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Spotify, Match Group, Epic Games Join Fight Against Apple's App Store

Chris Katje
·2 min read

The fight against Apple and its App Store fees and practices intensifies with thee large companies joining a non-profit pushing for changes.

What Happened: Spotify Technology (NYSE: SPOT), Match Group Inc (NASDAQ: MTCH) and Epic Games, owned by Tencent Holdings (Pink: TCEHY) joined the non-profit Coalition for App Fairness.

Coalition for App Fairness is advocating for legal changes to change the way Apple (NASDAQ: AAPL) does business for its app store.

Apple charges commissions of up to 30% for its apps and in-app payment system. Apple also has rules for inclusion into its App Store.

The non-profit, based in Washington D.C. and Brussels, is releasing a list of 10 “App Store Principles” that it wants to demand Apple adhere to. The group believes that “no developer should be required to pay unfair, unreasonable or discriminatory fees or revenue shares.”

Others in the non-profit include Basecamp, Blix, Blockchain.com, Deezek, Tile and many developers from Europe.

The group was founded out of “a lack of hope that things will ever change” according to representative Sarah Maxwell, who previously worked on Hillary Clinton’s campaign and for Blockchain.com.

Why It’s Important: Epic Games, creators of the popular “Fortnite” game, is suing Apple and Google (NASDAQ: GOOG) over commission fees associated with in-app purchases. The dispute led to “Fortnite” being pulled from the App Store.

Apple generates a large chunk of revenue from its App Store and the associated fees. CNBC estimates the App Store had gross sales of around $50 billion in 2019.

That figure would make the App Store number 64 on the Fortune 500 if it was a stand-alone company.

The App Store created 9 billion in commerce last year according to Apple. Of that amount, it only takes a 15% to 30% cut on $61 billion that falls under digital goods and services and $45 billion of in-app advertising.

Apple defended its fees back in July by comparing its commission rates to others that facilitate downloads.

What’s Next: Apple and Epic Games are currently in an antitrust case battle with the U.S. federal court. Spotify is also in an antitrust battle against Apple in Europe.

We will wait and see if Apple responds to the Coalition for App Fairness and its list of 10 principles.

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