Apple would have been better off taking a 10% cut from apps: Bill Gurley

Benchmark’s Bill Gurley said Tuesday that Apple braced itself for trouble years ago when it rolled out its 30% in-app purchases, a figure that has come under increased scrutiny.

“I would always prefer a company to have a lower rake and a sustainable long-term future, and I felt that the 30% number was so high and so egregious that you were going to prepare for the exact type of difficulty you are having right now,” Gurley, who led the firm’s investments in companies like GrubHub and Zillow, said in an interview on CNBC’s TechCheck.

Apple has for years taken 30% of the purchases of software or digital products of applications distributed through the App Store. But developers have argued that Apple’s App Store platform is unfair to smaller businesses, and last year Apple cut the commission to 15% for apps with less than $ 1 million in annual net sales on its platform. Most recently, Epic Games sued Apple and argued in court that the company’s App Store is anti-competitive.

Apple has denied the allegations, saying it “does not have a dominant market share in any category in which we do business.” In response to the lawsuit, Apple argues that it created the App Store and can set the rules, which are designed to ensure that applications are safe and of high quality.

“I think it was a bad decision at the time and it was difficult to recover from. I think it would probably be better if they chose something like 10[%] and take it from everyone, “Gurley said.

Still, it’s a problem that could have been avoided, Gurley said.

“If you had started with a lower rake and being fair across the board, you wouldn’t end up in this mess,” Gurley said.

The tech investor has long said that Apple has taken too much, criticizing the company in a 2013 blog post called “A Rake Too Far: Optimal Platform Pricing Strategy.”

“Most venture capitalists encourage entrepreneurs to maximize price, to extract as much income as possible from their ecosystem in each transaction. This is probably nearsighted. There is a big difference between what can be removed and what needs to be removed. The water runs downhill, “Gurley wrote in 2013.

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