Apps can be free or cost money. If they cost money, Apple can take a cut.
Apps can sell anything they want that’s part of the app (game levels) and must then use in-app purchases.
All other sales both physical and non-physical (media, tickets, parking, ...) you can sell how you want.
Are these terms really that absurd?
If you want to use Apple's discovery and distribution system, you pay a cut.
If you want to train your customers how to install on their own, you pay nothing, but have to distribute the app yourself.
The DOJ needs to force Apple to allow this, because they've unfairly strong armed their way into being middle-man for over 40% of Americans for all of the computing they do.
Outside our bubble, most don't even know what are the implications of switching.
What about the actual selling of iPhones counts as "unfair strong-arming"? No one's getting their arms twisted to buy a phone they don't want.
The forces at play are so great that the DOJ needs to pull the levers to fix this broken and unfair system.
There’s no a priori reason to assume consumers should be aware / educated which places to download from are safe and which ones are not.
What should imho perhaps be changed if is the size of the cut, which indeed seems a lot.
The other option, "don't have a smartphone", is becoming less and less tenable for most people who want to interact in society in a common way.
And sure, you could buy something that runs PostmarketOS or whatever, but then you lose access to banking apps and mobile payments and a whole host of other things that are becoming table stakes for a mobile platform.
Companies winning with good consumer solutions to complex problems isn't arm-twisting in any sense of the word.
If Apple put up a bubble around 40% of all Americans and you wanted to give these folks air to breathe, would you be content to pay Apple 30% or be forced to go through Apple's slow moderation and release control mechanisms? Keep in mind that they may shut off your ability to provide oxygen at any point in the future for any reason.
The correct model was Microsoft Windows. You pay to license it, but then you can execute anything you want on top of it. If you want to pay Microsoft to help with distribution, you're free to do so. Microsoft is still making bank.
What Apple has done is uniquely controlling and prohibitive. They've captured all computing-related economic activities for a large percentage of the population. You shouldn't be allowed to conduct business like that in the United States.
They lost because there are very few entities with the capital and manpower that Apple or Google have. A modern successor to WebOS or FirefoxOS would be what I would want as a consumer nowadays.
And yes, when more and more interactions with society depend on a smartphone, the basic rules of capitalism don't really satisfy.
This is why consumer protections are even more important, not less. If a market by its very nature has a high barrier to entry and makes competition difficult, the so-called "free market" principles that drive potential competition tend to fall flat, and that's why we need regulation to help ensure consumers don't get squeezed.
> Companies winning with good consumer solutions to complex problems isn't arm-twisting in any sense of the word.
That seems to contradict your first paragraph. They're winning not because their solutions are so good, but because even getting a solution off the ground at all is really hard. And it's not hard because the problem itself is hard (from a hardware or software perspective), it's because it involves a lot of expensive, time-consuming business relationships as well as building network effects over time among your user-base.
I'd concede that MS flunked in part because they built a product people didn't really want, and RIM/Blackberry flunked because they failed to keep up with where the market was going. But if you look at some of the more recent failed/small players, like FirefoxOS, PostmarketOS, etc. -- they failed (or are destined to be a niche product) because they had/have little chance at building the required third-party relationships they need to bring table-stakes apps to their platforms. In part that's because they don't have the financial resources Google and Apple do.
It seems like a fairly easy regulation to make it possible to not need to worry about this when buying a phone or computer. You should be able to repair it, you should be able to run what you want on it.
Pre-iPhone all loads of garbage were preinstalled on phones by carriers, and phone software was mostly garbage. Part of why iPhone uptake was so large was because Apple specifically refused to let this happen. A lot of non-tech friends I have, have owned Androids before, and anecdotally many don't have good memories of the state of the Android ecosystem around apps.
Right to repair I do believe people should have. But that's related on principle but not the same issue at hand.
Even if a "free market" allowed Apple to get where they are, it doesn't mean a society can't say that the current way of things is harmful to the market. Government has a place in regulating network effects.
Walmart is large, but they no where near represent a portion of the retail market that google/apple represents in the phone market.
If we think the tech industry needs less vertical integration to be healthier (imagine if Samsung made cheaper iOS phones), we simply can do it, passing laws as needed.
I only think the payment terms for developers and customers are bad.
It doesn't have Fortnite however, since the developed correctly told people that Apple took a 30% cut of their payments.
Apple is trying to create its ideal computer, which is actually an Appliance. iPhone was that, with added custom and App ability on top.
Google ( And Microsoft ) was trying to shrink the PC into Phone form factor.
Arguably the two meet somewhere in the middle. But they differs in fundamental principles and values. To be point I believe if there were no profits and vested interest in App Store, Apple will be happy to shut it down and only offers default apps.
I also agree the payment terms and how the handle developers were extremely poor. Did I mention Discovery and Search on App Store sucks?
Apple taking 30% (or trying) from every app is bad for everyone.
Apple is having enough trouble getting retailers to accept Apple Pay as it is; attempting to tax physical sales would kill Apple Pay and likely bring about the immediate ire of pretty much every government of every jurisdiction they do business in.
The original idea, which worked for a few years, was that 30% of the for-fee apps helped cover the costs of the free apps. For the first few years, Apple operated their App Store at a loss, and aimed for break-even.
I think subscriptions is ultimately what broke that model.
Enormous bill of what?
And lets not forget, and needs to be repeated every time this is mentioned, people are paying $99 dollar a year just to submit these "free" apps.
I'm not convinced at all that it's noteworthy for one of the most profitable companies in the world.
The question isn't whether Apple can afford to run an App Store. They clearly can. In fact, they currently profit from the operation, and are proud of the fact, which I think is a huge part of the problem.
What I said was that Apple initially ran the App Store at a loss and hoped to break even. That was true in 2008 when the App Store first opened, and it remained true during Steve Jobs' life, so at least 2011.
Some time after that, they stopped operating at break-even, and started profiting from it. I'm not sure when exactly that was.
[0] https://appleinsider.com/articles/20/09/24/app-store-rejecte...
The enormous bill of having to pay for a dozen hard drives! Oh no! That would drive the world's most valuable company into bankruptcy! If they can't charge everyone 30% they'll go out of business sometime in 10,000 years when they run out of their 11-figure cash pile!
/s
Apple's costs for hosting app's is already covered by the $99/year they make developers pay. They have no justification for 30% on all transactions beyond base rent-seeking.
The problem is with Apple forcing developers to do other things unrelated to the hosting of apps, such as giving up 30% of unrelated transactions (like events, etc) that would have occurred even in the absence of the app. And indeed, that is at the heart of the EU and US antitrust investigations.
Buy an iPhone for %15 off price if you use Apple's App store or buy it at full price if you don't use Apple's App store.
As in, let Apple subsidize the cost of the phone with the app store, I suspect a significant number of people would go for it even with just a five percent price drop.
The problem currently isn't that Apple is charging what they do for the App store, the problem is they are in effect selling customers of their hardware for that amount.
If you don't like the price, use (or create) an alternative.
Every reason you provided is more reason to build a competitive solution. None of them are incentive for Apple to lower their prices.
You don't have to use Apple. You can send snail mail or use pigeon carriers like in the olden times if you want to communicate with people. And of course, you can always use the string and paper cup method to talk to your friends, rather than Facetiming. The cost you pay is for the convenience, and despite being very used to it, most people can live without it.
The issue is not that they charge this fee. Instead it is that they prevent competing app store on their platform, through the use of anti competitive practices.
If, instead, it was quick an easy to install a different app store on the iPhone, then few people would complain.
> Every reason you provided is more reason to build a competitive solution
Apple prevents competing app stores. Thats not really possible to get a different app store on the iPhone.
This is anti-competitive, due to the size of Apple's market share, which is around 50% of the US smartphone market.
This anti-competitiveness is therefore illegal, according to section 2 of the sherman anti-trust act.
> If you don't like the entry fee, build your own clubhouse or find another one.
You missed the other option. Which is to prosecute apple for their illegal, anti-competitive practices, and make them follow the law by allowing competing app stores.
On...their platform.
The rest of your comment relies on this being an issue. I don't see how it is. They also don't make it "quick and easy" to install a different OS on their devices. Should we sue them for anti-competitive behavior here too?
"I can't one-click install Android on the phone that YOU built. That's not fair! I'm suing!"
I don't understand your argument at all.
Anti competitive practices are still illegal, under the sherman anti trust act, even if the company "owns" the platform.
To give a relevant example, most people would agree that it would be illegal and anti-competitive if Microsoft made every single app on the PC go through the microsoft store.
In fact, there was already a court case, 20 years ago, where Microsoft lost an anti-trust case, which was a bit similar to this. (Yes, microsoft had around ~80% of the market share then, but Apple now has ~50% of the smartphone market, which is enough for anti-trust law to apply. Thus it is a similar case)
> I don't understand your argument at all.
The argument is that Apple's actions are illegally anti-competitive, and that similar behavior has already been ruled illegal in the past, and if we thought about other hypotheticals, such as if Microsoft did the same behavior for the PC, that basically everyone would agree that this would be illegally anti-competitive.
Just think about the microsoft example if you are still confused. Basically everyone would agree that it would be illegally anti-competitive for microsoft to prevent people from downloading software onto their PC, and forced everyone to give them a cut through the microsoft PC app store.
One could argue that using anti-competitive laws to prevent people from controlling their platform for their own benefit, is in itself, anti-competitive.
I use my car to get to work and run errands. You could argue that my car is my platform, which I use for my benefit. Is it anti-competitive of me to not go out of my way to pick up other people and take them to their jobs? Would that be covered in the "Sherman Anti Trust Act of 1890" (Yes, I am familiar with it...), as the act was intended? I doubt it. You are of course welcome to disagree. I'll be expecting a ride to the grocery store tomorrow, and even if you have errands to run, we need to run mine first, because if you prioritize running errands in your car over mine, you are being anti-competitive, and that isn't fair!
If I went out of my way to prevent others from getting a car so that I kept an advantage over them, that is anti-competitive behavior.
Anti-trust laws were written to protect the public marketplace. As far as I'm concerned, the Apple app store is a private marketplace that Apple can do with as it sees fit. They can delete it today if they want, but that's just me.
This is a false view of how anti-trust law works.
If a company is engaging in anti-competitive practices, and has significant market power, this is illegal. And the courts can absolutely force a company to engage or not engage in certain actions.
Courts have already ruled on this. Just go look at the microsoft case. The courts forced microsoft to take certain actions.
This is a settled, legal issue, lol. The courts can absolutely force companies to stop engaging in anti-competitive practices, according to the sherman anti-trust act.
The courts can also force a company to sell to certain people and engage in certain business practices, if refusing to do is would be anti-competitive.
> You could argue that my car is my platform
Bad analogy. The reason why it is bad, is because a singular car is not a hundred billion dollar business.
If, instead, you controlled 50% of the car industry, though, then the government could absolutely force you to do things, or not do things, if your actions are ruled anti-competitive, as according to the Sherman anti-trust act.
> you are being anti-competitive, and that isn't fair!
Anti competitive actions are only illegal if you have significant market power. 1 person, with a single car does not have significant market power. Instead, I would have to control 50% of a 100 billion dollar business, in order for it to be illegal to engage in anti-competitive behavior.
Yes you can. Just go look at the microsoft court case, if you don't believe me.
Microsoft created their software. But it was absolutely still possible for them to be engaging in illegal anti-competitive behavior.
The Microsoft case directly proves you wrong. The courts ruled against them. Even though microsoft created windows.
Imagine if microsoft prevented people from installing other software on the PC, that did not go through their app store.
Even IF, they changed their licensings, to whatever Apple's are, I think that basically everyone would agree that this would be illegally anti-competitive.
Or do you instead believe that Microsoft could prevent competiting software (such as web browsers) from being installed on the PC?
Doesn't matter. That is not an excuse to break the law.
There is simply nothing in the law that gives a company immunity from anti trust law, if they built both the hardware and software. Such a law simply does not exist.
Nobody is complaining about Apple taking a cut from the Mac App Store.
Personally, it's nobodies place to dictate how much Apple charges. The main complaint is over Apple's monopoly over the channel for getting apps onto your mobile device.
Actually, it's everybody's place to dictate them, through commercial negotiation. Antitrust generally applies where, as with the App Store, traditional market dynamics do not apply to constrain one participant's market actions.
The main complaint is over Apple's monopoly over the channel for getting apps onto your mobile device.
No, that's the foundation of the antitrust claims. The main complaints are that Apple is abusing its power over the app delivery channel to force other market participants to put up with a variety of things they would otherwise never agree to if market dynamics were functioning correctly, like giving up 30% of all their income even when it's unrelated to the app itself (e.g., ticket sales), or preventing competing apps (e.g., browsing engines, mail apps like Hey, etc.), banning third-party apps from using API features in the OS or from certain forms of outreach but letting first-party apps violate those restrictions (see, all Apple apps released in the past 3 years).
You can't negotiate the Apple tax, which is is a sign of market dysfunction.
a) Being able to provide a free app with a subscription you can not buy in the app because of the 30% with IAP you're required to use
b) The ability to purchase tokens/credits in a game to then purchase other stuff.
So it wouldn't resolve the current major fights IMO.
Look up an appointment in another app or tab while the instructor is on a short break and you get disconnected in a way the app/instructor can't tell if was connection issues or just temporary, etc.
What happens if Apple takes a 30% cut of the app revenue, but you book the class offline (say, via web). But then you view via your iPad?
Another example might be the various learning apps. I purchased a Coursera class via the web, but then I added via my iPad -- does Apple get a revenue from this?
They can still offer a lower price on their own website, but they can't link to that from the app. Users would have to open a browser, go to their website, sign in, and make a purchase -- too much friction.
Maybe you e-mail a receipt that happens to list the paper's contents for 'quicker delivery'.
Apps that allow you to sign up / subscribe to a service in the app must have an equally prominent and easy way of cancelling / unsubscribing in the app. No additional steps can be required (ie no calling a retention specialist).
Sounds crazy, I know.
(We actually already have a workaround for this: https://altstore.io/ but it still requires Apple to sign your apps and is relatively difficult to use)
I’d choose the opposite... if I had that choice.
Why should we not have that choice though?
Can't you tell from his attitude? Even if you can, I still need to point that out because nobody else will