On the day Apple’s annual developer conference officially kicks off, it looks like the tech giant has chosen to settle a recent high-profile scuffle with its developer community—at least for the time being.
The news comes courtesy of a blog post dropped today by Basecamp CEO Jason Fried, who’s spent the past week openly feuding with Apple over the company’s monopolistic practices surrounding in-app payments. Fried—whose recently rolled-out email app attempted to sidestep some of these stipulations—appears to have reached an uneasy truce with the tech company following a week’s worth of different outlets reporting on the chokehold Apple has on its developer community.
If you haven’t been following the (objectively confusing) Hey saga up until this point, here’s the basics:
Last week, the personal organization pros at Basecamp rolled out Hey, an email-filtering service that—for about $100 per year—is supposed to give customers a better handle over blocking particular spam-senders from their inbox. Not long after that initial rollout, the company tried to release an update to the app with a few new features and bug fixes, only to find themselves stonewalled by Apple.
The reasoning for the rejection, as detailed in this bombshell of a thread by Hey co-creator David Heinemeier Hansson, is that according to the guidelines set forth for Apple developers, any paid services are required to offer users the ability to submit their payments through the App Store—a function that gives Apple a cut of up to 30% of the sale amount. Apparently, Hansson’s attempt to give app downloaders the chance to pay for the Hey service outside of the app—bypassing Apple’s cut in the process—didn’t sit right with the company, which threatened to give them Hey boot unless it moved payments in-app and started coughing up its cut of the cash.
Ironically enough, this kerfuffle happened on the exact day that European authorities opened an antitrust investigation into the company’s App Store policies over this so-called “App Store tax,” among other practices that have landed the company in hot water with EU regulators and others.
While slicing 30 cents off of a dollar’s worth of in-app purchases might not seem like much, a 2019 report from the Norwegian app development company Fuse found that a decade’s worth of App-store skimming had netted the company more than $51 billion overall. And with more and more cash pouring into the App ecosystem as time goes on, these skims are going to draw the ire of more regulators not only in the EU, but stateside as well.
Against this (slightly sticky) backdrop, it makes sense that Apple would backpedal rather than push the Basecamp team to pay its mandated “ransom,” as Hansson called it at the time. Rather, it appears that the company approved the latest version of the Hey app—sans in-app payments—with a few stipulations, according to Fried. As he explained:
Phil Schiller, Apple’s Senior Vice President of Worldwide Marketing, told us the kind of changes he’d love to see us make. His primary objection was “You download the app and it doesn’t work, that’s not what we want on the store.”
Okay. We thought we were following Appleʼs unwritten rules for multi-platform SaaS products: No signups, no links, no mentions of where to sign up. Plenty of applications in the App Store work exactly like this today, including long-approved apps from Netflix, Google, Salesforce, and Nintendo.
But then Schiller said “One way that HEY could have gone...is to offer a free or paid version of the app with basic email reading features on the App Store, then separately offered an upgraded email service that worked with the Hey app on iOS on its own website.”
According to Fried, Basecamp churned over the weekend to bring Apple an update that addresses these concerns in particular—by tweaking the app to satisfy the needs of both the average consumer alongside enterprise clientele, and by tweaking the app’s launch screen, rather than having an app that “doesn’t work” when users might tap to open it, as Schiller said.
“We’re confident these improvements will satisfy Schiller’s concerns about both the user experience and business model,” Fried wrote. “Hopefully this paves a predictable path for other multi-platform SaaS services like ours as well.”
The new-and-improved consumer-focused version of Hey allows users to use the Apple-approved in-app sign-up method to get a free, short-term @hey.com email address that works for two weeks. If they want to extend their subscription, then they’ll need to open their wallet outside of Apple’s purview.
It’s a compromise, albeit an uneasy one: Basecamp is giving Apple an app that technically allows for an in-app signup system, and one that, in turn, can allow the app to function at launch, sans payment. As a result, Apple is giving Basecamp a free pass to technically bypass its in-app payment mandates, allowing Hey users to pay for the service via the web—albeit after a full week of controversy about this exact issue and ire raised by lawmakers and laypeople alike.
It’s unlikely that this will be the final leg of this saga. Per Fried’s blog post, the latest update isn’t going to be the last—especially now that the company is ramping up its subscriber base. With that said, it’s also unlikely that Schiller will pick up the free Hey email address that Fried set aside for him with the latest update—a gesture that’s either good-natured or bitterly sarcastic, depending on how you look at it.