On Tuesday, Congress revealed whether it thinks Amazon, Apple, Facebook, and Google are sitting on monopolies. In some cases, the answer was yes.
But also, one app developer revealed to Congress that it — just like WordPress — had been forced to monetize a largely free app. That developer testified that Apple had demanded in-app purchases (IAP), even though Apple had approved its app without them two years earlier — and that when the dev dared send an email to customers notifying them of the change, Apple threatened to remove the app and blocked all updates.
That developer was ProtonMail, makers of an encrypted email app, and CEO Andy Yen had some fiery words for Apple in an interview with The Verge this week.
We’ve known for months that WordPress and Hey weren’t alone in being strong-armed by the most valuable company in the world, ever since Stratechery’s Ben Thompson reported that 21 different app developers quietly told him they’d been pushed to retroactively add IAP in the wake of those two controversies. But until now, we hadn’t heard of many devs willing to publicly admit it. They were scared.
And they’re still scared, says Yen. Even though Apple changed its rules on September 11th to exempt “free apps acting as a stand-alone companion to a paid web based tool” from the IAP requirement — Apple explicitly said email apps are exempt — ProtonMail still hasn’t removed its own in-app purchases because it fears retaliation from Apple, he says.
“There’s a lot of fear in the space right now”
He claims other developers feel the same way: “There’s a lot of fear in the space right now; people are completely petrified to say anything.”
He might know. ProtonMail is one of the founding partners of the Coalition for App Fairness, a group that also includes Epic Games, Spotify, Tile, Match, and others who banded together to protest Apple’s rules after having those rules used against them. It’s a group that tried to pull together as many developers as it could to form a united front, but some weren’t as ready to risk Apple’s wrath.
That’s clearly not the case for Yen, though — in our interview, he compares Apple’s tactics to a Mafia protection racket.
“For the first two years we were in the App Store, that was fine, no issues there,” he says. (They’d launched on iOS in 2016.) “But a common practice we see ... as you start getting significant uptake in uploads and downloads, they start looking at your situation more carefully, and then as any good Mafia extortion goes, they come to shake you down for some money.”
“We didn’t offer a paid version in the App Store, it was free to download ... it wasn’t like Epic where you had an alternative payment option, you couldn’t pay at all,” he relates.
Yen says Apple’s demand came suddenly in 2018. “Out of the blue, one day they said you have to add in-app purchase to stay in the App Store,” he says. “They stumbled upon something in the app that mentioned there were paid plans, they went to the website and saw there was a subscription you could purchase, and then turned around and demanded we add IAP.”
“We simply complied in order to save our business.”
“There’s nothing you can say to that. They are judge, jury, and executioner on their platform, and you can take it or leave it. You can’t get any sort of fair hearing to determine whether it’s justifiable or not justifiable, anything they say goes.”
“We simply complied in order to save our business,” he adds.
Yen tells me there was a month-long period where ProtonMail couldn’t update its app at all, even for security reasons, and Apple was threatening to remove the app if his company continued to delay. So ProtonMail decided to raise the cost of its entire service on iOS by roughly 26 percent to satisfy Apple’s needs, eating the rest itself.
“When Apple charges 30 percent extra ... we don’t have a 30 percent margin! It’s very odd to find a business with 30 percent profit margins,” he explains. “We had to raise the prices, and we weren’t even able to communicate to our customers that they could get it cheaper from our website.”
And while Apple increasingly pitches itself as the privacy company, Yen argues that Apple’s 30 percent cut is actually hurting privacy-centric apps — because it’s tough to compete with Gmail when you have to charge a fee for your service and you’re also being taxed. He explains:
Google exists by selling your data to third-party advertisers to subsidize the services you get for free, but that’s very bad for user privacy because companies are incentivized to abuse your privacy as much as possible. The alternative to that is the subscription model ... we have a certain percentage of customers who pay and that’s what sustains us. That makes us hit the 30 percent fee, but the ad-based models don’t have to pay, and that discourages business models that are pro-privacy.
He also thinks it’s hard to fairly compete with Apple’s own apps when you need to give 30 percent of your revenue to a direct competitor.
The elephant in the room is that Apple changed its rules in September, allowing free companion apps, including email clients, to evade the IAP requirement. Shouldn’t some of these points matter less today, at least for apps like his? But Yen says ProtonMail hasn’t yet bothered to try removing IAP, partly because the rules as written would still keep him from telling his customers that there’s even an upgrade to be had.
Apple told us this would be resolved
That surprised me because on September 11th, Apple clarified to us that it wasn’t prohibiting app developers from communicating with their customers outside the App Store, and that it would look at tweaking the language of its rules to say that more clearly. But sure enough, nearly a month later, App Store guideline 3.1.3(f) still prohibits “calls to action for purchase outside of the app.”
Today, Apple confirmed to us once again that the rule is more lenient than it sounds: “free apps acting as a stand-alone companion to a paid web based tool” don’t need to use IAP as long as the apps themselves don’t offer purchases, and as long as the apps themselves don’t ask users to make purchases outside the app. Developers can advertise different pricing on the web, TV, billboards, or anywhere else outside the App Store, the company tells The Verge.
Hearing that, Yen says ProtonMail will indeed try to remove Apple’s in-app payment system — but he’s still skeptical enough that he plans to test the theory with the company’s next app, ProtonDrive, just to be safe. He doesn’t want to risk ProtonMail.
Yen says it’s strange that Apple’s actual written rules aren’t as clearly defined as what I’m telling him, and that he doesn’t trust the rules in general: Apple originally justified blocking the app because of an obscure rule that apps shouldn’t “include irrelevant information,” he says, and he believes that the results of app review are largely predetermined: “They made a decision, and then it’s just about pointing to the relevant passages of the rules to justify the decision they’ve already made.”
He’s not the only one who believes Apple’s decisions are arbitrary. We’ve repeatedly written about the company’s inconsistent enforcement, but Phillip Shoemaker, Apple’s own head of app review from 2009 to 2016, spoke to Congress for its bombshell antitrust report, too. He testified that Apple’s senior executives would find pretexts to remove apps from the store; that apps which compete against Apple’s own services often have problems getting through the review process; and that Apple’s new guidelines that supposedly allow cloud gaming onto the App Store were probably written to “specifically exclude Google Stadia” and were “completely arbitrary.” (I came to the same conclusion about Stadia, too.)
You might be wondering what Apple thinks about all this, and so we asked. Apple tells The Verge in no uncertain terms that it doesn’t retaliate against developers — it works with them to get their apps on the store, and claims it applies the rules fairly. Apple points out that developers have many ways to communicate and appeal Apple’s decisions, including the ability to appeal entire rules, and that it will no longer hold up bug fixes for rule violations, unless the app has legal issues.
Following my conversation with ProtonMail’s CEO, another developer who’d been forced to abruptly add in-app purchases also told me she wasn’t willing to risk removing IAP quite yet, partly because the rules aren’t clear enough, and partly because of the arbitrary nature of Apple’s review.
“Even if it got approved, there’d be no guarantee that another reviewer in the future wouldn’t interpret the rules differently and reject the app, and force us to implement IAP all over again,” says Belle Cooper, co-developer of behavior-tracking app Exist.io. “We don’t really fear retaliation. It’s more that we don’t want to constantly live in fear (more than we already do) that they’ll suddenly reject us and force us into doing a whole bunch of work on their terms. It was a really stressful experience last time and threw a spanner in our plans for the app, and we’re nervous it might happen again.”
Cooper says she did try to challenge Apple back in September 2017 when the company forced her to add in-app purchases — two years after the app was first approved — but she didn’t get very far:
I argued we were a “reader” app and they said no. I argued other apps were doing the same as us and pointed out some examples and they said we can’t discuss other apps. They allowed one or two important bug fix updates that they’d blocked after I spoke to them on the phone and promised to do what they asked for.
I have to wonder how many more developers have stories like these. Perhaps more will share them now? (My DMs are open.) It feels like some are already getting bolder: here are a couple examples I was forwarded while researching this story.
I also wonder if Apple might follow developer Marco Arment’s advice, because as he amusingly points out, Apple’s rules around in-app purchases are clear as mud right now.