Elon Musk Says Pay More For Twitter If You Have An iPhone! Why Fight vs Apple Is Worth It
Twitter Inc. ‘s first tweet under the ownership of the world’s richest man was the announcement of a much-anticipated upgrade to its subscription feature. It was also a shot across the bow of the planet’s largest company, signaling a potential showdown that could finally bring much-needed change to the mobile app industry.
Twitter Blue will relaunch on Monday with a handful of features that Elon Musk and his team bet will justify the monthly fee: a blue tick, longer videos, higher visibility and an edit button. More importantly, however, Twitter announced two prices for the same service: $8 a month if you sign up on its website, but $11 if users choose to sign up via Apple Inc. subscribe to its iOS platform. That 37.5% markup is a not-so-gentle dig at Apple’s 30% cut in the subscription fees that go through iOS and its App Store.
For years, app developers and content providers have bemoaned this “Apple Tax” as too high and too restrictive. If you buy an app, purchase an upgrade, or subscribe to ongoing services, including streaming music or video, Apple collects 30% (the fee is discounted to 15% for developers who bring in less than $1 million in a year) . That means the company will get $3.30 a month for every person who joins Twitter Blue via Apple. And that’s why Twitter decided to discourage people from using Apple and logging into its own site. To be fair, Google Play Store collects similar commissions with its own set of restrictions.
Musk brought this fee to the attention of his 120 million followers last month, although he is among many industry executives who have known and complained about it for years.
In August 2020, Epic Games Inc. more done than moaning. The publisher of hit games including Fortnite and Infinity Blade sued Apple over a particularly prohibitive set of rules the iPhone maker buries in its 20-page license agreement. First, it requires subscriptions purchased within an app to use the In-App Purchases platform — preventing publishers from billing credit cards directly and ensuring Apple collects its taxes. Second, it restricts developers from providing information or links to places where a user can log in outside of the Apple ecosystem.
It’s this latter decree that got under the skin of Epic boss Tim Sweeney, who modified Fortnite’s app to bypass the payment system – a move that blocked the best-selling game from Apple’s App Store and resulted in a lawsuit had. Spotify Technology SA skips this rigmarole entirely by only allowing subscriptions via its website.
Unfortunately for Epic, software developers and smartphone users around the world, US District Court Judge Yvonne Gonzalez Rogers ruled in Apple’s favor on nine of the 10 charges filed by the North Carolina-based company. Among other things, Rogers found that Apple does not have a monopoly because there are alternatives, including Alphabet Inc. s Google Play Store. However, she decided that Apple should relax its rules about external links. But the battle is not over, with the case now in the hands of the Ninth US Circuit Court of Appeals.
“Apple may be winning the battle but losing the war,” Bloomberg Intelligence senior litigation analyst Jennifer Rie wrote last month. “The ruling could also catalyze bipartisan support for pending legislation to regulate app stores.”
That’s where Musk comes in. While the new owner of Twitter has recently used his access to the social media platform to push back against the “woke” crowd, reveal suspected censorship of right-wing information and restore previously banned accounts, the long-term battle may have change platform’s content to its business model.
To date, the battle over the Google-Apple duopoly has largely played out in court. The two giants argue that they provide infrastructure, marketing and moderation support that ensures developers are paid and users are protected. This argument has merit. Allowing software to be installed on a phone undetected is a big risk, and apps are mostly found via the stores themselves, so being fairly compensated is an important part of the business model.
But a 30% fee for services where the app platform offers little value-add, such as video streaming, seems out of place — especially when those providers are limited in their ability to even tell users about an alternative payment platform. The policy also forces software and content producers to spend increasingly more money on marketing just to be seen, which is especially difficult when these providers have their own products – such as Apple Music and Apple TV+ – that come pre-installed and directly connect with Spotify and Netflix competition. Inc.
Twitter’s tweet, from its own @twitter account, makes a mockery of the current situation. Twitter, the app, isn’t allowed to advertise within its own software that a cheaper price is available — but Twitter, the Twitter user, can use its own social media platform to tell the world about it.
That’s the kind of power that Epic, Spotify, and Netflix don’t wield. Even Microsoft Corp., which makes software but does not compete in the mobile app market, is part of the growing chorus against Apple and in support of Epic. But none of them can boast nearly every senator and congressman as an account holder, nor a high-profile executive who isn’t averse to grenades and burning bridges.
And now may be the time for Musk to throw his weight around. The Open App Markets Act, a bipartisan bill introduced in August 2021 by Republican Senator Marsha Blackburn and Democratic Senators Amy Klobuchar and Richard Blumenthal, would require companies to offer alternative app stores and payment systems, and prohibit Apple and Google from giving preference to their own. products.
But this bill has yet to come to the floor and could be delayed further if a procedural maneuver fails in the coming days, Bloomberg News reported last week. That means months, maybe years, before the app giants are forced to mend their ways. Unless Musk decides to enter the fray and take on Apple directly.
