Russian draft bill would force third-party app stores, cap commissions at 20%

Posted:
in General Discussion edited September 2020
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
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.
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Comments

  • Reply 1 of 33
    mcdavemcdave Posts: 1,919member
    The Russians are really taking this ‘he who control by options, controls the outcome’ to heart aren’t they?
    watto_cobra
  • Reply 2 of 33
    Guess someone is waiting for a big bribe from big tech. 
    magman1979ronnjahbladerazorpitwatto_cobra
  • Reply 3 of 33
    cpsrocpsro Posts: 3,019member
    Particularly on the 3rd party app store, screw the mass murder.
    watto_cobra
  • Reply 4 of 33
    Apple could cap to a 20% commission, but add other fees. Apple’s costs don’t drop just because political meddlers tell them to drop.
    edited September 2020 Beatsjahbladerazorpitapplguycat52cornchipwatto_cobra
  • Reply 5 of 33
    Let me know when their dictator for life agrees to limit his pilfering of their resources to just 30%. Putin is considered to be the richest unlisted billionaire on the planet.

    “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.
    edited September 2020 qwerty52BeatsjahbladeDogpersoncornchipgilly33watto_cobra
  • Reply 6 of 33
    BeatsBeats Posts: 3,073member
    What a shi**y government. I bet they know nothing about tech and since it doesn't affect them they don't care.

    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.
  • Reply 7 of 33
    Apple could cap to a 20% commission, but add other fees. Apple’s costs don’t drop just because political meddlers tell them to drop them.
    LOL!  I don't think Apple is just squeezing by on the current 30%.  Seems every quarter, Apple is making record BILLIONS in profits on their services.

    Literally, everything Apple does is high-profit.
    mariowincomuthuk_vanalingam
  • Reply 8 of 33
    rob53rob53 Posts: 3,008member
    Surprised nobody has said anything about the forcing of third-party app stores forced onto Apple devices. Apple will fight this one and we as users should fight it also, especially in areas like Russia and China.
    Beatsjahblademark fearingrazorpitDogpersonwatto_cobra
  • Reply 9 of 33
    mjtomlinmjtomlin Posts: 2,572member
    rob53 said:
    Surprised nobody has said anything about the forcing of third-party app stores forced onto Apple devices. Apple will fight this one and we as users should fight it also, especially in areas like Russia and China.

    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.
    edited September 2020 cornchipwatto_cobra
  • Reply 10 of 33
    BeatsBeats Posts: 3,073member
    ITGUYINSD said:
    Apple could cap to a 20% commission, but add other fees. Apple’s costs don’t drop just because political meddlers tell them to drop them.
    LOL!  I don't think Apple is just squeezing by on the current 30%.  Seems every quarter, Apple is making record BILLIONS in profits on their services.

    Literally, everything Apple does is high-profit.

    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.
    jahbladerazorpitDogpersoncat52JanNLbeowulfschmidtcornchipgilly33michelb76
  • Reply 11 of 33
    Let me know when their dictator for life agrees to limit his pilfering of their resources to just 30%. Putin is considered to be the richest unlisted billionaire on the planet.

    “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.
    If Russians were really not OK with him they’d overthrow their government.
  • Reply 12 of 33
    ITGUYINSD said:
    Apple could cap to a 20% commission, but add other fees. Apple’s costs don’t drop just because political meddlers tell them to drop them.
    LOL!  I don't think Apple is just squeezing by on the current 30%.  Seems every quarter, Apple is making record BILLIONS in profits on their services.

    Literally, everything Apple does is high-profit.
    And you want Apple to only do moderately profitable things instead of high profit things? Tim Cook's legal responsibility is to provide the best profit he can to Apple's investors, like all those retirement accounts that have AAPL shares in them. Are you wanting him to take money from investors and not give them the best return he can? Do you know he's legally required to give them the best return he can? They would every right to sue, and they'd win, if he guided the company to abandon high profit lines of business for things he knew to be lower profit.

    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.
    razorpitaderutterwatto_cobra
  • Reply 13 of 33
    There is an easy way to get rid of this by getting rid of Rusky market!
    cornchipwatto_cobra
  • Reply 14 of 33
    The writing is on the wall: tech mega caps should relinquish some power and profits.

    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.
  • Reply 15 of 33
    I repeat what I wrote elsewhere some time ago: what If... Apple would allow any third party App Store - however put clear requirements on them in terms of app reviews for clearance, update availability, TestFlight availability, server uptime and speed, and providing at some extra cost infrastructure such as payment through Apple, etc. you know, all that Apple is requiring for their own App Store. Then Apple may create a “meta store” similar to what they did with the TV app for the various steaming sources - so it would be one front end for the consumer. 

    I mean, apart from the proposed bill and it being Russian, wouldn’t that be an idea that might actually be beneficial to the consumers?
  • Reply 16 of 33
    sflocalsflocal Posts: 5,988member
    ITGUYINSD said:
    Apple could cap to a 20% commission, but add other fees. Apple’s costs don’t drop just because political meddlers tell them to drop them.
    LOL!  I don't think Apple is just squeezing by on the current 30%.  Seems every quarter, Apple is making record BILLIONS in profits on their services.

    Literally, everything Apple does is high-profit.
    So what? 

    You think no one should profit from a widget everyone wants?

    You're more than welcome to come up with your own successful widget, and make no profit from it if you want.  Go right ahead... I'm sure Tim Cook is just waiting to see how your business model works!

    ignoramus. 
    Dogpersoncat52beowulfschmidtwatto_cobra
  • Reply 17 of 33
    Let me know when their dictator for life agrees to limit his pilfering of their resources to just 30%. Putin is considered to be the richest unlisted billionaire on the planet.

    “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.
    If Russians were really not OK with him they’d overthrow their government.
    Yeah, just like the citizens of Belarus.
    cornchipmichelb76watto_cobra
  • Reply 18 of 33
    n2macs said:
    Let me know when their dictator for life agrees to limit his pilfering of their resources to just 30%. Putin is considered to be the richest unlisted billionaire on the planet.

    “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.
    If Russians were really not OK with him they’d overthrow their government.
    Yeah, just like the citizens of Belarus.
    Remember the “Arab Spring”?
    razorpitwatto_cobra
  • Reply 19 of 33
    I repeat what I wrote elsewhere some time ago: what If... Apple would allow any third party App Store - however put clear requirements on them in terms of app reviews for clearance, update availability, TestFlight availability, server uptime and speed, and providing at some extra cost infrastructure such as payment through Apple, etc. you know, all that Apple is requiring for their own App Store. Then Apple may create a “meta store” similar to what they did with the TV app for the various steaming sources - so it would be one front end for the consumer. 

    I mean, apart from the proposed bill and it being Russian, wouldn’t that be an idea that might actually be beneficial to the consumers?

    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.
    cropr
  • Reply 20 of 33
    kbeekbee Posts: 24member
    beeble42 said:
    ITGUYINSD said:
    Apple could cap to a 20% commission, but add other fees. Apple’s costs don’t drop just because political meddlers tell them to drop them.
    LOL!  I don't think Apple is just squeezing by on the current 30%.  Seems every quarter, Apple is making record BILLIONS in profits on their services.

    Literally, everything Apple does is high-profit.
    And you want Apple to only do moderately profitable things instead of high profit things? Tim Cook's legal responsibility is to provide the best profit he can to Apple's investors, like all those retirement accounts that have AAPL shares in them. Are you wanting him to take money from investors and not give them the best return he can? Do you know he's legally required to give them the best return he can? They would every right to sue, and they'd win, if he guided the company to abandon high profit lines of business for things he knew to be lower profit.

    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.
    For sure. First Apple stops selling in Russia. China is next, South Korea - why not stop selling at all? Maybe EU will introduce some regulations - ok, stop selling in the EU. Oh and if the congress takes action in the US - stop selling in the US 🤪
    muthuk_vanalingam
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