Just one day after its CEO painted the company’s choice to snoop on rival apps as a pro-privacy flex, Apple’s been hit with an antitrust suit from the encrypted messaging app Telegram, claiming that no matter how much Tim Cook wants to argue otherwise, he’s created an ecosystem where Apple’s the only app game in town.
First spotted by the Financial Times, the suit concerns what some folks call Apple’s “App Store Tax”: a 30% cut from any in-app revenue that a dev might earn from their product. While Apple has a laundry list of defenses for the tax, it’s becoming pretty obvious that most app developers disagree with the idea that Apple should be entitled to more than a quarter of their earnings.
This news comes on the heels of an open letter published by Telegram CEO Pavel Durov earlier this week. The title? “7 Myths Apple Is Using to Justify Their 30% Tax on Apps.”
“Apple spends a lot of money on PR and lobbying in order to keep their monopoly power,” Durov writes, noting that despite Apple’s claims to the contrary, the 30% cut that Apple takes from the countless developers on its platform leaves the company with far more cash flowing in than what’s actually needed to maintain its gargantuan app st0re.
“[Running] an app store costs only a fraction of what Apple takes from app developers,” he explains. “Every quarter, Apple receives billions of dollars from third-party apps. Meanwhile, the expenses required to host and review these apps are in the tens of millions, not billions of dollars.” And despite what Cook says, nobody can really create their own rival OS if they want to escape Apple getting a cut of their cash. Apple—and Android—are really the only options available.
“There’s a vicious circle: devs don’t build apps if the OS doesn’t have enough users, and users don’t buy phones if there aren’t enough third-party apps for them,” he wrote. “If [developers] want to create a service that is socially relevant, they will have to build apps for both platforms in the mobile duopoly.”
These are the same sorts of claims Tim Cook spent hours shutting down—successfully or otherwise—during yesterday’s hearing, and these are the same sorts of claims that led the EU to open two probes into the company’s app store and app payment system back in June. Earlier that month, it was hit with a complaint from the Japanese ecommerce giant Rakuten, saying that Apple was using that 30% cut to keep its e-book offshoot—Kobo—from becoming big enough to topple Apple books. A few months earlier, Spotify filed its own complaint against the company, alleging that Apple was using its cut to keep Spotify from getting too large to compete with Apple’s own music service, Apple Music.
Time will tell if more irate App devs will come forward against the company. In the meantime, let’s the European authorities will treat Apple’s monopolistic ways a lot more seriously than their American counterparts.