When fees are 'taxes' and free speech costs $8 a month

Thanks to the headline-grabbing new boss at Twitter, Apple faces renewed criticism over App Store fees and its insistence on content moderation. That criticism misses the mark.

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Thanks to the Twitter CEO Elon Musk, Apple faces renewed criticism over its App Store fees and whether its insistence on content moderation somehow suppresses free speech. Neither is quite true.

App Store fees: A negotiation in progress

Let’s begin with App Store fees. At present, some developers must pay Apple 30% of from sales of their software or from subscription income. Not all developers do so — in the second year, subscription fees drop to 15% of the take, while developers shifting under a million dollars in value also pay just 15%. (Developers who do not charge for their apps pay no fee at all.)

In exchange, the developers get access to the world’s most secure app store, best-in-the-industry developer tools and the least-fragmented mobile platform. Side note: developers are required to use Apple’s own payment processing systems.

Now, there is a good argument to be made that the fee itself is no longer appropriate. While 30% has become pretty much an industry standard, it has been some time since the costs were weighed against the economies of scale.

At the same time, it seems perfectly appropriate that Apple should be entitled to make a viable business out of App Store provision. That means the argument surrounding fees will inevitably (as I keep saying) become a decision concerning how much they should be, not whether they should exist at all.

It's a fee, not a tax

Regulators everywhere are scrutinizing these fees and I think it likely some compromise will be reached — but referring to them as an “Apple tax” is inappropriate. It’s no more a tax than any retailer’s markup in any store anywhere, including car dealerships or tunnel boring projects.

But when a company that proposes to charge users for the right to share their own content in such a way as it might get seen begins to argue that Apple’s fee is a tax on free speech, it’s hard not to see a massive moral conflict.

How can speech be free if it costs $8 each month? And when a company evicts most of its staff with very little warning, what is that cost for? Interest fees? Severance payments? Legal fees to justify breaking employment laws?

...Which brings us to content moderation

Everyone who has ever visited a website has encountered GDPR. It’s a European set of legal requirements for the digital age. They extend to websites, platform vendors such as Apple or Google, and content companies including Twitter.

While there are lots of requirements within GDPR, one restriction is the need to police against some forms of discussion, such as encouragement of hate crimes, CSAM content, and more. With this in mind, is not at all reassuring that one of the world’s biggest social media companies has reduced its team handling CSAM content to just one person.

Billion-dollar companies usually have teams to maintain GDPR compliance, though at Twitter most have now been sacked or resigned.

That reduction in content moderation is already impacting advertisers on that platform, who find their brand messaging being placed beside deeply offensive posts — some from the CEO. The risk to advertisers is clear. In addition, the company does not seem to be compliant with FTC regulation, as some reporters claim.

Beyond Europe and the US, there are other nations with strict requirements for moderation, some of which are even more demanding.

Any platform distributing a poorly moderated app runs the risk of falling into a legal minefield. It’s just prudent business practice to avoid questionable environments. For Apple, it must ensure the software it distributes meet those needs, also. We know it will evict an app that does not maintain such moderation. It has done so before.

No one is obliged to take (or click) an ad

Apple, a company which I see as more sincere than most with its focus on business values in an increasingly murky world, will not spend ad money on a platform that distributes questionable content.

That’s noteworthy, given Apple perhaps contributes at least 4% of Twitter’s revenue.

Remember those little animations around your WWDC or Take Note keynote Tweets? Apple paid for those. It paid a lot.

I see it this way: If Steve Jobs were placing Apple’s acclaimed “Crazy Ones” ad, he wouldn’t place it on a site that failed in its responsibility for content moderation. An ad campaign featuring Albert Einstein, Gandhi, Martin Luther King, and Muhammed Ali would sit very badly on a platform where hate speech is seen as acceptable.

These risks — of litigation, brand damage and more, means many advertisers (not just Apple) have quit spending on Twitter's platform. Doing so isn’t an argument against free speech; it’s an argument in favor of brand protection and collective responsibility.

So, what’s happening?

Apple is in a predicament. It feels like it quietly tried to convince one of its larger profile developers to constrain itself better within the many different laws and regulations around content moderation. The reaction was a tirade of criticism, which cannot hide the fact that free speech also requires personal responsibility and a supportive environment in which conversations can take place. Someone is going to have to think different, or face significant consequences.

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