The App Store Under Scrutiny – The Coalition for App Fairness Emerges
This year, Apple became the world’s most valuable public company. However, the tech giant was also accompanied by several challenges across 2020. The Coalition for App Fairness was formed in September 2020, as a response to the conduct displayed by the App Store. The group compromises of 13 app developers, including Epic, Spotify as well as Blockchain.com, and aims to advocate a legal shift towards better practises.
The advocacy group came out with 10 principles that it believes define “fair treatment”. They outline behaviour regarding anti-competitive policies, the “Apple Tax” as well as a lack of overall consumer freedom. Currently, Apple secures up to 30% of the value of app purchases, in-app transactions and subscriptions, being processed through the App Store. Apple’s recent escalation of conflict with Epic Games has led to more controversy around the charge. Fortnite used to attract over 100 million users across all Apple devices. In August, the game was removed from the App Store, for setting up an internal system that avoided the Store’s fees. Epic Games has since sued Apple and shortly after Tim Cook’s company responded with a countersuit.
What may be the legal implications?
Although the group has centralised its objectives around Apple’s practices, the developers seek to enforce a wider, new standard of regulations. The Coalition has also voiced concerns regarding Google and the analogous Play Store. Sarah Maxwell, the representative of the group, explains the necessity of this further, by implying behaviour patterns of the past led to “a lack of hope that things will ever change”. However, the Coalition only represents a minority of apps on the platform – the App Store is home to around 2 million different applications in total.
Alongside public pressure, Apple is also in the process of responding to antitrust allegations, both in the US and the EU. Tim Cook defends the company by highlighting that it has “never increased commission in the Store since the first day it operated”. Nonetheless, Apple is being criticised for the levy because the download sphere was not as prominent, and brought in fewer profits when operations first began in 2008. Apple’s valuation today brings more critique to the table - it’s estimated that the App Store alone, secured $17.5 billion in revenue for the fiscal year of 2020.
As a response to an increasing assertion, Apple declared it would temporarily exempt businesses, that were forced to shift online because of the pandemic, from paying the 30% charge. The fee will still be applied to apps that fall under the gaming category as they do not qualify for the special circumstances.
Some of the biggest names, including Microsoft and Facebook, have voiced their concerns but have not joined the Coalition for App Fairness officially. The next couple of months are set to define the way app stores operate. App developers could triumph as the percentage of revenue they conserve continues to be addressed.
By: Zuzanna Potocka