The founders of Chicago tech company Basecamp are in a public feud with tech giant Apple over a new email app they are trying to sell on the Apple App Store.
The app, called Hey, which is advertised as a simple, no-nonsense email organizer, debuted Monday on the App Store and costs $99 per year. But when Basecamp tried to deliver an update to the app the next day, Apple rejected it, according to reporting by The Verge.
Apple is now telling the makers of Hey that if they want to update the app, they will have to share 15-30% of the revenue, according to David Heinemeier Hansson, the CTO at Basecamp and developer of Hey. He also wrote on Twitter that if Hey doesn’t comply with Apple’s demands, the tech giant will take Hey off its App Store.
The primary issue surrounds Apple's 3.1.1 rule that essentially tells app developers that if they want consumers to pay for an app, the payment process needs to be administered through Apple's payments system.
Heinemeier Hansson calls Apple’s practices “abusive,” “capricious” and “exploitive.”
The rejection of Hey updates by Apple came the same day that the European Union opened an investigation into Apple’s App Store and Apple Pay practices. Since Tuesday, Match Group, the owner of dating apps Tinder and Hinge, and Fortnite creator Epic Games issued statements supporting the investigation.
“It's clear that Apple feel like they're now so far above the trifling concerns of antitrust law that even while under the scrutiny of regulators and justice departments on TWO CONTINENTS, they can still afford to tighten the screws,” Heinemeier Hansson tweeted.
Basecamp, co-founded in Chicago in 1999 by CEO Jason Fried, makes a project management tool for businesses. The company has long garnered attention for its completely remote workforce, and its anti-VC, bootstrapped approach to business financing.
Other Chicago tech companies have reported having similar issues as Hey with the App Store. Cameo CEO Steven Galanis tweeted that the celebrity shout-out app was barred from making updates to its app last year, unless it agreed to share revenues with Apple.
As a result, Cameo did not allow customers to book celebrity shout outs through the app, and instead forced customers to do so directly on its website. Even now, more than 85% of Cameo bookings take place on a web browser, Galanis said.
This isn’t the first time Heinemeier Hansson has criticized Apple. Earlier this year, he appeared at the House Antitrust Subcommitee’s hearing on online platforms and market power to ask for help in defending Basecamp and other small tech companies from being subject to large tech companies’ whims. He discussed how he perceives Apple and other tech giants like Google and Facebook monopolize the internet, data and software distribution.
Additionally, Heinemeier Hansson claimed in 2019 that Apple’s Goldman Sachs-issued credit card was sexist after he was approved for a credit line 20x higher than his wife. Between complaints from Heinemeier Hansson and others on the internet, the New York State Department of Financial Services launched an investigation into the card.
