Apple Publishes Study Which Defends Its 30% App Store Cut
Apple has commissioned a new study that explains its 30% App Store cut and compares it against online marketplaces from rivals such as Amazon, Google, Microsoft and Samsung. The aim of the study, by Analysis Group, is to show that Apple's cut is similar to what its rivals offer in their app stores and e-commerce marketplaces.
The study comes just before Apple's CEO Tim Cook was supposed to appear before a congressional hearing, alongside Amazon, Facebook and Google's CEOs. However, the hearing was postponed due to a conflict with the memorial service of late John Lewis.
Apple has been facing antitrust complaints for App Store's policies and 30% commission on sales and in-app purchases. The complaints have been heard by the Department of Justice in the United States as well as the European Union. Many developers and service providers claim that the cost is unjustified. This study is Apple's answer to the claims.
The 48 page study compares Apple's various stores for videos, podcasts, eBooks, audiobooks and apps against the likes of Epic, Steam, Amazon, Xbox, PlayStation, Nintendo, Play Store and Microsoft Store. The reports findings are summarized below:
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%.
Marketplaces that distribute digital content such as videos, podcasts, eBooks, and audiobooks generally charge commission rates of 30% or more. Commission rates charged by e-commerce marketplaces vary by industry but sometimes exceed 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 study is an interesting read, and gives some rather detailed insights of how various digital and e-commerce marketplaces currently work.
It is interesting to see that Microsoft, who had actually shared concerns with the antitrust U.S. committee against Apple’s App Store, charges the following for its own marketplaces:
- 30% on games
- 30% on all sales in Business and Education stores
- 30% for Windows 8 devices
- 15% otherwise
- 30% (15% for non-video game subscriptions)
Microsoft also enforces usage of the company's own payment gateways and APIs for in-app purchases and disallows circumventing these mechanisms.
- Microsoft’s App Developer Agreement states that “[n]ew App and in-App Product submissions to the Store are required to use Microsoft’s commerce engine to support purchase of any In-App Product(s) that are or can be consumed or used within [the] app.”
- Microsoft Store Policies require that “[i]f your product includes in- product purchase, subscriptions, virtual currency, billing functionality or captures financial information ... You must use the Microsoft Store in- product purchase API to sell digital items or services that are consumed or used within your product. Your product may enable users to consume previously purchased digital content or services, but must not direct users to a purchase mechanism other than the Microsoft Store in- product purchase API.”