Apple’s App Store fees a ‘de facto global tax on the Internet’: Elon Musk

Tech gazillionaire Elon Musk is known as much for his entrepreneurial genius as he is for his lively Twitter presence. From space to digital currency, the Tesla boss has never been shy about speaking his mind from his perch on Twitter – often to his own detriment.

On Friday Musk waded into the court battle between Apple and Epic Games, and called Apple’s app store fees a “de facto global tax on the Internet”.

Apple app store fees are a de facto global tax on the Internet. Epic is right.

— Elon Musk (@elonmusk) July 30, 2021

Epic, maker of Fortnite, is currently embroiled in a legal fight with Apple, arguing that Apple’s App Store rules, which allow it to take a 30 per cent commission on many transactions, are unfair and anti-competitive.

The fight dates back to when Epic added a direct payment mechanism to Fortnite in violation of Apple’s rules. The iPhone maker quickly removed the game from the App Store and Epic responded shortly after with an antitrust lawsuit aiming to establish the App Store as a monopoly.

In his tweet Musk added: “Normally, competitive pressure would force Apple to lower fees, but Apple & Android have a duopoly on phones. When interface familiarity is taken into account, it’s basically a monopoly. The effective 30% sales tax Apple charges is hidden from users or there would be an outcry.”

Further in a thread, Musk was asked if Apple should allow third-party app stores on iOS. He said: “That’s arguably a security issue, but allowing companies to use other payment options, especially for in-app purchases would be fair. As soon as they allowed that, they would have to lower their fees. As for the cost of reviewing apps for security, a fixed fee makes sense.”

The Apple Tax is far more pernicious than many realize. “It only applies to digital goods accessible on iOS”, they say — but in the future all physical goods will have a digital presence, and Apple will tax and gatekeep world commerce. Apple must be stopped.

— Tim Sweeney (@TimSweeneyEpic) July 30, 2021

Just 25 minutes after Musk’s tweets, and perhaps aiming to take advantage of the spotlight the Tesla CEO is bringing to the fight by tweeting about it to his 58.7 million followers, Epic CEO Tim Sweeney posted his latest salvo against Apple on Twitter.

“In the future all physical goods will have a digital presence, and Apple will tax and gatekeep world commerce,” Sweeney said. “Apple must be stopped.”

Epic has also filed an anti-trust suit against Google over its Play Store policies.