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Comment by etchalon | Hacker News Reader

I never really get the argument that Apple is somehow some horrible villain here.

If you own a store, you sell products at a markup. That's how it works. You buy a widget for 0.50 and you sell it for 1.00.

You could say "That retailer is stealing 0.50 from the producer!" but no one says that.

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The difference is if you are a store, your customers can easily walk next door and buy something else. You cannot do that on iOS. Your analogy is flawed. Edit: not to mention, in your analogy, Apple is the mall.

How is Apple the mall? They're a store which sells a singular type of product (Applications), with a singular user experience under a singular brand.

We used to actually buy software in stores. Developers used to have give CompUSA, and Best Buy, etc. massive cuts just to be on their shelves.

Exactly. We had a choice to go buy it from CompUSA -OR- Best Buy -OR- from the developer themselves. There is no choice with iOS.

From a consumer perspective, software prices in real terms have gone down dramatically since those days. Apple brought unprecedented scale and discovery to a software marketplace, and consumers have benefitted.

There's also no choice with Best Buy. If you walk into a Best Buy, you pay Best Buy prices.

If you don't want to pay iOS prices, you go to Android. If you don't want to go to Android, you can go try and find a Firefox OS phone, or a Ubuntu one.

The problem isn't that choice doesn't exist. The problem is that equivalent choices don't exist.

Bestbuy doesn't charge you hundreds of dollars to buy the store before you walk in.

Consumers don't own Bestbuy, Bestbuy owns Bestbuy, so it's okay for Bestbuy to control the shelf space in their own stores.

It is not okay for Bestbuy to exclusively own the app shelfspace on your own phone. Just as it is not okay for Bestbuy to exclusively charge a premium to it's competition when you, the user, are signing up for services with the competition on your own phone.

Costco charges you a membership before you can shop there, and behold, they sell things at a markup.

Does Costco sell things at a markup? They are famous for having net income equal to the amount of membership fees they collect, so they must be selling products at however much it costs to obtain the products and operate the stores.

https://www.fool.com/investing/2019/02/13/how-costco-actuall...

You aren't buying the Costco store when you enter, just as you aren't paying a membership fee to use someone else's phone as your own.

Members don't own Costco, Costco owns Costco, so Costco can dictate it's own shelfspace. You would not expect Costco to exclusively dictate what apps you can and cannot buy on your own phone or charge a premium to Costco competition.

They're using their near monopoly in one area (app store) to make competitor apps worse and extract income from them.

For example kindle is not allowed to sell books (unlike ibooks), hey is not allowed to sell subscriptions, yet other apps are.

Classic abusive monopolistic behaviour, the enforcement is completely inconsistent and the fees high enough to put competitors out of business.

Apple are not buying products then selling them at a markup, they're forcing their users and suppliers to transact at the company store at a high markup then raking in a huge profit because they own the platform. Your analogy makes no sense.

They're selling a products to their users, sourcing those products from suppliers, and charging a markup for doing so.

The problem is that, for whatever reason, people seem to believe they're entitled to access to Apple's users without any restrictions.

Which is like demanding Walmart stock your CD "because reasons!"

They aren't just Apple users. They are people that paid good money for a device that is capable of running code. The person who bought the phone should naturally have the right to run whatever code they want to authorize on that device, regardless of where the code came from.

Your Walmart analogy is broken. I think it's more like this:

A band that I like released a CD. I buy a CD from one of their live shows. I should have the right to play the CD on my CD player without having to pay 30% of ALL CD sales to the maker of the CD player.

I don't mind paying a 30% cut to a store which made it more convenient for me to buy the CD, but I shouldn't HAVE to go to that ONE CD store to buy my CD's.

We're getting into a net neutrality type argument here.

Does Apple really own their users? Should they?

Why does Netflix feel entitled to access AT&Ts customers? AT&T should get a cut of Netflix's subscription revenue as well!

No, it's like walmart demanding that suppliers of a house alarm which has an associated subscription (e.g. alert response service) also give them a cut of that subscription, or else.

I'm fairly certain they do that. In fact, I know they do.

Got any examples of that? Seems like it should be illegal to me, and it's also nothing like the original analogy.

I can't be too open, but I work with a firm that makes IoT products, sold at retail, and as part of the contract a retailer was granted a percentage stake in the attached subscription service since otherwise the margins weren't sufficient for them.

There's no reason that should be illegal. A contract is a contract is a contract.

I disagree that any contract is valid - sometimes they're illegal because they abuse the near monopoly power of the retailer to force suppliers into contracts to their detriment - the choice is either accept the draconian terms or go out of business. Very much like Apple's message to hey - nice app you've got there, shame if something were to happen to it.

This is why we have (or had) antitrust laws - not every contract is legal and left alone capitalism tends towards abusive monopolies.

Because Apple sells computers (iPhones ARE computers) and somehow still thinks it owns them after sale, regulating what people that purchased them are allowed to run.

There would be zero issues if we could install and run any app we want, bypassing AppStore, like we can on Mac/Windows/Linux PCs

A lot of businesses publish apps on the App Store because it is the only option Apple gives consumers to install their app.

You are most likely not going to be discovered just by being on a Store but rather through your online presence.

In a free world you could own your app distribution logistics with the cloud provider you already have to use for your app, website or for other part of your business. You can do it on Windows it didn't kill Microsoft business at all

The issue is not Apple making a profit on its store. Selling phones is unrelated to owning a store, they have one good for them but why is it mandatory to access such a huge share of the mobile market ?

What value is given to businesses and developers, and what undue avantages over competition Apple gets by tying both together ?

Now let's admit you do want to be on their store. Now you want to take payments, your bank has tech to take payments, Stripe has tech to take payments, PayPal does to etc. Apple want to compete with those with their In App Purchase tech fine but there has to be choice. The cut is 30% because they forbid competition in payments. They forbid even mentioning to customers they can have a better deal outside.

If Apple thinks being on the App Store is such a privilege it should either :

- Make businesses & developers pay for being on it and let them chose their payment provider

- Keep on bundling phones with a store where their payment tech is mandatory but let customers install apps that are not from the App Store

They can fight it as hard as they want the EU regulators will make them do that choice anyway because the anti trust case against them is even sounder than the Microsoft one with Internet Explorer

Take a look at the usual margins in the retail market, online or offline.

What we're seeing does not look like what should happen in a free market.

The mobile market is a duopoly.

Have you ever sold anything at wholesale to a retailer? A 30% cut is not remotely unheard of. Different products obviously have vastly different margins, but 30% isn't outside of reason, depending on the industry.

But absolutely, the mobile market is a duopoly. Consumers and developers, who used to have a wider ranger of choices, opted to primarily pick one of two experiences, over and over again, until those were the only viable experiences.

The problem with this analogy is that in many cases the "app" is only part of the service, or a way to access the service.

Lets say I sell a service where you can mine a bitcoin. It costs me $2000 in electricity for every bitcoin I mine. I sell the service for $2200. I offer an app, to access this service. Apple wants 30% of the whole amount, not 30% of the value-add that app brings.

Consumers have already purchased the store, but Apple is still controlling all the shelves inside, and the cash register.

Consumers didn't purchase the store. They purchased a phone, with a Store on it. On that same phone, there's another Store where Apple has zero control.

But consumers prefer the store Apple controls because the products they can get out of that store work better, due to the efforts Apple puts into the Store to make that so.

Developers want to sell in that store because they know users prefer products from that store, due to the efforts of Apple.

People would really like if Apple made it such that products from either store could do exactly the same things, but Apple is under no obligation to do that.

The phone is the store in your analogy. You own it.

It is yours, yet you do not expect the previous owner to still forceably control the shelf space of your own store. Or exclusively take from your cash register.

The phone is very much not the store in my analogy. The store is the store. The phone is the phone. My analogy is not that deep.

Oh no it's spot on. You own your phone, so you own the hardware that houses the store, yet the previous owner is still getting exclusivity inside the property you just purchased.

And forceably taking a cut from their competition as you try to transact with their competition.

The phone is useless without the store and the store is nothing without the phone. They are inextricably linked. Which is, of course, the whole problem right there.

The phone launched without a store.

Yes, and it replaced my flip phone. Lets see them try that again in 2020.

They also ask for a cut from the monthly subscription fee.

A better analogy would be to buy an inkjet printer from Best Buy with the condition that you can buy the cartridges only from Best Buy in the future as well.

That's fair.

The carriers used to take 70% and that didn’t even cover all of the fees. 30% is a huge improvement.

They maintain the infrastructure and integrity out of that.

It's my phone and I want to install whatever I want. IKEA doesn't tax people for building mods nor for selling them.

Good capitalism: Open markets, encourage competition and innovation, protects consumers, pay taxes

Bad capitalism: Act like drug cartels and squash competition, sleep with the government to fix markets, fucks consumers, don't pay taxes

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