Apple to stop charging commission?
Business
Last year, Apple removed the popular video game Fortnite from its App Store after its parent company, Epic Games, introduced a way for users to circumvent Apple's in-app payment system.
Fortnite was said to have 2 million downloads in July 2020 alone, with Apple users having spent USD 34 million vs USD 2 million spent by Android users.
The beef
Historically, developers have paid Apple a 30% commission on all in-app purchases. However, several developers took the issue to such exorbitant rates, with Epic Games’ Fortnite introducing ‘V bucks’, an in-game currency for users to circumvent Apple's in-app payment system.
The app was removed from the App Store shortly after, which resulted in Epic Games filing an anti-trust lawsuit against Apple.
The Epic contention
Interestingly, Epic Games did not seek any monetary compensation for the removal of its USD 1.8 billion revenue-generating app. It just sought an end to the levy of commission, suggesting that Apple was abusing its monopolistic position to charge a commission, commonly referred to as the ‘Apple Tax’, without any significant value add.
Apple’s rebuttal
Apple argued that it does not hold a dominant position in the smartphone market (~14%), OS segment (~26%) or mobile gaming market (4th position in 2019), thus exposing the logical fallacy in Epic’s argument. Apple’s argument was also supported by the federal judge.
The catch
The judge, however, did rule that Apple could not prevent app developers from introducing their own payment portals outside the confines of the App Store, thus paving the way to circumvent the 30% commission.
Is Apple the patsy?
Apple is often the face of Bigtech exploitation of the little guys. However, to get some perspective, here are margins charged by some other App Stores
Google’s Play Store also charges a 30% commission beyond USD 1 million in revenue. Similarly, Samsung’s Galaxy store and Amazon App Store also charge a healthy 30% commission.
Even Microsoft, which charges 15% on apps and 12% on PC games, levies 30% on all apps, games and purchases within its XBOX console.
What does this mean for Apple?
Apple itself admits in its 10-K SEC Filing, “If the rate of the commission that the company retains on such sales is reduced, or if it is otherwise narrowed in scope or eliminated, the company’s financial condition and operating results could be materially adversely affected.”
‘Services’ which primarily comprise commissions from digital content sold on the App Store account for USD 54 billion (~20%) of the total sales of Apple and ~34% of the total operating margin.
Way forward
Whilst both parties are expected to appeal the ruling, Apple has already taken steps to contain the situation by amending its policy to expand the price points (from <100 to >500) available to developers for subscriptions, in-app purchases etc.
In November 2020, it also halved its commission (15%) levied on small businesses with net sales of less than USD 1 million.
It remains to be seen if these actions would be deemed sufficient to ensure developers route all in-app purchases through the platform or follow suit after Epic Games.
Child marriage registration in Rajasthan
Law
On Friday, the Rajasthan State Assembly passed the Rajasthan Compulsory Registration of Marriages (Amendment) Bill, 2021 to amend the Rajasthan Compulsory Registration of Marriages Act, 2009.
The 2009 Act provides for the mandatory registration of marriages, including child marriages. As per the Act, the parents or guardians of the bride and groom who have not completed 21 years have to register the marriage within 30 days.
The amended section 8 of the Bill seeks to reduce the age of mandatory registration by parents of the bride, from 21 to 18.
Opposition’s reaction
The Rajasthan State Government while passing the Bill relied upon judgment given by the Supreme Court (SC) in Seems vs. Ashwini Kumar (2006). As per the judgement, the SC made it compulsory to register all marriages including child marriages of Indian citizens.
Staging a walkout, BJP stated that the Bill violated the law against child marriages and would pave the way for the wedding of minor children. Whereas, the National Commission for Protection of Child Rights (NCPCR) requested the Rajasthan state government to be sensitive towards children and rethink.
Does the bill promote child marriage?
The Act originally required the age of both boys and girls to be 21 for mandatory registration by parents, the amendment aims to reduce the age for girls to be 18. It does not legalize child marriages.
Also, the registration can now be done in three levels, instead of just the level of District Marriage Registration Officer as well as Additional District Marriage Registration Officer and Block Marriage Registration Officer level.
The question the amendment does bring up is, are the existing laws on child marriage enough?
Prohibition of Child Marriage Act, 2006
The Act seeks for the prohibition of solemnization of child marriages and matters incidental thereto.
Section 2(b) of the Act defines “child marriage” as a marriage to which either of the contracting parties is a child. The same Act defines a male and a female child as not having completed 21 and 18 years of age, respectively.
Section 3 of the Child Marriage Act
Interestingly, Section 3 of the Act does not make child marriage void but calls it voidable. The section treats it as an offense that can lead to rigorous imprisonment.
Rigorous imprisonment may extend to two years and shall be liable to a fine which may extend to one lakh rupees for performing, conducting, directing, or abetting a child marriage (Section 11), or solemnizing a child marriage (Section 10). Either of the two punishments or both may extend in case a male adult marries a child (Section 9).
Decree of nullity
Section 3 of the Act declares that child marriages are voidable at the option of the contracting party being a child at the time of marriage and allows a petition for annulling a child marriage by a decree of nullity.
The petition can be filed by a contracting party to a marriage in a district court only, at any time but maximum within two years of attaining majority.
It can also be filed through a guardian or next friend along with the Child Marriage Prohibition Officer if the Petitioner is a minor at the time of filing the petition.
Various marriage laws and age limits
The Hindu Marriage Act 1955, The Jammu and Kashmir Christian Marriage and Divorce Act, 1957, Parsi Marriage and Divorce Act, 1936, Special Marriage Act, 1954 all lay down the age limit of 21 years for a male and 18 years for a female to be validly married.
Similarly, as per the Indian Christian Marriage Act, 1872, the groom must be 18 and the bride 15. Muslim personal law allows marriage if the boy and the girl are both 15 years of age.
Does the above stop child marriages from happening?
Unfortunately, no. In the recent few years, the number of cases registered has only seen an increase as per reports from NCRB.
However, as per UNICEF, while at least 15 lakh girls under the age of 18 are married in India every year, the instances of child marriage have declined from 47% during 2005-06 to 27% in 2015-16.
Was there an increase in the number of child marriages or was there an increase in reporting of child marriages with the District Magistrates and local panchayats becoming more conscious? Will the Bill help identify the actual number of child marriages happening and help the Government frame necessary laws to stop the same from happening? Only time will tell.
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