Reporter Zheng Xue from China Economic Weekly
The almost uninterrupted controversy over the "Apple Tax" has resurfaced.
Since May this year, Apple has issued consecutive warnings to Tencent and ByteDance, demanding that the loophole of the "Apple Tax" be plugged, otherwise product updates will be rejected. The rumor that "iPhone16 will not support WeChat" has sparked wider attention to this matter.
In August of this year, Tencent responded for the first time to the "Apple tax" and stated that it is in negotiations with Apple; On September 6th, the Apple App Store released an updated version of WeChat. Byte has not yet made a public response to this matter. As of September 25, the version update of Tiktok in the App Store was only two months ago.
This is not the first time that the "Apple Tax" has attracted attention. From a global perspective, the closed Apple ecosystem and the "Apple Tax" are putting multiple pressures on Apple from legal and regulatory sources.
The proportion of 'apple tax' in China is too high
The so-called 'Apple tax' can be understood as the channel sharing of the Apple App Store. Generally speaking, for every transaction made within the Apple system, Apple will withhold 30% of the transaction amount as a "toll fee" and transfer the remaining 70% to the developer. In terms of the percentage of extraction, it varies among different countries and regions.
According to media reports, Apple has issued warnings to Tencent and Byte successively since May this year. They found that developers tried to guide users to external payment systems to plug the payment loopholes of WeChat and Tiktok, or they would stop updating related products.
Apple officials have stated that all sales of digital goods in Apple applications must go through its system, and if this rule is violated, Apple's review team may refuse application updates. Many opinions believe that behind Apple's actions, it may be targeting mini programs, especially mini games (hereinafter referred to as "mini games").
As previously stated by Tencent's Chief Strategy Officer James Mitchell during the Q2 conference call, Tencent is in talks with Apple regarding revenue sharing for iOS mini games. He stated that currently Tencent has not generated revenue from "in app payments" for iOS mini games.
At present, there are two aspects that people criticize more: first, there are many charging items. Taking games as an example, Apple charges a commission for all virtual props. Second, the amount charged is relatively high. Taking paid members as an example, in general, the membership price on iOS is more expensive than on Android Ai Media Consulting CEO Zhang Yi said in an interview with China Economic Weekly.
Public information shows that Apple's commission rates in China are 30% and 15% respectively, and third-party payment is not open; The commission rates in the United States are 27% and 12%, and third-party payment is open; The commission rates in the EU region are 17% and 10%, respectively. Third party payments are also available, but developers who meet the relevant conditions need to pay a "core technology usage fee" to Apple.
Zhang Yi said that Apple's implementation of a top tier fee standard of 30% in China is too high. And the related expenses are directly deducted from the developer's operating income, rather than deducted from net profit.
This is not the first time that the "Apple Tax" has sparked controversy in China. As early as 2017, Apple extended the collection scope of "Apple Tax" to the reward function of WeChat official account, and finally both parties agreed not to draw a percentage from it.
But this time, when it comes to the "apple tax" again, Zhang Yi feels different. If it used to be 'criticism', then now it is' protest ', "Zhang Yi said.
This may be related to market changes.
In the past, it was the era of incremental markets, and both domestic and foreign developers believed that Apple could bring huge traffic growth, that is, by improving services and innovating products, they could earn more money, "said Zhang Yi.
He further stated that currently, both in terms of the overall development trend of smartphones and Apple's market share, the incremental space that Apple can bring to developers has reached its peak.
The 'Apple Tax' has sparked protests and has been investigated by multiple countries
The world has been suffering from the 'apple tax' for a long time.
"The reason why everyone dislikes Apple is that it involves abusing its ecological advantage and market dominance to unilaterally launch such platform rules, which in a sense is a denial of the equal, open and inclusive Internet environment." Wu Shenkuo, doctoral supervisor of the School of Law of Beijing Normal University and deputy director of the Research Center of the China Internet Association, analyzed to the reporter of China Economic Weekly.
In the case of global developers' resistance to the Apple tax, the dispute between game developer Epic Games and Apple is undoubtedly the most concerning.
In 2020, game developer Epic Games opened its own payment system in its popular battle royale game Fortnite, hoping to bypass the 30% "Apple tax". Apple has taken down the game on the grounds of violating App Store policies.
Subsequently, Epic Games sued Apple for alleged monopoly and argued that the platform profit sharing obtained by Apple was unreasonable. Epic Games also received support from Microsoft and Facebook (now Meta).
Although it was not confirmed that Apple constitutes a monopoly, the judge ruled that Apple cannot prevent developers from informing users of payment methods other than Apple.
The closed ecosystem of Apple and its tough stance on the "apple tax" have also attracted the attention of regulatory authorities in multiple countries. In order to create a more fair competitive market environment, Apple is facing regulatory pressure from multiple countries.
In 2021, the amendment to South Korea's Electronic Communications Act was passed through a vote. The bill requires that neither Google nor Apple can force developers to use the platform's payment system.
In 2021, the Indian Competition Commission launched an investigation into Apple. A non-profit organization accuses Apple of abusing its dominant position in the app market by forcing developers to use its proprietary purchasing system and imposing a 30% "Apple tax".
Even in the United States, Apple's life is not easy.
In March 2024, the US Department of Justice, together with attorneys general from over a dozen states and territories, filed an antitrust civil lawsuit against Apple, accusing it of monopolizing or attempting to monopolize the smartphone market.
The indictment mentions that Apple consolidates its monopoly position through implicit rules and restrictions, binding users to the Apple ecosystem. On this basis, Apple charged high Apple taxes to third parties. Related behaviors are detrimental to fair competition.
From the perspective of governance effectiveness, the EU's handling of the "Apple Tax" is more effective, which is closely related to the Digital Markets Act (DMA). In 2022, the European Union reached an agreement on DMA, which aims to restrict certain behaviors of technology giants identified as "gatekeepers". One year later, the first batch of six tech giants recognized as "gatekeepers" included Apple.
Under the strong influence of DMA, in January of this year, Apple allowed EU customers to download software from outside the app store for the first time, opened up third-party payments, and lowered Apple's tax to 17%. It is reported that it will further decrease to 10% in a year.
It is worth noting that in March of this year, the European Union imposed a fine of 1.84 billion euros on Apple. The decision stems from a complaint filed by streaming service platform Spotify against Apple in 2019, which involved Apple's imposition of a 30% commission on its app store and other related content.
The practices of various countries have certain rationality and referenceable significance. At the same time, it should be noted that solving such problems through legislation and judicial means can achieve partial correction, but there are also varying degrees of limitations, "said Wu Shenkuo.
In his view, the core of the "Apple Tax" issue lies in shaping an equal, orderly, and transparent industrial ecological environment, which requires the joint attention of all market entities and the game between "rights, responsibilities, and interests" to be properly resolved.
(This article was published in the 18th issue of China Economic Weekly in 2024)