Is Apple the Zacchaeus of our times?

Apple’s updated App Store policy only tightens its grip over the marketplace it runs

Zacchaeus is an anti-hero in one of the short portions in the Holy Bible. He is depicted as an evil tax collector based in the ancient town of Jericho. People disliked him as he grew wealthy from collecting large amount of taxes from them. 

Apple, in recent times, has begun to gain a poor reputation, similar to Zacchaeus, for its notorious App Store “tax system”. The infamous 30% cut it takes from apps when users make in-app purchase has been a thorn in the flesh for app developers.

At the 2018 developer conference, CEO Tim Cook told audience that the company had over 20 million registered third-party developers building apps for smartphone maker. He further claimed that developers earned more $100 billion through the App Store. That translates to roughly $14 billion as commission in Apple’s coffers, just $4 billion short of the company’s iPad sales that same year.  

Mobile applications that sell value-added services for a fee to their patrons on iPhones are mandated by the Silicon Valley company to enable transactions via its own payment system. And in that process, Apple takes a cut in the range of 15-30%. Developers earning less than a million dollar in sales annually pay 15% commission. 

Apple claims the commission it takes from these transactions helps it build tools for developers, control fraud on the platform and provide security for users. In 2020 alone, the company says, it prevented about three million cards from being used to purchase goods and services.

In a way it does make sense for Apple to charge a commission for adding several apps on its marketplace, similar to how supermarkets charge brands for stocking their products on their shelves. But the challenge here is the precise value that Apple should charge. Several developers note that the iPhone maker charges an exorbitant price for the little value it provides them.

Epic Games, the maker of  Fornite, took Apple to court. In September 2021, U.S. district Judge Yvonne Gonzalez Rogers largely ruled in Apple’s favour after a weeks-long trial. But Rogers expressed concern that developers were being prevented from communicating with iPhone users about alternative prices.