With a looming existential crisis (formerly known as Election Day) on our collective horizon, the fate of self-determination in mobile application ecosystems may seem trivial. But the desire for democracy takes many forms — not just in government but also in business and technology.
If you’re a developer on the two major mobile application stores — Apple’s App Store and Google’s Play Store — there is no democracy whatsoever. As a developer for Apple, you aren’t even allowed to mention to your customers that they can buy directly from you, outside of the App Store. You can’t even say “visit our website for current pricing” with a link.
Both companies take an approach to running their app stores that would make any authoritarian leader proud.
And, oh boy, the taxes. It’s one thing for both Apple and Google to charge a 30% cut on apps, but to take a 30% cut imposed on everything you sell, including subscriptions and any ongoing revenue, is preposterous.
A mounting revolution
The rumblings of revolution began four years ago with Spotify, the popular streaming service that runs on iOS, Android, Mac, and Windows. Specifically, the company protested that Apple was imposing oppressive restrictions that made it very difficult for Spotify to do business.
While Apple does not require apps like Spotify to use its billing service — which takes a 30% cut on every transaction — you aren’t allowed to advertise that customers can buy subscriptions outside of the app itself. This billing requirement is what got Epic in hot water at Apple and Google. And it is sowing the seeds for potential antitrust investigation against these Silicon Valley giants.
Google recently dropped the hammer on its developers, by clarifying that all participants on its Play Store must use its billing system for all purchases and In-App-Purchases (IAPs).
Over the years, other companies, such as Amazon, Spotify, and Netflix, have found a way around this rule. Their apps display content bought or subscribed to externally — like the Amazon Music and Amazon Video apps, which are “benefits” of already being an Amazon Prime member. Most of the content consumed is under the auspices of being part of Prime.
Indeed, in the iOS version, you can buy content on the Amazon website, but not from the app itself. Google has now stated that its developers, Amazon included, are subject to the same rules on the Play Store and have a year to comply and fix their apps.
Amazon was the first to end-run this, with the Kindle application, when Apple first put these business rules in place in 2011; it merely removed the Kindle Store functionality and added language about logging in with your Amazon account to download subscribed content to conform with Apple’s policies. The app became a pure content receiver.
As with Amazon Video and Amazon Music, you can’t buy any books with the Kindle app. But, once you log in, it syncs everything you’ve purchased or subscribed to on the web site or a regular Kindle device.
(In case you were wondering, sales of physical goods through the Amazon app for iOS don’t fall under Apple’s In-App Purchase (IAP) Review Guidelines. Groupon, eBay, and other companies that sell physical goods with iOS apps don’t fall under this either.)
If companies like Amazon can create an extensive program like Prime to shoehorn everything under a subscription benefit category, and if people know to come to you directly, then not offering subscription renewals via the app is not a big deal.
But, for a company like Spotify, which has an entire business model based on subscription music streaming, that’s a big problem.
The war of services
Why are Apple and Google getting all aggressive about this now?
It has to do with the fact that now iPhones, iPads, and Android phones have effectively hit total market saturation. The only thing left to make money from is the attach rate for supplementary products such as services. In other words, stuff you offer after the initial product sale that has “stickiness.”
Apple and Google are like car manufacturers that also own the highways those cars travel on. They own the rest stops, which have third-party gas stations, convenience stores, and fast-food restaurants — all of which pay rent and transaction fees as a cost of doing business. They make the rules by which those third parties could do business. That’s fine.
Specific rules are necessary to optimize the end-user experience at the rest stop. The problem is that Apple and Google have now decided they want to be inside the gas station, convenience store, and fast food businesses themselves.
Any of those existing rest stop tenants — who are now finding themselves in competition with Apple — not only have to agree to high transaction fees for each sale, but they aren’t allowed to tell you verbally or via signage that you can buy gift cards at Wal-Mart when you get off the exit to pay for goods the next time you come back.
It should go without saying that legislative authorities in different countries need to closely examine if Apple and Google are truly respecting those markets’ commerce laws.
Breaking off from the Apple and Google crown
At what point do these independent businesses feel that maybe they should pack up shop and put up a shingle elsewhere?
Like the American Revolution or the recent UK “Brexit” from the EU, breaking off from the Apple and Google crown still has many unknowns. With the App Store and the Play Store, you certainly will have your “loyalists.” These are big companies that know, despite how insane King Tim Cook and Emperor Sundar Pichai are, breaking off from the crown is not in their best interest.
Many developers and end-users may see the benefits of using other platforms and third-party best-of-breed services instead.
As Apple and Google continue to flex their muscle to quash the colonists, we need to examine whether it is worth the price of admission into the iOS and Android ecosystems. Potentially, there could be friendlier places to do business.
While no third-party options exist on iOS — as sideloading isn’t possible without a jailbreak — the potential for disruption by antitrust efforts against Apple in the future may pave the way for independent app stores.
On Android, it is possible to sideload, and innovation may not be as blocked. Amazon has certainly done this already, with its AppStore for Android. And Huawei has also done this with its App Gallery, which was built out of necessity due to China’s contentious relationship with the US Commerce Department.
In order for developers and end-users to truly determine their own fate, what’s needed is a new third-party, truly independent app store that is not tied to Apple, Google, or an existing player.
I don’t know if Spotify, Amazon, Epic, and Netflix will break off from the crown and decide to put up their permanent shingle someplace else. They might all eventually back down. Then again, they might not.
The time is certainly right for a change, now that both Apple and Google have put their foot down and are increasingly positioning their services to compete with their own software developers that have similar apps on their platform app stores. Effectively, an “App Switzerland,” or a neutral third party, if you will, is needed. I envision it as a consortium of developers and vendors that have banded together to create a single app store for Android (and potentially, for iOS). It isn’t subject to a single vendor’s rules and doesn’t require tribute in the form of in-app purchases or sales transactions.
Four years ago, when I first explored the subject of independent app stores, it might have seemed far-fetched, Many things have changed since 2016. The mobile platform vendors themselves have increasingly squeezed out their competition, by pushing their apps and services over those of the developers who helped them become successful platforms in the first place.
Is it time to throw the iOS and Android tea into the San Francisco Bay and declare independence from King Tim and Emperor Sundar? Talk Back and Let Me Know.