Apple Faces Antitrust Probe in Japan Over App Store Policies

Sep 4
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Apple is facing yet another antitrust probe, this time in Japan, because of its App Store dominance. The scrutiny is due to complaints by various game developers regarding not just the company's 30% commissions on sales, but also unpredictable enforcement of its guidelines when approving apps and poor communication and support.

Bloomberg spoke to more than a dozen people regarding the issues. These complaints have also caught the attention of Japan's antitrust regulator which has begun a probe into Apple's App Store practices.

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Apple has 720,000 registered developers in Japan. As per a study, the App Store generated $37 billion in billings and sales in 2019. $11 billion from this was for digital sales, $24 billion was for physical sales, while $2 billion was for in-app advertising. Some of the developers in Japan include huge companies like Square Enix and Bandai Namco. Square Enix gets 40% of its revenue from its mobile games, while Bandai Namco has found massive success with its game called Face/Grand Order. The developers that have shared concerns regarding Apple's App Store do not include any from these companies.

The issues with App Store have led to the creation of a third-party service called iOS Reject Rescue, which aims to help developers through Apple's challenging approval process.

As per Makoto Shoji, founder of PrimeTheory which develops apps for iOS and Android:

“Apple’s app review is often ambiguous, subjective and irrational. “Apple’s response to developers is often curt and boilerplate, but even with that, you must be polite on many occasions, like a servant asking the master what he wants next.”

Most Japanese developers who spoke to Bloomberg said that they don't mind the 30% revenue that Apple charges, but they expect better customer service from the company when it comes to providing support for rejection issues and its approval process. Nintendo, one of the most popular Japanese-origin gaming companies in the world, also charges 30% revenue as commission for physical sales, as well as digital sales and in-app purchases. Sony, another Japanese gaming company, charges the same commission for each sale.

One of the issues shared by game developers regarding Apple was when their servers went offline for a day in November, without any notification to developers. The company was slow to provide status updates or maintain proper communication channels with registered developers. Another issue is when the approval process takes too long, without any clear status updates from the company. This can cause developers to lose revenue because in-game events become difficult to execute in a timely manner.

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Apple responded to Bloomberg and said that it has 1,400 advisers and customer service employees in Japan which provide developer support via phone and email. The teams work across two time zones to provide support during business hours. It has also localized its App Store review guidelines and developer conference videos in Japanese and continues to put in more effort.

Developers are also unhappy with Apple's inconsistency over its App Store review guidelines. A few developers had characters in their approved games in swimsuits, only for the games to be later rejected because Apple decided that they were in their underwear and sexualized. Apple does not allow sexual or pornographic material in the App Store, but it is unclear how the rule applied to this specific case.

From the looks of it, the issues raised by Japanese game developers seem closely related to poor support, communication and service. Apple should work to step up its service and support quality to ensure these developer complaints are heard and resolved.

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