Apple’s FTC-prompted fee revision should benefit makers, users of apps

The Yomiuri Shimbun

12:44 JST, September 7, 2021

Will this be a step toward making mutual progress with the understanding of its business partners? U.S. tech giant Apple Inc. needs to listen sincerely to its business partners and make further efforts to resolve problems.

Apple announced that it would review the rules by which companies that provide smartphone apps for the iPhone pay commissions to the tech giant.

The change in the rules is to apply to what Apple calls “reader” apps, such as those used to enjoy e-books, videos and music.

Currently, app users are required to use Apple’s payment system when they purchase paid content. The app providers then pay the tech giant commissions of up to 30%.

Apple has come under fire for charging app companies such hefty commissions, also referred to as an “Apple tax.”

Taking such criticism into account, starting in 2022, Apple will allow app providers to lead users in the reader apps to a different payment system on an external website, enabling app companies to collect fees without paying commissions to Apple.

Apple makes huge profits from iPhone sales and other businesses. It is only natural that the company should aim to offer fair deals that app providers can be satisfied with.

The review of the rules this time was prompted by an investigation by the Japan Fair Trade Commission. Since the iPhone accounts for nearly 50% of the Japanese smartphone market, Apple apparently took the commission’s indication of the problem seriously. Apple has said that the measures to reform the commissions will be implemented worldwide.

In January this year, Apple reduced the commissions for small app companies from 30% to 15%. The tech giant needs to further examine whether there is room for expanding the application of the review of the rules, and room for further reducing the commissions.

The move this time will give consumers more options. It can be expected that reducing the burden of the commissions on app companies will lead to a reduction in app fees. App companies need to deliver the benefits of the review of the rules to consumers as they increase convenience.

As for why the revision of the rules applies only to certain apps, such as those for e-books and music, the FTC explained that it demanded that Apple take action in light of the fact that high copyright fees are a burden on such app companies and the high commissions make it difficult to make profits.

Meanwhile, apps for smartphone games and others that are a major source of revenue for Apple are excluded from the revised rules.

The FTC should continue to check whether there are problems besides those with the reader apps. At the same time, it is also important to keep close contact with authorities in other countries that are stepping up monitoring of the tech giants.

— The original Japanese article appeared in The Yomiuri Shimbun on Sept. 7, 2021.