Apple Inc (NASDAQ: AAPL) has been privately buying Alphabet Inc Class C (NASDAQ: GOOG) ads for top-quality apps to collect subscription revenue, according to several app developers. According to app developers, the company does this without consent, and Google refuses to delete them.
This issue has been happening for two years now and has cost apps about $2 million in lost revenue. Additionally, it has raised advertising costs for their campaigns.
Major apps such as Babbel, Masterclass, HBO, Bumble, Plenty of Fish, and Tinder are affected. These ads do not appear to be from Apple. Instead, most people would assume they come from the brands and redirect go to the App Store. However, one could notice that they have similar tracking links showing that the company might be hiring a single agency to place ads.
The app developers say Apple is cutting their revenue
By doing this, Apple can maximize profit by increasing in-app purchases through their Apple Store. Usually, ads to convince users to subscribe to a platform direct them to online pages to sign up. As a result, Apple does not receive the 15-30% in-app purchase fee, and the service provider can collect the full payment.
These brands have claimed that Apple is hurting their revenue as customers from the App store were not as valuable. In addition, they had to use more money for ads as the move by Apple increased advertising costs.
Google has pointed out that it does not control who buys ads. The company allows third parties to use a company’s trademark to drive the sale of its sale.
Apple says apps are aware of the practice
The report, which Forbes gave, did not provide substantial evidence for the allegations. Moreover, Apple representatives have claimed that it is a mischaracterization of what they are doing. They add that biting ads from Google is standard practice for companies that sell products from the associated ads. It adds that it is similar to retailers advertising goods they sell.
Furthermore, Apple says that it does this with consent from developers as it is part of their agreement. Apple claims it talks to developers about the ads, and many of them have expressed their appreciation for the move.
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