Microsoft Fights With Apple Over 30% Cut
Apple takes 30% off everything in the App Store. It’s how it goes. Be that for purchasing the app, grabbing in-app purchases, subscriptions, buying books for an ereader app, anything. Apple gets 30%. And, it turns out, Microsoft doesn’t like that — and the two companies are currently wrestling over an update to theMicrosoft SkyDrive app.
According to TNW, Apple is blocking the app from approval, because it contains the ability to pay for more storage space, and Microsoft doesn’t want to give Apple the 30% off the top. It seems there’s more to this than just wanting to keep all the funds, this apparently has to do with Apple demanding that money even if the user migrates away from iOS:
Microsoft does not appear keen to pay Apple the 30% cut, as it lasts in perpetuity, regardless of whether a user continues to use an iOS device or not, as the billing is through their Apple account.
Therefore, if a user signed up for a few additional gigabytes on their iOS device, and then moved to Android or Windows Phone or not phone at all, for the length of their account, Apple would collect 30% of their fee for storage. This hasn’t sat well with Microsoft.
Not only that, but TNW’s sources indicate that Microsoft has attempted to reach a compromise, only to be rebuffed by Apple. Apparently Microsoft offered to remove all subscription options, so that the app doesn’t generate any revenue at all. According to the report, Apple isn’t interested, “If a service has a subscription option, it seems, and it is not listed in the iOS store, the application cannot, and will not be allowed.”
This sort of battle is not new to the App Store. It hit particularly hard at ebookapps — though Apple did notably allow Google Books back with in-app purchases stripped. It’ll be interesting to see what happens with a major player like Microsoft at the receiving end of this behavior.