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> actual harm => consumers end up paying more for the apps because the app developers have to increase their price to cover Apple's cut (which is more like a shakedown).

Out of all the arguments against Apple's App Store policies, this has always struck me as the weakest. I remember app prices for Palm Pilots, and for that matter, app prices in general before the App Store came along -- and they were way, way higher. In 2005, a program like Pixelmator for iOS would have at least been $40; on iOS, it's $5. And how much do you think LumaFusion, a multitrack video editor, would have gone for in 2005? If it had been under $200 reviews would have been calling it a steal. It's $30. And that seems insanely high.

So the problem with the "Apple's cut artificially inflates prices" argument is that prices have demonstrably been in free fall during the app era. We can argue that LumaFusion would be able to cut their price to $25, or Pixelmator to $4, and that somehow "proves" that developers have to increase their price, but it's not super compelling.

> I don't see any reason why a company needs to pay any percent of their revenue instead of a flat fee. You pay a % of revenue when someone is your partner or an investor in your company. Apple is neither.

Well, Apple is acting as a payment processor, and payment processors charge you a percent of revenue. I don't think anybody's gonna run credit cards for you for a flat $19 a month fee; if Apple charged only what Stripe did (30¢ + 2.9%), LumaFusion's fees would be over $19 on their 11th copy sold per month and Pixelmator would hit it on sale 65.

I'm super amused by people bemoaning Apple's cut of sales on the App Store. I remember mobile software before the App Store. Buying software for a Palm or PocketPC device was a fucking shit show.

There were multiple competing stores and sometimes even the developer's own site. The prices were ridiculous, partly because everyone had to implement their own payment and distribution systems. If the software didn't work or there was a problem it was rare to get a refund. Most of the time your contact info was readily sold to "partners".

Apple's cut of sales for the service they provide is pretty small compared to the costs of doing it yourself. There's many of thousands of developers that are enabled by the fact they don't need to host their apps, handle billing, or handle user accounts and PII.

If you seriously think prices to end users would decrease if Apple took a smaller cut you're deluding yourself. If developers are making sales at current prices there's zero reason for them to drop prices even if their overhead drops. Prices are set by what the market will bear and only have their lower bound set by the developer's overhead.

Prices are set by what the market will bear

That's the entire issue right there. When Apple is the market, then they can make it whatever they want. If Apple has to legitimately compete with other "App Stores", then the market will find a lower price than 30%.

Play charges 30% as well, it seems to be the market price.

If that is exorbitant, what SHOULD the price be?

A flat monthly fee

That doesn't answer the question. A flat monthly fee could be $1 dollar or $100,000.

Play is also an anti-competitive monopoly as well. Google was a bit smarter about avoiding potential anti-trust though, because they at least give the illusion of choice with 3rd party app stores.

There basically is not a competitive market for either app marketplace right now, so an accurate price can't be determined. Allow 3rd party marketplaces to be installed as easily as any other app and I'm certain prices will come down from where they are today.

> Google was a bit smarter about avoiding potential anti-trust though, because they at least give the illusion of choice with 3rd party app stores.

I'd argue the opposite -- one of Epic's allegations is that Google scuttled a deal Epic had reached with OnePlus to ship Epic's own Android app store.

The illusion of choice has nothing to do with what is the default choice.

The choice is important. About 20% of apps on my Android phone come from F-Droid marketplace distributing free software and some of them are not distributed via Play store at all. And then there are Amazon App Store, Galaxy Store etc. (device-manufacturer stores) https://fossbytes.com/10-google-play-store-alternatives/

The fee should be whatever would the fee would be, if there were multiple app stores allowed on the iPhone.

I expect that number would drop to around 10%, for "premium" app stores, such as if Steam or the Epic app store were allowed on iPhones.

But also, I would expect there to be even lower priced competitors. Payment processors charge 3% of sales, so a competing app store could get pretty close to around 3%, if they wanted.

So the answer is 10% for "premium" app stores, and for the app stores that instead only doing payment processing, the price should be 3%.

> Apple's cut of sales for the service they provide is pretty small compared to the costs of doing it yourself

Pretty small? I think Epic, who makes billions and billions of dollars in overall sales (though revenue is unknown specific to Apple devices, but fair to say at least $100M), would strongly disagree with this point.

I couldn't possibly care less if Epic only makes $100m instead of $130m. Why are you carrying water for Epic which makes stupid amounts of money selling props for in-game toons? I'd be sympathetic if they sold anti-cancer drugs or built low income housing but they sell fake things to people in their own captive market.

2020 is very different from 2008. Palm and PocketPC devices were "organizers" and not primary computing devices (as smartphones are today, for some users), so there was a lot less at stake back then.

Additionally, companies like Stripe have made integrating payments _way_ easier than it was back then. Hosting downloads is not difficult either. As noted in the Stratechery article, developers not only give up 30%, but give up a customer relationship and can't even issue refunds! They can't do upgrades, either. It's not just the 30%, it's the flexibility in payment models as well.

I don't know that prices would drop, but more developers would have a sustainable business.

PocketPC apps were written using MFC and a subset of C# - the same APIs used for Windows. They were very much capable of general purpose apps.

Late model PDAs and early smartphones (Treo, Blackjack, N95, etc) were capable devices. The paid software for these you'd see were office suites, PIMs, e-mail clients, and games. Of course these weren't as capable as 2020 devices but we're not talking early Palm Pilots.

Payment processors like Stripe aren't new, there was PayPal, Kagi, and others before 2008. Handling payments is a non-trivial task for a small developer, the same goes for handling user accounts/data. They're not insurmountable problems but they're a lot more effort than Apple or Google just sending you money when people buy your app.

Hosting is worse than payments as it costs the developer money and keeps costing money. If your app gets a popularity spike instead of getting a revenue spike you get a huge hosting bill.

I think you've got it entirely backwards, more developers have sustainable businesses because of the App Store than without. Payment processing, hosting, managing user data? That shit is easy for big companies or it's an extant expense so mobile app sales aren't adding real overhead. So for Microsoft, Adobe, and Epic those aren't problems. They could easily sell their stuff without the App Store/Play Store and in fact currently do so. For the many thousands of small developers that aren't Epic payment processing and hosting are big costs as is advertising they need to even be found. Before the App Store mobile app aggregators charged money to get listed and wanted bribes to be featured.

Epic et all might see their overhead drop from Apple's 30% to maybe 10%. They pocket the extra revenue and prices don't change for consumers. For many thousands of developers their overhead goes from Apple's 30% to 50-60% doing it in house. So Epic rakes in even more money and small developers get the shaft.

Apple doesn't have a monopoly, people are free to chose other platforms. You can't claim harm on end-users due to higher costs when literally every single costumer of Apple chose their product and ecosystem despite it being more expensive.

> Why not the same feelings for Apple who's made this far more extreme and far more anti-competitive.

Because you can't abuse a monopoly when you don't have a monopoly. Apple isn't being anti-competitive. In fact by the very nature of your argument that they are hurting themselves by having high prices and are welcoming competition as consumers could chose cheaper alternatives, which most actually do as Apple only sits on like 14% of the market. Microsoft on the other hand tried to misuse their near 100% position one market to corner a different one in order to kill of competitors and take it for themselves.

“consumers end up paying more for the apps because the app developers have to increase their price to cover Apple's cut”

I think it will be hard to defend that argument in court, given the historical development of prices for apps.

Also, Apple will likely argue that prices could go down because they provide developers a huge market relatively cheaply, so that they can make up Apple’s cut with increased number of sales.

I also think one could argue Apple is your partner when you publish on the App Store (evil partner, maybe, but developers sign a contract with them)

> actual harm => consumers end up paying more for the apps because the app developers have to increase their price to cover Apple's cut (which is more like a shakedown).

So what? All markets work like this. Food prices go up whenever there fuel prices increase, so the grocery store increases the cost to cover the higher cut taken by the supply chain. Apple created this entire market - they could've been far more anti-competitive than they are. Why should the free advertising, access to a market that has users that spend more on average, be free to anyone?

> I don't see any reason why a company needs to pay any percent of their revenue instead of a flat fee.

You're the one making the claim - you have to prove why it's wrong to charge a percentage of revenue first.

The Internet Explorer argument just doesn't apply. They had market dominance - Apple does not.

> So what? All markets work like this. Food prices go up whenever there fuel prices increase

If it were a monopoly then anti-competitive practices, that would result in price increases, would be illegal .

> Apple created this entire market

It doesn't matter if they created the whole market. That is completely irrelevant to the legality of anti-competitive practices. Now, they are a monopoly, and they are no longer to allowed to engage in anti-competitive behavior.

> they could've been far more anti-competitive than they are

The idea that they could do worse, is not an argument against something as for why it is not bad.

Apple could do many things that are worse than what they are doing now. Maybe, in the future they will hire assassins to kill anyone who does not own an iphone. But that hypothetical world, does not make the current world any better. It is not an excuse.

> Why should the free advertising, access to a market that has users that spend more on average, be free to anyone?

Because the purpose of laws are to help consumers, not to protect apple. The reason why the law should force apple to allow competitors, is because by doing this, this helps consumers.

> They had market dominance - Apple does not.

Apple absolutely has market dominance over apps that are sold on the iphone. They prevent competitors from running app stores on that platform.

This is a huge market.

It's not a monopoly. There is an alternative which dominates the market share. This simply is not a monopoly.

> Apple absolutely has market dominance over apps that are sold on the iphone.

This is just wrong. This would hold true if no alternative exists. There currently is not an app the iPhone offers that isn't matched in functionality anywhere else.

This doesn't pass basic legal sniff tests.

> This is just wrong. This would hold true if no alternative exists. There currently is not an app the iPhone offers that isn't matched in functionality anywhere else.

There is no alternative for buying apps on the iPhone.

> It's not a monopoly. There is an alternative which dominates the market share.

Yes it is. There is not a single alternative, for buying apps on the iPhone. They control that market, and have 100% market share over the iPhone app store market.

> Apple created this entire market

Which market? 3rd party software on a computing device? Sorry, that was dozens of years prior. Packaged apps on a mobile device? Sorry, I had those on my Treo in 2001. They haven’t really created any market, they just created a software monopoly on their hardware using existing ideas.

Aside from trying to be smug, I'm not sure the point of this comment.

No one cares that a small handful of people owned a Treo in 2001. It wasn't relevant then and it isn't now. In any case, if it isn't a market, then there is no case here, so not sure what your comment means for you.

> They haven’t really created any market, they just created a software monopoly on their hardware using existing ideas.

The monopoly where the competitor has far, far higher marketshare. I'm sorry, I've never read about that in the history books.

Treo’s were extremely relevant! It was a device that early adopters loved and inspired Apple to make the iPhone which “crossed the chasm” into the mainstream. (Read “Crossing the Chasm” to learn about early tech and its influence)

There are no competitors on the iPhone. The iPhone isn’t the anti-competitive issue, the App Store is! No one has a market share but Apple on that front.

> consumers end up paying more for the apps because the app developers have to increase their price to cover Apple's cut.

I don’t think so. When we determined our app’s monthly price we have A/B tested several price like $5/month, $8/month, $15/month. And we have chosen the one that we earned most (It was the expensive one). If the Apple’s cut will become 10%, we won’t change our price because would earn less. Therefore, Apple’s cut won’t change most of the apps’ price.

Nice to know, so they can happily charge 95% from your app?

Oh no, they should close the App Store where my business lives and we should return to iPhoneOS 1 era.

When we returned to iPhoneOS 1 era, all of us should just develop PWA websites without dealing with 30% cut.

> On another note, regarding your first comments, in the late 90's Microsoft went through DOJ depositions and demands for breaking up simply because they bundled Internet Explorer with their operating system.

The crucial point of the Microsoft case was that their operating system had 90% market share, which Apple does not.

This isn’t a clear argument.

Many customers and developers want the service the App Store provides and are willing to pay for it.

I.e. it’s not a shakedown, it’s a service just like any other.

But even if you argue that people should be allowed to have someone else provide a different service (which is technically problematic since they will still need to use Apple’s API’s), there is no reason to presume that more stores equates to lower prices.

It doesn’t in streaming for example, because of exclusive content.

It also means developers will need to support multiple stores and pass that cost on to the customers.

They might want the App Store, we don't if they're willing to pay for it because they have no choice.

And it's absolutely a shakedown. It's not a service, it's a requirement. A service implies app developers have options. They do not. Apple could raise the price to 70% of the revenue and app developers would have no choice but to pay. It's not much different than the mob saying "it'd be a shame if this business went away for a while, wouldn't it" and demanded protection money.

The App Store is as much the product as the iPhone.

Without the app store the iPhone is literally just a piece of hardware. The idea that the App Store isn't a product in and of itself is a falsehood.

> A service implies app developers have options. They do not.

They do - it's called Android.

I've heard this argument before...

Internet Explorer is as much the product as Windows.

Without Internet Explorer Windows is literally just a piece of software.

They have options - it's called a Mac

Ah hah! I'm glad you brought this up.

What did Internet Explorer have? DOMINANT MARKETSHARE. That was the problem - not that a program came bundled with software. Such a basic fact conveniently ignored because Apple Bad.

> Without Internet Explorer Windows is literally just a piece of software.

A piece of software that can do many things - an iPhone without apps just doesn't work. Apps run everything - from making phone calls to keeping notes. Windows without internet can still be used. Bad analogy.

Internet Explorer didn't have dominant market share; Windows did. You say the problem wasn't that a program came bundled with software, but that was literally the heart of the antitrust action: the government contended that Microsoft was using their defacto operating system monopoly of Windows to give IE a leg up on non-bundled competitors.

> An iPhone without apps just doesn't work.

Sure, but an iPhone without an App Store works fine -- that was literally the way the first iPhone shipped, remember? -- so I'm not quite sure your analogy is a slam dunk here. :)

The iPhone without an App Store doesn’t work fine to install software.

Remember - they originally said - just use web apps, but developers demanded a way to install software, and Apple developed the App Store in response to that demand.

We know some of them want it because a lot of them say so elsewhere in this threads.

Nobody is forcing developers to develop for iOS.

If Apple raised their rate to 70%, I’d build for the web or Android in a heartbeat.

It can be both a service and a requirement for iOS developers without being a shakedown.