Apple's house rules

Apple's house rules

The debate between and Apple has definitely dominated tech Twitter this week. In short: released a new email client for web, Mac, Windows, Linux, iOS, and Android and it's charging a monthly fee for it. This subscription is set up on the web, but Apple insists on a revenue share since also released an iOS app.

David Hansson, founder of Basecamp and

Popular music streaming service Spotify has been in an ongoing dispute with Apple about its App Store revenue share model since early 2019 and was presumably the key driver for the EU to recently open antitrust investigations into the company's App Store and Apple Pay practices.

The Guardian describes the EU antitrust investigation into the App Store in more detail:

The App Store which is the only way that developers can distribute iPhone and iPad apps - is being investigated for two specific restrictions imposed by Apple.The first is the requirement that developers use the company’s own “in-app purchase system” for users to make payments, from which Apple takes a 15-30% cut. The second is the ban on developers telling users of other ways to pay for digital content outside of the in-app system.

Apple's marketplace economics

A marketplace, by definition, is a business that enables value-creating interactions between its participants and sets governance conditions for them, hence it is based on the principle that all actors are gaining value through interaction.

The current case for Apple to force developer who have an iOS app in their portfolio – as opposed to it being their core product – is a slippery slope for the company to say the least, more specifically because it is interpreting its own rules on a case by case basis.

It all could set off a dangerous chain reaction which could lead to disintermediation of the marketplace, yet this might only be a theoretical problem for now. Apple's App Store is too closely integrated with its whole ecosystem.

And yet, this very fact gives leverage to the EU antitrust investigation into whether Apple is restricting competition by enforcing its rules on Apple Pay and the App Store.

Transitioning to services

It's no surprise that Apple has been putting its recent focus on services as opposed to mostly relying on hardware sales. The upsides for Apple are pretty clear: recurring revenue, higher margings and less complexity (at least compared to their hardware business).

However, the ones suffering most are small companies and indie developers who do not have much leverage on Apple in such cases. For a positive long-term relationship with all actors on its marketplace, Apple would do best to reinterpret its own rules to better favor developers – otherwise the EU investigation will definitely further help with this.

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