Apple must avoid following a path blazed by Google. Years ago, the search giant touted its “don’t be evil” policy. But somewhere along the line, Google lost track of that — and ended up getting sued Tuesday by the Justice Department.
Apple, which faces similar scrutiny by a variety of governmental bodies, has a chance now to drop some of its questionable policies. If it doesn’t, Cupertino could end up facing its own lawsuit(s).
The encouraging news is, Apple is mostly a good company, so a few tweaks now could easily head off much larger adjustments down the line. Court-ordered changes — like a forced sale of the App Store — could prove painful.
Here’s why Apple needs its own “don’t be evil” policy, along with some concrete steps Cupertino can take to prove that it’s actually a force for good in the world.
Make the App Store 30% revenue sharing requirement progressive
Most of the scrutiny Apple faces centers on its management of the iOS App Store. And there’s good reason for that.
Whenever any iPhone or iPad owner buys an application in the App Store, Apple takes a 30% cut. The same goes with in-app purchases. Apple makes a ton of money this way. We don’t know exactly how much, but revenue from the company’s services division (which includes the App Store) totaled $13.1 billion last quarter alone. That’s about as much as revenue from Mac and iPad sales combined.
Many iOS software developers want Apple to lower this percentage or make it go away entirely. Apple’s counterargument is that it spends a lot of money building a mobile platform that brings in millions of customers willing to spend cash on apps, so it deserves a share of the take.
Even if you agree with Apple, you must admit that taking a sizable chunk of revenue hits small developers extra-hard. A solution is to make App Store revenue sharing like a progressive tax. Smaller developers would contribute less, while larger companies would kick in more.
Maybe the developer doesn’t pay anything for the first $1,000 an app earns. Then it goes up to 10% for the next $5,000 in revenue. And 20% for the next $10,000. Only after that does the developer pay 30%. (Those numbers are only suggestions.)
Reducing the cost burden on small devs would fall easily within a “don’t be evil” policy for Apple.
Stop the worst form of advertising in the App Store
Apple makes a bit of extra cash by selling placement in App Store search results. This really infuriates some developers. But advertising is also a way for good applications to stand out from the crowd of bad ones.
A compromise solution is for Apple to stop selling rival’s ads when a user searches for an exact product name. For example, searching the App Store for “Oceanhorn 2” shows a rival game listed first in the results. The search is for the name of a specific app, so showing a game that’s not Oceanhorn 2 isn’t what the customer wants — and surely isn’t what the game developer wants.
That said, there are good reasons for Apple to continue selling placement for generic search terms, like “RPG” or “image editing.” If someone doesn’t know which application they want, being shown one that’s successful enough to afford advertising can point them in the right direction.
Apple has to do something to fix this. With revenue sharing, developers are already paying to be in the App Store. Forcing devs to also buy advertising so a competitor can’t jump in front of them violates the “don’t be evil” policy Apple should adopt.
Make more consistent rules
Enforcement of some App Store policies remains wildly inconsistent. The iPhone-maker must clear this up if it hopes to avoid government oversight. The anomalies really make Apple look bad.
App Store rules allow applications like Netflix to draw from a library of TV shows. And they allow apps like Google Play Books to draw from a library of books. But Apple puts up huge roadblocks on apps that draw from a library of games. The only apparent reason for this policy is it makes Apple more money, at the expense of gamers and game developers.
Apple should change course and let the game libraries in. These all use cloud gaming, and there’s a good chance this is the future of mobile gaming. If so, iPhone and iPad need to be included.
Also, a major aspect of App Store revenue sharing seems utterly arbitrary. Apple forces developers who charge for their software to share this income with Cupertino. But developers who make money through advertising can use the App Store completely free. Consider Facebook. It makes billions of advertising dollars off iPhone users — and doesn’t pay a nickel of that to Apple. This undermines Apple’s entire argument that it treats developers equally.
One possible fix is a requirement that any application that generates money from advertising would pay Apple a flat fee per installation. Just a few dollars. That would mean that any company profiting from the App Store is also paying to support it.
But truly free software should remain free. If a programmer wants to release something as a public benefit, Apple could support the project.
Be nicer to small developers
Previous suggested policy changes have been mostly specific, but there’s a general change of course that Apple needs to make: It should start appreciating small developers more. While there’s no doubt that a big company like Adobe brings in far, far more revenue than some guy working in his basement in Cincinnati, the iPhone ecosystem needs both to thrive.
Apple pays lip service to this, but any dev in the trenches knows that it’s tough being an indie iPhone app developer. Getting software approved is a byzantine process full of arbitrary rules. Apple holds all the cards, and seems willing to ruin a developer’s livelihood by kicking them off the App Store for the slightest transgression.
That said, Apple can’t bend over backward for this group. Virtually all third-party developers work hard and play by the rules. But others deliberately try to slip malware into the App Store. It’s not always easy telling these groups apart from a distance.
Apple recently made some changes that are a good start. It stopped blocking “bug fix” updates to apps over minor violations of its rules. And the company lets devs suggest modifications to the policies.
But more changes are needed. Perhaps the best solution for this dilemma is for Apple to hire many, many more people to handle the application-approval process. These Apple employees would have more time to help small developers (or even just explain what’s going on). The whole process could become friendlier.
Apple, just don’t be evil
This isn’t an exhaustive list of all the changes Apple should make. There are myriad other tweaks Cupertino could put in place to be just a bit nicer.
Admittedly, this isn’t easy. There are roughly 1.5 billion iPhone users in the world, and finding company policies that make all those people happy is nigh impossible. But Apple already does plenty to build a positive image. It works hard to protect user privacy. Same goes for the environment. These stances grew from a set of core values Apple co-founder Steve Jobs put in place way back in 1981.
But the problems listed above show there’s room for improvement. That’s where the “don’t be evil” policy comes in. When deciding how to handle something, Apple must ask itself, “Even if this will make us money, will it also make us look like jerks?”
That doesn’t mean it can’t remain a very profitable enterprise. But it seems like many of the changes that would polish Apple’s image wouldn’t cost that much, relative to current profits. And they’d help head off government oversight.
The Department of Justice and Congress, along with the E.U. Commissioner for Competition, are watching Cupertino closely. Apple doesn’t want any of these governmental bodies forcing major changes on its business. Not trying to wring every penny from developers and customers is one way to avoid this. Or Apple could just simply institute a “don’t be evil” policy — and stick with it in perpetuity.