On November 19th, Apple China's official website released a rare report on the revenue of its App Store and domestic app developers, indirectly responding to the controversy surrounding the "Apple Tax" by citing a research report by a domestic university professor.
Not long ago, # Apple WeChat # became a hot topic on Weibo, with rumors that due to Apple's "Apple Tax" on WeChat ecosystem developers, the iPhone 16 may no longer support WeChat. Although Apple customer service clarified the update issue, Tencent executives admitted in a conference call that they are indeed negotiating the commission issue for the App Store, putting the tense relationship over the "Apple tax" issue on the forefront.
The so-called Apple tax refers to the 30% channel fee that the App Store charges for every purchase within the app, such as membership subscriptions, game recharges, and live streaming rewards, but does not include physical services such as ride hailing and food delivery provided by the app.
In the latest report released by Apple, "The Apple Ecosystem in China: A Study on the Value of Users and Developers," Associate Professor Ju Heng from the School of Business at Shanghai University of Finance and Economics stated that the income of Chinese developers has nearly doubled since 2018. And it is emphasized that the actual effective commission rate of Apple stores in China is not 30%.
Juheng explained in the report that many app markets in China charge commissions for in app advertising revenue, which is an important source of income for game developers. However, Apple has never charged commissions on in app advertising revenue, and the average effective "tax rate" for large game developers in 2023 is less than 20%.
The report also compared the channel fees of the Android app market, pointing out that some Android stores offer commissions as high as 50%, while most Chinese developers who earn less than $1 million annually through the Apple Store can enjoy a 15% discount on the "Apple Tax" through the Small Developer Program.
In addition, the report provides a detailed explanation of Apple's assistance to developers. For example, the App Store ensures privacy standards, security standards, and content standards through management rules such as app review, and provides software and hardware technology as well as developer tools. The report cites a set of data to illustrate that in 2019, the Apple ecosystem contributed 1.65 trillion yuan in developer revenue and sales in China; By 2023, this amount will reach 3.76 trillion yuan. More than 95% of the revenue belongs to developers and businesses, and there is no need to pay the 'Apple tax'.
However, it is worth noting that this third-party report declares that 'Apple provided support for this study'. Several industry insiders pointed out to 21 reporters that some data are worth discussing.
For example, regarding the fact that 95% of income does not need to pay "Apple Tax", iOS ecosystem expert Deng Chun noticed that these revenues include all amounts of online express delivery, food delivery, taxi hailing, online shopping, advertising, and so on. The offline consumption of these entities cannot be deducted by the Apple Store, and the 'Apple tax' we are discussing has always targeted in app purchases, "Deng Chun admitted.
On the other hand, many industry insiders have expressed doubts about the statement that "many app markets charge commissions for in app advertising revenue". Deng Chun, who has worked in iOS distribution, pointed out that app stores actually do not receive commissions for digital advertising within apps. Xiong Dingzhong, the chief partner of Beijing Qinglu Law Firm, also told 21 reporters in confusion, "Actually, there is no such thing as a comparison
In the eyes of multiple respondents, this report does not address the core controversy of the "Apple Tax" - whether a commission rate of 30% is reasonable or not?
The report lists all the help that the Apple Store has provided to developers, and I think it's correct because building this platform has indeed provided many developers with channels for monetization and exposure. However, the core debate about the Apple tax is why the commission is 30% and whether the 30% ratio is reasonable, "said Xiong Dingzhong.
Wang Qiongfei, founding partner of Zhejiang Kenting Law Firm, told 21 reporters why the strategy of Apple Store in China is different, which was not mentioned in the report. Under the requirements of the EU's Digital Markets Act, the maximum commission rate for EU developers in the updated Apple iOS 17.4 system in March this year has been reduced from 30% to 17%. In recent years, the United States, Japan, and South Korea have also forced Apple to reduce commissions or open up third-party payment channels, while the Chinese market has not yet adjusted.
At the end of May this year, the Shanghai Intellectual Property Court made a first instance judgment on the first anti-monopoly lawsuit filed by a consumer against the "Apple Tax". The court confirmed that Apple has a dominant market position in the Chinese software market, but rejected the plaintiff Jin's request for Apple to stop collecting the 30% "Apple Tax" and stop forcibly using Apple Pay. Wang Qiongfei, representing the plaintiff in this case, stated that he will file a lawsuit with the Supreme People's Court in the future.
The 30% apple tax is a complex economic account. Associate Professor Larson from the Law School of Beijing Technology and Business University previously told 21 reporters that due to the difficulty in estimating operating costs, the court mainly compares Apple's service fees with similar competitors. Determining whether a 30% apple tax constitutes an unfair high price requires sufficient data support, which is not easy in specific cases.
The reporter sent a letter to inquire with Apple and Professor Ju Heng about the issue of the commission for advertising revenue and how Apple calculates the total amount of unpaid "Apple tax" revenue. As of press time, no response has been received.