Fixing the App Store, part 2

In a blog post from 2020, I suggested four changes to fix the App Store for developers: 1) allow sideloading; 2) don’t require in-app purchase; 3) keep curating the App Store; and 4) lower the cut to 15%. I described each of these in more detail in that post, so I won’t repeat the reasoning here.

With this week’s App Store changes for the EU’s Digital Markets Act, let’s revisit how Apple is doing with those four points:

  • Allow sideloading? Not really. Instead, there is a new type of marketplace app that can install other apps. There are hurdles to jump through to become a marketplace app. For, I was imagining that I could have a marketplace app just for our suite of iOS apps, thus bypassing app review going forward, but this doesn’t seem like it is going to work in practice. Furthermore, there is a new Core Technology Fee that would still apply.
  • Don’t require in-app purchase? Sort of. If you opt-in to the new rules, you can use your own payment system, or link to external payments on the web. The problem is Apple still wants 10% (for small developers), so there is little to no savings, and it creates new bookkeeping problems. The only way to avoid the fee is to have an app on a third-party marketplace. Even then, you’re still subjected to the Core Technology Fee.
  • Keep curating the App Store? Yes. Isn’t very relevant here, though, and Apple is no closer to adopting my vision for how to run the App Store.
  • Lower the cut to 15%? Yes. It can be as low as 13% now. But again, there’s the Core Technology Fee to offset any savings if you have more than a million installs.

This is all pretty disappointing. I have been bitter about the App Store for years, but yesterday I tried to keep an open mind. I was initially excited about the potential for marketplaces. I blogged that it seemed like a good-faith effort to comply with the DMA. Apple had put a bunch of work into this, in documentation and new APIs. The more I understood it, though, the less compelling it became. In some cases it will be worse than what we had before.

My opinion from way back in 2011 hasn’t changed. The problem is Apple’s total control over app distribution, and so the only permanent fix for the App Store is removing that control with true sideloading:

Apple, want to charge 30%? Go for it. Want to make the submission rules more strict? Fine. Want to adjust how you run the App Store to reflect what’s happening in the market? No problem. Just give developers an out. We are going to be back here year after year with the latest controversy until exclusive app distribution is fixed.

I wrote that thirteen years ago and it has proven correct every single year since. The DMA attempted to address this, but Apple’s response comes up short. Instead of fixing the root problem, Apple has added an even more complex set of bandaids to preserve their control over the store.

(As an aside, see that quote from Steve Jobs about free apps in my blog post? The Core Technology Fee is a major departure from Steve’s framing. Apple now wants to charge free apps for the first time based on installs alone.)

So, is Apple actually in compliance with the DMA? Rick VanMeter, from the Coalition for App Fairness, says no. There’s also a thorough post by Damien Geradin on The Platform Law Blog that reaches the same conclusion:

As to whether the reduced commissions comply with FRAND. The answer is an unequivocal no. These commissions are not fair and reasonable for the reasons described in the preceding paragraph. But they are also discriminatory. The reason is that app developers whose apps sell digital goods and services and those whose apps don’t, effectively use the same app store services, but are treated differently.

I don’t know where we go from here. It always feels like two steps forward, then back. The EU must stand firm. I’m tired of ending up in the same place, over and over.

Manton Reece @manton