Hey.com exec says Apple is acting like ‘gangsters,’ rejecting App Store updates and demanding cut of sales

[AdrianMstr]

EDIT:

 

This story kind of blew up.

 

https://www.macrumors.com/2020/06/16/apple-threatens-to-remove-hey-from-app-store/

https://www.forbes.com/sites/robpegoraro/2020/06/17/apple-to-basecamps-hey-expect-to-pay-us-if-you-want-to-sell-privacy/

 

But apple isn't moving:

https://techcrunch.com/2020/06/18/interview-apples-schiller-says-position-on-hey-app-is-unchanged-and-no-rules-changes-are-imminent/

https://www.theverge.com/2020/6/18/21296180/apple-hey-email-app-basecamp-rejection-response-controversy-antitrust-regulation

 

ORIGINAL Story:

 

https://www.theverge.com/2020/6/16/21293419/hey-apple-rejection-ios-app-store-dhh-gangsters-antitrust

 

Quote

 

Apple is threatening to remove Hey.com from the App Store if the ambitious new email service doesn’t begin offering an in-app subscription and sharing a cut of its revenue, according to an executive at Basecamp, which makes Hey.

 

David Heinemeier Hansson, the CTO of Basecamp, said that Apple is acting like “gangsters,” rejecting a bug fix update and asking the company in a phone call to commit to adding an in-app subscription to prevent it from being removed. “I was taken aback by how brazen that threat was,” Heinemeier Hansson told The Verge. “I thought you were supposed to wrap the threats in euphemisms or something. But it was pretty clear.”

 

 

https://www.businessinsider.com/apple-developer-rage-30-percent-app-store-tax-2020-6

 

Quote

On Tuesday, a buzzy new subscription email service called Hey said Apple was trying to strong-arm it into integrating in-app purchases so it could get this commission, as first reported by Protocol.

 

I think this is also why the Floatplane app for iOS hasn't been updated in a long time (Luke might have mentioned it at some point)

 

Quote from the verge article, relevant to Floatplane:

 

Quote

While Apple told The Verge that apps must offer an in-app subscription option, the company does make exceptions for a variety of apps. Those exceptions include music, video, and magazine apps, among a few others, but email apps are not one of the approved exceptions. Despite this, some subscription email apps, such as Newton, are available in the App Store and don’t offer their service via in-app purchase.

 

Relevant twitter thread from Ben Thompson as well: https://twitter.com/benthompson/status/1273079296618201093

[Dujith]

Besides this coming from the verge  Isnt this standard practice for Apple to require all subscriptions and purchases to go through them?

Anyone wanting to release an IOS app knows this? So i dont get the rage. 

(This being beside the point if their practice is good, just about the present rules)

[Curious Pineapple]

*Insert somerambling on how someone else does this too so it's fair and Apple is the golden boy*

[HarryNyquist]

1 hour ago, Dujith said:

Besides this coming from the verge  Isnt this standard practice for Apple to require all subscriptions and purchases to go through them?

Anyone wanting to release an IOS app knows this? So i dont get the rage. 

(This being beside the point if their practice is good, just about the present rules)

Yes it is in the rules.

 

Unless you're Spotify. Or Netflix. Or Amazon. Or Microsoft. Or other companies that are really big and they've made exceptions for/gotten sued for noncompetitiveness by.

 

They either need to allow it overall or not allow it overall.

[Lord Vile]

2 hours ago, AdrianMstr said:

https://www.theverge.com/2020/6/16/21293419/hey-apple-rejection-ios-app-store-dhh-gangsters-antitrust

 

I think this is also why the floatplane app for iOS hasn't been updated in a long time (Luke might have mentioned it at some point)

 

Quote from the article, relevant to Floatplane:

 

 

Relevant twitter thread from Ben Thompson as well: https://twitter.com/benthompson/status/1273079296618201093

It's their platform they set the rules 

[Arika]

2 hours ago, Dujith said:

Anyone wanting to release an IOS app knows this? So i dont get the rage. 

Because it means Apple gets a cut of literally every single purchase. Regardless of if people know about it, doesn't make it any less scummy.

 

using the same logic, people shouldn't rage about any of the following because everyone already knows about it

• Facebook privacy
• intel security vulnerabilites
• Windows 10 updates
• Microsoft Telemetry
• Loot Boxes in games
• Anything Trump says on Twitter
• Epic Games Store exclusivity
• LMG click bait titles and shitty thumbnails
• Anything China does

[duncannah]

I didn't know people still paid for e-mail

[Dujith]

1 minute ago, Arika S said:

Because it means Apple gets a cut of literally every single purchase. Regardless of if people know about it, doesn't make it any less scummy.

100% agree with that. But again, he assumed he would get the same treatment as the big boys. 

At another techsite (tweakers) i saw someone posted the rules for app makers and how they are allowed to basically change all that stuff at their whim.

 

Again, i do not like their practices. But as an app maker you should know the rules where you want to sell. And this is in their rules.

Including the crappy stuff where they get to dictate who they treat how. I hope the lawsuits will change that but for now they are just screwed.

[AdrianMstr]

This also applies to Floatplane.

 

The reason why floatplane on iOS hasn't been updated for months is because Apple wants them to add a in-app purchase for the subscription in the App,

 

This wasn't enforced until now

 

[wanderingfool2]

3 hours ago, Dujith said:

Anyone wanting to release an IOS app knows this? So i dont get the rage. 

 

41 minutes ago, Lord Vile said:

It's their platform they set the rules

They do set the rules, but that doesn't mean they are allowed to set the rules.  There are antitrust law in place for a reason, as Apple has a large market share that they know companies have to release apps on.  This means Apple can't just step in and change the rules in their benefit (at one time, Apple tried even forcing Apps to have in-store purchases at the same rate as the alternative payment method...despite taking 30% of the cut).

 

Similar thing with idea when Apple and the book publishers essentially did price fixing on e-books...they got sued.

 

42 minutes ago, Dujith said:

But as an app maker you should know the rules where you want to sell

Depending on when they originally issued their app as well, the requirements on needing in-store app purchases through Apple may not have exists.  If the App existed before, I can understand how they wouldn't want to comply with the new rules that were imposed after the fact (and after they got an userbase).

 

Actually, if they did originally create the App before that happened, I wouldn't be surprised if eventually lawsuits fly for an antitrust case.

 

[Lord Vile]

39 minutes ago, wanderingfool2 said:

 

They do set the rules, but that doesn't mean they are allowed to set the rules.  There are antitrust law in place for a reason, as Apple has a large market share that they know companies have to release apps on.  This means Apple can't just step in and change the rules in their benefit (at one time, Apple tried even forcing Apps to have in-store purchases at the same rate as the alternative payment method...despite taking 30% of the cut).

 

 

 

They don't have to, they WANT to because they'll make money.

[Zodiark1593]

If Apple would allow a reasonably accessible capability to side load apps, then there wouldn’t be grounds for an antitrust suit to get off the ground. 

[Vanderburg]

I'm always amazed by how many of us are lawyers...

[Taf the Ghost]

Easy trick is to put a single purchase option for 1 cent with something that mocks Apple.

[AlTech]

They could just follow the LinkedIn model and make subscriptions on IOS more expensive than subscriptions on the web.

 

Then the customer can choose where they want to subscribe. 

[S w a t s o n]

Is anyone surprised, Apple has always acted like this.

1 minute ago, AluminiumTech said:

They could just follow the LinkedIn model and make subscriptions on IOS more expensive than subscriptions on the web.

 

Then the customer can choose where they want to subscribe. 

They should break down the price difference in the app as well so people are aware of why it costs more.

[Commodus]

1 hour ago, Zodiark1593 said:

If Apple would allow a reasonably accessible capability to side load apps, then there wouldn’t be grounds for an antitrust suit to get off the ground. 

iOS would also have Android-level malware issues.  I know iOS security isn't flawless, but the brunt of Android malware comes from apps obtained beyond Google Play.  It'd be better to argue for fairer subscription options within the current model.

[lvh1]

4 hours ago, S w a t s o n said:

Is anyone surprised, Apple has always acted like this.

They should break down the price difference in the app as well so people are aware of why it costs more.

That's the thing, the "guidelines" from the app store don't allow that. If you state in any way that purchasing the subscription on your website is cheaper your update will get rejected. Take a look at the site that spotify put up summarizing the stuff they've had to deal with https://timetoplayfair.com/facts

[DrMacintosh]

The key point that I feel people are glancing over is that Hey.com is a subscription based service. it is quite clear in the Apple ToS that any apps that have a subscription model must have an option to pay for said subscription though Apple. 

 

If Hey.com does not do this, they forfeit their privilege of having their app on the App store. 

 

Apple is 100% in the right here. 

[Jet_ski]

I don't think developers have a leg to stand on here. Apple will make their case that they are distributors/retailers of software and not a market or exchange. And so their 30% fees are in line with similar businesses. Here are two ways to look at it:

1. Retailers generally have a 50% markup and manufacturers can’t legally demand more of the revenue that their products generate. If Apple is a software distributor a 30% margin isn't unreasonable given the benefits of their platform.
2. E-commerce platforms charge similar commissions for every transaction that occurs on their platform, subscription or not. For example
   1. Poshmark charges 20%.
   2. Etsy charges a small listing fee, 5% transaction fee, 3% payment processing fee, and an additional 15% advertising fee which might not be optional based on how much you sell. That's 8-24% fee in total.
   3. I hear Twitch takes a 50% cut from streamers.

[mr moose]

8 hours ago, Dujith said:

100% agree with that. But again, he assumed he would get the same treatment as the big boys. 

 

It's actually a law that they get treated the same,  there is no assumption to make. 

 

https://lawpath.com.au/blog/what-is-anti-competitive-behaviour

 

Specifically misuse of market power.

 

Apple definitely has a market power with control of the app store.

 

 

[Tech_Dreamer]

Sounds like another rant of someone who didn't read Terms & Conditions.

[wanderingfool2]

6 hours ago, Vanderburg said:

I'm always amazed by how many of us are lawyers...

Sometimes it is helpful to know what can and cannot be done and what is in the grey area.  You don't need to a lawyer to know what may be drifting into legal issues (and sometimes it is good to get slightly educated on such to know when you need to talk with lawyers).

 

1 hour ago, DrMacintosh said:

If Hey.com does not do this, they forfeit their privilege of having their app on the App store. 

 

Apple is 100% in the right here. 

It depends, what about the case when developers created and submitted an App prior to Apple changing their TOS. An example being if Apple decides to change that 30% to 50% and ban all other payments (it would get them in trouble with anti-trust).  Apple has an indisputable large market share, with no alternative options. 

 

Anti-trust cases could potentially be brought up against Apple (which I think is why the larger companies don't have to comply, and Apple originally changed their TOS after it faced massive backlash)

[rockking1379]

10 hours ago, AdrianMstr said:

This also applies to Floatplane.

 

The reason why floatplane on iOS hasn't been updated for months is because Apple wants them to add a in-app purchase for the subscription in the App,

 

This wasn't enforced until now

 

They could add it. And then all of us just never pay for it in app

[Lord Vile]

1 hour ago, wanderingfool2 said:

Sometimes it is helpful to know what can and cannot be done and what is in the grey area.  You don't need to a lawyer to know what may be drifting into legal issues (and sometimes it is good to get slightly educated on such to know when you need to talk with lawyers).

 

It depends, what about the case when developers created and submitted an App prior to Apple changing their TOS. An example being if Apple decides to change that 30% to 50% and ban all other payments (it would get them in trouble with anti-trust).  Apple has an indisputable large market share, with no alternative options. 

 

Anti-trust cases could potentially be brought up against Apple (which I think is why the larger companies don't have to comply, and Apple originally changed their TOS after it faced massive backlash)

I think the larger companies don’t have to because they can just pull the app and Apple now doesn’t have say Netflix on their platform which would be a big hit, rather than anti-trust issues.