Apple’s compliance plan for recent App Store regulation has been met with rage from some corners of the Internet

With a group of loud developers, the corporate tech press, and State regulators champing at the bit for more regulation, it’s going to be really interesting to see how this all plays out.

Dutch regulators recently ruled that Apple must allow developers of dating apps to use third-party payment processors (yes, it’s oddly specific to dating apps) for purchases made in the App Store, and we’ve been waiting to see exactly how Apple would comply with this ruling.. Friday we got our answer: Apple will charge a 27% commission on in-app purchases in dating apps instead of its usual 30% commission. According to Apple: “This is a reduced rate that excludes value related to payment processing and related activities.” This was immediately met with resentment from some developers. Steve Troughton-Smith on Twitter responded thusly:

Absolutely vile. This says everything about Tim Cook’s Apple and what it thinks of developers. I hope the company gets exactly what it deserves. Everybody on their executive team should be ashamed, and some of them should not be here when it’s all over. We all see you. We’ve been told that if Apple ever asked its employees to betray their principles, they’d leave. In a similar vein, everybody, top to bottom, involved in planning, editing, implementation of everything in this document should leave Apple. You betrayed us.

Extremely strong words to say the least, but I’m not sure what developers like Troughton-Smith thought was going to happen. If Apple were to charge no commission or a substantially smaller commission on in-app purchases made via third-party payment processors it would serve as a massive incentive for developers to adopt third-party payment processors. Duh. Apple’s App Store business model relies on the revenue it receives from purchases within the App Store, so it makes no sense for Apple to undercut its own business. It’s enacting a plan to bring itself into compliance with the Dutch regulation while maintaining its business model to the fullest extent possible. This is imminently reasonable.

And don’t forget, developers benefit from this business relationship too! In exchange for paying the 30% commission to Apple (which again, only applies to purchases made within the App Store), developers get to market their products to a massive group of people.

As I’ve argued before, everyone would prefer business arrangements that were more favorable to their own interests. So of course developers would prefer to pay Apple a smaller commission (or no commission), just like people renting an apartment would prefer to pay their landlords less money each month for rent. (An imperfect analogy since free apps are subject to zero fees from Apple.) So I don’t mind developers arguing in the court of public opinion that Apple should require lower commissions. The problem, and you can see this front and center with the phrase “I hope the company gets exactly what it deserves” in Troughton-Smith’s tweet, is that this is really about convincing the State that it should use its monopoly on violence to compel Apple to change its business model by fiat.

I consider this extremely unethical, and also likely to lead to unintended consequences that will harm the experience of both consumers and developers alike. Apple has every right to charge a commission on App Store purchases just like your local grocery store does to the companies whose products it sells. Apple also has every right to set guidelines on how software gets to its platforms in the same way that Nintendo, Sony, and Microsoft do on their gaming consoles.

It is interesting that Apple is holding so tightly to the existing App Store business model in spite of growing agitation for regulation of the App Store. There’s a lot of sentiment amongst Apple watchers that Apple could “get the regulators off of its back” by making changes to its business model “before it’s forced to.” That may or may not be true. People welcomed the 70/30 split when Steve Jobs announced it in 2008, and a chorus of angry and loud developers haven’t gotten off of Apple’s back in spite of other changes it’s made since then. Let’s say Apple changes its policy such that it never charges more than a 15% commission. How long is it going to be before people start calling for a further reduction?

Also, I don’t see Apple willingly allowing competing app stores on iOS. Ever. They may eventually allow side loading of apps, but I wouldn’t bet on that either.

I’m neither Apple nor an app developer, so I have no personal stake in Apple’s App Store business model or the specifics of what commission it collects on sales. What I do oppose is calls for the State to force Apple to change its business model. I also oppose the attitude that never expresses appreciation for all of the benefits the App Store provides, both to users and developers.