Alphabet’s agreement to pay $700 million to consumers and states and open the Google Play Store to competition will leave intact the store’s service fees, or commissions, that the company charges mobile app developers.
Malathi Nayak for Bloomberg News:
The settlement announced in a court filing and lauded by elected attorneys general who helped negotiate it will make it easier for developers to offer apps to consumers outside Google Play and use their own payment systems. But there’s a catch: the developers will still have to pay Google a service fee of as much as 26%.
Sharp differences of opinion emerged Tuesday as to how much the accord will reshape Google Play’s business model and benefit consumers. While some state officials heralded the deal as an end to Google’s abuse of its market power, an executive at Epic Games Inc. — the maker of Fortnite that has waged a three-year court battle with Google and Apple Inc. over their separate app stores — said the settlement will provide “no true relief for consumers or developers.”
Google and Apple have for years faced complaints that their digital stores, the dominant marketplaces in the $200 billion-a-year mobile app industry, collect exorbitant commissions from developers who typically have few other options — resulting in higher costs for consumers. Those grievances have spurred app makers and regulators to rein in the two smartphone giants so that rival payment and distribution platforms have more space to compete.
MacDailyNews Take: It’s Apple’s App Store (and Google’s derivative app store). Of course they both have a right to charge commissions.
Apple’s App Store isn’t a charity and it’s not free to operate. – MacDailyNews, November 14, 2022
How much did it cost developers to have their apps burned onto CDs, boxed, shipped, displayed on store shelves prior to Apple remaking the world for the better for umpteenth time? Apple incurs costs to store, review, organize, surface, and distribute apps to over one billion users. — MacDailyNews, June 10, 2022
That said, as we wrote last year:
Those who want safety, security, and privacy will stick to Apple’s App Store, but a single point of control is always a danger, especially when it comes to capricious censorship (see: pre-Musk Twitter, Apple’s App Store in China, etc.).
iPhone and iPad users must, like Mac users, have the ability to install third-party apps; even if they never do, for it will keep Apple honest. The ability to ban an app loses all power when it’s simply available in another App Store.
These moves, including removing the mandate to use WebKit, Apple’s Safari browsing engine, in third-party browsers, will greatly reduce, if not eliminate, the threat of anti-trust actions against Apple for the foreseeable future.
Also, expect Gatekeeper to come to iOS and iPadOS from macOS.
Yes, Apple’s App Store revenue will take a hit, but there are new products for new markets on deck (AR/VR headsets, AR glasses, Apple Car, etc.) that will more than make up for any loss of App Store exclusivity.
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