Expedia chairman attacks Apple's 'disgusting' 30% commission fee
Barry Diller, the chairman of IAC and Expedia, spoke against Apple's App Store fee on Friday, accusing the iPhone maker of overcharging companies with its 30% App Store fee.
Barry Diller (via IAC)
An interview with Diller, chairman of the two companies, featured remarks attacking Apple and its policies on Friday. According to the chairman, companies that exist in the App Store are "overcharged in a disgusting manner."
"The idea that they actually justify it by saying We spend all this money protecting our little App Store. I mean, it's criminal," said Diller speaking to CNBC. "Well, it will be criminal."
Diller complained about Apple's "quasi-monopoly," and compared Apple's 30% fee to a credit card company, which would take a fee of around 2% on transactions. "It's irrational, 30%. I mean, it makes no sense," he insisted.
"Match, little Match.com, pays $500 million a year to Apple top go through their store," Diller continued. "Does that seem rational to you?"
The chairman refers to the dating site that span out from IAC in 2020. Match Group testified against Apple at a Senate hearing in April, accusing it of anticompetitive conduct in being a supposed gatekeeper of the App Store.
Expedia reportedly takes between 15% and 25% of a consumer's hotel reservation transaction for itself.
Further into the interview, Diller proposed that Apple be regulated to preserve competition, but not necessarily to be broken up."Regulation, proper regulation, makes sense" to him, insisting "when you have size and power, you've got to have regulation."
The interview took place ahead of the testimony of Apple CEO Tim Cook, who faced questioning about the App Store and Apple as a company in its lawsuit against Epic Games.
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Barry Diller (via IAC)
An interview with Diller, chairman of the two companies, featured remarks attacking Apple and its policies on Friday. According to the chairman, companies that exist in the App Store are "overcharged in a disgusting manner."
"The idea that they actually justify it by saying We spend all this money protecting our little App Store. I mean, it's criminal," said Diller speaking to CNBC. "Well, it will be criminal."
Diller complained about Apple's "quasi-monopoly," and compared Apple's 30% fee to a credit card company, which would take a fee of around 2% on transactions. "It's irrational, 30%. I mean, it makes no sense," he insisted.
"Match, little Match.com, pays $500 million a year to Apple top go through their store," Diller continued. "Does that seem rational to you?"
The chairman refers to the dating site that span out from IAC in 2020. Match Group testified against Apple at a Senate hearing in April, accusing it of anticompetitive conduct in being a supposed gatekeeper of the App Store.
Expedia reportedly takes between 15% and 25% of a consumer's hotel reservation transaction for itself.
Further into the interview, Diller proposed that Apple be regulated to preserve competition, but not necessarily to be broken up."Regulation, proper regulation, makes sense" to him, insisting "when you have size and power, you've got to have regulation."
The interview took place ahead of the testimony of Apple CEO Tim Cook, who faced questioning about the App Store and Apple as a company in its lawsuit against Epic Games.
Stay on top of all Apple news right from your HomePod. Say, "Hey, Siri, play AppleInsider," and you'll get latest AppleInsider Podcast. Or ask your HomePod mini for "AppleInsider Daily" instead and you'll hear a fast update direct from our news team. And, if you're interested in Apple-centric home automation, say "Hey, Siri, play HomeKit Insider," and you'll be listening to our newest specialized podcast in moments.
Comments
Barry Diller also owns Expedia.com
"HOW DOES EXPEDIA MAKE MONEY?
Expedia makes its money in a few different ways. The largest of those ways is through hotel bookings, which the company is mainly known for allowing users to do. A whopping 70% of Expedia’s revenue is generated from hoteliers (people who own or manage hotels). The way that Expedia get’s here in the first place is through a simple supply and demand strategy. Expedia buys up a large number of rooms at a discounted cost and then advertises the bookings through their website as the cheapest you’ll find in the market.
An example would be Expedia pushing for a 7-night all-inclusive trip to a remote island in the Caribbean. Expedia reaches out to a hotel on the island and buys up a block of, say, 100 rooms at a discounted price (because everything is cheaper in bulk). Expedia than buys a large number of plane tickets going to that island, usually at little to no discount. Then Expedia offers the deal to 2 people at a price like $1,700, which is most likely going to be at least marginally cheaper than it would through other sites. People get a good deal and Expedia is able to fill more plane seats and hotel rooms. And Expedia has only paid a part of what they charge the people for the service, meaning they profit from every transaction.
Another way that Expedia makes money is through commission fees. Because Expedia always offers the lowest price (or at least a lower price than the hotel will offer), people will be far more willing to actually take a trip in the first place. So hoteliers are far more inclined to sell rooms to Expedia because some money is better than no money. The commission fees are usually between 20% and 25%.
An example of the way that this works is that if a hotel sells a room (in this example we will use just one room, but in reality, it would be far more) to Expedia for $100 and Expedia gets the room booked, then Expedia will collect that $100 and pay the hotel $75 (if the fee is 25%). They will say that that $25 goes towards customer service, marketing, and various other business functions.
HIDDEN FEES?
Expedia makes a little on the side through fees. These fees aren’t hidden, but they’re also not in your face. They can get away with this because they don’t charge users a fee to actually book the hotel, or whatever it is that they are booking, in the first place. These fees include:
HOW DOES EXPEDIA GET ITS DATA?
Does Expedia have full-time employees whose sole responsibility is to troll the internet to find hotels that they can buy rooms from, and then contact those hotels and reach an agreement for those rooms? Definitely not. Expedia has a third party sourcing organization that does all that for them. This method is called “Merchant Inventory.” They have local contractors, essentially the ‘boots on the ground’ people that are collecting data about hotels in different areas as well.
I'm thinking that this guy needs to have his business model exposed...
Ten years later, and Match.com users still have the option of using Apple's app for subscriptions. One would think that some dating site users actively avoid subscribing through Match.com's website, hence Apple's well deserved commission fees.
How brave of him to ride the coattails of those who actually had the guts to take a stand.
Why isn’t he calling Expedia’s 20%-25% commission “disgusting”?
Someone should suggest to the government to investigate Dillers’ business’ “disgusting” commission structures.
IMO, most actors popping up in connexion with this case are actually redundant. That is, I personally wouldn’t even notice their absence were they to be removed from the App Store. I do admit I’m the odd one out, though, because I don’t game (on mobile) and mostly use stock apps, with some web shortcuts when needed, - almost as one did with the original iPhone back in the day. I prefer to do my stuff on the Mac, and I’m not big on third-parties there, either. If there’s a website for something, I’ll stick to it.
This guys should've kept quiet, because now that I'm reading about Expedia's business model and how they make their money, I'm not gonna use them.
Using his logic, one can criticize Match.com for “overcharging” their customers.
Barry is just another sour grapes CEO who is unable to develop a strong platform that produces high profits
Goodbye Expedia and all its sister and dependent companies, Tribago, etc
Did you guys know that the airlines are trying to avoid those parasites with better prices. Check it out
What would happen if the hotels on Expedia put messages on their pages that said call us directly and save 30%.