Russian draft bill would force third-party app stores, cap commissions at 20%
A Russian legislator introduced a draft bill on Tuesday that would cap Apple's app commissions at 20% and could force the company to allow third-party app stores on its devices.
Credit: Russian State Duma
The draft legislation, submitted on Tuesday by Russian State Duma member Fedor Tumosov, would impact mobile app marketplaces like the Google Play Store and Apple's App Store. The latter platform has been accused of anticompetitive behavior by Russia's anti-monopoly authorities.
If adopted, the legislation would cap a company's cut of app sales and in-app purchases to 20%, Reuters reported. It would "oblige" device makers to allow the installation of third-party app stores on mobile devices, Tumosov wrote on social media.
Additionally, the bill would require companies that charge fees on app sales to pay a third of those commissions to a special internet technology training fund every quarter.
Apple currently charges a 15% to 30% commission on sales of digital products in its app store, in-line with other companies like Google. That cut has received criticism from both developers and antitrust regulators, one of whom likened the fee to "highway robbery."
"In recent weeks, the conflict between developers and owners of the so-called "marketplaces", that is, application stores, has only grown. Apple's conflict with Epic Games, Facebook's attempt to inform users about Apple's imputed tax - all of this led me to believe that the problem could be resolved through legislation," he said.
Tumosov also waved away concerns that the move would compel Apple to leave the Russian market, claiming that the "trend is worldwide, and Russia should not lag behind."
Some authorities in Russia are voicing their opposition to the bill, saying that it may create a "dangerous precedent" if the state imposes such regulations, according to Russia-based business publication Kommersant.
The legislation comes in the midst of global antitrust scrutiny of Apple and other tech giants. The CEOs of major tech companies, including Apple, testified in July before a U.S. House Judiciary Committee as part of a broader probe examining the power of U.S. technology companies.
Apple is also in the middle of an ongoing legal feud with Epic Games over the implementation of a payment system that bypassed Apple's App Store commissions.
Credit: Russian State Duma
The draft legislation, submitted on Tuesday by Russian State Duma member Fedor Tumosov, would impact mobile app marketplaces like the Google Play Store and Apple's App Store. The latter platform has been accused of anticompetitive behavior by Russia's anti-monopoly authorities.
If adopted, the legislation would cap a company's cut of app sales and in-app purchases to 20%, Reuters reported. It would "oblige" device makers to allow the installation of third-party app stores on mobile devices, Tumosov wrote on social media.
Additionally, the bill would require companies that charge fees on app sales to pay a third of those commissions to a special internet technology training fund every quarter.
Apple currently charges a 15% to 30% commission on sales of digital products in its app store, in-line with other companies like Google. That cut has received criticism from both developers and antitrust regulators, one of whom likened the fee to "highway robbery."
"In recent weeks, the conflict between developers and owners of the so-called "marketplaces", that is, application stores, has only grown. Apple's conflict with Epic Games, Facebook's attempt to inform users about Apple's imputed tax - all of this led me to believe that the problem could be resolved through legislation," he said.
Tumosov also waved away concerns that the move would compel Apple to leave the Russian market, claiming that the "trend is worldwide, and Russia should not lag behind."
Some authorities in Russia are voicing their opposition to the bill, saying that it may create a "dangerous precedent" if the state imposes such regulations, according to Russia-based business publication Kommersant.
The legislation comes in the midst of global antitrust scrutiny of Apple and other tech giants. The CEOs of major tech companies, including Apple, testified in July before a U.S. House Judiciary Committee as part of a broader probe examining the power of U.S. technology companies.
Apple is also in the middle of an ongoing legal feud with Epic Games over the implementation of a payment system that bypassed Apple's App Store commissions.
Comments
“I estimate that he has accumulated $200 billion of ill-gotten gains from these types of operations over his 17 years in power”
https://www.townandcountrymag.com/society/money-and-power/a14480615/vladimir-putin-net-worth/
Compare to the meager net worth he claims:
https://qz.com/1594989/vladimir-putins-financial-disclosure-claims-little-wealth/
“He takes what he wants,” American political scientist Karen Dawisha told the International Consortium of Investigative Journalists. “When you are the president of Russia you don’t need a written contract. You are the law.”
Russia’s per capita income was just under $25,000 in 2017, the most recent data available, according to the World Bank.
Crazy how the world is turning out to be. The government says "don't do that" and it goes, even when it's none of their business.
Literally, everything Apple does is high-profit.
Won’t ever happen. The only thing I can see Apple doing is opening the OS (with a clear warning to users) and allowing the side loading of apps directly from developers. Those apps would still need to be signed via their developer accounts, but any sales transactions would be the responsibility of the developer.
The signing process is key, as it would disallow 3rd party app stores from distributing apps that weren’t their own.
So?
Why are people demonizing profit in 2020? Should Apple be in a deficit every year to make a few broke people happy?
Either way we know Apple spends billions a year on the App Store. It isn't free money.
Apple won't cave on adding third party app stores for Russia. They'll stop selling in Russia and there will be plenty of enterprising Russians who will purchase elsewhere and import them themselves. Apple won't lose a nickel and Russia consumers will end up paying more to the middle men. And Apple won't pay taxes to Russia for the phones it didn't sell there.
If there is only a rate cap, then Apple will simple start charging fees for all the developer tools and services to Russian developers. And they'll be quite substantial if they are set based on the quality and value of the tools. Before ProjectBuilder and InterfaceBuilder came along (the precursors to XCode), CodeWarrior was over $1000. And CodeWarrior was no where near as full featured as XCode.
Let’s hope that also these big companies are taxed on the places they make their profits (and at a rate bigger of what I pay for my work, just saying) and that BEPS is also banned or at least limited.
That might work.
In my experience though, about 9 in 10 apps are discovered from reading reviews, blogs, and even just looking online for software and reading discussions about the pros and cons of a group of apps to help me decide which is likely my best option. Only then do I head to the app store to get the app. I pretty much never found an app through the app store.
While a meta store would change the way costs are managed between Apple and the dev, I'm not sure it adds much benefit to the end user - Apple would still be managing it just as they manage the current App store - the experience would be the same, but the user now needs to go to two different stores to download the app, so not really sure that helps. Having said that, when I go to a dev's website, read over their app, and decide to purchase it - I click a link on their web page that takes me to the App store (I don't think anyone ever things which App store am I at) so in that case the experience would be identical - and in that case the App store is not much more than a checkout / till / register).
I think that just as Apple are moving to using notorisation 100% on MacOS (people can still chose to run an app that is not notorised, but that will be changing over the coming year) notorosation of iOS Apps is all the security users actually need - it would mean that an app downloaded from somewhere else other than the App store could be installed and run if it was notorised by Apple. If it is not notorised, it will not run.
This offers all the protection users really need, and the flexibility that some software devs want.
Devs that wish to keep using the App store as is though could also do that.
I think that if Apple offered this option, most if not all of these court cases would pretty much evaporate.
Apple would charge a fee for this notorisation though (other than needing a dev account, I think it is free? See https://developer.apple.com/documentation/xcode/notarizing_macos_software_before_distribution)
The only thing that I really see as a potential problem for any of this is the update process. Right now it is pretty smooth. Have apps from all over the place makes managing updates more complex. Would end users be happy with that? Just food for thought.