted attention. from a global perspective, apple is facing multiple pressures from laws and regulations due to the closed apple ecosystem and the "apple tax".
“apple tax” takes too high a percentage in china
the so-called "apple tax" can be understood as the channel share of apple's app store. generally speaking, for every money spent on the apple system, apple will withhold 30% of the transaction amount as "tolls" and then transfer the remaining 70% to the developer. as far as the commission ratio is concerned, different countries and regions are different.
according to media reports, apple has issued warnings to tencent and byte since may this year. they found that developers were trying to guide users to external payment systems and required that payment loopholes in wechat and douyin be plugged. otherwise, relevant product updates would be stopped. .
relevant apple staff said that all sales of digital goods in apple applications must go through its system. if this rule is violated, apple's review team may reject application updates. many people believe that behind apple's move, it may be targeting mini programs, especially mini program games (hereinafter referred to as "mini games").
as tencent chief strategy officer james michel previously stated in the second quarter conference call, tencent is negotiating with apple on the revenue sharing of ios mini-games. he said that currently tencent has not made any profits from the "in-app payment" of ios mini-games.
"currently, there are two things that people criticize more: first, there are many charging items. taking games as an example, apple will take a commission from all virtual props. second, the charging amount is relatively high. take paid membership as an example. under normal circumstances, ios membership prices are more expensive than android memberships," iimedia consulting ceo zhang yi said in an interview with a reporter from china economic weekly.
public information shows that apple’s two commission ratios in china are 30% and 15% respectively, and third-party payment is not open; the commission ratio in the united states is 27% and 12%, and third-party payment is open; the commission ratio in the european union is 30% and 15%, respectively. at 17% and 10%, third-party payment is also open, but developers who meet the relevant conditions need to pay "core technology usage fees" to apple.
zhang yi said that apple’s top-grade charging standard of 30% in china is too high. moreover, the relevant fees are a direct commission on the developer's operating income, rather than a commission on the net profit.
this is not the first time that the “apple tax” has caused controversy in the country. as early as 2017, apple expanded the scope of the "apple tax" to include the tipping function of wechat public accounts. in the end, both parties agreed not to take a commission from it and it came to an end.
but this time when the "apple tax" was involved again, zhang yi felt something was different. "if it was 'criticism' before, then it is 'protest' now." zhang yi said.
this may be related to market changes.
"in the past, it was an era of incremental markets. domestic and foreign developers believed that apple could bring huge traffic increases, that is, they could make more money through service improvements and product innovations," zhang yi said.
he further said that at present, whether looking at the overall development trend of smartphones or the market share of apple mobile phones, the incremental space that apple can bring to developers has peaked.
"apple tax" sparked protests and has been investigated by many countries
the world has been suffering from the “apple tax” for a long time.
"the reason why everyone is disgusted is that apple has abused its ecological advantage and market dominance to unilaterally introduce such platform rules. in a sense, it is a denial of an equal, open and inclusive internet environment." beijing normal university law school wu shenkuo, doctoral supervisor and deputy director of the china internet society research center, analyzed this to a reporter from china economic weekly.
among the cases of global developers “revolting” against apple’s tax, the dispute between game developer epic games and apple is undoubtedly the most attention-grabbing.
in 2020, game developer epic games opened its own payment system in its popular battle royale game fortnite, hoping to bypass the 30% "apple tax." apple removed the game for violating app store policies.
epic games then took apple to court, accusing apple of being a monopoly and believing that apple's share of platform profits was unreasonable. epic games also has support from microsoft and facebook (now meta).
although it failed to confirm that apple constituted a monopoly, the judge determined that apple could not prevent developers from informing users of payment methods other than apple.
apple’s closed ecosystem and tough stance on the “apple tax” have also attracted the attention of regulatory authorities in many countries. in order to create a more level competitive market environment, apple faces regulatory pressure from many countries.
in 2021, the amendment to south korea's "electronic communications business act" was voted on. the bill requires that neither google nor apple force developers to use the platform's payment system.
also in 2021, the competition commission of india launched an investigation into apple. a non-profit organization accused apple of abusing its dominant position in the app market by forcing developers to use its proprietary purchase system and levying a 30% "apple tax."
even in the united states, apple's life is not easy.
in march 2024, the u.s. department of justice, together with the attorneys general of more than a dozen states and regions, filed an antitrust civil lawsuit against apple, accusing it of monopolizing or attempting to monopolize the smartphone market.
the indictment mentioned that apple consolidates its monopoly position through invisible rules and restrictions and binds users to the apple ecosystem. on this basis, apple charges high apple taxes on third parties. relevant behaviors undermine competitive fairness.
from the perspective of governance effectiveness, the eu’s handling of the “apple tax” is more effective, which is closely linked to the digital markets act (hereinafter referred to as dma). in 2022, the european union reached an agreement on the dma, which aims to restrict certain behaviors of technology giants identified as "gatekeepers." a year later, apple was among the first six technology giants identified as "gatekeepers."
under the strong influence of dma, in january this year, apple allowed customers in the european union to download software from outside the app store for the first time, opened up third-party payments, and apple’s tax was reduced to 17%. it is reported that it will further drop to 10% a year later.
it is worth noting that in march this year, the european union imposed a fine of 1.84 billion euros on apple. the decision stems from the streaming service platform spotify’s complaint against apple in 2019, which involved apple’s 30% commission on its app store.
"the practices of various countries have certain rationality and can be used for reference. at the same time, we must also note that solving such problems through legislation and judicial means can achieve partial correction, but there are also limitations to varying degrees." wu shenkuo said.
in his view, the core of the "apple tax" issue is that to create an equal, orderly, and transparent industrial ecological environment, it requires the common attention of all market entities and the game between "rights, responsibilities, and interests" to properly resolve it. .
(this article was published in "china economic weekly" issue 18, 2024)
