I have no contracts, agreements, or business with Apple, I do not use any Apple products, I do not rely on any Apple services, and none of my work requires the use of any of Apple’s tools. Yet, I’m forced to deal with Apple’s 30% tax. Today, Patreon, which quite a few of you use to support OSNews, announced that Apple is forcing them to change its billing system, or risk being banned from the App Store. This has some serious consequences for people who use Patreon’s iOS application to subscribe to Patreons, and for the creators you subscribe to. First:
Apple will be applying their 30% App Store fee to all new memberships purchased in the Patreon iOS app, in addition to anything bought in your Patreon shop.
↫ Patreon’s website
First things first: the 30% mafia tax will only be applied to new Patreons subscribers using the Patreon iOS application to subscribe, starting early November 2024. Existing Patreons will not be affected, iOS or no. Anyone who subscribes through the Patreon website or Android application will not be affected either. Since creators like myself obviously have no intention of just handing over 30% of what our iOS-using supporters donate to us, Patreon has added an option to automatically increase the prices of subscriptions inside the Patreon iOS application by 30%.
In other words, starting this November, subscribing to the OSNews Patreon through the iOS application will be 30% more expensive than subscribing from anywhere else. As such, I’m pondering updating the description of our Patreon to strongly suggest anyone wishing to subscribe to the OSNews Patreon to do so either on the web, or through the Patreon Android application instead. If you’re hell-bent on subscribing through the Patreon iOS application, you’ll be charged an additional 30% to pay protection money to Apple.
And just to reiterate once more: if you’re already a Patreon, nothing will change and you’ll continue to pay the regular amounts per tier.
Second:
Any creator currently on first-of-the-month or per-creation billing plans will have to switch over to subscription billing to continue earning in the iOS app, because that’s the only billing type Apple’s in-app purchase system supports.
↫ Patreon’s website
This is Patreon inside baseball, but as it stands right now, subscribers to the OSNews Patreon are billed on the first of the month, regardless of when during a month you subscribe. This is intentional, since I really like the clarity it provides to subscribers, and the monthly paycheck it results in for myself. Sadly, Apple is forcing Patreon to force me to change this – I am now forced to switch to subscription billing instead, somewhere before November 2025. This means that once I make that forced switch, new Patreons will be billed on their subscription date every month (if you subscribe on 25 April, you’ll be charged every 25th of the month). Luckily, nothing will change for existing subscribers – you will still be billed on the 1st of the month.
This whole thing is absolutely batshit insane. Not only is Patreon being forced by Apple to do this at the risk of having their iOS application banned from the App Store, Apple is also making it explicitly impossible for Patreon to go any other route. As we all know, Patreon won’t be allowed to advertise that subscribing will be cheaper on the web, but Apple is also not allowing Patreon to remove subscribing in the Patreon iOS application altogether – if Patreon were to do that, Apple will ban the application from the App Store as well. And with how many people use iOS, just outright deprecating the Patreon iOS application is most likely going to hurt a lot of creators, especially ones outside of the tech sphere.
Steven Troughton-Smith did some math, and concluded that Apple will be making six times as much from donations to Patreon creators than Patreon itself will. In other words, if you use iOS, and subscribe to a creator from within the Patreon iOS application, you will be supporting Apple – a three trillion dollar corporation – more than Patreon, which is actually making it possible to support the small creators you love in the first place. That is absolutely, balls-to-the-wall, batshit insanity.
Remember that ad Apple made where it crushed a bunch of priceless instruments and art supplies into an iPad – the ad it had to pull and apologise for because creators, artists, writers, and so on thought it was tasteless and dystopian?
Who knew that ad was literal.
Thom Holwerda,
This all falls well within the scope of antitrust law. I know everybody gets tired of the topic, but our politicians and regulators deserve an “honorable mention” here too, since their complicity helps keep these market abuses possible.
Alfman,
sorry, I don’t see how this is any kind of market abuse — and I am not a fan of Apple or its products. Let me explain my point:
1) Apple provides a certain platform which of course comes at a cost
2) This platform is obviously (for reasons beyond my understanding) in high demand and favor. (I spend most my life in frontier markets, People here trade their kids school fees and lunch for the latest i-phone with “candy crush” while I run half of my business well on a dated middle class android.) This certainly asserts “value” which can be monetized.
3) Nobody is forced to use an I-Phone or any other Apply product. People chose and pay a high premium for it.
So where is the victim here?
Instead, if you are facing a premium forwarded by Apple for being present on this platform, then charge you customers accordingly.
Exploiting dominance is a completely different thing: E. g. getting charged a Television fee even when you don’t own a TV or Radio. On Apple though you have all choices in the world.
And trust me, I despise Apple and its crappy products. But I also had to learn early that I am not main stream.
Andreas Reichel
Owners are very clearly being deprived of the right to use different app stores. It’s blatantly anti-competitive.
Restaurants don’t allow people to bring in their own food or drinks all time (unless you pay a “cork-fee”).
That said: We can argue about allowing the installation of your own software (I am very much in favor of it), but again you won’t go very far because 1) Apple will cite “security concerns”, 2) there is “TPM” and “UEFI” where Microsoft is pretty much doing/threatening the same thing under different names and 3) its their own yard and so their own rules.
Andreas Reichel,
This “We’re doing it to keep you safe” is nothing new. They can say what they want but antitrust trumps the marketing. Think about it this way: if a corporation claiming they’re doing it to protect us were an exception to antitrust, then every last antitrust abuser would use that excuse. They can make whatever recommendations they want, but at the end of the day antitrust is about protecting competitive free markets. When owners are very deliberately being deprived of app store competition by a dominant apple, it’s a textbook case of antitrust abuse.
I think your assertions are wrong.
Ad 1) Yes Apple provides a service, but in this case the only meaningful service is being a payment processor. Mastercard and Visa don’t take more than 5 percent, so 30 percent is ridiculous.
Ad 2) It was in high demand when fees were lower and when the Apple cool aid was clearly working. It’s a fashion brand and fashion isn’t rational.
Ad 3) This is by far rhe most important assertion that is wrong. There are only 2 choices and they both suck. Apple because they charge too much and don’t allow much, Google because you are going to lose your privacy and be brainwashed by ads. This is like a 19th century mining town where there are only 2 supermarkets owned by 2 different mining companies and you need to do your daily grocery shopping. Both companies will point to eachother and say that there is choice as you can go to the other. But practically there isn’t.
Fewer and fewer people will go to a website and pay there. My bank even requires me to verify my transactions on a phone.Also, Apples customer base is like a clan: when most of your family and friends are on iPhone, you can’t really move to Android, especially when Apple actively makes you look unfashionable (until recently closed system chat messages, different colour bubbles, actively working against Progressive Web Apps, not allowing other stores, disallowing apps that compete with Apple even when they became threats 10 years later by conjuring up new rules, having different fees for different companies depending on how strong they are).
Now, this will break somewhere and the EU is trying to regulate (thank you!) but it will be many moons before Apple’s customers won’t take it anymore. It’s also no helped by the fact that 30 percent of 1 dollar isn’t much in the eye of the individual beholder but millions of victims make a nice catch for Apple.
Driven by the insatiable appetite of shareholders, the next step will be to introduce advertising into the Apple ecosystem, they have no choice in the ever increasing need for more profits. It’s already happening slowly, but the marketing campaign is so good that people don’t realise it yet. (frog, pan heating up, etc)
Andreas Reichel, you asked, “Where is the victim here?”
That is the cogent question we need to give consideration here. The answer is, “The creator.” If someone was willing to give $10 a month to a specific creator to help support their work, be a web serial, a news platform, or anything else, the creator would receive between $9 and $9.50 from their benefactor. That 5% fee from Patreon plus any other processing fees required are all reasonable as Patreon is doing a lot of work to provide a secure platform for all of these transactions to occur on. Now if Apple wants to take an additional 30% that now drops this down to the $6 to $6.50 range which is less beneficial to the actual creator. Apple didn’t do anything particularly difficult to earn their 30% and the fact that I can do it on Android or from a browser and the artist then gets the larger amount emphasizes that what Apple wants to charge is unfair and unreasonable.
Many people just do these kind of things through their phone for convenience and don’t realize how much Apple is taking or that they could use another platform to help the creator. Even if they do realize it, it’s another barrier to the creator getting funded.
I live in the US where Apple has a dominate market share (it was over 60% for smartphones in the US last time I checked) and the average user doesn’t truly realize the difference between Apples App Store and Google Play. I also know that if the app turns around and asks me to pay an extra 30% to support someone so they continue to get the same amount is likely to make consider about not contributing at all. Other, like me, may have been willing to give $10 per month, but not $13 per month.
So remember the victim isn’t necessarily Patreon, it’s not the iPhone user, and certainly not Apple. The victim is the creator.
SeanEParsons,
I agree with the points you make about the creator’s interests.. But it also hurts the user’s interests. After all it means less of your payment is actually going towards what you are paying for.
Even if they payer can bare the fee, on a macro-economic scale, these billions in fees still carry significant opportunity costs. The money could have paid for any number of better things. In the US where creators don’t receive public health care, apple’s 30% tax could instead go to provide dental/vision coverage and health insurance for the creator. Maybe better equipment, retirement funds, whatever. Heck even building parks & playgrounds for kids would be a better use of that money. Sending the money to rent seeking corporations has got to be one of the worst outcomes for society.
Patreon is being forced to use the Apple payment platform to process payments and subscriptions, in order to remain on the IOS and app store at all. It’s a kind of bundling or tying, exploiting Apple’s dominance in one market (smartphones in the US) to force users and businesses to transact using Apple’s contender in another market (their subscription/payment platform). Refusing to transact using Apple’s payment platform will result in Apple depriving them access to the App Store and hence to the IOS platform. Patreon don’t even have the option to simply refuse to conduct transactions at all on IOS, leaving aside whether it is acceptable to force them to transact using Apple’s system specifically. It’s coercive and anticompetitive.
> but our politicians and regulators deserve an “honorable mention” here too, since their complicity helps keep these market abuses possible.
Which basically means, it’s the voters fault (at least in democratic states) which are the consumers which is where the circle closes: Let the consumer’s decide! If they insist paying the Apple premium, let the go for it and wake me up when I am forced to buy an I-Phone.
Somebody might be able to give me an update as I’m not across this, but I’d like to be able to advise associates.
I suppose this applies to people who subscribe to streaming types services through the App store on devices like the AppleTV or Mac Mini as well. So I presume you are nearly always better off subscribing directly via a browser and entering credentials via the system interface rather than using the built-in App stores.
If it isn’t applied globally to the App store, isn’t that discrimination?
This is why i think distributed services should win on the long run. This is the only way out of the app serfdom that lay ahead.
This indeed is one of those great ideas Apple got, the idea everybody owes them 30% of whatever they make. And then you have to deal with Apple user base, claiming things like don’t provide a mobile app for iPhone then. No. This is not on how the world works. You don’t owe any company 30% cut just because it became a monopoly and you are a programmer, creator or run a business. But still, they are getting away with it. At some point i assume somebody will do something about it. I expected more out of Epic lawsuit but it looks like US courts sided with Apple. Maybe somebody like Patreon should try at EU courts. As honestly Patreon doesn’t owe Apple 30% cut and neither does Thom. Apple has no business in people wallets, just keep Apple out of there.
Geck,
EU regulators are more likely to call out this sort of abuse than their US counterparts. Now that we’re starting to see apple’s response to antitrust lawsuits, it looks like we are moving into a future where consumer rights are much more fragmented depending one’s legal jurisdiction. While this isn’t entirely new, owner right gaps might start to increase more drastically if western regulators don’t become more serious about antitrust regulation.
To be honest i am rather disappointed US courts sided with the idea everybody owes one or two companies in the world 30% of everything they make. True, you don’t have to go digital, but c’mon. That is not really true, you must go digital in this day and age or you are non existent. If i am not mistaken there were complaints, by judge, that Epic might not have done their job to the fullest. Hopefully it was just that and a more complete and successful attempt will be made in the future. At best Apple should be allowed to take a much lower transaction fee and even here the ecosystem should be opened up for other transaction providers.
Again, what “owner’s right” exactly is violated here? (Apple may violate owner’s rights indeed regarding repair and dissembling and locking the phone — but here we talk about Apple deciding what they want to feature on their own platform and at what price.)
Secondly, where is a “trust” involved? Apple’s market share is like how close to 100%? People buy this shit on their own will literally sacrificing their children for it!
If at all, charge Apple for being a cult and exploiting idiots. But “anti-trust” is hardly a case here.
Andreas Reichel,
I do believe companies should have the right to decide they sell in their own stores and to decide at what price to do so. If they want to charge a 50% cut so be it. Their store, their rules. The idea behind capitalism is that free markets will set pricing by the law of supply and demand, However I hope we can all agree it would be a huge problem for dominant companies like apple purposely and forcefully deny owners a right to go use competing app stores. This is very clearly monopolistic, anti-competitive, and harmful to consumers. When companies are so powerful they can control the market as apple are doing, that’s exactly the sort of abuse that antitrust laws were designed to stop.
Antitrust doesn’t require 100% or even 50% of the market. Even market oligopolies can be prosecuted although it obviously becomes less likely for them to be prosecuted with less market share. I am not aware of precedence below 50%. Apple still surpasses that level in the US. Their market interference should really be stopped under antitrust.
> I am not aware of precedence below 50%. Apple still surpasses that level in the US.
https://arstechnica.com/gadgets/2024/01/apple-hits-all-time-high-smartphone-market-share-takes-1-spot-for-2023/
From what I know it’s somewhere between 20-35% — which is not trust relevant.
“Trusts” were used around 1890 to really undermine competition and corner the consumers. I can’t see how Apple is doing this.
> However I hope we can all agree it would be a huge problem for dominant companies like apple purposely and forcefully deny owners a right to go use competing app stores.
Sorry, not as long as a) nobody is forced to by Apple and b) there are similar alternatives to all Apple products. And at least until now, Apple is strong but not overwhelming. They a great in Marketing (granted!) but not overpowering in any technical way.
You would to have buy Apply by your own choice still.
Andreas Reichel,
You probably don’t live in the US, in which case citing a lower worldwide number is understandable. But their market share is actually much larger in the US and puts them into antitrust territory.
That is not how antitrust has ever worked though. Antitrust laws recognize that dominant market players can still abuse the competition even when consumers aren’t under an absolute monopoly. And not for nothing, but even a duopoly comprising of two players does not make for a healthy competitive market. It’s your right to not believe in strong antitrust regulation, I can see you disagree with me on that. But even so, there is no denying the fact that apple are using their control to block app store competition.
This one is actually easy to answer. First of all it always happens, first thing for people to emerge and to say things like they are just better, i mean i use an iPhone, or Windows, why are people even making a fuzz about it. That is people will very often start defending such practices, due to for example using such products and believing there surely isn’t anything fishy going on here. They simply lack in depth understanding and don’t see beyond their product. That there is much more behind of it. Luckily, market regulators have deeper understanding and the results are usually totally different. That is for such behaviours to become illegal. Now, to answering the original question, it’s rather simple, Patreon doesn’t owe Apple 30% cut and neither does Thom. There is all thee is to it, really. Apple, due to the position on the market, call it a monopoly or gatekeeper, or whatever the current term is, will need to settle for much less. That is at best they will be allowed to collect transaction fees, similar to those at banking. On top of that likely they will need to open up the platform, for other companies being able to provide the same service. In addition links to alternative methods of payments to be right there, in the app itself. If app creator choses so. This is bare minimum. What we need now is for a serious lawsuit to be filed against Apple, for that to get achieved. Epic tried but AFAIK they weren’t taking it as seriously, as they could. Some consumer organizations, in addition to companies, should get involved too. Until then, Apple will get away with it. Simply as they can.
I’m having a hard time feeling sorry for the iOS users here; if they didn’t want to pay a 30% idiot tax they probably should have bought a non-idiot device. Apple have been doing this kind of anti-consumer action for decades now.
You are right.
Actually this doesn’t affect just Apple user base but the whole market. In this day and age, if you conduct any sort of business, or beyond, you need to provide a mobile app. It’s just expected of you. By doing that you are then taxed with 30% by Apple and this is not acceptable.
The issue here is that it’s not the IOS user that will likely have to stomach the premium. It will be cut out from the donations and will most likely hit the recipents. This way Apple is redirecting a charity and voluntary fund stream towards itself, most likely with majority of funders unaware. Also IOS “idiots” happen to be the ones with most resources cash and in monetary sense constitue much bigger part of Patreon market share that Apple in itself. Therefore it indeed is a threat to the whole funding model.
This sucks so much. Do you have a Swedish bank account with Swish? If so, I can send you a little something without all the little feudal lords claiming a piece of the cake (for now at least). They have an option where you don’t have to make your phone number public.
It is not credible that this is due to Apple’s bullying. Patreon has been nagging creators to change to subscription billing for years, with the little red error icon appearing everywhere. This is their decision. They are transparently using Apple as an excuse.
there was a great post on what would actually constitute a viable patreon replacement: https://siderea.dreamwidth.org/1824441.html
I wonder if a year later anything passes those tests.
> Steven Troughton-Smith did some math, and concluded that Apple will be making six times as much from donations to Patreon creators than Patreon itself will. In other words, if you use iOS, and subscribe to a creator from within the Patreon iOS application, you will be supporting Apple – a three trillion dollar corporation – more than the most likely small creator you want to encourage to keep making content, art, or whatever. That is absolutely, balls-to-the-wall, batshit insanity.
Am I missing something, or is there a basic misunderstanding here (which appears to have come from Steven’s post)? In Steven’s example, Apple’s fee (30%) is six times Patreon’s platform fee (5%); it is not six times the amount that goes to the creator (65%). These figures can change somewhat due to Patreon’s other fees (payment processing, etc.), but the basic point stands. There are helpful examples in Patreon’s documentation at https://support.patreon.com/hc/en-us/articles/27992185537037-How-iOS-in-app-purchases-work-for-fans and https://support.patreon.com/hc/en-us/articles/27991664769677-How-iOS-in-app-purchases-work-on-Patreon .
Thom, if I’m right about this, will you please correct the article? Ideally, Steven’s post would be corrected too, but I’m not familiar with that community to feel comfortable bringing it up myself.
Thom Holwerda:
Matt McCutchen,
The first sentence you quoted says the same thing as you, and so does the twitter thread. So I assume your issue is specifically the second sentence (which I bolded)? What was meant probably could have been stated better. I think most people think it’s unfair because apple’s doing very little work in return for a 30% cut. It’s not a rate they would be earning under true free market conditions. It’s purely the result of severely imbalanced market power. Patreon users who are doing actual work for their cut might well earn less profit than apple on every dollar paid through patreon. Apple’s 30% cut of the revenue incurs very little overhead since it’s nearly free money for apple (minus a likely 3-4% payment processing fee). Meanwhile those depending on patron for their livelihoods are doing actual work and might have much higher expenses to pay before they can make a profit.
You’re right. I meant to write what you said – Apple will make more than Patreon per creator – but my brain messed up somewhere. I fixed it, thanks!
A 30% charge on revenue is mind boggling insane, just INSANE.
Not even governments go that far on VAT systems (where the money is collected for public benefit), yet this is allowed to happen like a mockery on humanity’s intelligence…
It is predatory, mafia style level mediocracy.
This should be rulled illegal on a retroactive basis, with interest bearing refunds to be issued going back to day 1, be it Apple, Google, or anyone else.
INSANE!
I’d remove all mention of billing in the app (and if the app isn’t useful, remove it from the App Store) and then simply release a PWA – they are a pain to set up, but are completely viable. Once they are installed, they look and work just like any other app. Apple has in various ways sabotaged PWAs, but they aren’t completely dead yet. The nice thing is – they’d have to further destroy the viability of PWAs in order to counter such a move, which would produce real and meaningful regulatory blowback. It’s all upside.
I don’t know much about this world of patreon donations, except that my brief time subscribing to one was pretty awful because patreon itself was awful.
But isn’t there an alternative called Liberapay that’s supposed to be more sane?
I stopped using Apple altogether when I realized it was a tax system:
– They basically will stop supporting your perfectly fine iPad or iPhone when they decide you should buy a new one.
– They strongly try to tie you to their devices and if possible their applications.
I realized I basically used Chrome or Google services otherwise and avoided the Apple “tax” moving to the Samsung/Android, which was cheaper and basically the same thing nowadays.
All Patreon can do is to advertise their PWA on their website and remove links to IOS app from the web website and incentive IOS app users to switch to the PWA (they cannot advertise donations in the IOS app but they can advertise the PWA in general) to make it gradually less relevant until it doesn’t matter whether Apple bans it or not. They should also be honest about AppStore royalties while doing the donation thought the app.
Hey Thom, the us there an coordinated action among users of Patreon to actively stear their funders away from the app?
dsmogor,
Ideally there would be a very clear breakdown of how much money is actually reaching the recipient when paid through the various methods. The problem is it sounds like it’s going to be dependent on preexisting activity and the dates of those activities.
Patron should be disclosing this information as a line item before the subscription is placed “apple fee of $X/mo” that way users can make their own informed decision. However the article suggests that apple are prohibiting patron from disclosing that fact to the users who are effected. This is clearly unethical and should be remedied by courts rendering it null and void. Unfortunately the courts don’t generally factor in public interests when it comes to contracts and corporations can exploit it.