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Apple Faces a Growing Backlash Against App Store Fees | TheStreet

Just days ago, Apple (AAPL – Get Report) announced that the decade-old App Store, which hosts millions of apps and has raked in billions in revenue for Apple, broke a new record with its highest-ever single day sales number, generating $322 million in sales during the first 24 hours of 2019.

Meanwhile, a growing number of app publishers say they want a bigger slice of the pie. Apple takes a a 30% cut of app transactions on the App Store, and some publishers are protesting the fee — or making moves to bypass it entirely. In late December, Netflix (NFLX – Get Report) — the top-grossing iOS app of 2018, netting $780 million according to Sensor Tower — removed iTunes billing for new customers, forcing them to sign up on Netflix’s own site. Similarly, Spotify ended iTunes subscription billing in 2016. And weeks ago, Epic Games, maker of the uber-popular Fortnite, announced plans to open its own app store with a revenue share that lets developers keep an 88% cut.

There’s also an anti-trust case that could potentially jeopardize the App Store revenue model. In 2011, a group of iPhone owners sued Apple on the grounds that it inflates the prices of apps partly due to App Store fees, and constitutes a monopoly on app distribution. That case is now on the docket at the Supreme Court, with oral arguments heard in November 2018.

The backlash comes at a time when Apple is placing ever greater emphasis on services — a category that includes the App Store, along with iTunes, Apple Pay, iCloud and other software-based products — amid weakening iPhone sales and slower growth in the smartphone industry at large.

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Apple Faces a Growing Backlash Against App Store Fees – TheStreet.

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