“I’m literally stunned”: Startup accuses Apple of “mafioso” behaviour after App Store rejection dispute

Apple becomes the world's first trillion-dollar company

US startup Basecamp has found itself in an epic David vs Goliath battle with Apple, with co-founder David Heinemeier Hansson accusing the tech giant of a “shakedown” and “mafioso” behaviour, as it pushes its Hey app from the App Store.

First reported in Protocol, the dispute centres around the launch of Basecamp’s new email service, Hey.

Having launched on Monday morning in the US, the Hey team soon released a second version of the app, containing bug fixes. But, that second version was rejected for violating Apple’s guidelines.

The guidelines apparently state that if you want people to be able to buy things through your app, those payments have to go through Apple’s payments systems.

While Hey costs $99 a year, that payment is for the service, not for the app itself. The Hey app simply enables that service. As it stands, the founder says, no payments are made within the app.

In a letter Heinemeier Hansson shared on Twitter, an Apple representative said the issue came down to App Store Guideline 3.1.1.

“Apps that operate services across multiple platforms may allow customers to access content, subscriptions or features they have acquired elsewhere, but those items must also be available as in-app purchases,” the representative said.

However, the letter failed to acknowledge that Apple typically takes 15-30% of revenues from in-app purchases. Needless to say, that is not something that escaped the notice of Heinemeier Hansson.

The founder also claimed Apple said if they don’t make the change, it would remove the Hey app from the App Store altogether.

Later, Apple reportedly claimed the actual mistake was approving the original version of the app in the first place.

According to a report from Axios this morning, Basecamp’s appeal to Apple has been rejected.

Heinemeier Hansson’s plight was met with support from his followers. One called Apple “a bully”, and others recounted their own trials in dealing with the App Store.

As the story blew up, one Twitter user noted that the startup was getting a lot of attention.

“This is an opportunity for free publicity while you fight the forces of evil,” they said.

This debacle comes at the same time as Apple is facing an antitrust lawsuit from the European Union, addressing this very issue.

The European Commission is investigating whether rules around in-app purchases violate EU competition rules. In a statement, the commission also points to restrictions that don’t allow developers to direct potential customers to other purchasing options, outside of their app.

“It appears that Apple obtained a ‘gatekeeper’ role when it comes to the distribution of apps and content to users of Apple’s popular devices,” European Commission executive vice-president Margrethe Vestager said in a statement.

Apple is one of the most valuable companies in the world, with a current market cap of just over US$1.5 trillion ($2.2 trillion).

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