7 Reasons Every iPhone User Should Be Worried About the App Store’s 30% Tax

In the last few months, many prominent app developers voiced their disapproval of the App Store policies Apple imposes on all apps. Why should that concern you if you own an iPhone? Here are 7 reasons.

HIGHER PRICES. Apple’s 30% commission makes all apps and digital goods more expensive for you. It goes on top of the price you pay to developers for any services and games you buy on your phone. You pay more for every app, even though Apple already charged you a few hundred dollars more for your iPhone than it cost to make. In short, you keep paying even after you have paid.

CENSORSHIP. Some content in apps like Telegram is unavailable to you because Apple censors what is allowed on the App Store, which it fully controls to enforce the 30% tax. Apple even restricts us – app developers – from telling our users that certain content was hidden for iPhone users specifically at their request. Apple should realize how ridiculous their attempt to globally censor content looks: imagine a web browser deciding which websites you are allowed to view.

LACK OF PRIVACY. In order to install an app from the App Store, you must first create an Apple account and log in using it. After that, every single app you download and every push notification you receive is tied to your account, making you an easier target to track. Since the main reason you have to use an Apple account to download an iPhone app is Apple’s desire to enforce their 30% commission, the cost of their greed also includes your private data.

DELAYS IN APP UPDATES. You get new versions of your apps several days or weeks after they are actually ready, because Apple’s review team is notoriously inefficient and often delays approval for no apparent reason. You would think Apple could use the billions of dollars it receives from third-party apps to hire additional moderators. Somehow they are unable to do even that, and us – big apps like Telegram – typically have to wait several days or even weeks to publish updates.

FEWER APPS. Apple’s 30% commission on apps goes on top of all the other expenses developers must pay for: government taxes such as VAT (~20%), wages, research, servers, marketing. Many apps would have been net profitable in a world without Apple’s 30% commission, but being forced to surrender 30% of their revenue to Apple makes them unsustainable. As a result, many of them go bankrupt and lots of great apps you could have enjoyed just don’t exist.

MORE ADS IN APPS. Because Apple makes selling premium services and accepting donations one-third less meaningful for developers, many of them are forced to show ads in their apps in order for their companies to survive. Apple’s policies skew the entire industry towards selling user data instead of letting them adopt more privacy-friendly business models like selling additional services to their users.

WORSE APPS. Billions of dollars are taken from developers who could have otherwise spent those funds on improving the quality of the apps you use every day. Instead, this money rests idly in Apple’s offshore bank accounts and does nothing for the world, while app developers struggle to find resources for the research and development the world needs.

The situation is so bad that one would expect Apple’s 30% cut to be unsustainable. Yet it’s been around for more than 10 years and is still there. In my Telegraph post below, I'm explaining how Apple has been able to trick consumers and regulators into inaction for so long.

I can understand why the US gov threatens to ban TikTok unless its US assets are sold to US investors. After all, China bans pretty much every non-Chinese social media app on its territory. Why should the rest of the world, including the US, let a Chinese app have a free ride in their markets? If you want to access the markets of other countries, you should also open your market to them – that would be fair.

However, the US move against TikTok is setting a dangerous precedent that may eventually kill the internet as a truly global network (or what is left of it). Before the US-TikTok saga, only autocratic countries like Iran, China or Russia were known for bullying tech companies into selling parts of their businesses to investors with close ties to their governments. It’s not surprising, for example, that Uber had to sell both their Russian and Chinese branches to local players.

I am proud that, unlike Uber, we at Telegram have always declined offers to sell our operations in specific countries. A few years ago we received letters from two funds with ties to countries that later attempted to block Telegram. Both letters expressed the same idea: “Telegram is going to get blocked in our country soon, so your only option is to sell us the local part of your business”. My response to those offers has been along the lines of my 2011 middle finger photo: we are not in the business of betraying our users. We are not selling Telegram – neither in part, nor in full. This will always be our position.

The problem with the US-TikTok case is that it legitimises an extortion tactic previously employed only by authoritarian regimes. For decades, the US has been perceived as the defender of free trade and free speech. But now that China has started to replace them as the main beneficiary of global trade, the US (or at least the Trump administration) seems to have become less enthusiastic about those values. This is regrettable, because billions of people on this planet still like the idea of an open and interconnected world.

Last week, Turkey introduced a bunch of laws limiting social media companies. A few years ago, the US would have had the moral right to criticise such efforts, citing freedom of speech and free trade as ideological foundations for their concerns. Today it’s less clear whether the US still has that right. Authoritarian leaders all over the world are already using the TikTok case as justification in their attempts to carve out a piece of the global internet for themselves. Soon, every big country is likely to use “national security” as a pretext to fracture international tech companies. And ironically, it’s the US companies like Facebook or Google that are likely to lose the most from the fallout.