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IOS The Almighty Buck

Popular Meditation App Must Pay 30% App Store Fee On 'Tips' Sent To Teachers (techcrunch.com) 53

Sarah Perez reports via TechCrunch: The CEO of meditation app Insight Timer, Christopher Plowman, is frustrated. He doesn't think the teachers who leverage his app's marketplace to reach their students should have to share 30% of their income with Apple -- its commission on in-app purchases -- and for the past 12 months, Apple had also agreed. After Apple loosened its rules around in-app donations in 2022, Insight Timer took advantage of the option to adjust a digital donations feature that allowed Insight Timers' teachers to collect "tips" from their user profiles and during live events. Apple reviewed the app and approved its release on the App Store. Now the tech giant has changed its mind -- it wants to collect a commission from this content, and Insight Timer had no choice but to comply or have its iOS business shut down, Plowman says. [...]

In section 3.2.1 of Apple's App Review guidelines, the company explains that apps can route around Apple's in-app purchase if the app enables individual users to "give a monetary gift to another individual" and "100% of the funds" go to the receiver of the gift. Insight Timer capitalized on this option to allow its users to tip meditation teachers, healers, musicians, and others who use its app to teach classes on meditation, managing stress, finding happiness or spiritual enlightenment, and more. Insight Timer implemented the feature using Stripe as the payment provider on the back end, as the rule permits. Users can opt to donate funds to the teacher, but they don't have to. Insight Timer's main business is selling premium subscriptions to its app, which offer additional features, like offline listening, journaling, and unlimited access to its courses. Fifty percent of this revenue is shared with the teachers, so they don't have to rely on donations to fund their work. During the time the commission-free donations feature was live, Insight Timer's users donated roughly $100,000 per month to the app's teachers, Plowman says.

Apple appeared to have blessed this use case, as the tech giant went on to approve 47 more updates to Insight Timer's app over the course of a 12-month period. When a question arose, Insight Timer explained that these were donations -- it doesn't take a cut of that revenue -- and Apple would approve the app. Late last year, those approvals stopped. An app reviewer told Insight Timer that these donations were no longer considered monetary gifts -- they were now "digital content." That meant they were also now subject to Apple's commissions. This decision doesn't hurt Insight Timer's bottom line, as the app's main business is subscriptions. Instead, it hurts the community of teachers who generate additional funds via users' donations. Now, with Apple demanding 30% of that revenue, the teachers are getting a 30% pay cut overnight, so to speak.

Plowman says he went back and forth with Apple over this feature, trying to understand why the donations option that Apple had previously allowed -- 47 times! -- was now subject to commission. Apple compromised and said it would allow the donations' link on teachers' profiles to be subject to its commission-free rules, but all other donations -- from live events, from meditations themselves -- had to be commissioned. It wouldn't allow those links to point to the donation link on the teachers' profiles, either. "And I was like, well, what's the point of building an ice cream stand across the road if you won't let the customers cross the road to buy the ice cream?" Plowman argued. In the end, the two parties didn't reach any sort of resolution. Plowman was given until February to comply with Apple's decision, or his business would be shut out of the App Store.

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Popular Meditation App Must Pay 30% App Store Fee On 'Tips' Sent To Teachers

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  • First you pay a premium price for the Apple phone/tablet and then they want to double-dip by charging for the use of your device.
    As bad as this is, the 30% is outrageous.
  • Robber Barons (Score:5, Insightful)

    by quenda ( 644621 ) on Thursday February 22, 2024 @05:12AM (#64259274)

    Apple and (to a slightly lesser extent) Google are the robber barons of the 21st Century.
    "The Raubritter (robber knights), the medieval German lords who charged nominally illegal tolls (unauthorized by the Holy Roman Emperor) on the primitive roads crossing their lands,[4] or larger tolls along the Rhine river.".

    These companies have found a way to construct toll booths on the internet.

    • Apple and (to a slightly lesser extent) Google are the robber barons of the 21st Century.

      Apple cannot be a baron. A barony maybe but not a baron. A baron is an individual human. Steve Jobs was a robber baron. Larry Page and Sergey Brin are robber barons. Bill Gates, Jeff Bezos, Mark Zuckerberg, Elon Musk, etc. are all robber barons, too.

      Why do I cane? Because blaming companies instead of people works in those barons' favor because then something external is to blame. There's no personal responsibility.

    • by Anonymous Coward

      Bill Gates must be turning in his grave that Microsoft are no longer the worst company in the valley.

      • At this point i figure apple must have a team of psychics in constant contact with steve jobs in hell. Only way they can keep up this level of being scummy
        • If that were true then we'd have more innovative product releases by now instead of drab incremental Iphone and I-pad "improvements."

      • He would probably be turning in his grave, saying, "Wait! I'm not dead yet!"
  • by Entrope ( 68843 ) on Thursday February 22, 2024 @05:22AM (#64259282) Homepage

    This is our daily reminder that when your business runs entirely on somebody else's platform, it's not really your business at all. It only exists to the degree that the platform owner tolerates you.

  • Isn't Apple one of the many companies that lobbies for lower taxes & more exemptions? Surely, they should extend those sentiments to their partner developers & lower this 30% tax & create more exemptions. Apple needs smaller bureaucracies, less autocratic control & monopolisation, & customers should be given more freedom to choose, right? How about they let app developers & customers vote on it?
  • So you choose a pocket computer that has a walled garden for software, makes it hard or near impossible to sideload stuff, etc.

    Turns out they do get to decide who gets included in their software store, and what rules those vendors have to follow. Unsurprisingly, they are rules favorable to the company you bought the pocket computer from.

    So why buy from them? It's Apple, so we know it isn't the expense stopping you ...

  • by gnasher719 ( 869701 ) on Thursday February 22, 2024 @07:00AM (#64259390)
    When Covid was in full swing, Apple allowed people to do courses etc. online through on app instead of doing them in person. These were people who didn't really want to do this through an app, but were forced to by a dangerous virus. Since they didn't actually want to do this through the app, Apple allowed them to do this without the usual fees.

    Before Covid, they would have had to pay for this (but wouldn't have used an app like this). During Covid, they were forced to use an app, so they were allowed to do this without paying, because Apple didn't want to profit from Covid. And now Covid is gone.

    And "tips" are really the same thing as "in-app purchases". Just like donations. I can understand they don't like it, but it's the same thing.
    • No, tips are not the same as a purchase. A purchase is an agreed upon fee for product or service. A tip is a gratuity paid after the fact as acknowledgement of good service. In an employer/employee setting, an employer is forbidden from keeping a percentage of tips. Understandably, this is not a an employer/employee situation, but it illustrates that a tip is not the same as an in-app purchase. I'd like to see the class-action suite by these teacher vs Apple and see how it shakes out.

      I'm not very famil

  • by gnasher719 ( 869701 ) on Thursday February 22, 2024 @07:06AM (#64259398)
    Create a website where people can donate tips. Then the teacher can tell the users - in person - where to find the website. They go to the website and do whatever they like. That's really easy. (The hard way that is possible now is to have an alternative in-app payment, which is considerable programming work).

    Whether you call it a tip or whatever, if it goes through Apple's in app purchases, then it is an in app purchases. For two years or so there was an exception because Apple didn't want to profiteer from Covid, that's gone now.
    • Re: (Score:3, Insightful)

      by ACForever ( 6277156 )

      . Then the teacher can tell the users - in person - where to find the website. They go to the website and do whatever they like.

      Bless your heart, you are not evil enough to work for apple. When apple got wind of this it would be considered a link to outside site and "app denied"

    • The article omits this part of Apple's TOS, "However, a gift that is connected to or associated at any point in time with receiving digital content or services must use in-app purchase."

      Hate defending them since they should 100% allow this, but since the tip is associated with the content received, it does meet the criteria in their TOS. And allowing the tip on their profile page is OK. If they allow the app to mention that they can tip from that page that seems like it should be legit. But the teachers can

    • Re: (Score:2, Redundant)

      by thegarbz ( 1787294 )

      Create a website where people can donate tip...

      Sorry you lost me when the browser window opened. It was more than 1 click, I don't have time to tip for complex shit like that.

      No I'm not being funny here. That is generalised consumer behaviour. Your desire to gift is very strongly inversely proportional to the complexity of making that gift.
      - From within the phone, from Apple Pay, from a single click in an app is easy.
      - Redirecting to a website, entering payment details manually (wtf where even is my wallet right now, I have a phone I haven't used my cre

      • This is why things like Paypal, Patreon, and many others exist. No need to capitulate when there are alternatives.

        • Paypal is a great example. You know it effectively doesn't exist in Europe? Accepted virtually no where. The reason: It's more difficult than the alternative means of transferring someone money since bank transfers are free and trivial here.

          In America it's different. Bank transfers are complicated so people will gravitate to what is easiest and most straight forward: Clicking the Paypal button for a small private transfer.

          In terms of a company accepting any money on the iOS platform, literally any alternati

  • by GeekWithAKnife ( 2717871 ) on Thursday February 22, 2024 @07:39AM (#64259432)

    If they have to share 30% of the tips maybe they also have to share 30% of the discussions stemming from the use of the app leading to a business profit as well?

    Apple could argue that the business or project would not have existed unless via its app.

    I'm waiting for when apple sue me for being happy without paying them. After all their magical devices made me happy so that's 30% too no?!

    ...or perhaps this was all just a sarcastic way for me to ask "when are obscene profits enough before you lose objectivity?"
  • Employees (Score:4, Interesting)

    by bill_mcgonigle ( 4333 ) * on Thursday February 22, 2024 @08:43AM (#64259598) Homepage Journal

    If Apple is controlling their tips then they have an Employment Relationship with these people and are responsible for full compliance with all obligations and regulations.

    They can't have it both ways.

    • If Apple is controlling their tips then they have an Employment Relationship with these people and are responsible for full compliance with all obligations and regulations.

      They can't have it both ways.

      Apple has more money than any user/teacher/developer/etc. Therefore, they can have it any way they want it. And we can cry all we want about it. Thems the rules in this world.

      Not that I think it's right, but in the end the amount of bank you have behind you is the determining factor in every dispute. That's the world we live in. As much as reality sucks, sometimes we just have to face it.

    • ok pay $2.13/hr + tips.

  • ..and only once I have to side with Apple here.

    It may be a "pay as much as you want" system, but when you are receiving a service, and you are returning money, that's a business transaction and in no way a present, gift, donation, tip or charity.

    I can't say my employer is donating my salary to me and refuse to pay taxes either.

    I mean yes, fighting Apples 30% monopoly is important, too, but that's a try to weaponize tipping culture (or minimal wage culture) which is none the better..

    • So, Amazon should pay Apple 30% of its profit from all sales generated by the Amazon App? I mean, without the app there would be lower sales, right? Amazon clearly provides a service. You pay, stuff shows up at your door. The point is that in this case the app has in-app purchase for upgrades, the publisher pays Apple 30% of that revenue. Taking money from recipients that have no contractual relationship with Apple (the teachers in this case) seems like theft.
      • That's the point. They do not have a contract with apple but with the app manufacturer who promises to forward payments from the users to them. But they can't make contracts on funds they don't get from apple - who THEY have their contracts with. No one takes money from people they don't have contracts with. And if their contract partner promises something like that they have to match it out of their own pockets.

        But this whole thing is bonkers anyway. When I want to get a product or service, I want to have

  • CA requires ALL tips must go to the person receiving them, though I am not sure whether or not you need to be considered an employee for that to be in effect.

    Slam Apple with a wire fraud charge.

  • Apple is a for profit company. They created the iphone and app store as part of their business to make money. If you want to use their platform, that they created, and that they operate at their expense, you have to follow the rules and regulations they have for their platform. One of those rules is they get a cut of sales made on their platform.

    Same with Google and Android; same with Sony and the Playstation; same with Microsoft and the Xbox.

    All I hear are commies whining that they can't treat other peo

    • Become an abusive monopoly, duopoly, what have you, suffer the wrath of regulation.

      Markets are only fair and competitive when they have rules to keep them that way; history has certainly taught us that. Economics is not supposed to only benefit a company/business. Markets are supposed to be beneficial to the society in which they operate. So, if a company starts to abuse its market power, governments can step in and address the problem.

      • This isn't abuse though; they aren't saying This app has no commission; but this app does. They are saying ALL apps using our store and our payment processor are subject to this fee. The Iphone also isn't a monopoly; and if you look at other marketplaces like this, their fee is in-line with the rest. (AT least, no moreso then Xbox, Playstation, Nintendo consoles, Android OS, etc.)

        This is just someone whining that they can't make as much as they thought they could after they setup their business on someo

  • by diodeus ( 96408 ) on Thursday February 22, 2024 @10:47AM (#64259974) Journal

    So, to workers get to write off Apple's slice as an "expense"?

    • by Moike ( 986142 )
      Either they show the full amount as income and then a loss of 30% to Apple, or they show only the 70% as income in the first place (hint, it's the second one). But in either case the net income is identical and the tax liability is also identical. "Writing off" is not a magical incantation that reduces taxes. It just means it's profit you didn't make.
  • by PPH ( 736903 )

    One needs to think about the approach they use to reach potential customers/users. Particularly those on Apple platforms, it might be best to just build a web site.

  • That is filled with complete utter bullshit that is design to make stupid people feel better about giving their money away for garbage.
  • Perfect example of why not to do business with Apple or on their platform. Has the Beeper saga taught him nothing? This was always going to happen. This is why your business shouldn't depend on Apple's ecosystem at all. Plowman did this to himself.

  • Although I think apple should allow this its not apple money. I think allowing students to buy teachers favor by giving them money seems very dangerous. Education is already skewed severely in the favor of the rich do we really need it more skewed.

    Also if it catches on teachers might start getting paid like waiting staff, where their salary accounts for tips.

  • Apple: If you put in effort, we promise not to tax you.
    Users:
    Apple: Haha !

    If they'd been up-front there wouldn't have been the same incentive to create revenue which they are now taxing.

    • Apple: If you put in effort, we promise not to tax you.
      Users: <put in effort>
      Apple: Haha !

      If they'd been up-front there wouldn't have been the same incentive to create revenue which they are now taxing.

  • Apple sucks compared to Android. The hardware is antiquated before Apple can get it onto the shelves, and yet they charge a premium for the little Apple logo. And then there's the app store, with a smaller audience, less choice, and Apple robbing both the creators and the consumers.

    From the outside, all I can do is order another bag of popcorn and watch Apple users pay a tax for being stupid.

  • Most uprated comments are tying this to Covid ending, but it is more like the number of lawsuits arguing that the app store is illegal have died down, so Apple is returning to its old ways of monopolizing the app store. pretty straight forward.

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