Apple defends its 30% cut of in-app revenue
It is estimated that the App Store brings in $15 billion in revenue for Apple annually which is approximately twice the haul brought in by the Google Play Store despite the much larger share of the smartphone market that is owned by Android. The latter has approximately 85% of the connected handset market, but still, it trails badly when it comes to collecting revenue from its app storefront.
The Wall Street Journal today published Apple’s defense and the tech giant says that it does not run a monopoly. Instead, it says that the revenue it takes in from the App Store comes from a small percentage of the two million apps that are available from the store. One argument that Apple often cites on its behalf is that the 30% it charges is still cheaper than what software developers were paying to distribute their products to stores prior to the 2008 launch of the App Store.
Apple decided to run a comparison study that sought to compare the App Store with other “digital marketplaces” including ones run by Amazon, Microsoft, Uber, and Walmart. Economists at Analysis Group, commissioned by Apple, came to the conclusion that the 30% cut charged by Apple is in line with the cut taken by Google and other peers. It is below the 37% and 31% cuts taken by ticket sellers StubHub and Ticketmaster, respectively.
European competition attorney Damien Geradin, who co-authored a study on this topic a couple of months ago, said that the App Store fee structure is “uneven.” He notes that while apps like Tinder pay 30% of their App Store sales to Apple, Uber and Airbnb don’t pay anything. “Problems are much deeper than the 30%,” he said.
