Apple's policy of lowering commissions in the EU should also benefit Chinese developers

On January 25 this year, Apple officially announced that it would make changes to iOS, Safari and the App Store in the EU in compliance with the provisions of the EU's Digital Markets Act (DMA). Starting from March this year, users and developers in 27 countries in the European Union will begin to enjoy the benefits of the new regulations through the iOS 17.4 Beta version. Specifically: The App Store will lower the commission rate for digital goods and services within the EU (commonly known as the "Apple tax"), with the standard rate significantly reduced from 30% to 17%; the above figures do not include payment processing fees and core technology usage fee. Apple will open its third-party app store to EU users, install apps through websites outside the Apple ecosystem ("app sideloading"), and allow users to set third-party browsers as their default browser. Third-party payment processing systems other than Apple Pay have also been liberalized. If developers are willing to continue using Apple Pay, they will need to bear an additional 3% handling fee, which is optional. It is no exaggeration to say that Apple’s concessions in the EU are epoch-making. Previously, there have been many antitrust lawsuits against Apple in the United States, Japan and other countries. The initiators of the lawsuits include famous application developers such as Epic Games. Their demands are similar: to reduce the "Apple tax" ratio and open third-party application stores. Unfortunately, to date, the vast majority of lawsuits have not produced any substantive results. The main basis for Apple's self-defense is the "Walled Garden" theory: unlike open source systems like Android, Apple has absolute control over its software ecosystem, thus ensuring user safety and helping to reduce low-quality applications. Shut out. Of course, Apple has also made some limited concessions, such as launching a small and medium-sized developer program starting in 2020. Developers with an annual income (excluding commissions) of less than US$1 million can enjoy a lower commission rate; in Japan, readers Type of APP allows external links to jump. However, the impact of the above concessions is very limited and not enough to satisfy the majority of developers. This time, Apple’s concessions in the EU are completely different from before: for the first time, Apple users can use the third-party app market openly, and application developers can also conduct sales and promotions openly outside the Apple software ecosystem. . For the EU and the world, this is a landmark piece of digital economy antitrust legislation. From now on, Apple will only take a 17% commission on App Store revenue within the EU, and only a 10% commission on small and medium-sized developers - such a large reduction is obviously to better integrate with the third-party application market. compete. However, as the saying goes, "The wool comes from the sheep." The biggest beneficiaries of the reduction in commission rates are ordinary users. Moreover, the subsequent effects of Apple’s “tear down the wall” within the EU have far-reaching reference significance for regulators in other countries and regions. Because in the past many years, an important argument for Apple's refusal to "tear down the wall" is that "a closed ecosystem is more conducive to user privacy and data security." Now, the launch of the iOS 17.4 Beta version in the European Union provides an excellent opportunity for practice: if it turns out that Apple’s changes to the regulations have not had a significant adverse impact on user security, it will prove that Apple’s previous self-defense was exaggerated. suspicion. It is conceivable that Apple will face increasing regulatory pressure in other major markets around the world, and it is not even ruled out that it will actively make concessions.

Unfortunately, the concessions made by Apple in the EU are invalid for Chinese users. As Apple's second largest source of revenue in the world (after the United States), Chinese users and developers have never enjoyed any "preferential treatment" provided by Apple. By analyzing the data, we can see that whether in horizontal comparison with other countries and regions or with the domestic Android application market, Apple China’s application revenue commission rate appears to be too high:

1. Apple China’s App Store has always adopted The "global common commission rate" is 30% for standard and 15% for small and medium developers. There are no preferential treatment for individual categories, and there is no option to use third-party payment to reduce rates (please note that binding WeChat Pay and Alipay accounts through Apple Pay does not constitute "third-party payment").
2. Apple China strictly prohibits all third-party app stores and cannot sideload applications in any way; although third-party browsers are allowed, they cannot be set as the default browser. For example, TapTap, a well-known domestic game community, is struggling on the iOS side because it has been deemed by Apple to have "app market" attributes.
3. Domestic Android mobile phone manufacturers generally do not take a commission from the revenue of non-game applications, but take 30-50% from games in the form of joint transportation. However, in recent years, official servers of game manufacturers have replaced Android channel servers and become the mainstream. Regarding installation packages downloaded from the official website or purchase channels, Android phone manufacturers have increasingly weaker control and have gradually adopted a laissez-faire attitude.

   

   Apple China developer treatment improvement measures

Current situation:

1. Chinese developers only enjoy a 15% commission rate discount for small and medium-sized developers.
2. No discount for developers with annual income of more than 1 million US dollars.
3. All "application sideloading" is prohibited, resulting in high developer channel costs.
4. Internal testing by game manufacturers is difficult, and application developers have limited pricing and promotions.
5. The Apple tax controversy has attracted widespread attention.

Question:

1. Are the high commission rates justified?
2. Is it appropriate to apply a “one size fits all” market policy?

Solution:

1. Follow the "EU model"

• fully open the third-party application market and third-party payment channels.
• Apple will take the initiative to reduce commissions and support small and medium-sized developers.

2. Reduce the commission rate in China

• All-round or for specific types of applications.
• Lower in stages or in one step.
• Even if it cannot reach EU levels, moving closer to this goal will benefit developers.

Safeguard measures:

• Anti-fraud, anti-black property, protection of user privacy and other needs must be met.
• Chinese authorities evaluate the EU experience and find a balance point.

Looking forward to:

• Improving developer treatment and promoting user freedom.
• It is expected that Chinese regulatory authorities will pay close attention to the EU experience and look for risk response measures.
• It is completely feasible to balance user freedom, reduce developer burden and protect security.
• Looking forward to the change coming soon.

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