Microsoft Offers Up 10 Principles for App Stores

Posted on October 8, 2020 by Paul Thurrott in Android, iOS, iPadOS, Mobile, Windows 10 with 89 Comments

Microsoft today revealed a set of 10 principles for app stores that it says will promote choice, fairness and innovation for everyone. It’s implementing them in the Microsoft Store for Windows 10, of course, and hopes that Apple, Google, and others will follow its example.

“App stores have become a critical gateway to some of the world’s most popular digital platforms,” Microsoft vice president Rima Alaily notes. “We and others have raised questions and, at times, expressed concerns about app stores on other digital platforms. However, we recognize that we should practice what we preach. So, today, we are adopting 10 principles—building on the ideas and work of the Coalition for App Fairness (CAF)—to promote choice, ensure fairness and promote innovation on Windows 10, our most popular platform, and our own Microsoft Store on Windows 10.”

Those 10 principles are:

  1. Developers will have the freedom to choose whether to distribute their apps for Windows through our app store. We will not block competing app stores on Windows.
  2. We will not block an app from Windows based on a developer’s business model or how it delivers content and services, including whether content is installed on a device or streamed from the cloud.
  3. We will not block an app from Windows based on a developer’s choice of which payment system to use for processing purchases made in its app.
  4. We will give developers timely access to information about the interoperability interfaces we use on Windows, as set forth in our Interoperability Principles.
  5. Every developer will have access to our app store as long as it meets objective standards and requirements, including those for security, privacy, quality, content[,] and digital safety.
  6. Our app store will charge reasonable fees that reflect the competition we face from other app stores on Windows and will not force a developer to sell within its app anything it doesn’t want to sell.
  7. Our app store will not prevent developers from communicating directly with their users through their apps for legitimate business purposes.
  8. Our app store will hold our own apps to the same standards to which it holds competing apps.
  9. Microsoft will not use any non-public information or data from its app store about a developer’s app to compete with it.
  10. Our app store will be transparent about its rules and policies and opportunities for promotion and marketing, apply these consistently and objectively, provide notice of changes[,] and make available a fair process to resolve disputes.

These are all excellent, of course, and many cut to the heart of the complaints that Apple, especially, has faced in recent years thanks to its abusive business policies. But I’m most interested in #6, because it’s so vague. What are “reasonable fees”? Shouldn’t they be closer to the 3 percent or so that credit card makers charge and much lower than the exorbitant 30 percent fees that are now so common in these stores? Microsoft is silent on this issue.

“We know that regulators and policymakers are reviewing these issues and considering legal reforms to promote competition and innovation in digital markets,” Alaily concludes. “We think the CAF principles, and our implementation of them, can serve as productive examples. Applying these principles to the Microsoft Store on Windows 10 is a first step and we look forward to feedback from developers and the broader community.”

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Comments (101)

101 responses to “Microsoft Offers Up 10 Principles for App Stores”

  1. abiddine

    It would be sweet if they add good UX to their list of principles.

  2. toukale

    In reply to RM:

    Actually, consumers love the current arrangement. As a matter of fact software have never been cheaper or abundant. One can argue we have too much crap available in those stores. This is a B to B issue. The reality is most of those developers and business don't need an app listed in the AppStores to run their business, they want to be in the Appstores for discovery and attract more users which therefore leads to more sales and money. From my experience the AppStores provide a all in one solution that includes payment processing, app bandwidth, App supports, digital shelf space and sales lead, not to mention api's etc.


    It's not a right to be on those stores, as Netflix and Amazon have proven, you do not need to be on the app stores to conduct your business. Netflix app is just a viewer app, meaning, they don't give Apple a dime, users join using the web. Amazon is launching their streaming gaming service without the app store. Those are just two quick examples that shows, no one needs to have an app listed in the app store. If the value of those app stores are not there, then maybe those developers should not have their apps listed there. Its not that hard, that's the beauty of the web.

    • nbplopes

      In reply to toukale:

      “Actually, consumers love the current arrangement.”


      I guess you come to that conclusion because consumers buy personal computers right? How come?


      Are you arguing that consumers, citizens, should not have clear and unobstructed right to choose to whom they buy a good or service on any personal computer of their choice? Why not?


      In the land of freedom it seams that choice is becoming a problem on people minds. Equated to an obstacle to progress, and the right for compensation not to mention innovation as far as some discourses go.


      I will fight this mindset. Repudiate it. No social engineering and candy bars will make me share such a chain of values.


      As for the declared MS 10 commandments ... they do not look that honest given their opportunistic stance. It seams that the value of choice, security and privacy in the tech space is a matter of opportunism.


      The decay of western values in favor of share holders interests and their lively charity parties made to make them feel better about themselves.


      Yaikes.


      PS: I mean real choices, not fabricated ones to make it look like you have some. There is a name in psicology for this social tactic.

      • sammyg

        In reply to nbplopes:

        You have choices. Go with an Android phone. You can then wipe it and install a plain version of Android or possibly some other OS, Ubuntu Phone or whatever. Don't buy any smartphone. Don't have a phone period.


        No one is forcing any one to use any of these products. I do not have a Facebook, Twitter, Instagram or any other social media account. I only use Youtube and no other Google products, logged into some fake gmail account that I never use for anything I do in real life. I use Apple and Microsoft products. If I retired tomorrow I would only use an Xbox and dump all of the other Microsoft products I use.


        This is nothing but lobbyist (for one side) working the corrupt politicians in the US, which is basically all of them.


        I do agree with this statement for sure.


        "The decay of western values in favor of share holders interests and their lively charity parties made to make them feel better about themselves."

        • nbplopes

          In reply to sammyg:


          You have choices. Go with an Android phone. “


          What you are arguing is preconditioned by an obstruction to choice based on a fallacy that a Store and a Personal Computer serve the same purpose. Yet they do not. The consequence of this fallacy is your conclusion, but its not the only possible conclusion neither necessary.


          No business in the world requires you to go use totally distinct shops, much less use two devices, in order for you to be able to have a choice on the supplier of good or service. You go to one, buy it ... take it home and use it. Not go to one Store to buy and than go to another Store to get it. It’s pure manipulation, an obstacle for choice. Consumers should be able to choose the best device and the best shop independently with no obstacles.


          The choice of personal computer or OS should not preclude the right choose with no obstacles from and to whom, people and businesses, can buy and sell goods or services. Especially when the device maker has 50% market share in the US. This preconditioning is nothing but a construct, not by any means a standard practice much less best practice in a free market.


          The idea that this is good for consumers is ludicrous. It’s good for centralization of wealth and one day or another will blow on consumers faces if not stopped. The US and the World already learned some lessons with FB by failing to act in time to protect users/consumers.


          Look. Ii’m not against Apple, I’m against this practice. For personal and work, only use Apple devices, me and the member of my household (ok we also have PS4, Xbox, Switch...). We like their tech. From the top of my head over 10K worth of devices,. I’m all for companies making good stuff to be compensated ... well compensated ... and Apple no doubt had been, its inspirational even. Yet this is a step too far. Nothing they have done is worth such power over their customers, over digital goods and services providers, over one in two Americans.


          This discussion is not about choice, its about having the power to control and mold people’s choices. Should they have it with no regulation because they make wonderful devices and OSs and are very successful doing it?


          Roger out.


        • jgraebner

          In reply to sammyg:

          The fact that consumers can, if they want to, choose other platforms is not the point. The point is that the iOS platform has become so popular that providers of mobile apps and services can't be competitive without supporting it and Apple is unfairly taking advantage of that market position.


          As for the whole "consumers like it" argument, I'm sure they do like the convenience of the App Store, but do you really think that consumers would object to lower prices on services/subscriptions ? Do you think that most consumers would object to being able to buy Kindle books or manage their Netflix account in the iOS application? Do you honestly think that XBox Game Pass customers are going to have a better (or even equal) experience in a browser-based app than they would in a native one?

      • Greg Green

        In reply to nbplopes:

        There are many real choices. Just go to Best Buy or even Verizon or T-mobile to see how many choices you have.

        • nbplopes

          In reply to Greg Green:


          We are talking about buying and selling digital services and apps on personal computers, not buying and selling devices. I know Apple guys like to confuse the issue by poisoning the air with the idea that stores and and devices are the same thing as of serving the same purpose. It’s not the case, they don’t serve the same purpose at all hence logically they aren’t the same thing. Emotional driven mindsets sometimes leads to illogical conclusions and this is one, a construct driven by a fallacy.


          And yes Best Buy is not Apple. Apple is standing in the freedom and business ethics around choice that others have stood for when it comes to selling and buying devices. It’s a shame it does not understand this and contribute to this basic principle. It’s a shame that it tries to social engineer using subversive messages with the point of “choice is not good “ ... when it comes to them ... but it will soon.

  3. Wizzwith

    Tim Sweeney has spoken! heh :)

    "It's wonderful to see Microsoft formally codify its long-held principles in Windows as an open platform and fair market for all developers and consumers."

    And: "Microsoft supports choice, competition and fairness on Windows. This is the freedom consumers and developers want and it's the future of app stores."

    This is the future of app stores... yeah one can only hope that's true and what's been started will prevail.

  4. innitrichie

    The Microsoft Store is the gold standard IMHO. For example: you'll find an abundance of PDF editors and creation tools, at really excellent prices. Ditch your phones and tablets and come on over to Windows 10.

  5. Wizzwith

    The standard fee for apps and IAP in the Microsoft store is 5%. FIVE PERCENT!!! Again, 5%! If a sale comes from direct promotion/advertising by Microsoft, they charge a total of 15%. Games are under the more standard 20-30% fee structure.

    Bravo to Microsoft for publishing these principles. Anyone making up some nonsense reason to criticize this, shame on you; this is nothing but great and exactly what the industry needs. The current level of success of their app store is not relevant, and game consoles are not comparable; what matters is they published these principles which are undeniably good. These principles aren't exactly new for the MS app store, they've been following these all along, but having it in print matters. If only Apple had the "courage" to do this, LOL.

    • lvthunder

      In reply to Wizzwith:

      #5 and #2 conflict with each other. For instance Facebook and Google's business model is to collect everything about you so they can serve you with ads. That doesn't respect your privacy.

      • nbplopes

        In reply to lvthunder:


        It did not start that way. It turned to be that way once it became a waste land.


        They are all in the same boat.


        You need understand that these companies don’t care for security, privacy, choice or labor rights ... they care for making money. If those values are the path of more profits great, if not they will do otherwise. They owe this practice to the shareholders, not customers, not democracy.


        Thats is why the digital space needs some basic regulation protecting these values much like the analog space.


        Look, I don’t think of these companies as evil or angels. Protecting these values is for people to protect, for democracy to protect ... not companies. Companies will follow their lead if they want to operate.


      • Wizzwith

        In reply to lvthunder:

        I disagree, but I also don't care about tearing apart each point. Each are nothing but good on their own and all together. That’s what matters.

        These are great general principles that should be applied to any app store for any general computing platform that holds sway in the market.

        I commend MS for doing this and wish Apple and Google would amend their ways too, but they won’t on their own. This will have to get forced on them by government regulation or extreme market pressure. But market pressure is not feasible given their market dominance, so regulation it will have to be.  

  6. anderb

    11. We will not let you install a competitor's web browser because that stops us collecting details about what sites you visit

  7. illuminated

    All good points. Too bad market "winners" start as small good guys that later become total a-holes.

  8. ontariopundit

    This is comedy gold: our operating system is so unloved that we need to bend over backwards to attract developers, and we need a marketing gimmick to draw attention to our store.


    We also are quite happy to use anti competitive strategies ourself, so please ignore them in our marketing push.


    You can use the ribbon, but you can't make office style applications with it. You want a web browser through our store that isn't Microsoft? Too bad, so sad. No third party rendering engines allowed in our store.


    I hate to break it to the Microsoft buttercups, but developers don't care as much about the 3% or 30% surcharge as what customers a store can deliver.


    Apple and Google can both deliver hundreds of millions* of PAYING customers.


    Microsoft? Umm. Judging by the dearth of good software in the Microsoft store, I'm thinking that developers are prepared to swallow the 30% commission they have to pay Apple in order to be in the App Store! There is no real value to being in the Microsoft store since Microsoft can't drive customers to buy apps.


    *Google may have more customers, but Apple has much more profitable customers, who are also much more likely to pay good money for an app.

    • Paul Thurrott

      It's not Windows. The Microsoft Store is so unloved that we need to bend over backward to attract developers.
      • miamimauler

        In reply to paul-thurrott:

        The Store just isn't needed on desktop for most everyday users. I would assume the Mac Store doesn't exactly kick arse either.

        • bkkcanuck

          In reply to miamimauler:

          Well, I would say on average I have one purchase on the Windows App Store (a codec), and 29 (3 of them are Apple apps) active paid apps (totally probably 39 in total I think) [and a few hidden ones that have been replaced by 'upgraded' versions] from the Mac App Store.

          I don't regret any of those 29 paid apps... so I think you are making an incorrect assumption that if Microsoft's is unloved, Apples will be too. [yes, I also have a significant number of paid apps that do not exist on the Mac App store]

          • miamimauler

            In reply to bkkcanuck:

            I didn't claim the MS Store was unloved. I claimed the MS Store is simply not needed for most everyday home users. There is a difference.


            Yes, Apple users are known to pay for apps much more than the average Windows user. I do suspect though your case of having 29 paid for apps is the exception rather than the norm.

  9. nbplopes

    In reply to RM:


    Nope. The point is not that Apple is a closed ecosystem. There is no problem with that.


    The problem is that given their market share in the device market along with their policies they are obstructing the right of consumers and suppliers to buy and sell goods and services to and from whom they want. That is the point.


    Personal computers, including smartphones , much like energy, oil, internet, water ... are basic commodities in today’s world.


    If the consumers rights such as choice aren’t protected, even if against their candy bar desires, towards a bigger picture, soon “nothing” will be sold outside these mega stores. The entire digital economy will be ransom of 3 or 4 megastores unleashing 30% of their global revenue. Things that cost less than 1 buck will be sold at 30 as there is no choice ... all will be applying the same scheme ... controlling demand not through the store but through the devices and OSs they produce.


    Which goes fundamentally against the opportunity that the Internet presented. Direct sales, direct producer to customer conversation ... unfiltered ... more competition and profitable opportunities, better products.


    Apple was reborn in such a space. Google and Amazon were born in such a space. All these mega corps with the exemption of the older MS were born in such a space. A space they want to shape differently towards the interests as they have became large. Is up to you, us, to keep the choice flowing as ever.


    That is point.

  10. Daninbusiness

    I like the positioning here! Curious how it plays out. Also, I see this very specifically does not include Xbox; though comparing the console business model to the PC business model is like apples and oranges.

  11. stmorr82zw5zml

    Microsoft will not use any non-public information or data from its app store about a developer’s app to compete with it.


    I wonder how this applies to the third-party hardware Microsoft sells in their store.


    including those for security, privacy, quality, content[,] and digital safety.


    All hail the Oxford Comma.

  12. skolvikings

    In reply to RM:

    Strangely, I tried to buy a PPV movie from DISH using my DirecTV gear, and it didn't work. I can think of a million ways in which hardware/service manufacturers have locked down ecosystems where customers can only buy from them. I'm unable to watch HBO Max on my Roku. I'm unable to brew coffee that wasn't licensed by Keurig in my coffee maker. I'm unable to play any game I want, from any store I want, on my PS4 unless it's been licensed and Sony's taken their cut (nor can Xbox users).


    People hate Apple and then they seemingly get ADS. At least you mentioned Google as they have the same practices. I give you credit for that. Most of the people I hear ranting about Apple, only talk about Apple, seemingly oblivious to the fact that almost all of the popular digital ecosystems have similar rules.

    • Michael Sorrentino

      In reply to Skolvikings:

      I think the reason for Apple getting more hate is that they started most of those "industry standards" as Tim Cook put it.


      As for the gaming comment, I think its fair to say that most consumers understand that each console only plays games for that console, plus they have the option of PC gaming. There are certainly more options in that area than iOS and Apps.

  13. bkkcanuck

    In reply to RM:

    I would say based on my very very small pool of friends that have a game console - they have spent way more on games on average during a single year than the cost to purchase the console. So what is happening is that you are selling a device at below market price (that would be called dumping if it were normal international trade) and then locking you (the average 'you') into a revenue stream over the life of the device that far exceeds the price of the console. This means the market for game console at the time of purchasing the console is distorted, as that is not the total cost. This is now done by companies making printers, coffee machines with pods, etc. In many ways this is also an anticompetitive practice and if you are going to attack 'monopolies' within a closed environment - then this practice should also be outlawed.

    • Michael Sorrentino

      In reply to bkkcanuck:

      The difference however is that within those markets there is competition.


      Gaming has PlayStation, Xbox, Nintendo, Oculus, Steam, PC gaming, etc. while each may lock you into their ecosystem, you still choose the ecosystem you get locked into, and overall with exception to mostly in house developed exclusive titles almost every game available on one platform is available on all the others.


      Similarly, while Keurig may have originated and dominants the coffee pod machine industry, other companies have created competing products. Also, despite being owned by Green Mountain Coffee, itself now owned by the Dr. Pepper Company renamed Keurig Dr. Pepper, Keurig allowed competing brands of Coffee to offer their products in Keurig Cups.


      This contrasts Apple's App Store approach in which iOS devices can only have Apple's App Store and Apple determines which apps are allowed in the store.

      • bkkcanuck

        In reply to msorrentino:

        I don't get the distinction.


        With the XBox or Playstation -- each of those platforms also act as gatekeepers. I chose which ecosystem to get myself locked into when I buy an iPhone - I am sorry, but I just don't see the difference... when you become a gatekeeper you can close the gate. In this case they also have 30% commission on those 3rd party developed products.


        Keurig patents expired in 2013 (which means there were then competitors [like Google to Apple]), and Keurig came in with version 2.0 which had DRM (digital rights management). So if Keurig is 'allowing' competing brands, then they too are acting as gatekeepers (with licensed third party developers).

        • Michael Sorrentino

          In reply to bkkcanuck:

          The distinction is that of the mentioned products and services only Apple alters it guidelines to harm competing apps, that is the issue not the closed marketplace. Think of it this way, when someone downloads and subscribes to iTunes, Apple gets 100% of the profits minus taxes because they own iTunes and they own the iOS platform. However, if someone downloads and subscribes to Spotify, Spotify doesn't get 100% of the profits minus taxes because Apple demands a 30% share. So competing music services can only ever earn 70% against Apple's 100%. This applies to every app in which Apple offers its own solution the competitors are at a financial disadvantage. This is the same issue Google has with the Google Play Store, they are making money off of competing apps in addition to their own.


          The issue here really isn't about the consumer end, but the developer end, developers have no choice but to develop for iOS if they want to make money, and in turn fork over 30% of that money to Apple because they can only offer the app through the Apple App Store. Google with Android allows for side loading of apps, but warns consumers of the potential security risks involved, but that means that developers can release Android apps that aren't in the Google Play Store and in turn not fork over 30% of the money to Google.


          With Keurig, third parties choose to license from Keurig, because it is ultimately cheaper, than releasing their own competing Pod Style Coffee Machine, but they could if they wanted to. The marketing, manufacturing, and development costs of releasing their own machine would likely be far more than the licensing fees probably are.


          With gaming the difference is that while Microsoft, Sony, Nintendo may take licensing fees, they are not releasing games that directly compete with those of third parties, which is the issue that Apple and Google have. Microsoft may own Halo and Activision may own Call of Duty and they both may be First-Person shooters but they offer gamers different experiences and stories, so they really don't compete with each other and many gamers that play first person shooters play both games. In contrast, with a music service app such as iTunes or Spotify consumers are going to choose one or the other not both.

  14. kb923689

    In reply to RM:


    I'm not talking about this "10 principles" PR thing. I'm talking about the state of Windows 10. 5 years later and there's nothing great going on. They just keep messing core features in a desperate attempt to make Windows "cool" again. It's time to scrap everything and go back to Windows 7 and Aero.

  15. bkkcanuck

    hmmm... so the first few items in that list refer to the 'Windows' app store.... so they are not applying this to the XBox app store? The equivalent for Apple will they won't do the same for the macOS app store... oh yes, that is basically the same - you can install your own applications.


    Now I expect Microsoft to also start down the same road with privacy - and removing telemetry related to advertising and remove advertising from the platform as well... but then I will not hold my breath.


    It is easier to take the high road when you have failed at something... sort of like Apple and the failure of iAd.


  16. Greg Green

    In reply to RM:

    I don’t think developers are willing to have apps taken out of the App Store. Epic is fighting a legal case to keep their apps in the App Store. The apple App Store is where the money is for developers.

  17. sammyg

    So why was my comment removed?


    The question is..."with this statement from Microsoft can I get games from another App store for my Xbox now?"


    That was removed because ???? I was not bashing on Apple? It is a relevant question.


    I am sure Microsoft gets some cut of game sales for the digital versions of a game like COD. For me I like that locked garden and I do not want it to change on my Apple devices or my Xbox.


    I am ditching PC gaming in favor of the Xbox and PS only gaming. Mainly because of that crazy amount of cheating that goes on in PC multiplayer games and how easy it is to acquire and use those cheats. The PC is open and this easily allows this to go on. If they were to open the Xbox and PS stores or allow you to get apps from other locations then these kinds of cheats and who knows what else would be allowed into the ecosystems and ruin them.

  18. jchampeau

    It’s easy for Microsoft to modify its store however it wants since it is basically unused and produces no revenue. Apple and Google executives, on the other hand, would face a shareholder revolt and probably all find themselves jobless if they just decided to give away 2/3 or more of their store earnings. This is a case where the right thing to do morally is in conflict with that which benefits shareholders, and shareholders (especially institutional shareholders) prioritize returns and profits over morality.

  19. Greg Green

    In the same blog MS continues:


    “We also operate a store on the Xbox console. It’s reasonable to ask why we are not also applying these principles to that Xbox store today. Game consoles are specialized devices optimized for a particular use. Though well-loved by their fans, they are vastly outnumbered in the marketplace by PCs and phones. And the business model for game consoles is very different to the ecosystem around PCs or phones. Console makers such as Microsoft invest significantly in developing dedicated console hardware but sell them below cost or at very low margins to create a market that game developers and publishers can benefit from. Given these fundamental differences in the significance of the platform and the business model, we have more work to do to establish the right set of principles for game consoles.”


    • sammyg

      In reply to Greg Green:

      I consider the iOS/Apple ecosystem just as specialized. In fact its closed garden approach is a benefit for me and many others and well-loved by their fans. Apple invests significantly in developing its hardware and app developers have benefited massively from this.


      Apple response...


      "Last year in the United States alone, the App Store facilitated $138 billion in commerce with over 85% of that amount accruing solely to third-party developers."


      I would say those developers are doing well. But yeah lets go ahead and open it all up and take away the thing that many customers actually like about the Apple ecosystem.

      • jgraebner

        In reply to sammyg:

        I'm genuinely curious what it is that you like about the closed ecosystem. I completely understand how it benefits Apple, but I struggle to see what the advantage is for the consumer. If they open the platform up to allow installation from other sources, you'd still be perfectly free to ignore other sources if Apple is the only company you trust. Personally, I think it is nuts to think that Apple is somehow more trustworthy than, say, Microsoft or Epic Games, or Amazon.

        • Truffles

          In reply to jgraebner:

          It's a bit misleading to call iOS a closed garden. It's not as if users have real money tied up in iOS exclusive software. I'm guessing 90% of iOS users have never paid for iOS software, and the vast majority of the balance of users having only a few dollars tied up in software. That pretty much means that the entire iOS user base could switch to Android and replace all of their software with pocket change. That's not lock-in, that's a cappuccino.

          • Paul Thurrott

            It's not misleading at all. It's literally a walled garden and a closed ecosystem and it's designed to lock-in users. What you wrote is not "misleading" either. It's just completely untrue.
  20. glenn8878

    And 10 ways to weasel out of it.

  21. jedwards87

    3% doesn’t cover it. There is a lot that goes into running those stores.

    • Paul Thurrott

      Wrong. It more than covers it. As I commented elsewhere, the App Store “costs” Apple $100 million a year to run, but it generated $17 billion in revenues last year. There are no costs, no expenses, and no justifications for their fees.
      • bkkcanuck

        In reply to paul-thurrott:

        "Wrong. It more than covers it. As I commented elsewhere, the App Store “costs” Apple $100 million a year to run, but it generated $17 billion in revenues last year. There are no costs, no expenses, and no justifications for their fees."


        I don't think your numbers add up. On one of your other articles it mentions that Apple makes around 64% profit margin on the operational costs of running the App store (higher than what they make on hardware which I think typically somewhere around 35%. If the 64% is correct then the operational cost would be on the order of $6.15 billion.

        • Paul Thurrott

          The $100 million figure comes from the person who used to run Apple's App Store. So I'd take that as gospel.
          • bkkcanuck

            In reply to paul-thurrott:


            Credit card charges of 2% (Mastercard is between 1.5% to 2.6%, Visa probably similar - a lot of the Apple store charges are small - so the overall rate is likely not going to be 1.5% since the charges on average are small).... 2% of 17 Billion is $340 million. So I don't think I can take your number as gospel - it does not pass even a silly sanity check.


            From your Judiciary Report Article....


            “Apple’s monopoly power over software distribution on iOS devices appears to allow it to generate supra-normal profits from the App Store and its Services business,” the report continues. “The Services business accounted for nearly 18 percent of total revenue ($46.2 billion) in fiscal year 2019 ... The Services category is also Apple's highest-margin business at 63.7 [percent] in fiscal year 2019 and 67.2 for Apple's ending in June 2020.”


            Services revenue would be $8.3 billion in year 2019. (not sure how 17 billion is the store revenue since I would think that would all be services).


            The bulk of those services are going to be the store.


            $100 million seems very small for the staff requirements - with operations that have to deal with multiple jurisdictions and tax reporting across the world.... The staff to review the apps that are submitted (significant volume), the server farms that have to be allocated, the office space, etc. etc. etc.


            I am sorry, but there are inconsistencies that either do not match what you are saying or inconsistencies in the reporting of the financials themselves to congress and your reporting.

            • jgraebner

              In reply to bkkcanuck:

              I'm not sure if the App Store is part of the services business and, if it is, it's definitely not the only component and you can't extrapolate costs from combined totals.

              • bkkcanuck

                In reply to jgraebner:

                There financial revenues come from Products (by category):

                • iPhone
                • Mac
                • iPad
                • Wearables and Accessories

                and Services (no breakdown).


                I did make a mistake in taking 18% of 46 Billion... to come up with 8 billion... 46 billion would be the 18%... Services totaled 46 Billion.


                So yes, it would be part of services and that would make room for the 17 billion figure... but then the back of the hand calculation on what the credit card charges alone would be far exceed what Paul is saying the total cost of running the App Store would be.


                There is continuing development on the App Store (AI assisted learning likely), staffing for the review process (of which 92% of what they review is free), as well as support staff handling stores across the world (different languages), the tax reporting/processing for different app stores in different countries), staff needed to interface with regulators and remove content ruled illegal in those countries.... I would expect the staff to handle that would not be insubstantial.


                The $100 million that Paul indicated therefore cannot be accurate.

    • Wizzwith

      In reply to jedwards87:

      Microsoft app stores's standard fee is 5%. Not very far from 3%.

      • lvthunder

        In reply to Wizzwith:

        Then they are losing money on their app store. They must give 3% for credit card processing. Do you really think hosting, development, marketing, the reviewers, etc. can be done for 2%? Or 0% since all their subscriptions will use a different payment method so all that's left in the store is a free app.

        • Wizzwith

          In reply to lvthunder:

          That's not they way it works. The CC fee is taken off the top, not out of the 5% fee. If an app is $1, CC gets 3c, the 97c remaining is then split 95/5. Besides, CC fees are often negotiated down. But anyway, who says they are trying to make money on it? ;)

    • illuminated

      In reply to jedwards87:

      That is the reason why Visa and MasterCard are out of business obviously /s

  22. redstar92

    I like these principles but how about fix the microsoft store first and then write to us about transparency and freedoms :)

  23. murray judy

    What are “reasonable fees”? Shouldn’t they be closer to the 3 percent or so that credit card makers charge ...


    App stores have to pay credit card fees, probably around 2%. A "reasonable" fee should be based on a reasonable profit after app store costs including credit card fees, hosting, support and overhead costs.

    • ontariopundit

      What are “reasonable fees”? Shouldn’t they be closer to the 3 percent or so that credit card makers charge ...


      A reasonable fee is that which the customer is prepared to pay in a free market. No one is holding a gun to the customers' heads. It is a FREE market. It just so happens that Apple makes the most desirable and PROFITABLE devices.


      Don't like iOS? Buy Android. Don't like the Play Store, install one of the others. Don't like these options? Get a flip phone or find a phone that runs Lineage OS.


      There is a thriving market out there. It just so happens that the most successful player can charge the most.

  24. frank_costanza

    I’m more worried about #5.


    “Objective” standards for content and safety. Impossible. Change it to “subjective” and at least I could give them credit for honesty.

    • jgraebner

      In reply to frank_costanza:

      "Objective" and "Universal" are not the same things. All that objective means is that there is a clearly defined set of standards that are not open to interpretation. It's possible that two app stores from different companies can have very different sets of standards, each of which are still objective.


    • jackwagon

      In reply to frank_costanza:

      It sounds like an "objective standard" for content and safety could apply to a specific set of guidelines regarding what permissions the program would be allowed to request, content/subject matter of various works (although in order to be objective, they would have to avoid "I know it when I see it"-type assessments).

    • threepwny

      In reply to frank_costanza:

      It's possible to define objective standards. As long as the definition doesn't leave room for interpretation, it's objective. I agree quality and whatever "content" means are generally nebulous, but it's technically possible Microsoft could define them pretty clearly. Security, privacy, and safety can definitely be objective

  25. dashrender

    I'm not sure I agree with Paul's 3%. These stores should be DOING a lot more to protect the users of the platform, that costs money. Users would likely never be willing to accept some type of monthly store fee, so really only the devs are left to shoulder that burden. I 'feel' like 5-10% should be enough for Apple to cover it's expenses in this regard, but I have zero basis for this feeling.

    • Paul Thurrott

      The App Store "costs" Apple $100 million a year to run, but it generated $17 billion in revenues last year. There are no costs, no expenses, and no justifications for their fees.
      • skolvikings

        In reply to paul-thurrott:

        It's Apple's own customer base. Devs are buying access to that, and making a ton of money doing so. I don't see very many A-list apps snubbing the iOS App Store. Collectively, developers are making billions on an ecosystem that Apple created, that wouldn't exist were it not for Apple. While I don't agree, I can see an end-user argument that the fees are too high (since we're the ones that pay those fees), but I don't see any argument on behalf of devs.


        And until Microsoft enacts these same principles on their Xbox Store, it's nothing but platitudes and bluster.

        • jgraebner

          In reply to Skolvikings:

          The reason that A-list apps aren't snubbing the iOS App Store is that they can't do so and still remain A-list apps. Epic really only got away with it with Fortnite because the game is bigger on desktop than mobile and I'm sure they are still taking a big financial hit.


          That gives Apple a lot of market power and, thus, makes them subject to scrutiny over possible abuse.

        • Paul Thurrott

          Most App Store devs don't make any money at all, let alone "tons" of money.
          • skolvikings

            In reply to paul-thurrott:


            Most App Store devs don't make any money at all, let alone "tons" of money.


            That goes for everything in life and business. Some people make it, most don't. Apple changing their fee structure will help very few fledgling developers make a living from their app. But the fact remains, if Apple is taking 30% and made $17 billion last year, that means app publishers collectively made ~40 billion. Perhaps we have different perspectives on what's considered a ton of money, but I consider $40 billion to be a ton of money. Money they likely don't make had Apple not created the iOS app store ecosystem.

  26. waethorn

    AFAIK, Walmart still charges a rental fee for shelf space for third-party products in their stores.

  27. ghostrider

    What a laugh. MS trying to take full advantage of the current distrust in Apple and Google's app store policies. How righteous of them. The big problem is, nobody uses Microsoft's app store, and that ain't gonna change.

  28. harmjr

    And how often is this store used again? Windows has a store....

  29. bart

    If only Microsoft had a viable mobile platform, this could have an impact on Google and Apple.


    Maybe it is time to get that alternative App Store going on Android?

  30. kb923689

    Apple and Google stores are established. Microsoft is left behind. The best they could do is make Windows attractive to the younger generation but they're doing the opposite.

  31. winner

    Is Microsoft trying to pretend they have some competence, relevance, or leadership in app stores?

  32. scovious

    It looks like they are proposing to treat digital platforms with over a billion users like Windows, iOS and Android differently from digital platforms with under around a hundred million users such as Xbox and Playstation.

    I don't know how they should decide what digital storefront taxes should be, but it should not be higher than the sales tax.

    Charging over double that requires more justification than: "my duopoly competition charges 30%, so that's industry standard."

  33. lewk

    Does this mean we'll see some love given to the Store now? Like Xbox gave to their store?

  34. matthewitt

    2, 3, and 4 have nothing to do with the app store. The way it is worded, Microsoft could block something from the Windows Store based on 2 and 3.

  35. waethorn

    "Our app store will hold our own apps to the same standards to which it holds competing apps"


    Hmm....so why was Office removed from the Windows Store again?

  36. madthinus

    And the xbox store?

  37. darkgrayknight

    As a user of app stores and as a developer, these are a great list and a good starting point that pretty much no app store has done to date.

  38. venividivinci

    Does this go for Xbox as well. Not taking 30% from there would be nice

  39. crp0908

    Microsoft Offers Up 10 Principles for App Stores because the Microsoft App Store is so much more successful than the Apple and Google App Stores /s

  40. Michael Sorrentino

    Okay, here's a crazy thought...

    If the Apple App Store is the real money maker for Apple and developers and not actually the iPhone as some in the comments have suggested, then why does Apple not release an Apple App Store app on Android?


    I mean most of those apps are available on both platforms anyway, I doubt Apple couldn't figure out a way to have an app store system that could figure out if you are using an iPhone or Android device and download the correct version of the app.


    However, this most be coupled with Apple allowing Google, Microsoft, Amazon or anyone else having their own app stores on iOS devices.


    Seems that it would quickly fix the issues the House Committee had with Apple.


    That said, we don't have time for rational ideas.

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