‘Give us 30% or Vinnie breaks your legs’

I’m trying to get my head around how astoundingly stupid Apple can be.

The new (or possibly ‘it’s always been this way, but now we are enforcing it’) policy of in-app purchases for Apple products smells suspiciously like extortion to me.

It works like this – You download an app, let’s say the Kindle app that I mentioned in my last post. If you want to buy content for that app, in this case a kindle book, you are allowed to go, via a button in the app itself, to the Amazon website where the transaction is made.

Apple has changed this so that, in order to have your app allowed in the store, you must make the purchase available within the app itself.  And give Apple 30% of the money you’ve charged the customer.

In the case of the Kindle app – despite not owning the book, not providing the service that lets you browse books and not hosting and serving the file to your device – Apple demand 30%

Amazon do something similar for people who self-publish their ebooks, they take 30%, but in return they run the website, host the file, serve the file and have a pretty robust e-commerce back-end to the website that takes care of all the credit card charges.

Apple do nothing – and charge 30%.

The worst thing is that this is mandated. In my reading of the policy, Amazon will have to offer in-app purchases and give Apple their 30%  Amazon will not be allowed to only offer books on their website. They are also not allowed to bump up the price of their ebooks by 30% to cover for the Apple percentage, as that is specifically ‘against the rules’.

It’s not just Amazon, Comixology (that I adore) will be hit in a similar way, as will anyone else wanting to make content for applications in the iPhone/iPad store.

So, what choice does Amazon and other companies have if they want to keep playing in the iOS market?

1) Bump their prices up by 30% across all their outlets in order to pay the Apple tax.

2) Tell Apple to shove their protection racket where the sun doesn’t shine and withdraw from the platform all together.

3) Go to the courts and start making noises about anti-trust and anti-competitive behaviour.

I’m hoping that they go for option 3. I love the Kindle for iPad app, I adore the Comixology for iPad app. I use my Tesco shopping app all the time.

Tesco shopping app?

The Tesco shopping app lets me buy my groceries from the comfort of my sofa. But does my Chicken and Mushroom Fray Bentos pie count as an in-app purchase?  Technically it would appear so – in which case Apple may start claiming that they are entitled to get their 30% of my shopping bill.

(I think that Tesco will be safe as the in-app purchasing rules state ‘content’, not ‘yummy pies’)

I await the day that Apple start demanding 30% of the cost of the electricity that I use to charge my iPhone on the same basis.  Or that, as Safari can be used to see adverts on the web, that Google hands over 30% of their ad revenue.

Realistically – I see some rumbling of lawsuits from Amazon and others and Apple then backing down.

That, or Kindle for iPad and other similar software going ‘jailbreak only’.

13 thoughts on “‘Give us 30% or Vinnie breaks your legs’”

  1. Behaviour like this is why I will never buy an Apple device, plain and simple.

    I hope that Amazon and all other big players simply turn round and say "Screw you then, Apple" and replace their apps with a simple app which presents a big screen explaining "Due to Apple's ridiculous polices, we can no longer offer this service. Click here to send a big fuck-you email to Steve Jobs".

    Incidentally, your comment form doesn't work without Javascript enabled; a <noscript> block explaining that would be sensible (or, better, making it not require Javascript to function).

  2. Like David above me, this kind of thing is exactly what turns me off Apple's products – as shiny as they are.

    I really do hope that the retailers stick it to Apple – because it's about time that someone did something about their ridiculous anti-trust and competition limiting policies. And also, because if you replaced 'Apple' with 'Microsoft' in this, you can bet that the right people would be all over this like flies on a turd.

    In the meantime, I quite like David's idea for modifying these apps. =P

  3. Wouldn't buy an i-anything. Steve Jobs lost any business he might have gotten from me decades ago with his arrogance and heavy-handed behavior.

    Also, I can make any Apple computer I've ever had the misfortune to encounter to go BSOD, which is SUPPOSED to be impossible, but I can, and I don't know how and so… meh.

    Gimme DOS. Gimme Linux. Gimme Windows. Just keep your i-crap, Stevie.

  4. I find this behaviour on the part of Apple very sad, because it is likely to impact on the non-Apple consumers as well (due to the likelihood of the smaller players taking option (1) ). I'm not one of those people who say "I won't buy Apple because of this", because I won't buy Apple because of the cost, and also because of their requirement that you have to provide your credit card details (or pre-buy credit) in order to download free applications – I don't trust them with my details! (and it turns out that I was right not to trust them:http://www.theregister.co.uk/2011/01/25/itunes_gifting_scam/)

    The very sad thing is that the larger players who have the clout to do so, will move themselves away from Apple, shutting down the iTunes account (therefore impacting Apple users), and those smaller players who rely on the iTunes store for their business will have no recourse but to raise their fees by 30% in order to compensate for the 'tax'. Either way, it's the consumers who will have to pay.

  5. The most dodgy thing about Apple's behaviour is the timing. Although it would put me off buying an Apple product (not that I have yet, but iPad is the first form-factor device I've actually thought about buying), I can just about see that by providing an attractive platform Apple might justify their cut. But to not institute this for over a year (for the iPad, longer if you consider iPhone-suitable content), causing both buyers and content providers to make investments in the platform and then pass down this ruling is too much of a bait-and-switch that I don't think I'll be trusting Apple enough to buy any new platform from them in the future.

  6. I can only add a 'me too'. I would never buy Apple. They used to be seen as the friendly alternative to Microsoft's Empire of Evil. Now they've become even worse. Time to say No to this overpriced control-freakery.

  7. Hi Brian (followed you here from elsewhere)

    It is interesting to see the following http://www.engadget.com/2011/02/18/us-justice-department-and-ftc-looking-into-apples-new-subscript/

    So, it looks as if Apple "might" have to modify their plans.

    Also, this might be the thing that starts the EU looking into the world of Apple – finally – as I think they have had a very easy ride of it so far.

    I agree with the comments above by Anji – and also by embryonic – take them both together, and you get the feeling that Apple might have thought "we are overcharging for the product, why not make even more money as fast as we can until it gets noticed by someone"

    I am not a fan of Apple – they make very good kit, with good spec, but at too high a cost, and too restrictive on usuablilty (and iTunes is a bit bloated now!) – But then they do "get it right" for the end user enough times.

    In my mind, they just need to be knocked down a peg or two – remind them that users want to be looked after, not punished

  8. Here is Apple's problem.

    I can make a free app and sidestep the 30% by offering a link to a website. That way I can profit from being in the store but without the need to pay Apple anything.

    Any product in Tesco is subject to a cut before its allowed on the shelf, whats the ruckus here?

    I do think the 30% is too high though. I'm sure not everybody who sells their wares in Tesco all pay 30% or the same percentage. Everybody cuts a different deal.

    Speaking of deals, its widely known that Amazon and Netflicks knew about this policy before hand and were in talks with Apple.

    To those who won't buy an 'i' product because of this policy, you're not doing yourself any favours. Tesco allow Nestle to sell in their stores even though Nestle's record on environmentalism and human rights is dreadful. That doesn't mean I won't go Teetotal on Tesco, it means I won't buy Nestle products.

  9. I absolutely love Apple products and it makes me really said that they started behaving like monopolists: "I will charge you, because I can."
    Hope that somebody will be able to stop them!

  10. Somehow the fact that the ultra-big boys (Amazon) in the business knew about this beforehand doesn't make me feel that if I were to buy an iPad either as an individual consumer or to try to become a small-scale content-provider that Apple wouldn't completely change the relationship later on with no warning to the little guys.

    The Tesco analogy would make be vaguely comparable if it were possible to pay a non-refundable 400 pounds for a dedicated parking space at your local Tesco and then once your money was paid over Tesco decided to go Nestle products only.

  11. @embryonic

    Actually everybody knew, it's in the T&C's that everybody needs to read as they sign up.

    Every T&C is liable to change on short notice, this isn't a symptom of the iPad.
    Another thing that has been overlooked in these new terms is the publishers don't get your personal information, everything is opt in, but strangely nobody is praising apple for that bit. But i do know the publishers will complain more about the 30% cut in order to get some leverage from Apple by telling the media how unfair it is and get them to lower the percentage maybe in exchange for your personal info from the subscriptions ( which apple controls)

    Dont get lost too much in my analogy, the point is, I cant put my wares in telco for nothing, at present I can in the apple app store until June when the rules will be inforced.

    Reading your rebuttal of my analogy, it seems you missed my point anyway. I was focusing on the relationship between the 3rd parties and apple. Not the customer and apple.

  12. To be honest I think that the better analogy would be that Apple makes a DVD player and every DVD that you buy has to give 30% of the cover cost to Apple. Also you can't sell it your DVDs cheaper in HMV than in the Apple store – bang go the discount sales…

    Apple make money off free apps because they draw business to the store where people then go on to buy paid apps, for which Apple, rightly, get their share. Also the rich ecosystem encourages people to buy Apple hardware, and then buy *more* Apple hardware from the halo effect.

    Expecting money from content that goes nowhere near your bandwidth is more than a bit cheeky methinks.

    To steal a metaphor from Cory Doctorow, it's like Ikea expecting royalties every time you read a book illuminated by one of their lamps.

  13. I use Android and linux.
    I have to use Windows for school but the moment i have to use apple i will boycot computers as they make mustake after mistake !!!

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