Elon Musk Says Pay More For Twitter If You Have An iPhone! Why Fight vs Apple Is Worth It

The new Twitter Blue could be the staging ground for an important global battle.

| Updated on: Dec 13 2022, 17:11 IST
Elon Musk Twitter Bankruptcy Talk: Timeline
Elon Musk
1/13 He’s told employees to brace themselves for long hours, that “the road ahead is arduous and will require intense work to succeed,” and said bankruptcy was possible. Here’s how the saga is unfolding: (Bloomberg)
Elon Musk
2/13 Oct. 27: Musk takes control- His first act is to fire the Board along with CEO Parag Agrawal, CFO Ned Segal, head of legal Vijaya Gadde and Counsel Sean Edgett. Musk forms advisory team that includes celebrity attorney Alex Spiro, VC David Sacks, Neuralink CEO and head of Musk’s family office Jared Birchall, investor Jason Calacanis, and partner of Andreessen Horowitz Sriram Krishnan. (Reuters)
Elon Musk
3/13 Oct. 28: Brands begin to take pause- As Musk plans to unban accounts and says he will charge for user verification, advertisers suspend ads. (AFP)
Elon Musk
4/13 Oct. 31: Top tweeters protest- Amid murmurings of plans to charge existing verified accounts, author Steven King tweets, “$20 a month to keep my blue check? F**k that, they should pay me. If that gets instituted, I’m gone like Enron.” (AFP)
Elon Musk
5/13 Nov. 1: Teams working around the clock- The product team works over the weekend on Musk’s idea to charge users for blue check marks. A photo of product director Esther Crawford sleeping on the floor of a conference room, trying to make the deadline, goes viral. Meanwhile, managers are asked to make lists of who can be fired. Employees print out their software code for review by Musk and engineers from Tesla, to determine if their contributions are worthy of keeping a job. (REUTERS)
Elon Musk
6/13 Nov. 3: Massive layoffs begin- A memo is sent to all employees telling them of imminent layoffs and to watch for an email with the subject line: “Your Role at Twitter.” Badge access to offices is suspended as 3,700 staffers receive word that they’ve been cut. Realizing employees essential for the continuity of the business have been let go by mistake, some are asked to come back. (AP)
Elon Musk
7/13 Co-founder EV Williams tweets, “Heart’s out to the tweeps getting laid off today.” Co-founder Jack Dorsey adds, “I realize many are angry with me. I own the responsibility for why everyone is in this situation: I grew the company size too quickly. I apologize for that.” (REUTERS)
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8/13 Nov. 5-6: Musk responds to celebrity protests- Unrest grows on the platform over the weekend, particularly over the issue of impersonator accounts. Actress Valerie Bertinelli starts a movement of people changing their Twitter names to “Elon Musk.” Comedian Kathy Griffin joins the protest, finds her account locked. Then Musk announces, “Going forward, any Twitter handles engaging in impersonation without clearly specifying `parody’ will be permanently suspended.” (AP)
Elon Musk
9/13 Nov. 8: Musk sells more Tesla- Despite a previous vow not to sell any more Tesla stock, Musk sells an additional $3.95 billion, bringing the total sold in past year to $36 billion. (REUTERS)
Elon Musk
10/13 Nov. 9: Musk Blue tick mark- Blue check mark option becomes available for purchase, and immediately becomes a tool for impersonators. An account masquerading as Nintendo Inc. posts an image of Super Mario holding up a middle finger. (REUTERS)
Elon Musk
11/13 Tesla and SpaceX CEO Elon Musk, and a close cadre of advisers are considering a host of changes to the way Twitter is run and makes money. (REUTERS)
Elon Musk
12/13 Nov. 10: More key executives quit as Musk warns of bankruptcy- In his first meeting with employees, Musk tells them to brace for 80-hour weeks and requires everyone back in the office full time. He also says bankruptcy for the company is not out of the question if it doesn’t start generating more cash. Several executives in charge of keeping Twitter safe and accountable to its users quit, including chief information security officer Lea Kissner, chief privacy officer Damien Kieran and chief compliance Marianne Fogarty.. (AFP)
Elon Musk
13/13 Nov. 11: Verified accounts get “Official” tags- Twitter adds badges that say “offiical” to verified accounts in some places, though confusion abounds. More brands depart the platform. (REUTERS)
Elon Musk
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The pricing of Twitter Blue on iOS may turn into a battle between Elon Musk and Apple. (REUTERS)

Twitter Inc.'s first tweet under the ownership of the world's richest man was the announcement of a widely anticipated upgrade to its subscription feature. It was also a shot across the bow of the planet's biggest company, marking a possible showdown that could end up bringing much-needed change to the mobile app industry.

Twitter Blue will relaunch Monday with a handful of features that Elon Musk and his team are betting will justify the monthly fee: A blue checkmark, longer videos, higher visibility, and an edit button. More importantly, though, Twitter announced two prices for the same service: $8 per month if you subscribe on its website, but $11 if users choose to sign up via Apple Inc.'s iOS platform. That 37.5% markup is a not-so-gentle dig at Apple's 30% cut of the subscription fees which pass through iOS and its App Store.

For years, app developers and content providers have bemoaned this “Apple Tax” as too high and too restrictive. If you buy an app, purchase an upgrade, or subscribe to ongoing services including streaming music or video, then Apple collects 30% (the fee is discounted to 15% for developers who bring in less than $1 million in a year). That means the company will get $3.30 per month for every person who signs up to Twitter Blue via Apple. And it's why Twitter decided to dissuade people from using Apple and sign up at its own site. To be fair, Google Play Store collects similar commissions with its own set of restrictions.

Musk brought this fee to the attention of his 120 million followers last month, though he's among many industry executives who've known and complained about it for years.

In August 2020, Epic Games Inc. did more than whine. The publisher of hit games including Fortnite and Infinity Blade sued Apple over a particularly prohibitive set of rules the iPhone maker buries in its 20-page license agreement. First, it requires that subscriptions purchased within an app must use the In-App Purchase platform — preventing publishers from billing credit cards directly and ensuring Apple collects its tax. Second, it restricts developers from providing information or links to places where a user might sign up outside of the Apple ecosystem.

It's this latter decree which got under the skin of Epic chief Tim Sweeney, who tweaked Fortnite's app to bypass the payment system — a move which got the top-selling game blocked by Apple's App Store and sparked a lawsuit. Spotify Technology SA skips this rigmarole altogether by only allowing subscriptions via its website.

Unfortunately for Epic, software developers, and smartphone users around the world, US District Court judge Yvonne Gonzalez Rogers ruled in Apple's favor on nine of the 10 counts brought by the North Carolina-based company. Rogers found, among other things, that Apple doesn't have a monopoly because there are alternatives, including Alphabet Inc.'s Google Play Store. She did, however, decree that Apple loosen its rules on external links. But the fight isn't over, with the case now in the hands of the Ninth US Circuit Court of Appeal.

“Apple could win the battle but lose the war,” Bloomberg Intelligence Senior Litigation Analyst Jennifer Rie wrote last month. “The ruling could also catalyze bipartisan support for pending legislation to regulate app stores.”

That's where Musk comes in. While the new owner of Twitter has recently used his access to the social media platform to push back against the “woke” crowd, unveil supposed censorship of right-wing information, and reinstate previously banned accounts, the long-term fight could turn from the platform's content to its business model.

To date, the battle over the Google-Apple duopoly has largely played out in court. The two giants argue that they provide infrastructure, marketing, and moderation support that ensures developers get paid and users are protected. This argument has merit. It's a huge risk to allow software to get installed on a phone unchecked, and apps are most often found via the stores themselves, so getting fairly compensated is an important part of the business model.

But a 30% fee for services where the app platform offers little value-add, such as video streaming, seems out of whack — especially when those providers are restricted in their ability to even tell users about an alternative payment platform. The policy also forces software and content makers to spend increasingly more money on marketing just to get seen, which is especially tough when these providers have their own products — such as Apple Music and Apple TV+ — which come preinstalled and compete directly with Spotify and Netflix Inc.

Twitter's tweet, from its own @twitter account, makes a mockery of the current situation. Twitter, the app, is not allowed to advertise within its own software that there's a cheaper price available — but Twitter, the Twitter user, is able to use its own social-media platform to tell the world about it.

This is the kind of power that Epic, Spotify and Netflix don't wield. Even Microsoft Corp., which makes software but doesn't compete in the mobile app market place, is part of the growing chorus against Apple and in support of Epic. But none of them can boast almost every senator and congressperson as an account holder, nor a high-profile executive not opposed to lobbing grenades and burning bridges.

And now may be the time for Musk to throw his weight around. The Open App Markets Act, a bipartisan bill introduced in August 2021 by Republican Senator Marsha Blackburn and Democratic Senators Amy Klobuchar and Richard Blumenthal, would require companies to offer alternative app stores and payment systems, and prohibit Apple and Google from giving preference to their own products.

But this bill has yet to make it to the floor and may be further delayed if a procedural maneuver fails in coming days, Bloomberg News reported last week. This means months, maybe years, before the app giants are forced to mend their ways. Unless Musk decides to enter the fray and take on Apple directly.

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First Published Date: 13 Dec, 17:10 IST