Coinbase (NASDAQ:COIN) has taken to Twitter to criticize Apple (NASDAQ:APPL) because it has blocked its most recent App update as Coinbase moved to evade app store fees.
Coinbase said that Apple does not understand how NFTs and blockchain work, and thus Apple is in the wrong.
Coinbase stated:
For anyone who understands how NFTs and blockchains work, this is clearly not possible. Apple’s proprietary In-App Purchase system does not support crypto so we couldn’t comply even if we tried.
This is akin to Apple trying to take a cut of fees for every email that gets sent over open Internet protocols.
The biggest impact from this policy change is on iPhone users that own NFTs – if you hold an NFT in a wallet on an iPhone, Apple just made it a lot harder to transfer that NFT to other wallets, or gift it to friends or family.
Simply put, Apple has introduced new policies to protect their profits at the expense of consumer investment in NFTs and developer innovation across the crypto ecosystem.
We hope this is an oversight on Apple’s behalf and an inflection point for further conversations with the ecosystem.
Coinbase is not the first firm to gripe about the fee Apple assesses to iOS apps in its ecosystem. Some have started to call the App store fees an effective tax.
Apple has long taken a 30% cut (15% in some instances) of transactions that go through Apps hosted on its ecosystem. Apple has defended its actions as it operates the App store enabling billions of dollars in transactions to take place online in a market that did not exist until 2008.
Additionally, Apple reviews and approves each submitted App, thus creating a fairly effective barrier to nefarious actors that would like to submit trojan horse Apps, offering a more secure market for Apps. In fact, Apple has removed more than one million Apps that have been deemed harmful, unsafe or illegal content. Apple sees the App store as similar to shelf space in any other store where there is a markup so the store operator can generate a profit – and so far they have been pretty good at it. Apple boasts that it currently accepts over 195 local payment methods and 45 different currencies.
Apple has added NFTs to its App store guidelines stating:
“Apps may use in-app purchase to sell and sell services related to non-fungible tokens (NFTs), such as minting, listing, and transferring. Apps may allow users to view their own NFTs, provided that NFT ownership does not unlock features or functionality within the app. Apps may allow users to browse NFT collections owned by others, provided that the apps may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than in-app purchase.”
Regarding In-App Purchases, Apple states the following:
“If you want to unlock features or functionality within your app, (by way of example: subscriptions, in-game currencies, game levels, access to premium content, or unlocking a full version), you must use in-app purchase.”
An In-App purchase is where Apple takes its cut.
While we may not have all of the details on the Apple/Coinbase disagreement, Coinbase does have a point that Apple does not support crypto transactions. At the same time, Coinbase is poking Apple very publicly during a period when Elon Musk and others have slammed Apple for taking a cut of the action that takes place in iOS-approved apps. It is difficult being king.