Elon wants to go to war with Apple. History suggests it's probably not going to make a difference.
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Elon Musk sent Twitter staff a memo on Thursday confirming job cuts would be announced on Friday.Carina Johansen/Getty Images
Elon Musk isn't the first — or necessarily most powerful — executive to take on Apple's App Store fees.
Industry insiders, from developers to CEOs, have long criticized the 30% fee dubbed the "app store tax."
Court cases, regulators, corporations and many others have failed to bring about major change.
Elon Musk publicly launched a tirade against Apple this week, denouncing the iPhone maker's "secret" fee of 30% for all in-app transactions on its iOS platform.
While Musk is new to this particular battle, he's part of a war that's been waged in the tech industry for years: Over the years, everyone from independent app developers to CEOs have embraced Apple's "monopolistic" hold over its app store criticized and demanded use of the in-house payment processing service.
Still, Musk is arguably the mainstream public figure to challenge Apple, and his very public stance on the subject sheds light on what has been a relatively niche topic for app-dependent companies. For Musk, who has announced his intention to turn Twitter into an "everything app" that connects social media to shopping and other forms of online payments, that 30% cut could weigh heavily on business.
"It's very special to have someone who's also the richest man in the world, who has the same problems as a small app developer - who might have one or two employees -" said Rick VanMeter, executive director of the industry Group Coalition for App Fairness, a frequent critic of the so-called "Apple Tax".
At the same time, Musk's wealth and influence may not be enough to turn the tide and persuade Apple to back down. Over the years, Apple has fought off lawsuits, regulators from around the world, and its peers in the tech industry — none of whom have had much success in getting Apple to change its approach to in-app payments
But history may not be on the new Twitter owner's side. A high-profile lawsuit, global regulators, and big corporations have all tried to change Apple's app payments systems with little success.
Epic Games challenged Apple even more directly
The most prominent challenge to Apple's fees came in 2020, when Epic Games sued after its mega-popular game Fortnite was pulled from the App Store for offering users discounts when using non-Apple payment methods to purchase digital goods used.
A decision in the lawsuit came in late 2021, when a judge ruled largely in Apple's favor, except for an admission that the iPhone maker must allow developers to link non-Apple payment methods. Both parties are currently appealing the decision, leaving the ultimate outcome and impact of the litigation uncertain.
However, Epic's challenge was successful in furthering the greater cause of pressuring Apple to change the way it operates. Shortly after the lawsuit was filed, a group of companies including Spotify, Match Group, the parent company of Tinder, Tile and Blockchain.com, formed the Coalition for App Fairness with the self-proclaimed mission of campaigning for a more balanced dynamic between apps and their marketplaces to use .
The coalition introduced 10 principles that all app marketplaces should follow, including a call to eliminate "unfair, unreasonable or discriminatory fees or revenue sharing" and a more fundamental plea for developers to communicate more directly with their users.
Apple has largely resisted regulation
Apple CEO Tim Cook.REUTERS/Eric Gaillard
VanMeter of the Coalition for App Fairness said the renewed attention to the 30% transaction fee in the App Store highlights the problem and the need for legal solutions.
Regulators in the United States, Australia, Japan, South Korea, Russia and other countries with significant iPhone users have also targeted Apple's App Store payment structures. The European Union, Japan, South Korea and the Netherlands are just a few of the jurisdictions that have successfully passed legislation targeting the "Apple Tax", with others such as the UK expected to follow soon.
The US hasn't joined yet, though -- though a bill called the Open App Markets Act has been sitting in the Senate since it was introduced in February.
"Unless the United States acts, it really risks falling behind these other jurisdictions that are moving forward to address the competition issues in the app market," VanMeter said. "The United States has a real opportunity here to lead this discussion."
Even where Apple faces new laws that limit some of its power, however, the tech giant hasn't always shown full compliance. Dutch and South Korean regulators have clashed with Apple, which has so far made few if any changes to its operations in those countries.
All of this means that Musk and his supporters are joining a battle that has been raging in public and private for some time, and it's not clear if he'll succeed in persuading Apple to reconsider. But Evercore ISI analyst Mark Mahaney also says the weight of its influence changes things at least somewhat.
"I don't know it's any different," Mahaney said. "I don't know if he'll find a quick fix for this any time soon, but his voice will play a role."
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