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This column was written by the Coalition for App Fairness, on behalf of Spotify, Epic Games, Basecamp, Blix, Blockchain.com, News Media Europe, Protonmail, and SkyDemon.
Bipartisan cooperation is hard to find in Washington these days. But when it comes to holding Apple accountable for its anti-competitive business practices, there is a growing consensus on both sides of the aisle.
As was the case earlier this month, when Democratic Senator Amy Klobuchar and Republican Senator Mike Lee sent a joint letter scolding the iPhone maker for initially refusing to testify at this week's Senate hearing on competition in the app store. The public reprimand from both sides of the Senate panel overseeing antitrust and consumer protection issues worked. Now, Apple is set to face tough questions from lawmakers in Washington about its app store policies just one day after its highly-staged product announcement event in Cupertino.
The push for a fair app marketplace should not be a surprise. With its dominant market position, Apple acts in a way that is detrimental to everyone except its own shareholders. For instance, Apple prohibits consumers from downloading apps unless they've been downloaded directly through its proprietary App Store — which pockets up to a hefty 30% commission for all digital purchases made within the apps themselves. Just to ensure there's no skirting the system, the use of their proprietary in-app payment services is compulsory.
The 30% commission charged by Apple — which is essentially a tax — is both unreasonable and excessive, with industry standard for payment processors standing at rates of 2.5 to 3.5%. The app tax often represents an untenable portion of developer revenue, oftentimes making it impossible for developers to innovate. The commission tax is not applied to sales of other goods and services such as Uber, Instacart, or Grubhub — this means the application of the tax is completely arbitrary, adding an additional burden on smaller and growing developers.
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