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When fees are ‘taxes’ and free speech costs $8 a month

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Thanks to the Twitter CEO Elon Musk, Apple faces renewed criticism over its App Store fees and whether its insistence on content moderation somehow suppresses free speech. Neither is quite true.

App Store fees: A negotiation in progress

Let’s begin with App Store fees. At present, some developers must pay Apple 30% of from sales of their software or from subscription income. Not all developers do so — in the second year, subscription fees drop to 15% of the take, while developers shifting under a million dollars in value also pay just 15%. (Developers who do not charge for their apps pay no fee at all.)

In exchange, the developers get access to the world’s most secure app store, best-in-the-industry developer tools and the least-fragmented mobile platform. Side note: developers are required to use Apple’s own payment processing systems.

Now, there is a good argument to be made that the fee itself is no longer appropriate. While 30% has become pretty much an industry standard, it has been some time since the costs were weighed against the economies of scale.

At the same time, it seems perfectly appropriate that Apple should be entitled to make a viable business out of App Store provision. That means the argument surrounding fees will inevitably (as I keep saying) become a decision concerning how much they should be, not whether they should exist at all.

It’s a fee, not a tax

Regulators everywhere are scrutinizing these fees and I think it likely some compromise will be reached — but referring to them as an “Apple tax” is inappropriate. It’s no more a tax than any retailer’s markup in any store anywhere, including car dealerships or tunnel boring projects.

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