{"id":3910,"date":"2019-05-28T06:26:58","date_gmt":"2019-05-28T11:26:58","guid":{"rendered":"https:\/\/reformingretail.com\/?p=3910"},"modified":"2019-05-28T06:27:07","modified_gmt":"2019-05-28T11:27:07","slug":"developers-get-creative-to-avoid-app-store-taxes-will-pos-developers-follow-suit","status":"publish","type":"post","link":"https:\/\/reformingretail.com\/index.php\/2019\/05\/28\/developers-get-creative-to-avoid-app-store-taxes-will-pos-developers-follow-suit\/","title":{"rendered":"Developers Get Creative to Avoid App Store Taxes. Will POS Developers Follow Suit?"},"content":{"rendered":"\n

This article is part four in a series that discusses the dynamics around APIs, integrations, and fees in the SMB world. Here are parts one<\/a>, two<\/a>, and three<\/a>.<\/em><\/p>\n\n\n\n

Before too long there will be a major legal ruling on the economics surrounding Apple’s App Store<\/a>. This case will tell us if the world’s largest app store is using its monopolistic heft to extract taxes and violate the principles of market power<\/a>. <\/p>\n\n\n\n

Regardless of the US Supreme Court’s verdict, there are third party developers who are taking matters into their own hands<\/strong>. <\/p>\n\n\n\n

Netflix is the highest grossing app<\/a> on Apple’s App Store. This means that more App Store users create and pay for Netflix accounts through the App Store than they do for any other paid app. Here’s a list of the top-10 grossing apps if you’re interested:<\/p>\n\n\n\n

  1. Netflix \u2013 $790.2 million<\/li>
  2. Tencent Video \u2013 $490.0 million<\/li>
  3. Tinder \u2013 $462.2 million<\/li>
  4. iQiyi \u2013 $420.5 million<\/li>
  5. Kwai (Kuaishou) \u2013 $264.5 million<\/li>
  6. YouTube \u2013 $244.2 million<\/li>
  7. Pandora \u2013 $225.7 million<\/li>
  8. Youku \u2013 $192.9 million<\/li>
  9. QQ \u2013 $159.7 million<\/li>
  10. Hulu \u2013 $132.6 million<\/li><\/ol>\n\n\n\n

    Apple collects a tax every time one of its App Store users signs up and pays for a third party app through the App Store. Markets, however, are incentivized to avoid taxation. Thus many app providers have turned off<\/strong> an App Store user’s ability to sign up and pay for their app through Apple’s App Store. In this way you can download and access the Netflix app through the App Store, but to create an account and pay you must do it directly within<\/em> the Netflix app.<\/p>\n\n\n\n

    Netflix issued a public comment on the matter as well:<\/p>\n\n\n\n

    We no longer support iTunes as a method of payment for new members. Existing members who currently use iTunes as a method of payment can continue to do so. Apple is a valued partner with whom we work closely to deliver great entertainment to members around the world across a range of devices including the iPhone and Apple TV.<\/em><\/p><\/blockquote>\n\n\n\n

    This is a marked change from Netflix’s prior stance, but they aren’t the only ones.<\/p>\n\n\n\n