I would call that a tax (informally; I know it strictly doesn't meet the definition) and as a customer I would like to know about it.
If the Spotify web store is more profitable than the Spotify iOS store, because Apple wants ITS CUSTOMERS to get the same deal and Spotify wants those customers, then this is good and fair for customers at the point of purchase.
I think it is widely accepted in commerce that a deal is only fair if both parties have the relevant information.
If customers know they're paying more because of Apple's fees and are comfortable with it because they feel they get adequate benefits in return, that's fair.
If they are unaware of this however, am not sure how the deal can be considered fair, since not all parties have the relevant information to make an informed purchase.
We could test this, I mean, suppose the invoices or even the details at the checkout broke down the total into developer’s fee, apple’s fee, government tax, and so everyone could see that, would that be sufficient to fix the problem? I suspect not, because Epic, in this story, are seeking to pay Apple less, and give themselves more - that’s really their bottom line.
Are they really going to all this trouble on my behalf?
The hotel could treat such taxes as overheads and incorporate it into the price, but that's not really useful because they can't change it, only the customer can. Most business overheads aren't like that. If only a customer can affect a charge it makes sense to break it out and highlight it.
What if the shoe were on the other foot? What company would hire me if I negotiated a salary and then after we shook hands and everybody had the warm and fuzzies, I said, "Well now, you'll understand this is just the rate I charge, so it is exclusive of federal and state income tax. These are additional fees that I am responsible, by law, for collecting from you on behalf of the government. I've broken the numbers down this way in the interest of full transparency."
There is a single income tax rate, 10%, so it doesn't matter how much you earn. If your investments make more than the annual minimum wage, you also have to pay the health insurance tax and "social security" tax.
Interestingly, many large companies use services for this kind of thing, much like Apples walled garden, where their employees can spend without worrying about tracking all these details, and the service takes care of all the (significant) legal wrangling and deal negotiation to make this simple.
That's essentially what Apple does for their money: makes it possible for users to buy things across a host of jurisdictions from an ecosystem of vendors, without risking their device security or payment security. There is a significant amount of legal and infrastructural wrangling involved, most of which the end customer, and many of the vendors don't fully understand.
But yeah, let us focus on the least important part: price.
Remember there was a time you could only phone people in the network you were a subscriber. It is not the same, but a similar situation here.
Developers make a choice and everything sold on those platforms has distribution costs. Fortnite is available on most if not all of those platforms. AND, players play against one another through the internet not through a private developers network. So there’s plenty of competition. Why Epic aren’t demanding Nintendo and Sony take a lower cut is a mystery. Or maybe not?
Epic have massively, massively, overplayed their hand here. Instead of creating an amazing new game and using THAT as leverage to platform owners for a deal, they’ve made a satirical video, broken a contract, had their bluff called, and cemented their place in future business school classes as how not to go about a negotiation.
it isn't a negotiation, it's an anti-trust lawsuit. Tim Sweeney made it clear that the only 'deal' he is willing to accept is 3rd party stores.
An iPhone is sold for a substantial profit regardless of gaming entirely, and offers none of those services or promotional benefits to developers/publishers.
The selling at a loss is just another business strategy to drive hardware sales of a limited-functionality device (ok, you can watch videos and surf the net, but it's hardly an actual computer) compared to the iPhone, where other factors drive sales and increase the user base.
I mean, I love my Switch and I'm definitely a profitable customer but it's a specialized device. If Nintendo's loss-leader strategy is worth 30%, why isn't Apple's strategy? Or really, who gets to decide what the correct % is? And how?
but when you have a duopoly there is no one to decide the correct %, and we start to not have a functioning capitalist market.
Not sure what the point is supposed to be with "The value of creating and enabling an entire ecosystem is found to be worth 30%", and making the judgment that Apple hasn't done the same. Without some harder numbers on both sides, it's not a conclusion that anyone is in the position to make. It's also worth remembering that Apple has amassed an extremely loyal customer base that has shown that they are willing to spend an immense amount of money on App Store purchases over the period of decades - Apple does deserve to cash in on that value created such as being the single point of contact for easily addressable issues with app purchases, fraud, & such for the customer, secure & frictionless payments, and most of all, creating the situation where users want to go and spend $ on their platform over alternatives.
The value created is in developers/publishers being able to make more $, which is the ultimate value.
Now that Windows 10X seems to go nowhere [1], and Project Reunion is still trying to find out how to merge Windows 7 and 10 worlds [2], one more reason not to do just fine.
[1] - https://www.thurrott.com/windows/windows-10x/238014/windows-...
It appears there may be some pushback to that as a corporate policy. I guess it could even be suggested that maybe not everything Apple does as policy should be golden law.
Just suggesting a different pov.
I don’t want to rob people of being able to have open hardware but I also don’t want that need to dictate all platforms. Luckily, there are a lot of phones which fit the needs of that market. If I want a phone with one App Store with authoritarian control of the system should I not be able to buy it without fear that one day it will be too popular and deemed too draconian in policy?
It is noticed and often people actively avoid the higher price once they are aware. Some are frustrated and unsubscribe.
This is understandable since they realize they've been paying an on-going 20% premium every month for a one-time convenience by originally pressing the subscribe button from the mobile version. And none of the extra 20% goes to the streamer they wanted to support.
The question is, should Spotify be able to tell customers that they are getting a higher fee because they are making the purchase on an iOS device?
To me, it requires massive contortions of logic to believe that customers are better off not having this disclosed.
Customers ought to know, but whether companies are compelled to tell them is problematic - just see the prices of fuel or snacks at motorway service stations - which reflect a local monopoly, not the true cost. Ultimately, it seems the answer over time is that nobody is forced to buy Spotify or a WHSmith sandwich. The music you can go and buy in the shops, or from Amazon, Googly, Tidal, Bandcamp. Spotify is like WHSmith at a service station and wants to use the local monopoly as an excuse to put up their prices and push the cost onto the consumer rather than factoring it into their business.
(OK, only appears to work on the desktop, weird)
Ok, that’s new to me. Thanks.
I am surprised how this unprecedented practice is not widely discussed - I am not aware of any situation in real life where you rent a store and you are told you cannot charge what you want.
There are established limits on what a contract can enforce, an outrageous terms are not considered valid in court. For instance a phone operator could not have penalty of £10,000 for a going over your credit.
I believe this term should be considered outrageous - if apple wants to charge 100% tax, thats fine, but their customers will pay 100% more and then they might have questipms for Apple.
Back in the real world, sales assistants may not be allowed to offer deals unless asked first - I know that my partner was basically given very heavy hints to ask if the sales assistant "had any special offers" before he could offer a deal on a new motorbike. I guess this is the same, without the helpful hints. Some people scour the web for coupons and deals, other people pay the full price (and then get extremely cross when the first screen they see in their new app offers a 25% off coupon, yes you, Capture One, you bastards)
John Lewis pay a different rent (again presumably) based on the more desirable location, but it's also reasonable to assume their payment provider is the same.
In this case, I would argue that Apple have the monopoly on the App Store, which is fine if they are reasonable about it. However, there's no optionality on the payment processor: they insist it's them and take 30% (from what I've read; not actually an iOS dev).
Would it not be more reasonable for them to charge a small revenue fee (rent) and allow you to choose a payment provider? They could audit the payment provider to achieve the security features that they seem to be presenting as an excuse for their charges.
Are you saying you think Spotify should just charge everyone extra and take extra profit from Android customers? As an Android user, why should I pay extra so you can use an iPhone?
Assume me and you are the only 2 users on Spotify and they need $10 per user in revenue. As far as I'm concerned, I should pay $10 and you should pay $14.29. Apple gets $4.29 (14.29 * .3) and Spotify gets $20.
If Spotify can't differentiate and has to charge every user the same, they won't charge everyone $14.29 because they're in a competitive industry and keeping the cost to the customer as low as possible is important. It's more likely they'll charge us both $12.15 and call it $10 average revenue per customer.
If Epic's lawsuit accomplishes only one thing, I hope Apple is forced to allow developers to advertise and charge different prices for iOS users. If you think iOS is worth +43% on everything you buy on your phone you're welcome to pay that IMO. I don't want to and I'm happy with Android.
Would you call that a tax or would you call that rent?
Conventionally, rent-seeking is a poor quality activity which doesn’t generate any new wealth, it just transfers it.
But that’s not the case here, at least from my perspective, as Apple invests huge amounts in developing their hardware and software and millions of developers around the world (ok, maybe thousands, I don’t know) and their families have benefited from this.
It’s not like they’ve inherited a vast real-estate portfolio that was amassed through violence and war (see British aristocracy, est. 1066) and have invested relatively little into it.
Prior to the 1980s, monopolies were considered bad (or at least extremely dangerous and suspicious) by default, and leveraging one to privilege your entry into another market was a huge no-no (though I'm not sure leveraging a monopoly to create a monopolized adjacent market would always have been seen the same way).
Robert Bork's theory of "consumer harm" as the guiding light of anti-trust enforcement (and further conceiving of "harm" mostly in the form of higher prices, or at least "value for money") has given corporations too much wiggle room and consequently led to a lot of contorted legal and economic arguments, substantially reducing antitrust scrutiny and enforcement (which was the whole point, AFAICT).
Maybe Apple should offer two deals to publishers: 1) Pay £1,000,000 up front and keep all the revenue 2) Pay As You Earn.
If iOS was a monopoly, how is it possible to get Fortnite on all these other platforms? That just doesn’t make any sense. The only monopoly Apple has is on selling and licensing their own products.
In the case of Google I would like to disagree, if only for the fact that I have options as where to procure my software and run it in a manner that is intended, but I must concede that it is more cumbersome that I would like. That is the key difference that makes what Apple does so egregious, and why I don't really have much problems with Google at the current time.
For me it is not about the fees or the stores, its that Apple in practice forbids anyone in the digital marketplace to do business with any of their consumers unless it goes through them, as they own the app store and for the average user, their devices only run apps that are on the app store. Epic is in no position to reject the proposition of using Apple's payment service or their store entirely and still do business with the million of customers that are playing Fortnite.
Apple should be definitely be able to charge for the access to their App store customer base, but Epic should be allowed to reject that price and still be allowed to do business with the iOS user base on their own terms, just like they did on Android with side loading before striking a deal to be on the Google Play store.
I’m personally opposed to Apple locking down MacOS to run only signed binaries. If they go too far with that I’ll stop buying Macs, but to what extent do I get to dictate to Apple what software they develop, what products they choose to sell and how they decide to implement them?
On balance I think it’s a good thing the US and EU are looking at these issues. Clearly at the moment there is at a consensus and I think there is a legitimate role for oversight of how these companies operate and enforce the rules on their systems. I’m not convinced though at forced openness on every platform of any kind is tenable.
I wouldnt call it trying to dictate what Apple does.Also I would like to specify that I don't really wanna dictate what software Apple develop or what products they want to sell in their store(atleast beyond whatever code is necessary for sideloading). What I do take issue with, is Apple dictating which companies are allowed to do business with "me" as a consumer, should I be on their platform.
Walled Gardens has not been the norm of Hardware/operating system platforms in the pc/laptop market, and I don't think it should be that way on mobile either. All of the major OS vendors could have implemented similar walled gardens if they wanted to, they just couldn't get away with it. I hope this leads to Apple not getting away with it either.
The same is true in the case of the iPhone vs. Desktop + web experience: it's different. One way that highlights the added benefit of the iOS app store is that it's safer than the open web.
It seems Apple prevents you from embedding the website, linking to the website, directing users to that website from the app, or giving a FAQ that includes information about how the user is expected to pay via the website. Users have to guess, or already know.
Watch the struggles LTT have gone through with the Floatplane app.