Apple has commissioned a study from the Analysis Group on how Apple’s CEO Tim Cook is ready to testify before the house’s judiciary committee next week at an antitrust hearing in the App Store [PDF] This is to show how similar the fees and practices of the Apple App Store are to those of other digital marketplaces like the Amazon Appstore and the Google Play App.
Apple reduces all paid apps and in-app purchases by 30 percent and all digital in-app subscriptions by 30 percent in the first year. That drops to 15 percent in the second year.
The Analysis Group compared Apple’s commission rates to 38 digital apps and software marketplaces and video game platforms, and found that most saw sales drop 30 percent. Similar commission fees apply to the Google Play Store, Amazon App Store, Galaxy Store, Xbox, PlayStation and Nintendo.
Because Apple also sells other digital goods like books and music, the study included commission rates for other digital content platforms like Kindle Direct Publishing, Nook, and Kobo, all of which generate between 30 and 65 percent of book sales on their platforms.
When it comes to e-commerce marketplaces like Amazon, eBay, Etsy, Uber, Walmart, Ticketmaster, TaskRabbit, Poshmark and more, the fees are between 5 and 37 percent.
The study suggests that “App Store” developers generate a “significantly higher share” of total sales than through stationary channels. For video games, developers and publishers collect less than 45 percent of the retail price, and in front of digital marketplaces, 60 to 70 percent of software sales went to intermediaries rather than software developers.
Regarding the Apple rules that require developers to use in-app purchase options, the study believes that this is common for many e-commerce websites and services. Amazon, eBay, Etsy, and Walmart have rules that prevent sellers from directing buyers to external websites, as well as Spotify’s Airbnb, VRBO, TaskRabbit, Upwork, and SoundBetter.
The study concludes that Apple’s commission rates for the “app store” match those charged by other marketplaces for digital content. It is cheaper to sell software digitally than through a physical store, and Apple’s freeriding rules are similar to those issued by other companies.
Apple chief “Tim Cook” is likely to cite this study when he testifies before the House Justice Committee on Monday. Cook is expected to be asked about the App Store’s fees and policies for rejection and competition. Cook’s statement is part of an antitrust investigation that does not directly lead to enforcement but regulates future laws that could regulate digital marketplaces.
The full Analysis Group study commissioned by Apple can be found here.