Illustration by Alex Castro / The Verge
Apple is standing behind its decision to reject future updates for the iOS app of new email service Hey. In a letter sent to Hey creator Basecamp and obtained by The Verge, Apple outlines the App Store rules it says the Hey app breaks and advises the company to adhere to developer guidelines if Basecamp wishes to continue updating the software on iOS or release it for the Mac. It also says it declined to publish the Mac version of the app in its App Store, echoing Apple’s earlier admission that it should never have approved an iOS version of the Hey app in the first place.
The letter is signed by company’s App Review Board, but Apple marketing chief Phil Schiller made similar comments in an interview with TechCrunch published today. Basecamp has publicly disputed Apple’s decision, saying it shouldn’t be forced to allow users to sign up for Hey through in-app purchase and hand 30 percent of its annual $99 subscription fee to Apple as a result. As it stands right now, the current version of Hey lets you sign into the app, but you must purchase a subscription for the company’s service on its website first. Hey launches to the public next month, but is currently available in a free trial mode for invited users.
“The HEY Email app is marketed as an email app on the App Store, but when users download your app, it does not work,” the letter reads. Apple cites three App Store policies — Guideline 3.1.1 and Guidelines 3.1.3 (a) and 3.1.3 (b) — that outline the company’s requirements for in-app purchases for most apps, with exceptions only carved out for a subset of “Reader Apps,” like Netflix and other streaming services.
Apple offers one other solution: Basecamp could allow the Hey app to support third-party email providers, thereby giving it a free option that would allow the app to function similar to other email clients, many of which do not have a similar business model to Hey and typically reskin the inbox for existing email providers like Gmail. (Hey charges $99 a year for use of its email service and for access to an @hey.com email address, and it does not support logging in with other providers.)
The primary issue at play, however, is not the specific rules Apple has outlined above, but its history of applying them inconsistently. Prior to this year, Apple has allowed numerous apps with similar business models to Hey to exist in the App Store and not required those apps include in-app purchase options. The company has also famously made exemptions for big rivals, like Amazon and Netflix, that have either disabled the ability to purchase subscriptions or content in their app or have, in some cases, directed users to a browser to do so.
The controversy, which kicked off earlier this week with the formal launch of Hey, has raised important questions about Apple’s stewardship of the App Store and whether the iPhone maker is exercising an anti-competitive advantage over competing services from third-party developers through its mandated 30 percent cut and inconsistent application of App Store rules.
The fight comes at precarious time for Apple. The company is about to host its annual developer conference next week in a virtual format. It’s also now facing down two antitrust investigations in the European Union launched after Spotify and other firms wedged complaints against Apple over its 30 percent “Apple tax” and the threats Apple’s App Store processes may pose to competitive markets.
Following a series of outspoken tweets and interviews from Basecamp co-founder and Chief Technology Officer David Heinemeier Hansson, in which Heinemeier Hansson called Apple “gangsters,” other companies like game developer Epic and Tinder parent company Match Group have come out in support of Hey.
Wow. I’m literally stunned. Apple just doubled down on their rejection of HEY’s ability to provide bug fixes and new features, unless we submit to their outrageous demand of 15-30% of our revenue. Even worse: We’re told that unless we comply, they’ll REMOVE THE APP.
— DHH (@dhh) June 16, 2020
Earlier today, Rep. David Cicilline (D-RI), the chairman of the House antitrust subcommittee, told The Verge, “Because of the market power that Apple has, it is charging exorbitant rents — highway robbery, basically — bullying people to pay 30 percent or denying access to their market.” He went on to say, “It’s crushing small developers who simply can’t survive with those kinds of payments. If there were real competition in this marketplace, this wouldn’t happen.”
The final paragraph of Apple’s letter acknowledges that Basecamp has offered enterprise apps in the App Store, another obvious exemption to the current App Store rules barring Hey’s iOS app, that do not offer in-app purchases or sign-up options. Apple says it’s done so without taking any money in a way that sounds ominously like it’s demanding gratitude for a free ride. But critically, it seems Apple is distinguishing Hey as a consumer email app that does not seem to fit the criteria for an in-app purchase exemption, despite evidence of other apps — including similar email providers like Newton — that have done the same in the past.
“We understand that Basecamp has developed a number of apps and many subsequent versions for the App Store for many years, and that the App Store has distributed millions of these apps to iOS users. These apps do not offer in-app purchase — and, consequently, have not contributed any revenue to the App Store over the last eight years,” the letter reads. “We are happy to continue to support you in your app business and offer you the solutions to provide your services for free — so long as you follow and respect the same App Store Review Guidelines and terms that all developers must follow.”
Here’s the letter in full:
We are writing to let you know the appeal results for your app, HEY Email.
The App Review Board evaluated your app and determined that the rejection was valid. Your app does not comply with the App Store Review Guidelines detailed below. As you are aware, this is the reason your Hey Email app was rejected when it was submitted to the Mac App Store on June 11, 2020.
The HEY Email app is marketed as an email app on the App Store, but when users download your app, it does not work. Users cannot use the app to access email or perform any useful function until after they go to the Basecamp website for Hey Email and purchase a license to use the HEY Email app. This violates the following App Store Review Guidelines:
Guideline 3.1.1 – Business – Payments – In-App Purchase
If you want to unlock features or functionality within your app, you must use in-app purchase. Your app requires customers to purchase content, subscriptions, or features outside of the app, but those items are not available as in-app purchases within the app as required by the App Store Review Guidelines.
Guideline 3.1.3(a) – Business – Payments – “Reader” Apps
Reader apps may allow users to access previously purchased content and content subscriptions. Your mail app is not one of the content types allowed under this guideline for “Reader” apps (specifically: magazines, newspapers, books, audio, music, video, access to professional databases, VOIP, cloud storage, or approved services such as classroom management apps). Therefore, customers must be given the option to purchase access to features or functionality in your app using in-app purchase.
Guideline 3.1.3(b) – Business – Payments – Multiplatform Services
Apps that operate services across multiple platforms may allow users to access content, subscriptions, or features they have acquired in your app on other platforms or on your website, provided those items are also available as in-app purchases within the app. Your HEY Email app does not offer access to content, subscriptions, or features as in-app purchases within the app. In fact, the app does not function as an email app or for any purpose until the user goes to the Basecamp Hey Email website to start a free trial or purchase a separate license to use the app for its intended purpose.
To resolve this issue, please revise your app such that it does not violate any of the App Store Review Guidelines and terms.
There are a number of ways that you could revise your app or service to adhere to the App Store Review Guidelines. Customers who have previously purchased access to content, subscriptions, or features elsewhere may continue to access these items in your app, as long as new iOS customers are given the option to purchase access using in-app purchase as required by the App Store Review Guidelines.
If you would prefer not to offer users the option of in-app purchases, you could consider having the app function as marketed — an email client that works with standard IMAP and POP email accounts, where customers can optionally configure the Hey Email service as their preferred email service provider. This would allow the app to function as an email client without requiring an additional payment to use its features and functionality. Under this approach, what you sell on your website is clearly an email service separate from the function of your app as distributed on the App Store.
We are here as a resource as you explore these or other ideas to bring the Hey Email app within compliance of the App Store Review Guidelines and terms.
Thank you for being an iOS app developer. We understand that Basecamp has developed a number of apps and many subsequent versions for the App Store for many years, and that the App Store has distributed millions of these apps to iOS users. These apps do not offer in-app purchase — and, consequently, have not contributed any revenue to the App Store over the last eight years. We are happy to continue to support you in your app business and offer you the solutions to provide your services for free — so long as you follow and respect the same App Store Review Guidelines and terms that all developers must follow.
We hope to assist you in offering the Hey Email app on the App Store.
Sincerely, App Review Board