Apple and Google face growing revolt over app-store ‘tax’

Apple and Google face growing revolt over app-store ‘tax’


Grumbling about app-store economics isn’t new. But the number of complaints, combined with new ways of reaching users, regulatory scrutiny and competitive pressure are threatening to undermine what have become digital gold mines for Apple and Google.

A backlash against the app stores of Apple and Google is gaining steam, with a growing number of companies saying the tech companies are collecting too high a tax for connecting consumers to developers’ wares.

Netflix and video-game makers Epic Games and Bellevue-based Valve are among companies that have recently tried to bypass the app stores or complained about the cost of the tolls Apple and Google charge.

Grumbling about app-store economics isn’t new. But the number of complaints, combined with new ways of reaching users, regulatory scrutiny and competitive pressure are threatening to undermine what have become digital gold mines for Apple and Google.

“It feels like something bubbling up here,” said Ben Schachter, an analyst at Macquarie. “The dollars are just getting so big. They just don’t want to be paying Apple and Google billions.”

Apple and Google launched their app stores in 2008, and they soon grew into powerful marketplaces that matched the creations of millions of independent developers with billions of smartphone users. In exchange, the companies take up to 30 percent of the money consumers pay developers.

For most of the decade, the companies won praise for helping to build an app economy that will grow to $157 billion in 2022, from $82 billion last year, according to App Annie projections. But more recently, smartphones and apps have become so important for reaching customers that these app stores have been criticized for taking too big a share of the spoils. Rather than supporting innovation, Apple and Google are being talked about as tax collectors inhibiting the flow of dollars between creators and consumers.

“They’re very aggressive about making sure companies aren’t trying to work around their billing,” said Alex Austin, co-founder of mobile company Branch. “They have whole teams reviewing these flows to ensure they get their tax.”

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