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Apple is defending its App Store against the Japanese government in response to the Headquarters for Digital Market Competition’s report. According to the giant, its in-app payment is not a payment processing service and provides developers benefits, noting its fees are “reasonable.”
Japan is one of the latest countries aiming to regulate Apple and its App Store due to their massive influence in the market. One of the things that is always pointed out when the matter is being discussed is the App Store’s in-app payment and fees. In the past, Apple’s policies for the former limits and pushes them to embrace the system of Apple. This led to the fees Apple collects from developers, which also has an unfavorable image among the developer community.
Now, with the Japanese government tapping the same issue, Apple has decided to explain its side to the country’s Digital Market Competition Council. In its submission (via Mac Otakara), the iPhone maker says that it is changing some OS and browser software sections to address some issues raised. However, it also argues that its in-app payment is not a payment processing service, saying comparing it with the benefits offered by payment processors is inappropriate.
The Cupertino giant underscores the technology investments in the App Store, claiming it is the reason behind its in-app payment’s success and high engagement. Specifically, the company wants to paint its in-app payment as a way for developers to monetize their applications by providing them with tools and essential resources to do so. As such, the company also reasons that its fee for developers for using its App Store in-app payment system is logical, citing the value of the innovation and tech investments it has been introducing.
As per Mac Otakara’s translation of the document, Apple explains:
Comparing the benefits provided by IAPs to the benefits provided by payment processors is inappropriate and inadequate, and Apple’s fees are based on the tools, technology, and other resources developers use to create, test, and distribute app services, which allow Apple to maintain and constantly improve the premium quality and feel that iOS device users have come to expect through IAP and other important iOS features.
In line with that, the company believes its commission rates are rational, stressing it is spending billions of dollars to bring the technology and innovations developers enjoy. Some include technical support from Apple, app and software tools and frameworks, marketing, and more. Apple further addresses the previous arguments about the commission rate being high by mentioning the rates of other platforms, including Google Play Store (30% or 15%), Amazon Appstore (30% or 20%), Samsung Galaxy Store (30%), and Sony and Nintendo (30%). As Apple notes, its 30% or 15% fees do not go beyond the industry standard rates.
Apple’s response also taps Japan’s plan to push it from allowing application sideloading into its system. The country first announced this intention in June. According to the Japanese government, the idea behind the move is to stir competition, which could soon lead to app price drops. It will do this by setting regulations that will guide the companies from what they should not do, ensuring companies like Apple will stop favoring their own system’s services and payment platforms. However, as Apple says in its recent submission, this action will expose users to risk.