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Comment by deep-root | Hacker News Reader

From the article: "The question was in relation to Apple's App Store anti-steering policy, which forbids apps from telling iOS users that they can purchase virtual goods or subscriptions cheaper elsewhere. [US Judge] Gonzalez Rogers was questioning why allowing this to be conveyed to App Store customers would be bad..."

It's not so much about offering choice (implying the choice multiple app stores on iOS), as it is allowing users to be directed off iOS for purchases.

This judge does actually seem to be looking for middle-ground between the parties.

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I’m generally on Apple’s side in this debate, but on this point specifically I think Apple is in the wrong. It’s just silly that apps which don’t route payments through the App Store aren’t allowed to say so. And further, it degrades the user experience when you download an app, which Apple has reviewed and approved, but that app doesn’t work without a subscription etc. which you have to just “figure out” how to buy outside the app. That rule has always felt over the top to me.

Why would any store allow its products to advertise a cheaper price outside the establishment? What would be the point of even offering those products?

Well, in Apple's case, it's because having e.g. Netflix available on iOS devices makes people more likely to buy their very-expensive hardware. If people couldn't get the assorted free service-client apps on iOS, that'd be a problem for Apple.

Even with the store metaphor, "loss leaders" to draw people in so they'll spend money on other things are a popular technique.

Manufacturers can and do print some 'manufacturer's suggested retail price' on their products, and (in the absence of a specific contract prohibiting so) retailers can and do sell them for a higher price despite the company and product advertising that in general they are available cheaper.

A lot of products you buy (especially ones that are huge recurring purchases, like lots of baby stuff) include coupons that direct you to the website to buy more via direct subscription.

It’s insane that in my product I cannot tell people about ways you can purchase it. Defending this rule seems like Stockholm syndrome.

> A lot of products you buy (especially ones that are huge recurring purchases, like lots of baby stuff) include coupons that direct you to the website to buy more via direct subscription.

is there a 15/30% fee for physical goods such as DoorDash, Amazon, etc? thought it was just for digital goods, subscriptions, etc.

Apps are not Apple products.

And the products on the shelves of stores are not the store's products.

Apple sells apps. Apps that were made by others. Walmart sells X. X that was made by others.

Apple didn't buy the apps from the developers, they provide a marketplace. Don't most supermarkets own their inventory?

I think a lot of businesses "borrow" the inventory from the supplier and only pay them once the inventory is sold. It's not the same as a marketplace, per-se but considering you pay apple, download from apple servers, after apple does "QA" and follows apple rules, i'd say its pretty similar to a store that sources select products and provides the checkout infrastructure and distribution logistics.

My 100% selfish take on this is that Apple's in-app payment flow is a pretty incredible user experience (double-tap a button + FaceID scan, and you're done), whereas being directed to a website and having to manually enter card details is a legitimate pain. I haven't pulled my credit card out of my wallet to enter my details on a phone in a long time. Haven't had to type my billing address, haven't had to find my CVC number. It's been nice!

I'm sure Apple is very pleased with the profit margins they get on in-app payments, but I'm equally certain that Apple's desire to keep people using their payment system is just as much about maintaining a great user experience for users.

Obviously the flip side is that some companies - Netflix! - then decide just not to offer payment in-app at all. That's also bad! But I don't know how to compromise on allowing apps to direct users to payment systems outside the app store without opening the floodgates to a million different payment experiences, which I (again, selfishly) would love to avoid.

"but I'm equally certain that Apple's desire to keep people using their payment system is just as much about maintaining a great user experience for users"

It's absolutely and fundamentally first about the platform-monopoly and control.

Apple has a considerable number of other 'bad users experiences' to point at to suggest that this issue, while might be a part of their legit product strategy, is way second tier to their control of the distribution.

Finally, there's also a fairly heavy 'bad user experience' in blocking from doing the things the want to do.

The answer to your question is actually in the economics:

Apple should be able to charge a premium to using their 'great experience' commensurate with the likelihood that vendors will use it, given that premium.

With a 15%/30% cut, vendors will not use the service.

With an 8% cut (assuming they'd have to pay Stripe 4% or whatever), then it may very well be worth it for vendors.

i.e. if the 'Apple Checkout' were forced to compete as an actual produced (even with it's entrenched position in the platform), the profits would be a measure of the value at least on some level.

I mean, the obvious answer here is that Apple needs to offer companies a reasonable revenue split (like, 5% or something) for these recurring subscription scenarios where it’s obvious Apple did nothing to drum up the business and is purely functioning as a (very convenient, admittedly) credit card processor.

You say "Apple did nothing", but the only way a company would be paying a 30% commission to Apple is if the user's initial sign-up came through their platform.

In that situation, maybe the user would have eventually signed up through a different platform, and the company could have been directly paid 100% of the price. But it's also possible that the user would simply never have signed up, in which case Apple's 30% cut would look like a steal compared to the alternative (receiving nothing).

>Apple is if the user's initial sign-up came through their platform

Which is an admission that Apple is rent seeking.

The same 'logic' could justify a 95% cut.

No it wouldn’t, because cost would probably exceed revenue in that case.

What about transactions that weren't made directly with a credit card, but rather with an Apple Store gift card purchased from a physical retailer? Possibly during a 20% off sale? Even if you elide any such discounting, Apple's transactional cost is going to be far, far higher than 5%.

I doubt there's any publicly available hard data around the costs of running the gift card ecosystem, but a number between 15 and 35 percent would not surprise me at all.

On the contrary, it's super profitable since loads of them are never spent or only partially spent, to the tune of $3B/yr:

https://www.cnbc.com/2020/05/24/how-amazon-and-walmart-make-...

It's easy to offer the same user experience with other payment processors. It's even possible with websites. All that's needed is for Apple to export the relevant APIs and support the needed APIs in Safari.

Then again, given that other payment processors have more experience, I'm not sure their UX is worse. There's more to UX than Face ID (chargebacks, dispute resolution, being able to move your subscription to Android should you desire it, etc.).

Therefore the issue is Apple getting monopoly rent (which you pay for indirectly), not UX. Your selfish interest should ask Apple to open up.

Apple does offer Apple Pay on websites and it can easily be integrated with a payment processor. I use it for buying stuff on Apple Pay enabled sites all the time.

Why not offer a discount without 30% cut for Apple credit card users and force streamlined UX on all apps with this payment method they can control the checkout experience.

As someone who straddles Japan and the USA, Apple's system sucks. To update my MUFG Japanese bank app I need to be on the Apple Japanese App store. To update my Capital One app I need to be on the USA store. Switching stores cancels all subscriptions.

I'd prefer a system that allowed subscription to last and one that didn't require switching stores but I'm not allowed to use another store

I think this has more just the consequences of international law (particularly the US being all up in your business via FATCA to the point of Japanese banks not wanting to even bother if you are a US citizen). It seems better than the Android situation where you either have to wait a _year_ between switching countries on your account or find the APK (y’know, for your _banking_ app) on some shady site.

I doubt this has anything do whatsoever with laws. If it laws then something would prevent me from installing software from other countries on my computer.

Not a direct result, more like the banks don’t want/care about international customers (due to the laws), so they don’t bother publishing to different regions of the App Store.

>Apple's desire to keep people using their payment system is just as much about maintaining a great user experience for users.

Steve Jobs Apple, Yes. Modern Apple that is no longer the case.

It is very clear from 2016 when they announced their focus on services revenue. Every little changes, being implemented and enforced YoY was all to push for that double services revenue target.

If you have followed Apple long enough you start seeing all these changes. From Apple Retail focusing on AppleCare+ Target, retail staff having their KPI to include Apple Services Revenue Push, as well as enforcing rules where it wasn't previously enforced on App Store.

yep agreed, there has definitely been a big shift in priorities. When iPhones had dramatic hardware improvements every year (remember the S phones, 4s/5s etc, thats how fast things were moving) revenue was ticking up from genuine innovation. Now people are mostly happy with their phones are keeping them longer, how do they maintain the growth? squeezing more out of what they've got, which is services revenue, which is naturally exploiting their monopoly more and more until someone stops them.

I'm sorry to have to indicate it was not 'Steve Jobs'.

The economics of the situation are clear and massive, and they outweigh any 'usability' concerns.

Apple has tons of usability issues, they're not going to trade something marginal for 10's of billions of dollars in revenue opportunity.

This is a straight up realpolitik war over platform control.

I am really convinced their decision to have glass backs in iPhones has nothing really to do with wireless charging but the hope that it keeps breaking and people will keep repairing it.

The charger thing just sealed it how low they can stoop to make people pay for things customers shouldn’t in the first place.

But users are equally responsible. They literally encourage it by continuing to buy into the walled garden.

If it's such a value-add then you won't mind if users who are fine with the browser-based solution are offered a lower price to compensate for Apple's cut, then?

It's silly that when I want to watch something on Prime Video, I can see the title in the Prime app on AppleTV but can't rent it. I have to go to amazon.com on a different device, search the title, rent it, then it becomes available on the TV app.

As a person working in tech I understand it, but it's still silly.

I think it used to be this way, but now I can rent/buy things from Prime within AppleTV.

https://www.theverge.com/2020/4/1/21203294/amazon-prime-vide...

As a user I don't want to have to subscribe through anything but the app/play store. Whenever that happens I have no guarantee, at all, how easy it is to cancel, etc.

I'm sure most services would have no problem letting you do that, if they could also inform you that you're paying 30% extra when choosing that method.

That Apple's trying to control the narrative, that you can't even tell people what $ of their payment is going to Apple, is a problem; this is a problem with food ordering-delivery service apps too, it should be law so people can make informed choices of what app they want to use.

At this point, I am firmly of the opinion that we need a single, global standard for online payments that is just an electronic equivalent of cash or a direct bank transfer. Solid authentication of the parties. Explicit authorisation of each transaction or series of transactions to be performed. No other strings attached for anyone just because you're transferring money; that's what contracts are for. No arbitrary gatekeeping or labyrinthine terms for buyers and sellers, dictated by intermediaries in their own interests. No spying on who is paying for what and selling that data on to some shady broker for an extra cut. Ideally, the whole thing should be run as a public service in each country, at cost, with no intermediaries at all, in the same way countries operate their primary currencies as a public benefit that is beyond the control of any commercial entity. If not, then at least heavily regulated with a similar outcome. And make it illegal for any commercial entity offering goods or services for sale to require the use of some other payment method without also offering this one with at least the same prominence, so you can use something like an escrow service with a refund mechanism if you want to, but only if both parties genuinely agree to the terms.

With the increasing prevalence of online shopping, the increasing importance of reliable and efficient international money transfer to the global economy, and the seemingly never-ending ways the financial services industry can mess around both senders and receivers of money when all they wanted to do was send $X from A to B, we needed something like that long ago, but better late than never.

It doesn’t quite hit all those points but have you tried paying for a service with Bitcoin lately? The lightning network plus QR codes to autofill details all works pretty well.

Only on a tiny scale compared to all global commerce, though. IMHO, what we need is the digital equivalent of cash, something ubiquitous and readily understood, which can be handed from one person to another when both know who the other party is, with as little added ceremony on top as possible.

Diem!

(/s)

Devil’s advocate, but doesn’t the customer already have choice not to choose iOS?

In this case they couldn't even know that they are being overcharged by using iOS. It's like food hiding its sugar content.

It becomes more complicated because Fortnite is not iOS , nor apple. In the end the decision will be made over anticompetitive tactics. Because mobile marketplaces are a closed oligopoly, they 'll establish customer rights.

Not if they already have the device.

With most Android devices, you can unlock the bootloader and replace the Rom, root the device for administrator style access, debloat and remove system components, generally modify the hardware as you see fit.

With all Android devices that aren't managed (read: business device), you can sideload a third party app store without the need to use system exploits to 'jailbreak.'

Neither can be done on iOS. Attempting to modify the system or sideload apps on iOS requires using exploits that are security flaws and will likely be patched out in a future OS update.

If you already have an iDevice and can't replace it, you basically don't have any choice.

> With all Android devices that aren't managed (read: business device), you can sideload a third party app store without the need to use system exploits to 'jailbreak.'

Is an average Android user actually going to do any of that?

Sideloading apps is very easy (albeit you have to press “okay” on a very scary looking warming page). Plenty of people do, to play Fortnight or install the Amazon App Store, for instance.

> Is an average Android user actually going to do any of that?

It really doesn't matter if the average Android user will do it.

What matters is that you have the option to do so.

I think it only matters if that was the expectation when you purchased it. Nobody buys an iPhone with the expectation that they’ll be able to install apps anywhere outside of the App Store. In fact, a single place to buy and install apps is a selling point to many people.

Nobody? Not one single person?

That must be why there isn't a large jailbreaking community behind iOS.

Or why there hasn't been a lawsuit over...

> If you already have an iDevice and can't replace it, you basically don't have any choice.

An educated consumer would know that before they bought the phone. It’s never been possible to legally side load apps on iOS (well outside of your own) so it’s not unreasonable that anyone who’s bought an iPhone would expect to have that functionality. It was never taken away from them. They bought into that walled garden, whether they knew it or not.

An educated customer would also know that their food was made in a factory that also works with nuts and thus avoid said product if they have an allergy. An educated customer would also know that their car airbags have a defect and will thus fight to get them replaced. An educated customer would know that the Phoebus Cartel was driving down the lifetime of lightbulbs to increase sales.

It's entirely unreasonable to expect the average person to read up and become an expert on everything that they purchase. This is the whole reason consumer protection laws exist.

None of your examples are relevant.

I’d argue it is the responsibility of the consumer to know if their food has allergens. It’s convenient for consumers to have the declarations on packaged products, but that doesn’t stop an allergic person from being responsible for grabbing a street bite that ends up having nuts in it.

The airbag example is a contractual obligation with a a warranted product.

The light bulb cartel example is totally unrelated and throwing it in the mix only adds a sinister tone to the original topic. If you were talking about their salary collusion it’d be relevant. But it has no relation to iOS not allowing side loading.

I’m not saying a consumer need be an expert in everything. But expecting that a product has functionality that’s never been advertised or suggested is unreasonable.

Because it's not necessarily about the initial choice, but barrier of entry to change. See EU's anti-competitive ruling on Google's Android App Store monopoly: https://ec.europa.eu/commission/presscorner/detail/en/IP_18_...

"Android device users face switching costs when switching to Apple devices, such as losing their apps, data and contacts, and having to learn how to use a new operating system"

But the other way around.

Thank you for this comment. I had a hard time putting into words the aspect of “barrier of entry to change” which makes everything else “click”. It’s such a simple context, but hard to put into actual simple words.

I still dont understand this argument.

If Apple had 99% market share ( it is currently edging close to 70% in US, 75% of U.S. App Store revenues, and over 80% of time spent on the mobile internet ), and you have a choice of of using Android, would that 1% even count as a choice? In that case monopoly would not exist in any market.

It is about Market power ( and imbalance )

"That wouldn’t eliminate the market power Apple has here, but it would certainly diminish it ... it would not be much of a solution at all."

I thought this sentence sums it up pretty well. Apple has far too much power and we have plenty of evidence of email shown in court they are abusing it.

In terms of market share, Apple certainly doesn't have a monopoly over smartphones. While they do occasionally have a great quarter, I don't think they've ever cracked 50% share in any major market in any calendar year. Ever.

I find it interesting that Apple is being accused of such anti-consumer behaviours while simultaneously demonstrating the success of their overall product strategy in the truly free and open marketplace of smartphone sales. There are dozens of very strong competitors, most with a much wider spectrum of options and price points than Apple offers.

>While they do occasionally have a great quarter, I don't think they've ever cracked 50% share in any major market in any calendar year. Ever.

There is a different between Sales Unit Market Share, and actual usage market share.

As long as Apple user dont migrate to Android, and the total smartphone user in US being the constant ( most adult already got a smartphone ). Even if Apple sold zero smartphone in a whole year. They will still have the same market shares.

This is not unique to Apple, it would be true for any smartphone manufacturer that chooses to sell devices with a long useful life. If some Android OEMs are making products with a shorter useful life, that's their choice.

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