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Tim Cook, chief executive officer of Apple Inc., center, arrives at U.S. district court in Oakland, California, on Friday, May 21, 2021.
Nina Riggio | Bloomberg | Getty Images

In the past few weeks, Apple has made several changes to its App Store rules, allowing a larger number of companies to access a lower commission rate or evade Apple’s mandatory 15% to 30% cut entirely.

But while the concessions can seem like a shift in Apple’s approach to App store policy, when examined in the history of the App Store, they are a clear continuation of strategy going back to 2008.

Apple has historically made small changes to its “guidelines,” a 13,000-word document that says what iPhone apps can and can’t do, while defending its core interests that Apple has the right to determine which software can operate on iPhones, and set its own financial terms for those developers.

Apple has also not yet changed its policy of taking 30% of in-app gaming purchases, which comprise the largest category of App Store revenue. Apple’s App Store grossed $64 billion or more in total sales in 2020, according to analysis based on Apple disclosures.

JPMorgan analyst Samik Chatterjee said in a recent note that he believed the financial impact on the company on one emailing change would be “modest” and other tweaks reducing Apple’s cut for some apps to 15% would be “minimal.”

The regulators and developers who criticize Apple’s App Store have a variety of complaints in the past decade: Its 30% cut is too high, its manual App Review process is arbitrary and powerful, the App Store depresses prices for software and teaches consumers that updates are free.

So Apple has carved out categorical exceptions to the 30% fee, allowed software makers the ability to appeal or challenge its rules, and changed single rules in response to lawsuits or media attention.

Events in the coming months may force Apple to tweak its policies again. A decision in a trial with Epic Games is expected in the coming weeks. The European Union is examining penalties and remedies after finding Apple violated antitrust laws after a Spotify complaint. South Korea recently passed a law that could force it to allow customers to use alternative billing systems.

But looking at App Store history, it’s likely that Apple will continue to push in private negotiations and public lobbying for smaller, non-structural changes to the App Store that address some complaints but does not change its control over iPhone software.

Controversial from the beginning

Apple’s App Store has faced controversy since its launch in 2008. A year after that, the FCC probed the company over its refusal to approve the Google Voice app.

Now there is more regulatory pressure from countries and developers around the world, and it is leading to more rule changes. Apple made some of the recent concessions because of settlements in a developer class action lawsuit in the United States and an agreement with Japan’s Fair Trade Commission, although Apple is applying the changes around the world.

Those tweaks essentially allow companies like Spotify and Tinder’s parent company Match Group to bypass Apple’s sometimes 30% cut of gross sales, addressing a standing complaint that dates back at least five years. Apple also reduced its take to 15% for news apps that participate in Apple News, its own news app.

Apple officials say they are meaningful changes that address key concerns from software makers.

Some of Apple’s opponents, even those that have petitioned for those changes, say that they don’t go far enough, and are part of a pattern of dividing its critics by placating some of them with one-off rule changes.

“Our goal is to restore competition once and for all, not one arbitrary, self-serving step at a time,” Spotify CEO Daniel Ek tweeted this week in response to Apple’s in-app linking rule change.

“Apple’s strategy is Divide and Conquer: carve off special deals for different developer segments,” Epic Games CEO Tim Sweeney said last month in a statement to CNBC in response to Apple’s news app concession.

Epic Games is suing Apple seeking to be able to install its own app store on iPhones — which is the big change that Apple wants to fight off.

A history of Apple changing App Store rules

2009: Apple does not approve Google Voice, FCC investigates. A year after the App Store went live, the FCC started probing it over its refusal to approve the Google Voice app, which acted as a second phone number.

Apple responded to the FCC, providing many details about its app review process for the first time, and arguing that it had the right to reject entire categories of apps.

In its letter, Apple also detailed for the first time its Executive Review Board, a body headed by Apple executive Phil Schiller, which makes final decisions on “new and complex issues.”

The Google Voice app was eventually approved in late 2010.

2011: Apple requires in-app payments for digital goods, creates the “reader rule.” In-app purchases with a 30% fee were introduced in early 2009. But in February 2011, Apple significantly tightened its control over the App Store by announcing it planned to force companies to use Apple’s in-app purchase system if they offered digital subscriptions.

At first, Apple offered exceptions for products like Kindle or the New York Times, where users may have purchased e-books or digital subscriptions off-app. But companies still needed to implement in-app purchases with Apple’s cut, at the same price as their off-app subscriptions.

This didn’t work for many publishers, who wanted to retain their direct relationship with customers. By June, Apple had backtracked on some of its more draconian guidelines, allowing companies to pass on the 30% fee to customers or to, if they chose, not offer an Apple in-app purchase at all.

Shortly afterwards, Apple’s marketing chief Phil Schiller started to question Apple’s 30% fee, and suggested lower revenue sharing levels, such as 20%, according to an email released as part of the Epic Games trial.

This is when Apple started to put its first restrictions on redirecting users in-app to the publisher’s website, which were reversed in recent weeks.

2016: Apple reduces cut for 2nd year of subscriptions to 15%. By 2015, Spotify had publicly challenged tested Apple’s restrictions on subscriptions, first by emailing customers to tell them it’s less expensive to subscribe directly, instead of through the App Store. This was against Apple’s guidelines, and its one of the rules that was officially clarified as part of Apple’s concessions last month.

Shortly afterwards, Spotify removed Apple in-app purchases entirely and started a process of challenging Apple’s rules with government regulators.

In 2016, Apple announced that it would alter its revenue sharing agreement, specifically for subscription apps. Apple still charged 30% for the first year of a subscription, but subscribers who lasted more than 12 months would cost the app a lower, 15% rate of gross sales. Apple also opened subscription billing to all App Store apps and introduced search ads, which let developers pay for better placement on an App Store search page.

The announcement was also months after Schiller publicly took over oversight of the App Store, replacing services head Eddy Cue, although Schiller had been involved with App Store policy since the beginning.

Although Schiller is no longer a senior vice president at Apple, he remains an Apple employee with the title “fellow,” and continues to lead App Store policy.

2019: Apple backtracks on parental control apps, introduces appeals process. By the time Apple’s annual developer conference kicked off in 2020, the App Store had received considerable antitrust attention, specifically to its ability to reject apps, especially apps that competed with Apple features, such as parental control apps which gave users the ability to set screen time limits for kids.

Apple reversed some of its policies about parental control apps in 2019 after negative media attention, allowing some of them onto the store, and creating software tools that they could use to build their apps.

But the skirmish highlighted that Apple’s App Review process was arbitrary, and sometimes held up app updates over minor details or, worse, because the app didn’t comply with in-app purchase rules.

Developer protests over App Review continued to grow through 2020, and at Apple’s annual developer’s conference, Apple said that it would implement an appeals system for developers to challenge Apple’s rules, although many app makers say it hasn’t solved their complaints with the approval process.

2020: Apple reduces cut to 15% for small companies. Last November, Apple introduced the Small Business Program, a high-profile olive branch to lawmakers and app developers.

It reduced the take from 30% to 15% for any company making less than $1 million per year through the App Store. But because apps are a winner-take-most business, it didn’t hurt Apple’s finances too badly — one estimate at the time suggested the top 1% of app publishers generate 93% of App Store revenue. But it did cut the fees for the majority of individual app developers.

Documents from a settlement in 2021 said that the creation of the Small Business Program was because of a class-action lawsuit.

2021: Apple reduces cut to 15% for news apps that participate in Apple News, allows developers to direct users to alternative payment systems. Antitrust attention on the App Store heated up in 2021. Earlier this year, Apple CEO Tim Cook testified at a trial over App Store practices against Epic Games. Multiple states and the U.S. Congress saw bills introduced which could force Apple to allow alternative app stores.

In August, Apple reduced its subscription cut for any publisher from 30% to 15%, addressing a segment of developers who had fought off App Store changes back in 2011. There was a catch though — those news apps had to participate in Apple’s news aggregator.( News apps are not the main moneymaker on the App Store.)

Apple also settled a class-action lawsuit with smaller U.S. developers, paying $100 million and clarifying guidelines about apps emailing their own customers.

In September, Apple settled with the Japanese FTC and said that “reader” apps could link out to sign up customers for subscriptions on their own websites. All three of these changes addressed concerns that first popped up in 2011 when Apple created the reader rule.

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DoorDash to buy British food delivery firm Deliveroo for $3.9 billion in overseas push

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DoorDash to buy British food delivery firm Deliveroo for .9 billion in overseas push

A Deliveroo rider near Victoria station in London, England, on March 31, 2021.

Dan Kitwood | Getty Images

LONDON — British food delivery firm Deliveroo on Monday said it has agreed to a takeover offer from American rival DoorDash that values the company at £2.9 billion ($3.9 billion).

Deliveroo, which lets users order hot meals and groceries via an app, said its board agreed to an offer from DoorDash to acquire all issued and to be issued shares in the company for 180 pence a share.

That marks a 44% premium to Deliveroo’s closing price on April 4, the last business day prior to DoorDash’s initial offer letter.

Deliveroo shares jumped to a three-year high last week after the company confirmed it had received a takeover offer from DoorDash.

The transaction values Deliveroo at £2.9 billion on a fully diluted basis, the company said.

DoorDash said that the financial terms of the acquisition were final and would not be increased unless a third party steps in with a rival bid.

“I could not be more excited by the prospect of what DoorDash and Deliveroo will be able to accomplish together. We’ll cover more than 40 countries with a combined population of more than 1 billion people, enabling us to provide more local businesses with the tools and technology they need to thrive,” said Tony Xu, CEO and Co-founder of DoorDash.

International expansion

The acquisition deal marks an end to Deliveroo’s tumultuous ride as a public company.

Once viewed as a British tech darling, Deliveroo saw its shares tank 30% in 2021 in one of the worst trading debuts on the London Stock Exchange. Shares have continued to fall from that point and are down more than 50% from the firm’s £3.90 IPO price.

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Temu and Shein face massive tariffs. But don’t count them out of the U.S. e-tail scene, experts say

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Temu and Shein face massive tariffs. But don't count them out of the U.S. e-tail scene, experts say

Photo illustration of the Shein app on the App Store reflected in the Temu logo.

Stefani Reynolds | Afp | Getty Images

The closure of a trade loophole and prohibitive tariffs on China have upended Temu and Shein’s business model in the United States. And yet the e-commerce companies are likely to remain a dominant force in American online retailing, experts suggest.  

On Friday, the de minimis rule — a policy that had exempted U.S. imports worth $800 from trade tariffs — officially closed for shipments from China. This has seen Temu and Shein exposed to duties as high as 120% or a flat fee of $100, set to rise to $200 in June.

The small-package tariff exemption had been key to the companies’ ability to maintain budget prices on the merchandise they ship from China. Now that it’s gone, prices on Temu and Shein have been surging, with the former ending direct shipments from outside the U.S. altogether. 

The change will be welcomed by many detractors of de minimis, among them U.S. lawmakers, labor unions and retailers, who have argued that Temu and Shein abused the exemption to undercut local businesses and flood the country with illicit and counterfeit products. 

But despite the new trade challenges that Temu and Shein face, ecommerce and supply chain experts told CNBC that the companies are still capable of competing with their rivals in the U.S. 

“Don’t count them out … Not at all. These kinds of Chinese e-commerce apps are very adept and agile. They have contingency plans in place and have taken the necessary steps to cover the tariffs from a margin perspective,” said Deborah Weinswig, CEO and founder of Coresight Research.

“I personally believe, if anything, [America’s e-commerce] game has been accelerating in favor of Temu and Shein … I wouldn’t be surprised if the competitiveness gap actually continues to widen,” added Weinswig, whose research and advisory firm works with clients across tech, retail and supply chains.

Contingencies in place 

The loss of the de minimis exemption had long been anticipated, with U.S. President Donald Trump temporarily closing it in February. In preparation, Temu and Shein had been accelerating localization strategies for the U.S.

Scott Miller, CEO of e-commerce consulting firm pdPlus, told CNBC that Shein and Temu will continue to onboard goods from American sellers onto their apps to protect them from tariffs. 

“Many of the current sellers on Temu and Shein are located in China or countries nearby, but not all. Local U.S. companies have been joining these platforms at an accelerating pace … several of our clients have onboarded or began the process of onboarding in just the past few months,” he said. 

While margins for more localized brands and other sellers won’t be as high as those for China-based sellers on the platforms, they can be competitive, he said. 

He added that in the case of Temu, vendors are attracted to lower fees, lighter competition and greater assistance with onboarding and setting up sales channels compared with what Amazon offers. 

Temu, Shein raising prices ahead of Trump administration ending 'de minimis' rule: Report

In recent days, Temu, which is owned by Chinese e-commerce giant PDD Holdings, has begun exclusively offering goods shipped from local warehouses to U.S. shoppers.

Many of those goods are still sourced from China but then shipped in bulk to U.S. warehouses, according to experts. While these bulk items are subject to tariffs, they also benefit from economies of scale. 

This development is likely to see the variety of products on Temu scaled back, said Henry Jin, an associate professor of supply chain management at Miami University. However, he added, Temu is likely to resume direct shipments from China, depending on the outcome of the trade war between the U.S. and China. 

Shein, meanwhile, has leaned into supply chain expansion, building manufacturing operations in countries such as Turkey, Mexico and Brazil, and reportedly plans to shift to Vietnam.

The company appears to still be shipping directly from China and likely has more room to absorb tariffs because of its “sky-high” margins in its core fast-fashion business, Jin said.

“If there’s one thing that Chinese companies are good at, it’s operating on a razor thin margin in an intensely competitive, if not adverse environment … they find every scrap that they can to survive,” he added.

Competitive prices?

Contingency plans aside, experts agree that Trump’s trade policy will continue to affect prices on Temu and Shein. The companies first announced they were raising prices in mid-April to counter tariffs.

According to data from Coresight, prices across shopping categories on Shein rose between 5% and 50% in the latter half of April, with the sharpest rises seen in toys and games and beauty and health. 

However, many e-commerce experts remain confident that Temu and Shein will continue to prove price-competitive. 

Coresight’s Weinswig said the two companies have previously been able to offer products at a third of the prices on Amazon for comparable goods. So, even if they more than double the prices to absorb the impacts of tariffs, many goods could remain cheaper than those on American e-commerce sites and retailers. 

Jason Wong, who works in product logistics for Temu in Hong Kong, noted this dynamic when speaking to CNBC last month, likening Temu to a dollar store. If prices at the dollar store go from $1 to $2, it’s still a dollar store, he said. 

Furthermore, Trump’s trade tariffs on China and other trade partners have also affected American retailers and e-commerce sites like Amazon. 

Other advantages

When Forever 21 filed for bankruptcy protection earlier this year, it blamed Shein and Temu’s use of the de minimis exemption, which it said “undercut” its business. 

But experts say that exclusively attributing the success of Shein and Temu to that trade loophole misses many of the other factors that have made them smash hits in the U.S.

According to Anand Kumar, associate director of research at Coresight Research, Temu and Shein owe a lot of their success to their very agile supply chains that adapt fast to consumer trends. 

For example, Shein’s small-batch production — in which product styles are initially launched in limited quantities, typically around 100-200 items — allows it to test and scale products efficiently. 

Shein's Donald Tang: We are not fast fashion but fashion on-demand

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Here are the SpaceX employees who were elected to run Musk’s new company town of Starbase, Texas

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Here are the SpaceX employees who were elected  to run Musk's new company town of Starbase, Texas

The SpaceX Starship sits on a launch pad at Starbase near Boca Chica, Texas, on October 12, 2024, ahead of the Starship Flight 5 test. The test will involve the return of Starship’s Super Heavy Booster to the launch site.

Sergio Flores | Afp | Getty Images

Over the weekend, Elon Musk got his new company town along the Texas Gulf Coast. Controlling the city are three SpaceX employees, who all ran unopposed.

As NBC News reported, the election determining incorporation of the city of Starbase concluded on Saturday night, with 212 votes in favor and only six against. Just 143 votes were needed for the measure to pass.

Starbase was victorious in becoming a type C city, which in Texas applies to a previously unincorporated city, town or village of between 201 and 4,999 inhabitants. The city includes the SpaceX launch facility and company-owned land covering a 1.6 square-mile area.

The mayor is 36-year-old Bobby Peden, who has spent more than 12 years working for SpaceX and is currently vice president for Texas test and launch operations. Prior to joining the rocket maker in 2013, Peden was a graduate research assistant at the University of Texas at Austin, according to his LinkedIn profile.

Starbase has two commissioners, both from the SpaceX employee ranks.

One is Jenna Petrzelka, 39, who was an operations engineering manager at SpaceX until July, and now identifies as a philanthropist, according to her application to be on the ballot. She’s married to Joe Petrzelka, a vice president of Starship engineering and almost 14-year veteran at SpaceX.

The other commissioner is Jordan Buss, 40, a senior director of environmental health and safety for SpaceX who joined the company in 2023.

Musk, who has assumed a central role in President Donald Trump’s administration responsible for slashing the size of the federal government, began acquiring land for SpaceX in Boca Chica, Texas, about a decade ago. The first integrated Starship vehicle launched from the site, known as Starbase, in April 2023, and exploded in mid-flight.

The U.S. Fish and Wildlife Service soon disclosed details about the aftermath of the explosion, including that a “3.5-acre fire started south of the pad site on Boca Chica State Park land,” following the test flight.

State and federal regulators have fined SpaceX for violations of the Clean Water Act, and said the company had repeatedly polluted waters in the Boca Chica area. Environmental advocates and indigenous groups have also sued both the Federal Aviation Administration and SpaceX over the company’s flight tests and launch activity in the area.

Those groups said in legal filings that SpaceX caused harm to local habitat and endangered species due to vehicle traffic, noise, heat, explosions and fragmentation caused by the company’s construction, rocket testing and launch practices.

A SpaceX spokesperson didn’t immediately respond to a request for comment.

In a post on X on Saturday, the account for StarbaseTX wrote, “Becoming a city will help us continue building the best community possible for the men and women building the future of humanity’s place in space.”

WATCH: SpaceX launches third test flight of massive Starship rocket

SpaceX launches third test flight of massive Starship rocket

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