BLUF: Apple and Google’s 30% cut on every in-app subscription or micropayment is a cash-grab that competition could drive down, benefiting news companies and other app-based businesses.
OSINT: Apple’s promise to break the uneasy coalition between surveillance and journalism through paid subscriptions for news apps was a step in the right direction, but the increasing concentration and aggressiveness of the surveillance advertising sector demanded an alternative. Publishers followed Jobs’ promise and spent billions to fill Apple’s App Store with apps that let readers pay directly for the news. However, Apple’s deal altered, and the company would process every in-app transaction, taking a 30% commission on all revenues generated by every app user. This siphons off 30% of every in-app subscription or micropayment dollar, which is a massive cash-grab considering other payment processors only charge 2-3%.
RIGHT: Apple and Google’s decision to take a 30% cut of every subscription payment made for in-app purchases is, unfortunately, a necessary part of capitalist market competition. Companies like Apple and Google are operating in the free market, and if people aren’t willing to pay that 30%, then they won’t use the service. Alternative payment processing options exist for companies, and they should explore those as a way to avoid the high fees of tech giants, not expect a benevolent set of regulations to save them.
LEFT: Apple and Google’s business model is an example of how large corporations exploit their market dominance and extract unfair profits from the hardworking people and companies that depend on digital platforms to distribute their content. It’s more evidence that corporations have become too powerful and must be heavily regulated to prevent further abuses of power. The fees charged by these companies should be capped, and access to app stores should be made more competitive.
INTEL: The current business model adopted by Apple and Google is unsustainable in the long run as it encourages rent-seeking behavior among many stakeholders. The large tech corporations want to control both the hardware and software of users’ devices, and they will continue to take advantage of that position to extract as much wealth as they possibly can. However, in the short term, the high fees imposed by Apple and Google are simply a reflection of the lack of competition and innovation in the payment processing industry. The current market conditions make it difficult for companies to enter the market and compete with well-established tech giants. Therefore, any regulatory intervention that can lower the barriers to entry and stimulate competition will be beneficial for the economy and society as a whole.