'I'm glad Elon is in the fight': Tech CEOs battling Apple's 30% App Store fee get unexpected ammo from Musk
- Elon Musk has fueled a prolonged fight between Apple and app developers over App Store fees.
- Epic Games' CEO Tim Sweeney and Spotify boss Daniel Ek supported Musk's criticism of Apple.
Elon Musk has barreled into a long-running dispute between Apple and some of its biggest developers.
Twitter's new owner declared war on Monday on one of the most powerful companies in tech, alleging that it committed three offenses: halting ad spend on Twitter; apparently threatening to "withhold Twitter from the App Store"; and for charging a 30% fee on content sales made through the App Store.
The latter has delighted developers and tech CEOs who rely on the App Store for its huge reach. Apple controls app distribution for the iPhone and iPad, and takes up to a 30% cut of some digital purchases made via iOS apps above a certain size — think in-game buys. It mostly mandates that developers use its native in-app payment system, often meaning a significant revenue haircut, although it has slightly softened that requirement for certain apps like Netflix and Spotify.
—Elon Musk (@elonmusk) November 28, 2022
While many developers are resentful of the fees, few are willing to speak up and jeopardize access to a huge user base.
For the exceptions, Musk is a welcome ally.
Tim Sweeney, CEO of "Fortnite" maker Epic Games, on Monday appeared to back Musk, saying in a tweet that the iPhone maker was "a menace to freedom worldwide."
—Possibly Tim Sweeney (@TimSweeneyEpic) November 28, 2022
Epic Games launched its own payment mechanism to avoid Apple's fees, was booted from the App Store, and sued Apple on antitrust grounds in 2020. A judge in the case issued a ruling in 2021. Apple called the ruling a "resounding victory" but still appealed part of the verdict. Epic also appealed.
"They maintain an illegal monopoly on app distribution, they use it to control American discourse, and they're endangering protesters in China by storing sensitive customer data in a state-owned data center," Sweeney continued, linking to a Daily Mail article.
In a separate tweet, Sweeney noted that Apple had blocked "Fortnite" from the App Store.
"Would they nuke Twitter? Spotify? Facebook? Netflix? At what point does the whole rotten structure collapse?" he said.
Epic didn't immediately respond to Insider's request for comment.
Daniel Ek, CEO of Spotify, also quietly supported Musk. The Swedish entrepreneur retweeted Musk's tweets criticizing Apple but made no further comment.
Spotify filed a complaint to Europe's antitrust regulators in 2019 over Apple's levy, but the EU has yet to issue a final decision. The streaming app remains available through the App Store.
One entrepreneur predicted shortly after Musk's takeover of Twitter that Musk would come into conflict with Apple.
"I look forward to when @elonmusk realizes Apple's egregious 30% App Store tax is going to try and take $2.40 of every $8 Twitter Blue subscription and joins in the fight to open the App Stores," Christian Owens tweeted on November 3.
Owens is the CEO and founder of the billing startup Paddle. In October 2021, Paddle became one of the first companies to target Apple's native in-app payments (IAP) system — and its fee — with a new offering called Paddle IAP. The payment mechanism is still being tested with developers, and its rollout depends on the outcome of Apple's ongoing regulatory and legal fights.
"I wasn't necessarily surprised, given the only way to pay for Twitter Blue is in-app purchase on iOS," Owens told Insider. "It points to how egregious the 30% fee is. I'm glad Elon is in the fight. The best thing that can happen is that it brings broad awareness to consumers."
Musk may not prove a reliable ally.
For example, Apple charges some developers 15% rather than the full 30% in their first year. And should Apple and Twitter resolve its current dispute, Musk may back off. He has already deleted one belligerent tweet showing a highway sign and two options: "Pay 30%" or "go to war," with a car careening down the "go to war" path.
"This is one of those scenarios where I think, love him or hate him — and he is a divisive character — he tends to have a knack to get things done, whether it's increasing public discourse about something or making something happen," said Owens, pointing to Musk's commercial space firm SpaceX breaking through defense monopolies.
"It's about bridging the right balance," he added. "Apple has created a great ecosystem in terms of the iPhone, but now abuses its position as leader of that ecosystem now it's so big. We're just looking for a sustainable way forward."
Insider has approached Apple for comment.
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