Study defends Apple's App Store commission rates

An independent study on how the Apple App Store compares to other digital markets concludes that its fees are typical and that its enforcement is necessary to maintain consumer confidence.

While the EU has launched an antitrust investigation, developers have complained, and Microsoft has criticized, Apple continues to respond little, other than acknowledging that there are complaints about the App Stores that Apple operates.

On Wednesday, an independent study was released that directly compares Apple’s App Store to around 40 comparable digital stores. It was conducted by Analysis Group and its three authors include two vice-presidents of the research firm, Jonathan Borck and Markus von Wartburg, as well as director Juliette Caminade. The same three wrote the June 2020 study on the economic impact of the App Store.

The study, “Apple’s App Store and Other Digital Markets”, does not contain a rebuttal to the critics, but sticks specifically to “a comparison of commission rates.” It’s also not an Apple post or an Apple response. The study’s authors note that the work was supported by Apple, but say the findings are only theirs.

However, the numbers and comparisons from the 5,000-word study, along with detailed appendices, support Apple’s claim that its practices are industry-compliant. “Our study shows that Apple’s App Store commission rate is similar in magnitude to the commission rates charged by many other app stores and digital content marketplaces,” he says.

“Commission rates charged by digital marketplaces most similar to the App Store, such as other app stores and digital video game marketplaces, are typically around 30%,” he continues. “Markets that distribute digital content such as videos, podcasts, e-books, and audiobooks typically charge commission rates of 30% or more. Commission rates charged by e-commerce marketplaces vary by industry. , but sometimes exceed 30%. ”

“Many vendors are currently (or previously sold) their products in physical stores and markets,” he says. “We are finding that sellers typically earn a significantly lower share of total distribution revenue through physical stores and marketplaces than through digital marketplaces such as the Apple App Store.”

“When video games are sold in physical stores, developers and publishers collectively collect up to about 45% of the retail price,” the study reports. “In contrast, in most digital video game markets, including the Apple App Store, developers and publishers receive 70% of sales, of which 30% go to digital market commissions.”

Apple App Store home screen seen on an iPad

In more specific breakdowns, the study lists how a 30% commission rate is not exclusive to Apple, and is standard for the Google Play Store, Amazon Appstore, and the Samsung Galaxy Store. There are exceptions to this, like how Amazon has a 20% rate for video streaming app subscriptions.

The study also notes how Google Play and Apple both reduce their fees to 15% for subscription services after 12 months. And the Microsoft Store includes a 15% level, but universally charges 30% on games, apps for Windows 8 devices, and “all sales in business and education stores.”

While the study goes into further details about the different commission rates charged by several different app stores or similar online marketplaces, it also looks at how those stores are run.

“The purpose of this study is to compare the commission rates of the Apple App Store with those of other application stores and digital markets,” said the study. It is also used to “assess the App Store commission and associated rules in the context of the business model used by both digital marketplaces and platforms in general”.

These findings from the study conclude that for a market to be successful there must be “common rules and enforcement strategies” that promote “trust and integrity”. He says Apple “uses a strict verification process to review apps, making sure they’re safe, reliable and delivering value to customers.”

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