Clark’s App Warning for iPhone and Android Users

If you regularly download apps to your iPhone or Android device, money expert Clark Howard has a simple warning that can protect your wallet.

He says both Google and Apple have made a habit of overcharging users who pay to download apps as well as those who make in-app purchases in Apple's App Store and the Google Play store.

“Know that with apps you’re using, you’re usually paying much more than you have to,” Clark says.

Are You Overpaying for Purchases Inside Apple and Android Apps?

In-app purchases and the revenue they generate have become controversial topics for the two tech giants. To understand why, we have to take a look at the pay structures that Apple and Google have required app developers to abide by.

Apple mandates that developers pay a commission fee between 15 and 30% to have their apps housed in the App Store. Google has a similar policy for placement in Google Play.

Saddled with these high fees, the app developers sometimes pass these charges along to consumers.

Clark says what Apple and Google are doing restricts freedom of choice for consumers and burdens the app makers.

“What these two have been doing is they’re using their shared monopoly control over the ecosystem of phones to put up ‘toll gates’ to rip you off,” Clark says. “In a lot of cases, you’re not even aware how much you’re being ripped off.”

You may be wondering how the two dominant app stores may be getting over on you when you use their platforms on your mobile phone or tablet. Here’s just one example:

When you download a game or service that comes with a subscription or in-app purchase, it’s common for the price to be marked up, as much as 30%, in Apple’s App Store or in Google Play, Clark says.

For example, the Pandora app's Premium service costs $12.99 a month on iOS. It costs $9.99 a month via Google Play, the same as it does on Pandora's website.

In other cases, you may find apps that are less expensive on Apple rather than Google or cheaper still on an entirely different app store.

How Legal Troubles Facing Apple and Google Play a Role

This issue is part of a broad antitrust lawsuit brought by Epic Games, the maker of the popular Fortnite app, against Apple as well as a complaint Epic has filed against Google.

One of the issues at play is Apple’s so-called “anti-steering” policy, which forbids app developers to “steer” users to app platforms where their products may be cheaper.

Meanwhile, Google, already facing a U.S. Justice Department complaint related to alleged monopolistic practices and has been sued by 36 states and Washington, D.C., in a case that challenges the commission fees the company levies on app developers who sell through the Google Play store.

“This is a huge deal with Apple self-dealing,” Cark says, “… And Google is just as guilty in this area.”

How To Avoid Overpaying for Apple and Google Apps

“Something Google and Apple don’t want you to know is that you can download an app to your iPhone or Android and then go to the website of the provider and sign up for service and avoid the ripoff 30% add-on,” Clark says.

While Apple has not spoken publicly about whether it intends to loosen its anti-steering policy willingly, Google acknowledges in a blog post that, "If you don't find the app you're looking for in Google Play, you can choose to download the app from a rival app store or directly from a developer's website. We don't impose the same restrictions as other mobile operating systems do."

Clark’s Takeaway

Clark wants to make consumers aware of the choices they have when it comes to paying for in-app content and services.

“I want you to be aware enough that you go outside of doing purchases inside the Apple device or the Google device — the Android or the iPhone — and pay for the services you’re doing on the website. Remember, that’s the difference,” he says.

Let’s say you have a Pandora account and you want to add the Plus or Premium version.

  • Go to Safari, Chrome or the web browser of your choice.
  • Visit Pandora.com and sign in to your account.
  • Add the appropriate functionality at Pandora.com/upgrade.

Clark says if you follow those steps, “Apple and Google don’t get all that extra money. Because it’s your money that they’re running off with.”

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