Tech giant charges publishers a commission called a ‘platform news tax’ for subscriptions
Toronto Star, 22 Oct 2019, TARA DESCHAMPS
The tax is 30 per cent of a total transaction for the first year, but then drops down to 15 per cent for subsequent years, according to the International News Media Association.
As part of a series, the Star looks more closely at a new report by the International News Media Association: How to Decode the Publisher-Platform Relationship identifies seven issues as the most concerning to publishers in the digital age. Today, platform news tax.
When consumers purchase a subscription through an app on an Apple device, the tech giant charges publishers a commission called a “platform news tax.” The tax is 30 per cent of a total transaction for the first year, but then drops down to 15 per cent for subsequent years, according to the International News Media Association (INMA).
The platform news tax is separate from fees Apple levies for people who sell subscriptions through its own Apple News offering and the fee is not levied against other apps, such as that of ride-hailing business Uber, that use Apple for transactions, INMA says. Publishers argue having to pay this tax cuts into their profits.
“Before, it was possible for us and other newspaper to both charge for our products and build a relationship with our readers and users via the App Store, but Apple has shot down such solutions,” Lena Samuelsson, publisher of Swedish newspaper Aftonbladet, and Anna Careborg, CEO and editor-in-chief of Stockholmbased publication Svenska Dagladet, wrote in an INMA blog post.
“Instead ... Apple is using its dominant position to impose this ‘Apple tax.’ ” Possible solution: á Remove the in-app fees on news services or allow them to be bypassed.
Though Apple recently rewrote its policies to let Facebook bounce a consumer out of the Apple system to conduct news subscription sign-ups elsewhere, INMA says Apple has more work to do.
“Apple should treat news subscriptions the same way it treats video, podcasts, music, and books where no fee is applied,” INMA argues.
“By comparison, Google does not require an in-app purchase be made on an Android device for digital news products. Instead, Google allows a subscriber to log in using a subscription that was purchased elsewhere.”