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Sunday, September 26, 2021

A Nick to Apple’s Profits Could Be a Windfall for App Developers


Match Group, the maker of the dating apps Tinder and Hinge, is on track to pay more than $500 million in commissions to Apple and Google — which controls a similar app store for phones running its Android software — this year, according to Gary Swidler, Match’s finance chief. He said the company was already thinking about how to use Friday’s ruling to reduce that bill as much as possible, including by charging less for subscriptions paid through one of its websites.

According to one analyst, the change could save Match $80 million per year, but Mr. Swidler said there were too many unknowns to make such a prediction.

“Depending on the take rate, it will help us from a bottom-line standpoint, and it will allow us to invest more in our business, as well as pass on the benefits to consumers,” he explained.

Michael Love, the founder and CEO of Pleco, a Chinese dictionary app, said the prospect of avoiding a commission — he pays Apple 15% — was welcome. What’s even better? The possibility of him interacting directly with customers in ways that App Store rules prohibited, such as sending promotional emails, issuing refunds, and looking up old orders.

“I’m excited about the payment possibilities without Apple getting in the way,” he said.

Mr. Love, 39, said he hadn’t been able to close many deals with other dictionary publishers because they didn’t want to pay commissions to both Apple and him and thus lose a lot of money.

Mr. Love believes that by avoiding Apple fees and working directly with publishers, he can potentially transform his business into a “boutique e-book retailer.” According to him, this could boost his annual revenue from $500,000 to $5 million or $10 million.

“It makes it possible for little guys to compete,” he said.

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