Apple gives up ’tax’ on medical apps after outcry
Jul 19, 2019
Apple said on Thursday it will not charge the 30% App Store commission for several Chinese medical consultation apps after an outcry from developers.
Why it matters: The 30% so-called “Apple tax,” or commission from every transaction made through its App Store, has long been loathed by developers and its far-reaching implementation fails to address innovations in business models.
“We do not charge a commission for apps that exchange physical goods and services. Following a thorough review of DingXiang Doctor and several similar apps we have verified they are delivering medical consultations and they have not been charged and should not be charged… this was a new situation and we wanted to be sure we applied our guidelines correctly and consistently, and we’re sorry it took us longer than usual to make sure we got it right.”
—Apple in a statement emailed to TechNode
Details: Several apps that offer online medical consultation services had railed against Apple for restricting them to the company’s in-app purchase (IAP) system and applying the 30% commission to its consultation fees, according to a report (in Chinese) by China Youth Daily, the official newspaper of the Communist Youth League of China.
- Apple requires developers to exclusively enable its own payment system when users make payments for virtual services, ensuring that Apple can take 30% commission from each purchase.
- The Chinese medical apps in question, including popular DingXiang Doctor and Chunyu Doctor, help doctors provide online medical consultations over the phone or internet to users for a fee, a business model they have argued is different from virtual services such as in-game purchases or paid content.
- Apple told app developers the medical consultation services are the same as virtual goods, so users can only buy these services via Apple’s payment system, according to developers cited by the newspaper.
- Developers argued that each consultation is unique and can not be replicated and therefore should not be classified as virtual services.
- Apple said on Thursday it would not apply its commission to these apps because they are delivering medical consultations.
Context: Apple’s App Store commission has faced criticism by developers both in China and overseas.
- Swedish music streaming app Spotify filed in March a complaint with the European Commission arguing that the 30% fee by Apple gave its own music streaming service an unfair advantage over rivals.
- Mega chatting app WeChat had to block a function where users can send tips to original content creators on the platform’s public accounts in April 2017 after it was deemed in violation of Apple’s in-app purchase rules. The function was brought back in June 2018 after an outcry by Chinese netizens.