Apple Allegedly Buying Google Ads for High-Value Apps to Pocket 30% App Store Commission

Apple has reportedly been secretly buying Google ads for high-value subscription apps to line its own pockets, according to a report by Forbes. And many app developers are not too happy with it.

Google won’t delete these ads even if they were bought without the app developers’ consent. As per Google’s ad policies, ads may use trademarks of other companies if they are “primarily dedicated to selling (or clearly facilitating the sale of) products or services, components, replacement parts, or compatible products or services corresponding to the trademark.” Which means that Apple isn’t violating any Google ad policies.

But why are developers complaining about free advertising, you may ask. Some developers say that Apple’s 15% to 30% cut would eat into their margins. Furthermore, the report states that advertising prices rise when multiple parties bid on the same ad slots. This, in turn, is making advertising more expensive for the app developers.

However, it is to be noted that Forbes was tipped off by developers and could not verify if it really was Apple purchasing the ad spots. The app developers’ suspicions, however, do hold water based on their claims of not having purchased the ads themselves. That, and the fact that the ads go to an App Store link instead of the app’s website.

iPhone App Store

Apple doesn’t disclose that it is behind the ad placement for apps such as HBO, Masterclass, Bumble, Tinder, Plenty of Fish, and Babbel. The unsuspecting Safari user is diverted to the App Store instead of the developer’s site by Apple’s surreptitious ads. This gives the company a hefty 30% cut of first-year revenue and 15% cut for every subsequent year when a user subscribes from the App Store. The tech giant’s underhanded tactics could potentially cost app developers millions of dollars in subscription revenue.

While Apple’s commission doesn’t affect you as a consumer, but being corralled into the App Store route could negatively affect customer experience. When you buy a subscription service from the App Store, you essentially become Apple’s customer. If you encounter issues with your subscription, the app developers can’t help you because their hands are tied by the iPhone maker’s privacy policies. Apple does not share detailed customer information with the businesses that run these apps and subscription services.

Apple is no stranger to App Store controversies. Recently, Epic Games sued Apple for the right to offer its own payment options in its iPhone and iPad games. The Judge ruled that Apple must allow app developers to link to external payments in their apps.

Do you think Apple is doing app developers a favor with “free advertising”? Or is the mega corporation just greedy and eating into their profits? Let us know in the comments below.

[Via Forbes]