More than 30 states sue Google over 'extravagant' fees in Play store
npr.org
npr.org
$0.70 - App
$0.30 - Apple Fee
$1.00 - Total
However, I do agree. It should be shown to the user like this.
Another article [1] says 98% of developers in the Apple store would be below one million/year but also that that long tail generates only 5% of the store's revenue. There are a tiny number of apps that are enormous winners, games I assume, and there's everything else.
[0] https://techcrunch.com/2021/03/18/data-shows-how-few-google-...
[1] https://www.theverge.com/2020/11/18/21572302/apple-app-store...
So it's much better to earn 999k instead of 1.1 million...
I think both Apple and Google did that. It's a desperate attempt to avoid regulation IMO. I think both should be forced to facilitate competing app stores. There should be no mercy for them after a decade of anti-competitive price gouging.
Imagine you release your app, and you expect to hit a few thousands users... except those users are world-wide. Now imagine attempting to figure out how to process credit cards from 100 different countries, register your business enough to be able to file tax records for those 100 countries, actually file taxes for those 100 countries every year, etc. Sure $3,000 of your $10,000 went to Apple, Google Play or whatever, but it would have gone towards a huge number of other costs if you'd tried to go at it alone.
Epic store is an interesting example. They are losing massive amounts of money. We will see if that is sustainable or not.
At least from a consumer point of view, this doesn't seem to change the price much: https://arstechnica.com/gaming/2021/05/why-lower-platform-fe...
If you buy a Google Android phone, you have the Google Play Store. That's it. Maybe you can install some other store but 99% of consumers will never do that.
On Apple, you have to use the App Store. It's the only game in town.
This is why its a monopoly. They could charge 50% and devs would still be forced to do it. The developers and people who complain about this just want to be able to use other payment providers in their apps. They don't want to be forced to use Google Play or Apple. Let other payment providers in so they can compete on fees, customer satisfaction, chargebacks, security, etc.
30% is a gross margin and doesn't take into consideration a lot of thigns.
It'd be nice if Americans were exposed to the margins of everything but I'm not sure how much would change.
The 'end price' for consumers is fair enough - the issue is one of competitiveness and that Android phones are oriented towards Google's stores is the root of the problem.
Google and Apple now offer a 15% rate to the overwhelming majority of developers. Whether you call it a response to the market or a cynical ploy to stave off Government intervention, it means small and medium developers can no longer be seen as a profit centre for these mega corporations.
Apple actually has an additional compelling argument, which is the near-total elimination of software piracy on the iOS platform. I don't know what the real-world numbers are, but I honestly wouldn't be surprised if iOS developers ended up earning substantially more from the absence of piracy than they lost paying a 30% commission to Apple.
Firstly, you're assuming that app store sales number would have been equally successful if iOS was a fully open platform. Apple did a damn good job of converting iPhone customers into iOS software customers when compared to Android. Without the App Store, rates of conversion wouldn't be as high.
Secondly, you're assuming that Apple would have put nearly as much effort into the iOS platform, developer tools, software support and encouraging its customers to buy apps, if Apple wasn't seeing a revenue stream from it. No revenue stream, no incentive to build that marketplace, fewer sales.
Third, you cannot make assumptions about how prevalent piracy would be on iOS if the platform was open like macOS, and how many sales would have been lost as a result of piracy being widespread. Historically, levels of piracy in PC games have been in the order of 85 and 95 percent.[1] On Android, piracy has been estimated anywhere between 50 and 90 percent.[2] Of course we know that the vast majority of pirates wouldn't have paid if that was the only option. But assuming a piracy rate of 85%, it doesn't take many pirates being turned into paying customers to net more revenue than Apple takes in App Store fees.
Scenario one, "fully open iOS":
85% Pirated
15% Purchased
80% Didn't purchase
20% Purchased
[1] https://www.youtube.com/watch?v=2MIEVvv1QP0
[2] https://www.makeuseof.com/tag/piracy-android-how-bad-is-it-r...
Second, we have Java based, side-loadable Android universe as a reference point to determine rates of piracy. We also have desktop.
While piracy is always some kind of problem, it's generally not a problem that has wiped out companies. Adobe does just fine, in fact, the piracy threshold might be a reasonable 'valve' for people who don't actually have the ability to pay, to use the app. Adobe benefits from this. So long as people are truly 'not going to be customers' then people using the software is mostly good.
30% is nowhere near approaching a reasonable fee to 'defend from piracy'. It's not really even part of the equation frankly.
As for justifications, you've completely misunderstood my point. I'm not claiming that Apple should justify its 30% on piracy. Let me put it another way. I reject the assertion that an alternative universe where the iOS marketplace wasn't a walled garden would have reliably resulted in higher overall revenues for developers.
Obviously, if you wanted to propose a situation where everything was exactly the same but Apple took a smaller share of revenue, developers would make more revenue. But for most developers this hypothetical is now real, since all but the largest developers can now receive 85% of gross revenues.
There is one area where I disagree with Apple's policies, which is how they only allow in-app purchasing for multiplatform "reader" content. Companies like Netflix and Spotify should be allowed to subscribe customers using their own merchant system within their app, so long as the subscription is entirely multiplatform "reader" content.
The reason why I disagree with Apple on the above is because it's simply too dangerous to stand this ground. If Apple wants to be in the business of selling music and television, they need to suck it up and compete on a level field. Their current stance looks too much like penalties for Spotify and Netflix as protectionism for Apple Music and Apple TV+.
And to some extent, controversially, I ask why not? If Epic can take a percentage of revenues if you use Unreal Engine, Apple can rejigger the way they structure their libraries and demand a percentage of revenues from apps which use Metal. I realise that there are intellectually satisfying arguments for why UE and Metal shouldn't be treated the same, but I'm not so sure it's so easy to disentangle them in a legally satisfying way.
(Though there's no way Apple would ever go below 10%. I would eat my hat if Apple could even cover hard costs of running the store at 10%. Even at 15% they'd already be subsidising purchases made using gift cards purchased at retail.)
Retailers have substantial costs associated with distributing products and physical shelf space is a scarce resource. There are, by comparison, no limits to the number of apps on Apple and Google's "stores" and we know that the costs of maintaining them are quite low because the respective business units are wildly profitable.
The points you raised are the rather beguiling false equivalencies that have been propagated largely by people with a vested interest in preserving this system and averting scrutiny.
Sorry, between this line and not realizing you were also the GP commenter, I assumed you were suggesting the markets be forced to disclose the rake pro-actively themselves.
Making it illegal to prohibit disclosing the fee is great, and at that point I don't even think you need to make the case that the industry is different than others. It's not the same as the cost, but plenty of items have an msrp listed on their packaging. You know if your Arizona Iced Tea is being sold at a higher than usual mark-up because it's not $1.
(Disclosure: I live in San Francisco and have no idea whether Arizona is actually still a dollar in other places.)
Printing MSRP on the product happens all the time. Arizona Iced Tea is a prominent example.
Are you sure that they don't? I honestly wouldn't be surprised if Walmart does have clear policies around prices of any kind being printed on packaging. And it wouldn't be a stretch to assume that if they have a policy, it would disallow printing of any price which is less than the highest price Walmart intend to charge at retail.
Meanwhile, I'm merely saying that it wouldn't surprise me if such a policy exists, whether formally or informally. The distinct lack of any product on Walmart shelves which has a below-RRP price printed on its packaging is strong circumstantial evidence at the very least.
The fact that you mentioned is an extremely weak evidence in the light of very thin margins Walmart has (under 3%), which is more than 10 times less than the old store tax, with probably even smaller incentive to combat.
Oh, and the Apple car has an extra trick up its sleeve: it makes it nearly impossible to shoplift, which allows products to be sold at a dramatically lower price. Potentially far less than if shoplifting were as commonplace as it is among drivers of Windows cars.
Of course the producer of the product always decides how much the customer pays. It's up to them to decide whether to reduce prices in response to the elimination of shoplifting.
The broader point is that just saying "oh, it's like X, therefore we should treat it like X!" just isn't enough for app stores. There is no perfect analogue. Apple and Google call them "stores" because they really want them to be thought of that way, but there are important features of phyiscal stores that the app stores lack, and important features of app stores that physical stores lack.
How we, as a nation and a society, decide to treat app stores for purposes of consumer protection laws is up to us... so let's be careful just blindly trusting the way these companies want us to think about them.
Market forces produced consolidation, as they always do. Consolidation and capture of distribution, which happens in most industries, sets the pricing of products using cartel and gangster tactics. App stores aren't any different from the railroads of the 1800s or Walmart or Amazon inflicting all kinds of pricing tricks on suppliers.
The question we should be asking is: Why should the owner of a distribution network get to retain all that power to themselves? Distribution networks should be highly regulated, price controlled, or state owned. All else just yields completely unaccountable power to an unelected private entity that gets to control the material state of the world.
I cannot practically create my "Awesome Store" where I have the best ranking system and I ask 0.1% for fees.
As a consumer, I don't care if the fee is 30%. I have no idea of that's a lot or just the right amount of money for the services that the stores provide. I don't know if it makes the app devs life much harder or if it's just a slight inconvenience.
Do you know or do you care who is making the profits (and how much) when you buy a coke in your local grocery shop? I don't, and no matter of math and public information could make me care about it as a consumer.
For iOS it's essentially impossible, from my understanding. But there's stuff on android to let you install apps, after all?
And if you want your users to install your app store, they'll have to know where to go and tell the OS "I want this installed, it's not malware".
And every time any single app through there requires an update, it must be manually approved and installed by the user. Google's evergreen background updates are exclusive to them.
And if Google Play Protect decides you store is malware because it distributes apps that Google thinks harms users, any user with (the heavily pushed) Google Play Protect turned on likely won't be using your store for long.
But it is technically possible.
> As a consumer, I don't care if the fee is 30%. I have no idea if that's a lot
I think you're right about this particular example. But that's because rebelos identified the wrong problem. I would identify a different gag as the problem -- Apple prohibits you from directing your customers to other payment methods.
"Make your in-app purchase as conveniently as possible, right here and right now" vs "Pay 25% less by visiting our website" would kneecap Apple's app store revenue. Itemizing the fee is pointless.
You're absolutely right that this is another angle that could be looked at. A third argument, particular to Apple, is simply that there is substantial harm to the consumer when a company maintains a stranglehold on software distribution for what might reasonably be considered a general purpose computer.
However, I vehemently disagree with the insinuation that disclosing the fee wouldn't provoke market forces to lower it to some more reasonable percent above cost. Sure it's a duopoly at present, but I suspect that might be enough to get competitive forces working properly.
100% is a fairly normal markup "above cost" for each step in a supply chain; it also makes Apple's 43% markup look modest.
And then you get into unresolvable arguments about what is and what isn't a cost.
You're absolutely correct that Apple is adding no value, which is a bigger reduction in value added than the reduction in their markup. But the problem isn't that they're applying an objectively high markup. They aren't. The problem is that there's no reason for them to be involved at all.
Since the service is a monopoly there are no market forces at play.
That monopoly means it's a 'take it or leave it' situation.
If the states decided to sue pharmaceutical companies for extravagant profits on life saving medicines, people would benefit a lot more. May be there a political motive behind Google being targeted.
This is a false dichotomy.
There is no clear law against "extravagant profits." There is antitrust law. The winnable case is being pursued.
The internet never forgets and people will always remember. We’re seeing a time in history where I think the leaders will be looked back on and viewed as absolute failures.
30 years ago you could keep your head down, go to work, and today you own a house. It's not the same this time. In 20 more years there'll be 2+ generations of people that have worked for over 20 years and don't own any assets.
We are having the same discussions because we are not forgetting.
That said they also change over time.
I used to be on one side of the discussion in two different discussions, now I am on the other side.
Same goes for a number of others it seems.
However, yea, no one saw Covid coming. And, the whole 2008-Carpocalypse was extra bad because it wasn’t GM and Chrysler, it was literally everyone down the line. If GM went under, Johnson Controls goes under, and since they make every Toyota and Hyundai seat (IDK, figuratively, but probably) they struggle and go under too. It’s a fascinating deadlock / race condition of sales and profits and shipping.
I think it’s cool to see seats made two hours ago show up on the line at the exact second this body is on the line, installed, than a chassis that was made one a different line happens to line up and everything came together in seconds… but yes, there are some downsides.
Toyota et al. would bail out Johnson Controls. JC Penney was as good as dead. It got bought by two major mall operators because mall tenants have clauses in their leases that would lower their rent if an anchor tenant leaves. It was cheaper for Brookfield and Simon to pickup JCP for scrap and run a minimally viable department store just to keep up rents (and hopefully foot traffic) for smaller tenants.
Johnson was one example. I highly doubt Toyota or anyone could carry them at the time alone.
What about ContinentalTevis? What about Bosch Automotive? Delphi? Packard? Amphenol? Yazaki? New Venture? Dana? Allison? Vector? ETAS? How about the literally thousands of suppliers that all make one or two things or exist only to certify this or that? This wasn’t just these companies but a large portion of Michigan, Ohio, Illinois.
You missed the entire point of the interconnectedness of the automotive industry.
People love Google. It's only behind Apple as a brand people love.
> How valuable was all that JiT manufacturing bullshit
It's not BS. It's saying 99% uptime is good enough, and the cost of 99.8% isn't worth the added inventory. It may or may not be the right call, but for automakers who make a durable product that isn't as critical in an emergency as N95 respirators, it's a reasonable call.
> GE appliances
GE was definitely mismanaged. Management got distracted looking for growth and went into all sorts of side businesses. Appliances aren't exactly GE's core business, though. They became commoditized, and it's hard to justify premium prices or investment on a commodity. You're better off making jet engines and MRIs. GE actually sold off its appliance business because it's better at other things, and if people want to pay a premium for a microwave with a GE badge, go for it. GE isn't a consumer company anymore, so a bad experience with a microwave they didn't make isn't going to stop you from using their turbines.
Stepping back: what is the definition of "love" here, and do you have some data to back this up? I think you might be conflating brand awareness with brand loyalty or "brand love", because while Google is basically in the English lexicon for searching on a search engine now an it has a really high brand awareness I don't think I've ever heard people say they "love" Google or anything along those lines, while I have heard sentiments like this for an Apple product.
Apple also has a tighter hold on the app ecosystem, as well as the developer fee, xcode, no third party app stores, "entitlement" apis, etc.
Looks like Apple just barely squeaked by with the right moves.
(Edit- referring to app purchases, IAP and subscriptions, not the cost of having a developer account)
Google Play is ostensibly optional on Android. App Store is not on iOS. As such, Google Play has identifiable, harmed competition. Apple does not; its harm in fact falls not on competitors or consumers, but on developers--its suppliers. That bolster's the judicial merits of the Google actions as antitrust reviewable.
For Apple, one must create a novel expansion of antitrust rules and definitions. As we saw with Facebook, where a similar group of state AGs got their case thrown out for failing at the shockingly basic question of "what's the market they're alleged to have monopolized?"
TL; DR Pursuing Apple comes closer to a political question than a judicial one. Google, and to a lesser degree Facebook, may be judicially addressable.
Second, many of these claims have nothing to do with what Apple does. They are more similar to the old Microsoft case. Trying to stop competition, forcing OEM's to not have their own App store, etc...
I am not sure that the motivation by these States are well-intentioned.
The obvious answer when players dominate a market like this is government 1) force competition or 2) add regulation.
The easy solution here is to rule that 1) app stores can control how payments are made/received by apps. And then they are forced to put a offering that works vs other payment provider. 2) Possibly, though would have challenges, force Apple/Google app stores to become interoperable over some longer term period.
For the wider market I think a big part is platforms with significant market share need to be either distributors or product owners. For example Amazon should not have amazon products and they are a distributer, this stops them watching some business become profitable on their platform than just replace with their own products or changing search result to favour their own product etc. The same with a company like Netflix, otherwise we are going to see a very small group of streaming companies and it will be near impossible for anyone else to step into that space.
Something else Id also consider though is a bit mixed with pros/cons is make a rule suppliers have to offer standard prices. So I can offer Walmart my pens at $0.05 because they buy 50 million of them and charge $0.40 to the small business that buys 10,000. This would also be great for healthcare such as hospitals having the insurance price vs cash price vs negotiated price etc.
I think people often forget a core role of capitalism of government is to maintain a level playing field. This helps ongoing innovation and to put pressure on entrenched market segments for a more efficient system.
Both Apple and Google now take 15% commission.
I am not a fan of neither companies, plus I am an app developer for both. I don't have a problem with the 15% fee from Apple as it's quite fair for the services and human interaction they provide. Though a case can be made that the $135 CAD developer license fee per year should take care of that. Google on the other hand will ban your app for strange reasons (look at the recent DroidScript app debacle) and won't even let you talk to a human unless you are big enough to get some tech sites to write about it. On the other hand Google at least allowed side loading apps something which Apple doesn't let you do easily. But then Google doesn't allow competitive app stores on their play store which is a problem. I think overall, both companies need to be reigned in but in my opinion, going after the 15% is not the right way.
Edit: Why the downvotes?
https://www.theverge.com/2020/11/18/21572302/apple-app-store...