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Photo: Basecamp

Apple on Thursday rejected an appeal from Basecamp over the availability of its new email app Hey in Apple's App Store.

Driving the news: Apple said the company needs to either offer an in-app subscription option or offer an email reader for nonsubscribers in order to be in compliance with its App Store rules.

Why it matters: Apple's decision not to budge comes as the company is under antitrust scrutiny over its App Store practices, with the European Union on Monday announcing it has launched an investigation.

The latest: In rejecting Hey's appeal, Apple notes that the developers could work within Apple's rules by allowing the app to function as a reader for standard email, while also offering Hey subscriptions from its website. Alternatively, it says Hey can add an in-app subscription option, sharing revenue on those purchased within the app while keeping all subscription revenue earned outside of Apple's ecosystem.

  • "The Hey Email app is marketed as an email app on the App Store, but when users download your app, it does not work," Apple said in a letter to Basecamp CEO Jason Fried on Thursday. "Users cannot use the app to access email or perform any useful function until after they go to the Basecamp website for Hey Email and purchase a license to use the Hey Email app."
  • Apple notes that the Mac version of the Hey app was rejected on June 11 for the same reasons.

Between the lines: Hey's founders have been vocal that they believe Apple is not entitled to a cut of its subscription service. (Apple typically gets 30% of in-app subscriptions for the first year and 15% of renewals.)

However, there are a number of exceptions to this policy, which critics have said makes the overall system seem arbitrary.

  • So-called "reader" apps that display content previously paid for are allowed.
  • Apple has used that policy to allow a broad range of apps to be exempt from mandatory in-app purchases, including video and music services, e-book reader apps and some enterprise software. Apple also doesn't take a cut on sales of physical goods from within its app.

Apple, for its part, argues that its App Store has terms that are fair and applied to all. The company notes that the store has been operating for more than a decade and has never raised fees and only loosened the policy over time for software that qualifies under the reader rule.

David Hansson, CTO and co-founder of Basecamp, took issue with Apple's findings, saying its letter "fails to address the countless inconsistencies in their enforcements."

"All the rules they're citing should apply to Gmail and Outlook as well," Hansson told Axios. "So it's laughable that they state that we must follow the rules that everyone follows when it's plain as day that not everyone follows the same rules."

"But even if that was not the case. Even if Apple was perfectly consistent in its abuse of its monopoly status, it would STILL be abusive! Just because you say how you're going to abuse someone before you do it, does not make it any less abusive."
— Basecamp CTO David Hansson

The bigger picture: Apple faces questions from more than just Hey over its policies.

  • Tinder parent Match Group spoke out this week saying it disagrees with its policies, as does Fortnite creator Epic Games.
  • Spotify, which filed a complaint that helped launch the European inquiry, has also been clear about its disagreement.

Meanwhile: Microsoft president Brad Smith noted Thursday that many of today's app stores exert far more control than Microsoft did with Windows back in the day.

  • “They impose requirements that increasingly say there is only one way to get on to our platform and that is to go through the gate that we ourselves have created,” Smith said at a Politico event, per Bloomberg. “In some cases, they create a very high price per toll — in some cases, 30% of your revenue has to go to the toll keeper.”

Go deeper

Ina Fried, author of Login
Updated Sep 15, 2020 - Technology

Apple updates Apple Watch and iPad models, adds fitness service

Screenshot: Axios via Apple.com

Apple on Tuesday unveiled new iPad and Apple Watch models, as well as a new fitness service and Apple One, which bundles the company's main services for one monthly price.

Context: Apple has launched new iPhones in September in the past, but production issues have flipped the script this year and the new smartphones are expected to be unveiled at a second event, likely next month.

Myanmar's deposed leader Aung San Suu Kyi sentenced to 4 years in prison

An anti-coup protest in Yangon, Myanmar.Photo: Hkun Lat/Getty Images

A Myanmar court sentenced the country's ousted leader, Aung San Suu Kyi, on Monday to four years in prison on charges of "inciting public unrest" and breaking COVID-19 protocols, per the New York Times.

Why it matters: It's the first of several verdicts that could result in the 76-year-old Nobel laureate being imprisoned for decades.

The big picture: Suu Kyi has been detained since the military overthrew the elected government and seized power on Feb. 1. Security forces have killed hundreds of activists and arrested thousands of others following massive protests in the wake of the coup.

Editor's note: This a breaking news story. Please check back for updates.

2 hours ago - World

Pope Francis denounces European governments' migrant response

Pope Francis adresses refugees at the Reception and Identification Centre (RIC) in Mytilene on the island of Lesbos on Sunday. Photo: Louisa Gouliamaki/Pool/AFP via Getty Images

Pope Francis criticized European countries' response to migrants and asylum seekers during his visit to a refugee camp on the Greek island of Lesbos Sunday.

Why it matters: The pope said "migration is a humanitarian crisis that concerns everyone," but little had changed in the global response to displaced peoples since his first visit to Lesbos five years ago, per a transcript of his remarks. "Human lives, real people, are at stake. ... let us stop this shipwreck of civilization!"

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