Comment by skygazer | Hacker News Reader

Comment by skygazer | Hacker News Reader

One thing that's bugged/occurred to me. People keep acting like Apple will no longer get to charge 30% to developers for in-app purchases, but it seems like they may still be entitled to their 30% and even in this ruling Epic still owes that 30% -- Developers will be able to use alternate payment providers, but may still owe a commission to Apple? Tim Cook alluded to this in his original testimony, and the judge doesn't seem to have had an issue with it, and she ordered Epic to pay the 30%.

In other words, only the anti-steering violated California law, but otherwise, she validated that Apple's business model is reasonable under the law and supported the commission structure, it seems.

That seems like a whole can of worms. How will Apple know what to bill developers for apple sourced transactions? Do they need to build new reporting APIs? Within the next 90 days? Is it the honor system? Will developers raise rates on their sites to cover Apple's commission? Will this all have been moot? What if a developer doesn't pay? Can they be removed? Does apple send them to collections? What does that do to developer relations? Or does Apple abandon commission for external sales they alluded to needing to collect.

Edit to add Tim Cook quote from Epic trial [0]: “IAP helps Apple efficiently collect a commission” — for payment processing, but also customer service and the use of Apple’s intellectual property. Without in-app purchases, “we would have to come up with another system to invoice developers, which I think would be a mess.”

[0] https://www.theverge.com/2021/5/22/22448139/tim-cook-epic-fo...

You're right and this has been glossed over by much of the commentary in this thread. If you read the ruling the judge repeatedly stated that Apple is entitled to compensation for its intellectual property, regardless of whether that is achieved through IAP or some other means:

> Under all models, Apple would be entitled to a commission or licensing fee, even if IAP was optional.

> Turning to the intellectual property justification, the Court agrees with the general proposition that Apple is entitled to be paid for its intellectual property.

> As established in the prior sections, see supra Facts §§ II.C., V.A.2.b., V.B.2.c., Apple is entitled to license its intellectual property for a fee, and to further guard against the uncompensated use of its intellectual property.

> The Court also notes that in the but-for world where developers could use an alternative processor, Apple would still be contractually entitled to its commission on any purchase made within apps distributed on the App Store.

In other words, even if developers are allowed to link to alternative payment processors inside their app, Apple may very well still be entitled to some sort of commission/licensing fee for the use of their IP.

I believe the money owed to Apple is a seperate concern, raised from their apparent breach of contract.

At the time Fortnite was available on the App Store, the Apple In-App Purchase mechanism was the only contractually allowed method of purchase, and for the short time Fortnite enabled purchases via other methods, their contract with Apple was breached. As a result, the judge ruled that Apple is owed 30% of that revenue - money they would have gotten had those purchases been made via Apple IAP.

In addition, the judge ruled that Apple was well within their power to terminate Epic's developer relationship and App Store access, because of this breach of contract.

This new injunction only takes place in 90 days time, and doesn't nullify any power Apple has to determine who they wish to allow on their App Store. As a result, they are seemingly choosing to not permit Epic back on the App Store, again, due to their initial breach of contract.

My interpretation of this this new ruling is that Apple isn't entitled to money raised through other payment methods going forward, as likely the App Store developer terms of service will be revised to reflect the new state of the law. However I'm sure this will become clear in due course when we see the new terms.

So it could be just a coincidence that the damages she awarded Apple were specifically 30% of Epic's in-app VBuck sales, the exact same amount Apple would have been entitled to via IAP. I guess that's plausible and I read too much into her selecting 30% of their sales.

But I'm still thinking about how Apple suggested without restricting IAP to Apple's system, they'd have to collect that 30% in a more complicated way. I think you're perhaps right that today's ruling is orthogonal to that, but Apple may well still have that in mind, and be within their rights to impose that?

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