Illinois latest to try to mandate payments from outside the 'oppressive regime' App Store

Illinois senators have filed a bill that would require Apple and Google to allow alternative payment systems for app developers.

Illinois' new "Freedom to Subscribe Directly" act would prohibit Apple and Google from requiring developers to use first-party app marketplaces to sell their goods and services.

Basecamp, a software company based in Illinois, has publicly supported the new bill.

"Apple demanded we sell our new service through their payment processor, so they could take their 30% cut, or we'd be thrown out of the app store." Basecamp CTO David Heinemeier-Hansson told WGEM.

"Basecamp might have among the few companies willing to speak up but we are far from the only ones dealing with these oppressive regimes," he continued.

In recent years, Apple and Google have come under fire for their in-app payment systems. As a result, both have been heavily criticized for taking up to a 30 percent cut of sales and in-app purchases. However, even if Apple were required to provide alternative payment systems, the Cupertino-based tech giant has made it clear that it would still collect its share.

In November, a class-action lawsuit claimed Apple leveraged its popular iOS platform to create a closed ecosystem that locked customers into a software aftermarket saddled by App Store commissions, fees which continue to drive "supracompetetive" profits.

Facebook recently rolled out a new tool designed to help content creators earn money on its platform while sidestepping Apple's customary 30 percent cut of App Store transactions.

In early January, Apple for the first time said it would allow alternative payment systems in South Korea to comply with the new law. The company will provide an alternative payment system at a reduced service charge as part of the compliance plans turned into to the Korea Communications Commission.

9 Comments

shareef777 136 comments · 16 Years

About 2 years ago

I’m confused, if Basecamp has to pay (they’re an enterprise based tool, like Slack, Teams, etc). Are those companies paying a cut for every user (highly unlikely)!?

Something’s gotta give. Right now the only apps benefiting from the current 30% cut are ad-driven ones. And ad driven apps suck and has been slowly lowering the quality of apps in the App Store for years.

foregoneconclusion 2836 comments · 12 Years

That's funny...gigantic mainstream apps like Netflix and Spotify moved all their payments to the internet years ago and it was wildly successful. Maybe Basecamp isn't aware that the internet exists?

Kuyangkoh 838 comments · 7 Years

Hahahahaha, no matter where to pay, Apple and Google will still get their commission or get out of the eco systems

genovelle 1481 comments · 16 Years

foregoneconclusion said:

That's funny...gigantic mainstream apps like Netflix and Spotify moved all their payments to the internet years ago and it was wildly successful. Maybe Basecamp isn't aware that the internet exists?

Netflix and Spotify are mostly browsers with custom navigation. The functionality this app is giving is using Apple APIs and they are wanting access to Apple’s marketing to bring them customers they wouldn’t have from the exposure. Maybe Apple should flip the script. They should charge apps makers that don’t want to pay a commission an access fee based on how many times their APIs are called and bill them an advertising fee to be on the platform at TV average rates.

tundraboy 1913 comments · 18 Years

I don't know why app developers are under the illusion that if they use a different payments processor then they can get away with not paying Apple or Google a commission.

Also, I don't think the Interstate Commerce Clause of the US Constitution would allow Illinois to enact the proposed law. But I'm hardly an expert on the matter.