Microsoft, Apple in battle over App Store fees -- report

Microsoft reportedly doesn't want to pay Apple a 30 percent fee for customers who purchase additional storage through its SkyDrive iOS app.

Microsoft and Apple are fighting a behind-the-scenes battle over App Store revenue sharing, The Next Web reports.

Apple is currently blocking any Microsoft SkyDrive updates in its App Store until the software giant agrees to share revenue generated through its application, the site reports, citing sources who claim to have knowledge of the disagreement.

Microsoft currently offers its SkyDrive storage app to iOS users. The company rolled out the ability for users to purchase more storage from within the application. However, upon doing so, Microsoft decided that it wouldn't share 30 percent of the revenue generated through those transactions with Apple, leading to the kerfuffle.

Apple's App Store has clear policies on revenue sharing. The company takes 30 percent of the revenue generated from app purchases. Apple also requires that developers who use in-app purchasing share 30 percent of that revenue with it.

According to The Next Web's sources, a key sticking point appears to be Apple's billing policy. In order for developers to offer in-app purchasing, all billing for services must run through Apple's accounts system in perpetuity. So, if a current iPhone user who pays for additional SkyDrive storage decides next year to switch to an Android-based device, those charges will still flow through Apple's billing, giving the company 30 percent of the revenue, even though the person is no longer an App Store customer -- a prospect Microsoft reportedly finds unfair.

To make things a bit more troublesome for Microsoft, Apple has decided to stop approving SkyDrive updates, according to The Next Web's sources. Microsoft is trying to push through an update that addresses a bug that crashes the app.

According to the SkyDrive listing on iTunes, the application hasn't been updated since June 1.

The trouble between Apple and Microsoft has also reportedly affected third-party developers that link up their apps with SkyDrive and offer a way for users to sign up to Microsoft's storage service. Apple requires that all sign-ups for paid services go through its system.

For its part, Microsoft is trying to come to an agreement with Apple, according to The Next Web, and has offered to remove all functions that would allow iOS users to sign up for more storage. So far, however, Apple has reportedly ignored those requests.

"Similar to the experiences of some other companies, we are experiencing a delay in approval of our updated SkyDrive for iOS," a Microsoft spokesperson told CNET today in an e-mailed statement. "We are in contact with Apple regarding the matter and hope to come to a resolution. We will provide additional information as it becomes available."

CNET has contacted Apple for comment. We will update this story when we have more information.

Updated 10:34 a.m. PT to include Microsoft's statement.

Updated 1:30 p.m. PT: In a follow-up report, All Things D claims the hold-up is not just related to SkyDrive, but also future services, including Office 365 -- Microsoft's subscription based Office service -- and that Microsoft is trying to strike a deal.

 

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