A study headed by Jonathan Borck, Ph.D., Juliette Caminade, Ph.D., and Markus von Wartburg, Ph.D. for Analysis Group finds that Apple’s App Store commission rate is similar in magnitude to the commission rates charged by many other app stores and digital content marketplaces.
Digital marketplaces create value by facilitating and promoting valuable transactions between buyers and sellers. As a result, they typically share certain features that are critical to their management and success. Many digital marketplaces, for example, set up rules and policies to govern transactions and promote trust and reliability among both sellers and buyers. Some digital marketplaces also provide various services to users and invest in technology to improve the performance of the platform. In return, digital marketplaces typically charge fees based on the transactions they facilitate.
Apple’s App Store ecosystem facilitates interactions between app developers and nearly one billion Apple device owners globally. To promote its success, Apple provides developers with distribution, search, and review services, as well as a set of tools to build and monetize apps. Apple also invests in the safety of the App Store and in developing new technologies and functionalities. While Apple charges developers an annual fee to enroll in its Developer Program and upload apps to the App Store, Apple does not charge developers to offer each individual app on the App Store, to distribute updates to users, or to access Apple’s app analytics, marketing, and developer tools. Apple receives a commission from developers when users download paid apps and make in-app purchases of digital content, services, and subscriptions.
Our study shows that Apple’s App Store commission rate is similar in magnitude to the commission rates charged by many other app stores and digital content marketplaces. The commission rates charged by digital marketplaces most similar to the App Store, such as other app stores and video game digital marketplaces, are generally around 30%… Many sellers currently sell (or previously sold) their goods through brick-and-mortar stores and marketplaces. We find that sellers generally earn a substantially lower share of total revenue from the distribution through brick-and-mortar stores and marketplaces than through digital marketplaces such as the Apple App Store.
The most prominent app stores and software distribution platforms (Google Play Store, Amazon Appstore, Samsung’s Galaxy Store, Microsoft Store, App Store) all use policies that require developers to pay commission fees, and use the platform’s in-app payment system to purchase in-app digital products, with certain carve-outs for multi-platform apps. Additionally, most of those stores explicitly require that developers do not direct app users to make purchases outside of the store.
MacDailyNews Take: Irrespective of this study, which was supported by Apple (the conclusions and opinions expressed are exclusively those of the authors) likely due to ongoing antitrust investigations, since Apple does not have a monopoly in any market in which they participate, there is no legal basis for antitrust action against Apple.
In Apple’s case, there is no monopoly (which is legal by the way), much less monopoly abuse (which is explicitly impossible given the nonexistence of a monopoly). You cannot abuse a monopoly and therefore face antitrust action when you do not have a monopoly.
Worldwide smartphone OS market share, May 2020 (via StatCounter:
• Android: 74.14%
• iOS: 25.26%
By the way: On every iPhone, iPod touch, iPad Pro, iPad Air, iPad, and iPad mini box, the potential buyer is informed of requirements, including that “Apple ID (for some features), internet access, acceptance of the software license” (
apple.com/legal/sla) which discusses the need to have an App Store account for various features to work. Customers are informed of the requirements prior to purchase. If the customers didn’t like the terms that came along with Apple devices, they should have opted for a pretend iPhone from any one of a dime-a-dozen dishwasher/handset assemblers. Then they could blissfully infest their fake iPhones with malware from a variety of sources.
Apple built the Mac. Apple built the iPhone. Apple built the iPad. Apple built the App Store. Apple created the most verdant ecosystem ever created for developers by far. Only the losers and those developers who can’t read and follow simple rules are whining incessantly.
If anything, Apple takes too little of a cut for all that the App Store provides developers. — MacDailyNews, June 21, 2020