- Apple charges an extra 15-30% for in-app purchases and subscription fees like YouTube Premium
- This has become known as the ‘apple tax’
- Third-party developers have objected to this, most notably Fortnite founder Epic Games
Apple’s App Store is a one-stop shop for all your needs. It has made subscribing to third party services much easier and you can manage all your memberships from one place right there on your iPhone. That said, subscribing to platforms through Apple does come with a small but expensive catch.
If you’ve subscribed to top streaming services like YouTube Premium through the App Store, you might not know that this can cost you a lot more than signing up through YouTube itself — and that’s right down to App Store fees.
For example, if you were to sign up for YouTube Premium’s standard tier via its website, it would cost $15.99/£12.99/AU$22.99 per month, but if you signed up via the App Store, the monthly price will be slightly more expensive ($20.99/£16.99/AU$23.99).
So if you’re starting to wonder why your YouTube Premium subscription has skyrocketed compared to your Netflix and Disney+ memberships, this could be why. But why is the margin much higher for buying directly through Apple’s App Store?
Two words; Apple tax
Apple doesn’t just make bank by selling its extensive range of smartphones, laptops and other devices; its App Store has created another source of revenue for the tech giant, now often referred to as the ‘apple tax’.
Since Apple charges developers to implement alternative payment systems other than Apple Pay, these developers will increase monthly subscription costs by approximately 15-30% and charge more per month to simply subscribe to platforms via the App Store to avoid paying this fee. This does not only apply to monthly subscriptions; Apple applies this tax to most of its digital goods and in-app purchases.
Now, Apple has been doing this pretty much since the App Store launched on the iPhone some 18 years ago, resulting in an outcry against this tax – mainly by Fornite founding company Epic Games.
Back in 2020, Epic Games started its protest against Apple’s App Store fees by implementing its own direct payment system in iOS. As a result, Apple booted Epic’s developer accounts and removed Fortnite, but it didn’t end there.
Epic Games retaliated with a claim of its own, claiming that Apple decided to remove Epic’s developer accounts because it saw Epic Games as a threat to its ecosystem. Fortnite was then listed on the App Store after a five-year absence, but the dispute is still very much unresolved. As it stands, the US Supreme Court has decided to hear Apple’s contempt appeal in the ongoing lawsuit against Epic Games. It begins in the Supreme Court’s next term, which starts in October.
For most of you familiar with Apple’s ways, its App Store fees probably won’t come as much of a shock to you, but for the average user who relies on their Apple device to make digital purchases more convenient, they may not be as aware of the catch and still be blindsided by the Apple charge.
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