Ahead of Apple CEO Tim Cook’s testimony before U.S. lawmakers on Wednesday at an antitrust hearing, senior vice president of worldwide marketing Phil Schiller has defended App Store policies, in an interview with Reuters.
Schiller explained that the App Store was initially viewed at Apple as an experiment in offering “compellingly low commission” to attract developers. Small developers would otherwise face struggling to sell software into physical stores at the time.
“One of the things we came up with is, we’re going to treat all apps in the App Store the same – one set of rules for everybody, no special deals, no special terms, no special code, everything applies to all developers the same. That was not the case in PC software. Nobody thought like that. It was a complete flip around of how the whole system was going to work,” Schiller said.
He asserted that the review process and App Store rules were necessary since apps are purchased by customers through Apple’s own billing system. According to Schiller, when launching the App Store, Apple executives believed users would feel more confident purchasing apps if they felt their payment was secure and via a trustworthy vendor. “We think our customers’ privacy is protected that way. Imagine if you had to enter credit cards and payments to every app you’ve ever used,” he said.
Apple has been known to make exceptions to its own App Store rules, such as in 2018 with Microsoft, to allow users to log into Minecraft accounts that were purchased externally.
“As we were talking to some of the biggest game developers, for example, Minecraft, they said, ‘I totally get why you want the user to be able to pay for it on device. But we have a lot of users coming who bought their subscription or their account somewhere else – on an Xbox, on a PC, on the web. And it’s a big barrier to getting onto your store,'” Schiller said. “So we created this exception to our own rule.”
Apple’s 30 percent commission on sales via the App Store has been criticized by developers. Airbnb and ClassPass have, for example, recently claimed that Apple’s demand to take a cut of all online sales through their apps was wrong. Schiller argued that Apple’s commission helps to fund an extensive system for developers and that thousands of Apple engineers maintain secure servers to deliver apps and develop the tools to create and test them.
Apple has come under fire for its App Store rules and rate of commission, and there is increasing concern that Apple and Google have now established a “duopoly” on mobile app stores. Apple’s App Store policies and commission on in-app purchases have now become part of the ongoing inquiry by U.S. antitrust regulators, and a similar investigation has begun in the EU.