'IPhone owners should worry': Pavel Durov filed a complaint against Apple

In June of this year, the founder of the Telegram messenger Pavel Durov already wrote on Twitter that Apple and Google are increasing the price of mobile applications by 30% for all smartphone users in the world, thereby destroying startups and abusing their position in the market. "Hacker.ru"... He recently detailed his position and explained why he thinks iPhone owners should worry.

Photo: video frame YouTube / TechCrunch

Later, Durov published a detailed article on this topic (in Russian), noting that earlier many Russian-language media misunderstood him and incorrectly translated his word from English, writes "Hacker.ru".

Durov begins his story with the fact that four years ago, Telegram wanted to create a platform for game creators, where "developers from Eastern Europe could realize their talents by creating services for the international Telegram audience." However, Apple got in the way of this idea:

“In 2016, Apple banned us from launching a gaming platform, citing its own rules. We had to remove the Telegram games catalog we had already created and almost the entire platform interface - otherwise Apple threatened us with removing Telegram from the AppStore. "

According to the founder of Telegram, the game catalog was banned for the same reason that Apple prohibits the installation of applications from any store other than the AppStore:

“Apple, taking advantage of its monopoly position, requires all application developers in the AppStore to transfer 30% of the turnover from the sale of any digital services to it. Digital services are, for example, payments for the applications themselves or premium features in them. In return, Apple is giving developers nothing but allowing their apps to be available to iPhone users.

Application developers spend significant resources creating, maintaining and promoting their projects. They compete fiercely with each other and carry huge risks. Apple, on the other hand, does not invest in the creation of third-party applications on its platform practically no funds and does not risk anything, but it is guaranteed to receive 30% of their turnover. It's almost as sad for developers on Google's Android smartphones.

Application creators have only two-thirds of the funds they earn left for salaries, hosting, marketing, licenses, government taxes. Often this is not enough to cover all costs, and further price increases for users are impossible due to reduced demand. Those projects that manage to remain profitable despite the 30% collection almost always bring less net income to their own creators than the Apple and Google duopoly, ”writes Durov.

Thus, Durov comes to the conclusion that at present, almost all developers who sell premium and digital services to smartphone users are more likely to work for Apple and Google than for themselves. And if Google still allows users to install applications from outside the Play Store, then Apple does not release users outside of its own ecosystem at all. The latter, according to Durov, was created for only one purpose - collecting 30%, which is ultimately paid either by users or developers.

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According to him, even in the 90s, in the era of Microsoft's dominance in the operating system market, developers were able to freely distribute their programs for Windows and did not pay a percentage of their earnings to Microsoft. And in the XNUMXs, developers could monetize their sites, also without paying any royalties to the creators of browsers.

“As a result, Apple and Google are accumulating tens of billions of dollars in their offshore accounts, while hundreds of thousands of local development teams around the world are on the brink of economic survival. Funds that could allow startups to continue to improve their products and delight users are stored on the balance sheet of Apple and Google, says Durov and notes that because of this, entire sectors of the digital economy are drained of exorbitant collection, possible only in the absence of competition. "We live in a paradoxical situation where two Silicon Valley companies have complete control over which applications billions of users around the world can install on their phones."

To improve the current situation, according to Durov, the combined efforts of the antimonopoly authorities and legislators are needed. In particular, he proposes that different countries oblige Apple to at least pre-install alternative app stores on devices so that local developers have the opportunity not to deduct 30% of their turnover to California. Durov calls this step a more effective measure to maintain local IT than the digital tax discussed in a number of EU countries.

“Before attempting to impose a 3% digital tax on corporations, governments should first stop paying the 30% digital tax to Apple and Google themselves,” he writes.

Ideally, the creator of Telegram proposes to legally oblige Apple to give users the ability to install applications not only through the AppStore.

“For many startups, this change will have a more positive effect than any tax breaks. If this does not happen, the capitalization of Apple, which has already exceeded one and a half trillion dollars, will continue to grow, while developers from Russia, Ukraine, Belarus and other countries will continue to sell their low-margin startups for small amounts for the giants of Silicon Valley. Users will continue to pay 30% more for apps, or be content with lower quality services. And governments will continue to wonder why, despite a comfortable tax regime and an abundance of talent, there are no full-fledged analogues of Silicon Valley in their countries.

Preventing two supranational corporations from collecting taxes on all of humanity is not an easy task. There are thousands of lobbyists, lawyers and PR agents at the service of corporations. Their budgets are unlimited. At the same time, application developers are scattered and scared, as the fate of their projects depends entirely on the goodwill of Apple and Google. But we believe that the time for fear is over. Now we need to start talking directly and openly about the perniciousness of the current situation - pernicious for billions of users, for hundreds of thousands of developers, for national economies, for global progress, ”Durov sums up.

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Durov named 7 reasons for concern "all iPhone owners"

At the end of July, in his Telegram channel, Durov listed seven reasons why Apple's commission in the App Store should “worry every iPhone owner,” writes RBC... The founder of Telegram believes that due to the company's pricing policy for developers, the owners of its smartphones:

1. Overpay for all apps and digital purchases

“Despite the fact that Apple has already charged you several hundred dollars more than its cost when buying a phone, you pay it an additional tax for each application. In other words, you continue to pay after you have paid, ”writes Durov.

2. Do not see parts of developer content

According to the founder of Telegram, Apple censors applications that the company needs full control over in order to receive a 30 percent "tax". According to Durov, developers are prohibited from telling iPhone owners that certain content is hidden for them precisely at the request of Apple.

3. Risk privacy

All applications and notifications from them are tied to an account in the App Store (it must be created to install applications on the iPhone), which "will allow you to track your actions," Durov points out. Apple is using the account link to "push through" a 30 percent "tax," he explains.

“The result is that you pay with your personal information for their greed,” writes Durov.

4. Receive new versions of applications with delay

As the founder of Telegram points out, due to Apple's policy, apps are updated a few days or weeks after the developers release a new version. Durov blames this on Apple's moderators, who postpone the approval of updates "for no apparent reason." “With billions of app commissions,” the company could hire additional moderators, says the founder of Telegram.

5. Limited in the choice of applications

The authors of the applications also bear the costs of paying VAT, salaries, development, equipment and marketing. Durov believes that without the "tax" of the company, many applications could be profitable, instead, some of them either went bankrupt or "never appeared."

6. See more ads

Many app creators have to serve ads to users in order to cover costs.

"Apple's policy is economically pushing the entire Internet industry to sell data and user attention, instead of using other business models that are more acceptable in terms of protecting privacy," Durov complains.

7. Install lower quality applications

The money that developers spend on paying Apple's commission could go to refine popular applications, the founder of Telegram believes.

"Today, these billions are gathering dust in Apple's offshore accounts and do not benefit humanity, while the application authors who gave this money are trying to find resources to improve their developments," Durov writes, concluding that as a result, iPhone owners use lower quality services.

Telegram filed a complaint against Apple after Durov's words

Telegram messenger filed an antitrust complaint with the European Commission, accusing Apple's App Store of non-competitive operating conditions. This is reported by the Financial Times with reference to the text of the document, writes "Lenta.ru".

The complaint says that "Apple should enable users to download applications outside the App Store."

The company also drew attention to the 30 percent commission that Apple takes from each in-app purchase, which Durov has repeatedly mentioned.

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