Apple Will Find It Hard To Recover From Fallout Over App Store Policies, Says Bill Gurley
Apple Inc. (NASDAQ:AAPL) would not have ended up “in the mess” it is currently in if the tech giant had implemented a 10% commission on in-app purchases, according to Silicon Valley investor Bill Gurley.
What Happened: Gurley, a general partner at venture capital firm Benchmark, told CNBC in an interview on the “TechCheck” program that Apple set itself up for trouble when it implemented the App Store commission at 30% years ago.
“I think it was a bad decision back then and hard to recover from. I think they’d probably be best off just picking something like 10% and taking it down for everybody,” Gurley said.
The tech investor had criticized Apple’s 30% cut in a blog post way back in 2013, saying that the single biggest problem with Apple’s “aggressively high rake” was its impact on potential long-term strategic partnerships.
Why It Matters: For several years, Apple had taken 30% from purchases of software or digital goods from apps distributed through the App Store. In November last year, Apple reduced the App Store commission to 15% for small businesses earning up to $1 million per year.
Nevertheless, Apple has been facing several allegations surrounding its app store policies, including fees for digital purchases, and the lack of competition in app stores.
Apple was taken to court by Epic Games in August last year after the video game maker’s “Fortnite” game was removed from the App Store. Epic, which tried to bypass the earlier 30% cut charged on in-game purchases by Apple, has said in court that the App Store is anti-competitive.
Price Action: Apple shares closed almost 0.7% higher in Tuesday’s regular trading session at $126.74, but declined almost 0.1% in the after-hours session to $126.64.
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