Hey.com exec says Apple is acting like ‘gangsters,’ rejecting App Store updates and demanding cut of sales

Hey.com exec says Apple is acting like ‘gangsters,’ rejecting App Store updates and demanding cut of sales

Apple is threatening to remove Hey.com from the App Store if the ambitious new email service doesn’t begin offering an in-app subscription and sharing a cut of its revenue, according to an executive at Basecamp, which makes Hey.

David Heinemeier Hansson, the CTO of Basecamp, said that Apple is acting like “gangsters,” rejecting a bug fix update and asking the company in a phone call to commit to adding an in-app subscription to prevent it from being removed. “I was taken aback by how brazen that threat was,” Heinemeier Hansson told The Verge. “I thought you were supposed to wrap the threats in euphemisms or something. But it was pretty clear.”

In an email to The Verge, Apple said that it requires all developers to follow strict guidelines around business models. The company declined to comment specifically on Hey, but said that App Store review guidelines require an in-app purchase option if an app wants to offer access to content purchased on another platform. Apple suggested the call to Hey’s team was not out of the ordinary, saying it always works with developers to bring them into compliance. Apple also told Protocol that the app shouldn’t have been approved in the first place.

Wow. I’m literally stunned. Apple just doubled down on their rejection of HEY’s ability to provide bug fixes and new features, unless we submit to their outrageous demand of 15-30% of our revenue. Even worse: We’re told that unless we comply, they’ll REMOVE THE APP.

— DHH (@dhh) June 16, 2020

The rejection comes the same day that the European Union opened an investigation into Apple’s App Store and Apple Pay practices. Apple has “obtained a ‘gatekeeper’ role,” EU antitrust head Margrethe Vestager said, “We need to ensure that Apple’s rules do not distort competition in markets where Apple is competing with other app developers,” such as with subscription music.

Hey.com launched yesterday. The new email service offers an alternative to Gmail for $99 per year. To continue using the app on iOS, you have to sign up through the company’s website. Apple initially approved the app on Friday, according to Heinemeier Hansson, but upon review of a bug fix update on Monday, Hey was rejected for not including an option to sign up within the app itself. A second version was rejected on Tuesday.

Apple takes up to a 30-percent cut of revenue on in-app purchases and subscriptions, so developers try to avoid signing up users within their app whenever possible to avoid the steep tax. Netflix stopped offering in-app subscriptions on iOS in 2018, and Spotify charges extra to make up for the lost revenue. It’s a scheme that developers have complained about for years, but Apple has made few concessions. Only recently have select companies gotten a special deal letting them bypass the cut in some cases.

Like any good mafioso, they paid us a visit by phone. Stating that, firstly, that smashing our windows (by denying us the ability to fix bugs) was not a mistake. Then, without even as much of a curtesy euphemism, said they’d burn down our store (remove our app!), lest we paid up.

— DHH (@dhh) June 16, 2020

Spotify complained to the EU about Apple’s practices last year, leading to the investigation that was announced earlier today. Apple defended itself on Monday with a press release claiming the App Store facilitated $519 billion in purchases in 2019.

While Apple told The Verge that apps must offer an in-app subscription option, the company does make exceptions for a variety of apps. Those exceptions include music, video, and magazine apps, among a few others, but email apps are not one of the approved exceptions. Despite this, some subscription email apps, such as Newton, are available in the App Store and don’t offer their service via in-app purchase.

“Apple has been capriciously, inconsistently, and in a few cases, cruelly, enforcing their App Store policies for YEARS,” Heinemeier Hansson wrote on Twitter.

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