The walking contradiction that is Apple continues to show that in the business world, you’ve got to break a few eggs to make an omelette.
On the one hand, years after the death of Steve Jobs, Apple has made history as the richest firm ever with a market capitalization of $2 trillion. Most of us aren’t used to measuring this metric in the trillions, and it’s even more impressive that Apple doubled its value in just two years.
At the same time, Apple hasn’t done this without becoming embroiled in multiple investigations and legal conflicts over intellectual property and much more.
The newest saga, besides investigations by U.S. regulators into antitrust issues, is in the form of new challenges by an array of third parties complaining about Apple’s share of in-app purchases on its App Store.
Apparently, Apple collects 30% of all revenue from in-app purchases, and some of the payers feel that’s too high. They are additionally enraged by a fee waiver in which Apple offers a lower 15% rate to Amazon. Apple defends that practice by citing criteria for “deep integration” with its colleague in the U.S. tech top five of lucrative mega-companies, and suggests that other companies could have the waiver if they meet the criteria.
Interestingly, several among those clamoring for lower Apple fees are connected to America’s flagship newspapers, which is another indicator of just how powerless and marginal newspapers have become in the digital age.
30% of all in-app purchases means that Apple claims 30% of all digital subscription revenue for contracts with users of the Washington Post or New York Times who buy subscriptions through the Apple Store. That means 30% of the money that you pay to read the newspaper through this platform goes to an Apple employee, instead of a reporter on the street.
Oddly enough, in the case of the Washington Post, it seems that Amazon offers deep subscription discounts through its own platform, which is a weird way of squaring the circle or playing two degrees of Kevin Bacon…
Will traditional fogies like newspapers succeed in getting courts to limit Apple’s cut? Or will they find new ways of getting around Apple’s walled garden? Either way, it would appear that Apple has really pwned the newspaper industry … and others who need to pay fealty to its App Store.
