Dutch watchdog finds Apple App Store payment rules anti-competitive
reuters.com
reuters.com
Apple is going to lose this fight in basically every market except the US.
It's very clear that their behavior is rent-seeking. If their product (the app store) is genuinely better for users & companies - it should be able to out compete other products (alternative app stores) on the platform.
Instead they arbitrarily prohibit any competition what-so-ever.
Let's say we're living in a world where Apple's IAP framework has a 5% fee. This is roughly in-line with baseline credit card transaction processing fees, think Stripe or whatever, at 3-5%.
Many apps would still choose to not use Apple's system, because of exactly what Match says: Its not a matter of cost, its a matter of power. Service providers want to control the billing relationship with their users; they don't want Apple to have any control, because Apple is traditionally very pro-Consumer, and they will delegate much of that power to the Consumer. Service providers don't want their users to have any power in the billing relationship.
There are reasonable arguments why this is fine; say, for example, a service provider wants to offer some customer 20% off for the next three months, for whatever reason. This kind of setup is hard to model in the IAP framework; its very egalitarian.
But, overwhelmingly, the problem is more-so when it comes to canceling subscriptions, and whenever Match or Netflix or whoever says "we want to be able to directly deal with consumers" you should delete every word they say and replace it with the words "apple makes canceling free trials and subscriptions too easy, and we want to make it hard." There's actually nothing else to it; the magnitude of the fee Apple charges is high (30%), and needs to be reduced, but that tax is dimes compared to the profit companies make from users paying for subscriptions they don't want or need.
So; competition states, if their solution is genuinely better, companies will use it. Actually, this is false; companies don't give a shit about their users. They won't use it, even if its better for users, even if it were free, because the solution is definitely not better for them, because money is power, and Apple's IAP framework delegates too much power to Apple (a third party) and the users. The competition argument is actually irrelevant, because the two solutions we're comparing (self-managed sub management vs Apple-managed) are actually not fungible in the same way Stripe is fungible with Square (or whoever). They carry fundamentally different externalities for both users and service providers.
Apple is the primary reason we have unreplaceable batteries, for example. That by itself is massively anti-consumer, but it's one among hundreds of inherently user hostile behaviors that Apple inflicts on the world.
Other players in the market are constrained by Apple's design choices, because those choices often single-handedly drive economies of scale for device components.
Apple is not pro consumer. Apple is ruthlessly oriented toward absolute control of perceptions and behaviors of customers within their walled garden so they can extract the maximum amount of money from their customers.
Apple hides the externalities within their own domain and imposes market expectations on the rest of the world. Their exploitation of software patent and ip laws stifle innovation and competition, and they set the standards of corporate behavior for all the major players.
Unless by "traditionally" you mean exactly the period of Apple's history when they were plucky underdogs... Apple hasn't been pro-consumer for a couple or three decades.
Can you elaborate on why you believe people would be unhappy if this were the case? I truly don't understand the position.
Apple uses this internally for delivering apps to employees who work at the retail Apple stores. I helped support the Retail Software Engineering group at Apple that develops those applications.
One of the current common advanced methods is for attackers to get you to install their MDM profile on your device, and then they can do anything at all that they want with it, regardless. Fortunately, it’s only possible to have one MDM profile on a machine at a time, so if you install your own MDM profile (e.g. through JAMF or whatever), then you can prevent this type of attack from working. Yes, everyone in my family already has an MDM profile installed on their devices from a system I manage, so that we can prevent this type of attack.
So, Apple already supports alternative app stores. You just have pay for a license from Apple that lets you run it.
With more recent versions of iOS, they offer device profiles that can be installed, so that the owner doesn’t even have to run their own app store. They can just provide you links to apps to be installed, and the signed device profile to go along with them so that Apple will allow the app to be installed. And this will even work if there is already an MDM profile installed on the device.
I know this because I recently started work at a new employer, and they gave me device profiles to install on my personal iPhone, so that I could install some internal applications on it. And those device profiles were installed and activated, despite the fact that I already had my personal MDM profile installed on the device.
So, now the attack pattern is even easier. You no longer have to install a full MDM profile, you can just install a simple developer device profile and get the person at the other end to trust you. Okay, you won’t have full control over the device like you would with a full MDM profile, but at least you’ll be able to get your nefarious app onto their device.
So, this is a known, active vulnerability that is currently being exploited on regular basis by attackers. Apple knows exactly what this looks like in the small scale, and they know what will happen in the large scale.
I suspect that Apple will show the politicians what the risk is on their own personal devices, and then show them how many people around the world already get tricked on a daily basis.
Once the politicians see how that sausage is made, I think they’re going to want to roll back any requirements for mandatory alternative app stores.
And it probably wouldn't be that bad anyway. A vast majority of people will still use the official App Store, like they do on Android. But a more open ecosystem will keep Apple honest, and give more power to the end user.
Then both sides win: you get to have your perfectly secure iPhone, and I get to have a device that actually does the things I want it to.
If you don't want to understand security, fine: just don't be surprised when your personal information ends up in the hands of the wrong people. Everyone has a duty to understand their own threat model, and any reasonably comprehensive model would include Apple as an ultimately untrusted party. It's a zero-sum game, so they may as well just make it easier for me to use their devices when I'm forced to.
This is a goofy fantasy. Apple, which is a minority player in this market, is forcing everyone else to make battery replacements difficult?
No it's not. That's false, and doesn't pass the laugh test. Can we engage with the truth, instead? Is that too difficult?
There are no "economies of scale" here. Phone batteries aren't a standardized part; every iPhone has a customized battery that fits into the odd-shaped space Apple is able to create in the design. Your economies of scale argument is therefore total nonsense.
I wish they hadn't done some of those choices myself, looking at you glass back.
But Apple did not coerce Samsung to follow along, and I doubt that they made economies of scale issues for the rest of the phone market given their <20% market share.
Samsung makes plenty of ads to take pot shots at Apple for these changes, and then a few months later they themselves follow suit.
I just don't think enough people care about those features to vote with their wallet.
There are two ways to subscribe to the New York Times: through an IAP, or by visiting the NYT website.
If you then decide that you want to unsubscribe: Subscribed via the IAP? No problem, you click a button Subscribed via the website? You will need to call the NYT between business hours and have a chat with someone who will try their darnest to convince you to keep your subscription. This is the behaviour from a “reputable” company.
Apple could charge 0% and these companies won’t be happy - they want the direct connection so they can find as many ways as possible to take your money.
Things like IAP let people make purchases without having to make a trust evaluation of the developer. Frankly that is great for new, small or foreign developers, because consumers know that they can get their money back from Apple should things go poorly.
Sure there’s downsides to this approach - but choice also exists, so why should we be forcing this particular choice in individuals or in this circumstance (why not on Nintendo, Sony, Amazon, Microsoft and more?)
I dare say once this change is formalised worldwide and we have Premium-SMS style exploitation, there is going to be a lot more work needed to clean up the unintended consequences.
And yet many people on HN love their iPhones, Kindle Paperwhites, Xboxes, PlayStations, and Switch consoles...
(note: you can actually load PDFs onto your Paperwhite, or onto your iPhone/iPad for that matter)
I think I would give that crown to Disney. Their parks are literally walled gardens where Disney controls every aspect and profits from every transaction.
Dutch consumers mostly pay using IDeal, a payment standard created by all Dutch banks, that costs < 0.5% in fees to merchants. It has fewer consumer protections than what credit cards offer, for that there are consumer protection laws.
These same consumer protection laws should make things like cancelling a subscription easy. Of course many companies fail to do so properly. One day I hope the government will enforce these like Apple protects their platform, and we'll end up having what we have now, just cheaper.
No it isn't, EU already went after credit card companies and forced them to lower their rates. I see no reason why EU wouldn't do the same for Apple and similar. Of course in USA you still pay those insane rates, but not everyone has to do it.
The only objection to user choice is that the users are stupid and need someone else to chose for them, my answer is Apple has the money to educate the users , they can put a giant ad on TV to tell users about their "virtues"
Apple has undoubtedly made managing payments in their mobile ecosystem easier for the end user to understand. It definitely limits some of the choices for developers, but given what I have seen and experience in the massive failure that is Epic's game store, I think it is not something most consumers will benefit from.
As I mentioned most games are in more then one store , and if a game is missing from other store is not some bullshit contract or ToS, is because the developer did not had the time or motivation to do it.
P.S. and let's not forget Apple censorship, you will not get soon all games from Steam approved by Apple because Apple decides for you what you should consume, their Christian/conservastives values are forced on you.
And that's why stores get to compete to BE their preferred platform. Software stores are middleman. They've got to compete for both users and developers.
You can't say apps have to be on all stores at the same prices when stores charge different prices to be on them. Or have different requirements to be on the store. Or when stores straight up do not allow your app (Apple with Xbox Cloud Streaming)
If Apple's approach to billing is something consumers value and are willing to pay for, then consumers will choose to keep using Apple payment methods. Perhaps some consumers would like to pay 25% less and are fine with disputing charges when a company makes it too hard to cancel?
Also, Apple already enforces other rules when reviewing Apps, Apple could still force companies to allow easy cancelation without forcing them to use Apple for payments.
Apples' insistence of using their payments would also be less egregious if they allowed alternative app stores. As it is, Apple's stance is bad for consumer choice.
The users are part of the market too.
A lot of people use direct withdrawal from a checking account to pay their mortgage. Because the mortgage lender doesn't have the same incentive as a subscription service to make it hard to cancel.
So you do that for your mortgage, but would you do it for a subscription service you might want to cancel? Heck no. People use credit cards for that. Then if the service won't cancel your subscription you have a last resort the ability to dispute the charge with the credit card company.
Apple makes it even easier but charges even more.
But the choice is really important. Imagine if Apple was taking 30% of your mortgage payment and the bank had to pass that cost on to you. Even the 3% charged by credit card companies would be tens of dollars a month, for an ability to cancel which in that case isn't worth its cost.
So people will choose based on what kind of business it is. If Netflix demands that you use ACH, people will balk. If Apple is providing enough value over the alternatives to justify their fees, people will demand it. And in some cases maybe they are -- customers might demand it for super scummy services they know they'd otherwise have trouble cancelling. So in open competition, the users demand it where it's needed. In the other cases it's not worth the cost.
This is why credit cards are really uncommon in Europe. Most people just use their debit cards that are free and can also use the regular credit card systems (with the exception of the Netherlands which has a different system). A credit card really only makes sense here if you want to use its credit. And if you do there's cheaper options.
They are only pro consumer when it makes them more money.
It's not a matter of Apple being a positive force for consumers or customers. They're simply the most magnanimous blackguard.
Apple has built their business over the years to be generally aligned with the incentives of most of their customers. So, Apple profits at selling hardware and software and services that works the way the vast majority of their customers want.
The fact that there are a small percentage of malcontents who don’t like the way that Apple manages their business, that should not be grounds for Apple to be forced to change the way they run that business. If those malcontents don’t like it, then they can go somewhere else and build their own business and run it the way they want. They’re not forced to stay here.
The only time that Apple should be required to change the way they run their business is when the majority of their customers are being harmed by the way Apple works today, and the majority of their customers want Apple to make that change. And Apple is usually pretty good about making those kinds of changes in advance of being required to do so.
That 30% cut that Apple takes from the largest companies, that pays for a lot of benefits that you and I do not see, and cannot see. They’ve already reduced the price they charge for most developers, only the top 1% are affected by that 30% fee. And I, for one, am perfectly happy that the top 1% earners on the platform are paying a higher percentage of their earnings in order to support the platform.
On the payment side, the equation is largely the same. Yes, they might take a larger bite out of the transaction fees, but they provide significant benefits. I am totally happy to have that situation, as are the vast majority of other Apple customers. Again, the problem here is with a small number of malcontents that can easily go somewhere else.
Would you describe any company's actions under the light of "yeah they only did that because it lost money". That's not just something companies don't do; its illegal (for public companies).
If I tell my shareholders that I’m gonna drive my company into the ground by laying off 90% of the staff, and they give me money, that’s not my problem.
Yes, that's why "you're holding it wrong" happened. That's why they didn't replace the CPU in their laptops for half a decade. Because they care about you.
Also, could we argue in good faith, and not tell lies, and not pretend that there's not a complex issue in play regarding the debate over scanning for child porn? That'd be a lot better. Thank you.
Or perhaps even more simply: How does making the iPhone platform more like the Android platform somehow give customers more choice?
It is pretty simple. A user could be given the option to "lock down" their phone.
That way, if you want your smartphone to only allow apps that follow the platform's rules, that would be your choice.
What you wouldn't be able to do, is force other users to do what you want.
That way, you get what you want for your phone, and others get what they want for their phone.
And I would argue that they have already made this choice by buying an iPhone. At this point it’s one of the most obvious and significant differences between the two dominant smartphone platforms.
Ok, and an alternative solution, which gives more people choice, is to allow people who buy an iPhone, and lock it down of their own free choice, and allow people who don't want their iPhone locked down to not lock it down.
That way both groups get what they want. You would lock down your phone if you want, and other people, who don't want it locked down would be able to do that, both on an iPhone.
Only to tech people, typical people see the messaging app, hardware and ecosystem integrations as the main features. Switching from apple to another phone isn't just buying new hardware but also giving up on the entire apple account and ecosystem.
And if you are right and most Apple user really wants another app store and will flock to them causing companies to abandon the Apple app store then why should your opinion on this matter more than theirs?
> Or perhaps even more simply: How does making the iPhone platform more like the Android platform somehow give customers more choice?
You get just as much choice as before, you can choose Apple hardware and software just like then. Just that choosing Apple hardware and software no longer forces you to also choose their App store as your only way to access other software, so it also alters that choice a bit, but you still have as many choices as before. However just like android you will likely see that almost everyone chooses to use it anyway, so companies will still continue to support it. Your fears are totally unwarranted.
Look at the "choice" we got when Epic opened up their own game launcher/store. It created all these awful exclusives on those platforms and ultimately people still picked the terrible Epic experience (buggy launcher, crashes, etc.) just to get those games. That isn't consumer choice... that is developer choice by incentive/price discrimination/exclusivity.
Neither is this a position that app vendors must support multiple platforms such as Apple Pay. This is a win for app makers like PopEyes who really want your credit card.
This is not a win for consumers who want a choice as to whether Apple intermediates their payment relationship with app companies.
Which is the argument I have been saying since the beginning. They are stepping over the line of those in power.
And it doesn't help when this does not belong to those currently in power or they have no leverage to use it. When this happens, the only way to solve it would be no one has that power, hence opening up.
Any other reasoning, monopoly or not are only there to sugar coat their argument.
As with anything about power, it belongs to politics, and things get ugly in a hurry.
That highly depends on the lens you look through. To say Apple is pro Apple is more correct although they understand they must make some concessions here and there.
But if you look at repairability and generally lock-in, Apple is not pro-consumer. In the end the consumer also pays their store fees of course.
It's really only the blockbuster apps (e.g. Fortnight) that will have the power to convince people to move to a different payments system, because in their case folks who actually want the app will be willing to tap through one or two extra steps.
I don’t want to be bothered with a menu in-app on if I want to pay through Apple Pay or through PayPal or some other proprietary custom service. I just want to pay using the cards I have already added onto my phone’s wallet. Who handles the transaction behinds the scene is of no importance to me. The important thing is that it is handled.
I don’t want the app to bounce me out into Safari where I login to another service just to pay. I don’t want the app to open an in-app browser for me to enter my credit card information to pay.
I want a standardized, system-level integrated payment screen like what iOS currently does. I want it to be standardized and system-level integrated because I don’t want to have to think if the website or app is launching me to a phishing or scam page. I want this screen to tell me clearly how much I owe, who I owe it to, and let me choose how to pay for it by selecting one of the cards I’ve added to my wallet or an option to pay one-time with a card (that doesn’t get saved to the wallet) ad hoc.
I don’t care if the payment goes through Apple Pay, or Stripe, or Walmart Pay, or whatever. If Walmart is insistent on processing payments through Walmart Pay, then I want to just simply scan my phone’s NFC wallet and have Walmart Pay take money from the default credit card I have attached to my wallet app.
"Power Computing released upgraded models until 1997 with revenues reaching $400 million a year.... In September [1997], Apple bought the core assets of Power Computing for $100 million in Apple stock and terminated the Mac cloning business." [https://en.wikipedia.org/wiki/Power_Computing_Corporation]
Over 30 companies had invested in making licensed Mac clones. [https://en.wikipedia.org/wiki/Macintosh_clone]
The iMac I got to replace it had an (intermittently) faulty HD and within a year the display started to fail (for hundreds of users).
Does copyright benefit anyone other than US companies? I wonder if other nations would accept such a thing if the US didn't ram it down their throats via trade agreements.
Apple doesn’t make and sell App Store. It makes and sells iPhones. And it’s not “genuinely better” and they do not dominate the market however it’s good enough that a lot of people are willing to pay a premium for that product.
I don't think this is true. If there were multiple stores, then the one that is best for companies would win, not the on that is best for end-users. Users don't get a say in which store an app is published in.
I have to decide between getting a game (that I want to get and want to give my money to the developer for) at the time I want at the cost of using Epic's buggy and shady launcher.
It isn't Apple's job to hold my hand, but I certainly appreciate them dealing with the hundreds of developers whose products I interact with, creating a "code of conduct" that I can trust and know developers will abide by (99.9% of the time)
This doesn't make any sense. It is already the case that if someone only publishes the app on android, and don't publish it on the iPhone, then you as a consumer can't buy it on the apple app store.
Are you going to argue that your choice is being taken away, because a developer only put it on android? That is no different than if they put it on a different iPhone app store.
You expect users to not get an app they want to buy just because they prefer a different app store ?
And difficulty to install matters a great deal. If it is a few more clicks you will lose a ton of users because of it.
I think we can safely say that this will happen on the planet of Never, not in a trillion years.
Everything else, you are wrong about to the point of absurdity.
Alternative app stores is means the Facebook App Store*. Nobody can seriously pretend that Facebook competes on its merits.
The fundamental issue here is that developers, at scale, cannot be trusted. You can trust specific ones to do the right thing but you can’t trust them all. Apple sees themselves as responsible for protecting all of their customers from this reality. Some call them “gatekeepers”. The example here is sharing an email address with developers. There are other examples like “no background processes”. Developers hate this becuase they see _themselves_ as trustworthy but the reality still stands: developers at scale cannot be trusted to do the right thing.
Now let me add my opinion on this: Should we have a platform that allows consumers to make a single choice ie) choose Apple, and by proxy never needs to trust developers at scale? Absolutely. Many people, especially developers, would rather trade some developer flexibility (multiple payment processors) and push some responsibility onto Apple’s users to continue making an opt-in choice for Apple. I choose them for my phone. I choose them again for in-app purchases. Continue making choices in support of Apple for each layer of the system. I am not really sure what this buys the consumer. What is Apple blocking from you by forcing you to make that choice once, and then being forced to “never trust developers at scale” for the remainder of being an iPhone customer? Is it blocking “innovation”? Some people think that. I don’t see it. I see a company that pushes the hardware envelope with sensors, battery, operating system, etc, and works hard to give developers access to THOSE things. Maybe not a users email address, but is that really innovation anyway? I looked at this Paddle payment processor and they have some things like “pause subscription”. Is pause really an innovation that is being blocked by only using Apple’s system? Google has supported pause for a long time. Users want it, but to developers really want users pausing their subs? probably not.
The country's users are it's citizens, and it may act to ensure what it deems best for them. If Apple doesn't like that ... it can find another 'store'.
If you want to look at “transaction” as the activity that a government should look closely at then I think there is a bigger thing to look at right now; people tossing their money into shitcoins. If governments aren’t spending cycles looking carefully into the blockchain transactions of their citizens they shouldnt be spending too much time worrying about whether an iPhone user can choose to use their credit card with a different processor inside of apps
The primary result will be that Apple will be hurt, and other multinational companies that benefit from Apple being hurt will rejoice — and the politicians who passed the laws will make their multinational paymasters happy.
Nintendo is unique in that they actually make some small amount of money on their devices. Does that mean they should be required to allow alternative stores on the Switch?
Apple make a lot of money on their devices, but they still did all the work developing the product, maintaining the OS, supporting the ongoing costs of device services like iMessage and location services that they don't charge for. The App Store arguably provides recurring revenue to offset those costs, which alternate stores would not help support.
Is it really fair to require manufacturers to allow third party app stores to free ride on all the work they've done?Maybe there is an argument that if a manufacturer makes enough money on the device they should allow third party app stores, but how much is it? At what point does it become ok to bar the device manufacturer from maintaining an exclusive app store?
While consumers generally don't have too many expectations from being able to do much more on a game console (though that is changing on the XBox), people expect a LOT more from their minicomputer in a phone shape. Hampering control on that device is detrimental to the consumer who paid already a LOT for that device.
Because all the game devices I’ve seen lately have been much more capable as universal devices than most desktop computers from previous decades.
This is a weird objection. It's like saying that if you ban robocalls, it will break the robocalling industry. Well, yeah, that's the point. That business model is abusive.
It doesn't cause game consoles to not exist, they would just work differently. You would pay the actual cost for the hardware and less for games.
The overall cost would plausibly be less because there is no need for any of this lock-in business anymore. Instead of buying a "PlayStation" for $300 you buy a copy of PlayStationOS for $50 and install it as a secondary OS on your Xbox or PC. Then a console costs more but you need a third as many of them, meanwhile all the games are cheaper because they're not paying a huge cut to a gatekeeper.
That’s simply not an option for a lot of people. $800 for a console is just beyond many people’s reach. The economics of consoles work for several reasons. One is the person buying the console often isn’t the person buying the games. An uncle might get the console for a kid and a parent might mainly buy the games, or several adults might buy games for them. This efficiently distributes the cost over people and over time.
Yours is typical wealthy person thinking, but people on more modest incomes find it hard to make up front capital purchases. They may not be able to plan their finances long term if they have highly variable income. Pushing more of the cost into the games means they can easily scale their spending to match their current circumstances. Up front costs or even regular monthly payments on a financed purchase don’t let them do that. The net result would be a crash in console sales that benefits nobody.
Making the overall cost lower causes things to be more affordable. Up front cost is solved by installment plans.
> The economics of consoles work for several reasons. One is the person buying the console often isn’t the person buying the games.
All of these people are generally on good terms with each other. So now the parents and the uncle go in together on the console with the parents using some of the money they're saving because the games now cost less. Or the uncle buys the generation N console on an installment plan and the parents, having saved money on games all through generation N, use it to buy the generation N+1 console instead of the uncle.
> Pushing more of the cost into the games means they can easily scale their spending to match their current circumstances.
This is possible regardless. If you have less money, you have either a PlayStation or an Xbox instead of both. If you have less money than that, you have the previous generation for longer. And then the games cost less so you get more of them.
Having half as many consoles with twice as many games is a good deal.
> The net result would be a crash in console sales that benefits nobody.
When the total cost goes down, people generally buy more of a thing.
One hundred dollars per year for the privilege of them judging your app and maybe even get it rejected.
They made tinkering around so ridiculously unattractive, because every app needs a business model (unless you are okay with eating the 100$ every year).
There need to be other stores or distribution methods. Desperately.
They don't even consider the $100 Developer fee a real fee.
100$ a understaement,just keepting them workable between ios and xcode releases is non-trivial.
myself I have about a 4-5 pretty apps that were useful (to me and a few people at least) that just don't work anymore.. I could spend time fixing them but I'm time limited and don't use macos as my primary platform anymore
the intentional short shelflive of software on that platform is just crazy to me; like I know Apple does it to have the store 'clean it self up' over time but that's insane there's piles of software that just dosen't exist anymore
like what happens if an accident happens and a solo developer passes-away? their work is as if it never existed
I want to point out if you want to release a Safari extension, be it for fun or otherwise, it’s going to cost you 100$ per year to have Apple list it in the app store.
But in fairness Apple has made it clear that is $100 for using their API.
> According to case law, market shares of between 40 % and 55 % indicate a dominant position on the market (Eberhard, 2006).
https://www.europarl.europa.eu/RegData/etudes/IDAN/2019/6422...
I understand that I end up paying more than I would otherwise, but Apple doesn't really compete on price.
Perhaps if I was in the EU I would feel differently because they have better data protections.
Maaaaybe competition would force you to drop prices but a lot of consumer software isn't fungible and doesn't really compete on price.
Taking away Apple's 30% cut shouldn't be talked about as a pro-consumer move because it isn't. There's this pot of money that is either going to go to the app publisher or Apple. That's who the fight is really between.
If those people really exist in large quantities (and I can believe they do!), the developer is losing business by not providing Apply Pay as an option. But that'd just lead every single customer to use Apple Pay, which is not what the developer wants. So you need to somehow give the people an incentive to choose your version, unless they really think that going through Apple is giving them a lot of value. Differential pricing seems like the most obvious way of doing that.
> Maaaaybe competition would force you to drop prices but a lot of consumer software isn't fungible and doesn't really compete on price.
That seems implausible. If you think that software prices don't matter at all, such that lowering prices does not increases sale, it'd follow that raising prices doesn't lower sales either. In that case, why hasn't the developer already raised prices?
That is very situational and hard to predict. There is a whole discipline behind this statement for figuring out the right answer.
If it was just 5% or so then sure it wouldn't be very noticeable, but just taking 30% outright is huge and will push many from being viable businesses to being forced to stop. The appstore isn't like steam which gets you a huge ecosystem of extra features for your games and tons of marketing. I'd pay extra to be able to add a game to steam even if I bought it elsewhere simply because steam adds so many other things.
if that's how things worked then we wouldn't be having all this commotion. Part of the reason why devs are going after apple is because they /can't/ charge more on iOS compared to other platforms and they /can't/ explicitly state that they have to pay 30% to apple.
That is not true. As a specific counter-example, subscribing to YouTube Premium via the iOS app costs extra compared to subscribing to it via the website or Android.
But the way I see it, it doesn't make sense when dealing with companies I have a preexisting relationship with, like my phone provider, energy provider, kids' school, work serices, all kinds of online entertainment providers, etc, etc. I may want to be able to interact with them through my phone, and there shouldn't be any third party controlling and profiting from that interaction.
"Are you using your iPhone app as a digital storefront for digital goods or services to be consumed on your phone? => Apple gets a 30% commission"
What is - on my opinion - problematic is that apple prohibits alternative payment options. Eg I’d be happy to see (8€ per month with apple [pay now], 7€ per month direct [register on our website], but even that’s prohibited. That is Apple using its position as one of the 2 major phone offerings to prevent competition in a way that I consider monopolistic.
Even on really weakly policed platforms like windows, people still tend to leave virus scanners enabled; and on android similarly most people don't choose to expose themselves to unnecessary risk by sidestepping its store - at least as far as I know. Users regularly do really stupid things, so some level of external control is perhaps not unreasonable, but how much, and for what? And should Apple even get to be involved in that decision?
Therefore, that argument really has no bearing on this discussion.
Whether Apple should try harder to stand up to these repressive governments is a good discussion to have, but it’s not the one we’re having right now,
Nothing even remotely similar is possible on non-jailbroken iPhone.
"Freedom from" is a quite liberating concept.
I'm almost positive many people would gladly pay extra - certainly temporarily - to be sure no untrustworthy third party gets direct access to their money. The question is merely whether apple gets to force that when both end user and app developer would prefer otherwise, and if there are any conditions on such requirements by Apple.
I just hope that Apple would be allowed to say that if you are going to use outside payment providers, you must allow paying through Apple and the outside price can be no lower than 30% (or whatever Apple's cut is).
I don't spend a lot through Apple each year. Maybe $200. If I'm paying 30% more than I would otherwise that means it's costing me something like sixteen cents per day and I'm okay with that.
When I was younger, I used to focus a lot more on price. When Zappos came around it clicked for me that paying more can be smart if the service you get is better. I'll pay $0.16 every day if it means a few times per year I avoid a lot of bullshit.
Setting it worse opens up effectively a "soft disable" like Apple price at $1000 and their price at $1.
If they for some reason decided to charge $1 through Apple and $1000 through their own that poor decision is no skin off Apple's nose.
Most sellers on the App Store are now paying 15%, if anything at all. Most apps I’ve seen are using ads to bypass paying anything to Apple. Some of them support IAP to remove ads. But that’s just an option.
Don't they have rules that companies aren't allowed to charge a higher price for services on Apple devices than elsewhere? Seems to me they DO try to compete on price here. They want to have their cake and eat it too, and they absolutely should not be allowed to.
If you subscribe to Spotify in iOS, it costs more than doing so over the web. I think this is ultimately going to be a huge problem for Apple because they directly compete with Spotfiy.
But that said, those shops should have a right to choose which payment processors are appropriate for their business. Let the market decide what is the best for the market.
The OEM model (at least for computing platforms) is how the world works. Fragmenting it helps no one, save for perhaps the software freedom crowd.
They continue to fight the old war and at some point, it just might come back to bite them.
"There's no advantage to being a platform owner? Eh, OK, let's just not bother trying then."
It's a bad look.
It's quite obvious that the only reason Apple hasn't added that feature is because they have no intention on losing their stranglehold on the App Store. Without sole propriety of software, Apple's value proposition starts to crumble. So, why should we let them keep it? What do we, as a society, gain from letting Apple be the richest company in the world? The answer is nothing, and eventually some day when they go under we'll come to the realization that it was all a zero-sum game anyways.
This is almost Orwellian. Imagine Standard Oil customers cheering the demise of the corner mom and pop.
All of this while Apple collects a dossier on each of you that they'll willingly hand over to the FBI, FSB, or Chinese Ministry of State Surveillance.
If none of that convinces you, then do me a favor. A thought experiment.
Imagine an alternate history wherein we replace Apple with Microsoft. Imagine that the iPhone lost and became just a footnote or history and that Steve Ballmer's Microsoft ZunePhone Pro 10 won the market. That's what we all have in our pockets now.
Would you be happy if Microsoft owned the customer relationship? Would you feel just as happy?
Apple is immaterial in this. We don't need companies to be this powerful.
I do agree that companies shouldn't be so powerful tho
If you're using Apple Pay, the subscription is managed by Apple - and deleting a subscription is rather low friction.
With the "Apple can't mandate Apple Pay" that's currently in the winds (and yes, they'll eventually lose it everywhere), in order to maintain the iPhone customer experience, they're mandating that accounts (subscriptions likely) that are created must be able to be deleted easily too.
That is going to be a bit of a challenge to companies that want to have you set up an account, use their payment system, and then make it difficult to unsubscribe.
If it were true, you would be restricted to facetiming only with other apple users, only make phone calls to other Apple users, only visit 'the Apple internet' with their Safari browser. Whatsapp? Youtube? Facebook? Instagram? Epic? No no, those are not owned by Apple, and not part of their 'platform'.
Suddenly the 'customer relationship' isn't all that clear, hence the national watchdogs looking into anti-competitive behavior.
> A court spokesman confirmed the existence of the case to block publication, but could not say when a decision is expected. The proceedings are not open to the press or public.
Then the courts have created a PR and possible big financial hit on a company improperly. Could apple then sue for damages?
Similarly: if the ruling is upheld Apple does not get to pay more because they - apparently improperly - asked for the previous ruling to be kept secret.
Courts should operate in a transparent manner whenever possible otherwise the trust in the legal system will erode and that trumps the commercial interests of any single company, even one as large as Apple.
If an appeal is being made, and current decision being temporary suspended, then there's no reason for the original decision to be public. The courts decide on matters of law, so the publics view on the original decision is irrelevant, and up to the parties involved to convince the appeal judge their interpretation of the law is correct.
Once the matters been settled by the courts, it make sense to make everything public. But a no point during the process should or can public opinion influence the outcome.
Can anyone explain the policy reason behind the secrecy?
Unlike the US where court cases are publicized and disseminated widely with the charges, but never with the outcome of the court case.
As the Alien vs. Predator tagline said: whoever wins, we lose.
But if you've ever tried to cancel an AT&T internet line or New York Times subscription, you begin to understand Apple's position. Consumers oftentimes have no recourse; Apple's (and, similarly Google's) subscription framework is the first time in history many of these companies have experienced the powerlessness their users feel when dealing with recurring payments. They don't like giving up power.
It should come as no surprise that the companies most vocal about the payments monopolies are the ones who want to abuse the freedom Governments will hand them, in the name of maintaining a healthy competitive landscape.
I think a balance needs to be struck; Apple needs to have its power reigned in, and I think that takes the form of a forced reduction in revenue share to 10% max (Visa maintains a global network of hundreds of thousands of diverse swipe terminals at ~3%; if Apple can't maintain some servers at 10%, they're incompetent and deserve to be driven into bankruptcy by this totally reasonable legislation).
I don't feel that allowing alternate payment methods / subscription frameworks would actually benefit users/consumers, across any length of time, in any fashion whatsoever. I think subscription/payment management needs to be delegated to user accounts outside of any control of the service providers taking payment, as its an intrinsic and irreducible conflict of interest. Maybe that means Visa or whoever should start a "subscription and payments portal" that service providers have to integrate with. I don't know. But the way we've done it for 20+ years doesn't work, and Apple's way is absolutely better; its just not the best it can be, right now.
What would California actually choose to do on behalf of consumers who are in this situation, even if there is a law on the books that supports the consumer?
With Apple, the company in question had to work to get on the platform in the first place, and if I as a consumer go to them and tell them I want to cancel that account, then Apple just cancels that account. I don’t have to go to the state of California and ask for assistance, I don’t have to wait for a lengthy trial that might be years in the future. With Apple, it’s just one click and done.
Laws don’t help you if they are never enforced. Laws don’t help you if they can’t be enforced against a party outside of their jurisdiction.
Apple’s solution works, and works well, for all customers who want to cancel their accounts.
If Apple allows external IAP, but _also_ requires strict dispute resolution and simple subscription cancellation, that would probably be deemed anticompetitive as well, even though it's thoroughly pro-consumer.
The problem here is that the regulatory scrutiny is only on one dimension, not the full picture. And in the full picture, Apple's policies are eminently reasonable—if their fees are a bit high.
Thus the looming changes: Apple requires account deletion within apps in AppStore starting January 31 https://news.ycombinator.com/item?id=28776960
Why would that be considered anticompetitive?
However, the same people who say that it’s anticompetitive for Apple to control the payment flow are likely to say that _any_ impingement of Apple on the customer relationship is anticompetitive. These are the people who don’t actually _care_ about the customer relationship, like the NYTimes subscription department, or the companies that bank on customers forgetting to cancel their subscription for months at a time or not wanting to spend time on the phone to fight over a $1.29/month subscription fee.
IMO, antitrust/anticompetition investigations tend to be _far_ too limited in their scope (they look only at one or two aspects and not the big picture of what's happening). I remember a few years ago when Apple had worked with publishers to establish a new standard ebook contract for publishers and marketplaces. It was one that would have (slightly) raised the prices of ebooks, but replaced the unilaterally imposed contract that Amazon provided. Apple got in trouble over it, even the result would have been a _better_ and more _competitive_ marketplace and not one controlled by Amazon.
I have opinions on what should be done with the app stores that would _probably_ fix a lot of the issues, but any changes to the app stores need to look at whether it would be a _better_ situation for customers or just a more lucrative situation for publishers. And the customer impact would not just be measured on “choice”, but on overall price/privacy impact.
Measured by that, there’s no question in my mind that Apple’s doing a better job than people give them credit for.
It's just that all that other stuff came too. In addition to that web you love. Not pushing it away, but shadowing it in volume. Yet, there is no space shortage. The web is an infinite library.
Not one that has to remove those seventies sci-fi books to make place for the new Harry Potter section. But one that can keep both.
Well, there was altavista (and, ahh, the memories Astalavista.box.sk) and some other ad-loaded websites.
As long as Google says so. And they haven't been open to new old-school sites, just to old ones.
Despite all the negative externalities that it also causes, I fail to see how they could outdo its positive aspects.
This is totally true. Unfortunately, it's also the biggest repository of misinformation in history as well.
> I fail to see how they could outdo its positive aspects
On a macro scale, you're likely correct. If you're one of the unlucky people that suffers a significant negative consequence, your view may differ.
That could be said for anything, though. There isn't a thing on this planet that hasn't hurt anyone during its creation.
Apple might just remove dating apps from the app store for the Netherlands. Problem solved.
What did they demand specifically?
My point being, people might still use AppStore as they do. Just the whole government-mandated experience becomes much less convenient.
Just because an entirely different government entity (the EC) enforced a practice that has different outcome than expected, does not, in any way, predict how this private entity (a local market-watch and local court) will work.
Well shucks. Apple also controls who and what can be sold or distributed in the market, how it should be built. They control how much exposure apps get. Some of these controls are used more directly, or blatantly to "rig the market" than others... but these are just the current choices by Apple. It's not a rig. It's the OEM design. Apple rigging the app store market is like Apple penetrating icloud security. That's not a hack, it's a login.
I can see a logic within the frame. If courts force Apple to allow a competing system, it will put downward pressure on what are (imo) indisputably monopoly prices. That's competition, in a neoclassical sense. There can be a big difference between no competition and some.
OTOH, competitiveness within Apples' fully owned market seems like a silly frame to operate within. Competition between ice cream parlours within the walls of DisneyLand are at Mr Disney's discretion. They can decide all ice cream parlours will be subsidiaries, franchises or independants. They can set prices, ban ice cream, etc.
Trying to deal with ice cream competitiveness in DisneyLand this way is a fool's errand. One court rules on a policy forcing Parlours to use Disney's insurance vendor, and price gouging. It's a random detail and maybe it does help out parlour owners lower costs. Disney have an infinite number of such options available though. A free market it'll never be.
I think most people would find it bad if a BMW branded car could only take gasoline/petrol purchased using a BMW credit card. Even if the terms of the BMW credit card were better than everything else when the vehicle was first purchased, the lock-in it creates would stop competition. And of course, if BMW could change the credit card terms - say, stop allowing purchases at your closest filling station, that would be worse.
Just from a consumer's perspective, given the popularity of Fortnite, it's quite possible that there are some number of people who bought an iPhone just for the purpose of playing Fortnite, and had that use taken away from them. It feels wrong that Apple can take that away from them.
Disney: It's not the park or the device, it's about the experience, Apple wants to control that, just like Disney.
BMW: You're allowed to put any brand of electricity in your iPhone's battery. I would've gone with the third party car stereo market.
I think the main trouble with products like Apple's is that you end up in a monopolist-controlled market just after you have bought the product. See also e.g. Nescafe coffee where, after buying the coffee machine, you are limited to buying coffee from 1 vendor (this is not true anymore but it was true for a long time).
If monopolies are forbidden, then so should a monopoly-after-you've-bought-a-product.
Fortnite took it away because they wanted to create publicity for themselves and set up a situation where they appeared to be David to the Goliath of Apple.
Fortnite took it away and sold their software on the Apple App Store, in the full knowledge that they were planning this move, and they knew what that result would be.
So, Fortnite sold out their own customers willfully, and with maliciousness aforethought.
I'm not aware of any alternate payment processing on the Xbox store, PSN Store, Nintendo's eShop.
In each case, the platform owner has a monopoly.
Where is the consumer choice for that? I ask because I don't want 3rd parties selling insights from my financial data. Of all choices that a consumer actually wants, it would be the ability to control the apps (i.e., sideloading) running on their device, as opposed to have more control yielded to app makers.
Also, adding Apple as an intermediary increases the buyer's privacy exposure in some cases. If the buyer already has an account with the developer's service and makes a purchase that is linked to the account, interjecting Apple into the equation would reveal the purchase to both Apple and the developer, instead of just the developer.
Second, IAP is separate from Apple Pay. If you do payments through another payment ecosystem... Apple still gets a cut. Nobody gets to dodge a price premium. If you want to talk about price premium, we should really be talking about the IAP.
Third, you are getting more risk here. When you use Apple Pay, the vendor knows almost nothing about you. We're talking about the likes of Target and PopEyes (who really wants your credit card info) vs Apple, who retains very little financial information [1]. How many apps have you paid for? How many businesses do you transact with? That's a lot of Targets.
And fourth, I am concerned about whether Apple will be able to compel developers to have easy recurring payment cancellation in one place. Whether it's a business or a government doing this, being able to easily monitor and cancel recurring payments is a big consumer win. Where is the consumer choice for this?
Finally, the marketplace is about the negotiation of leverage. You talk about customers choosing vendors... my family members aren't going to win in negotiations with any company. The choice will be Walmart's way or the highway. Where is the consumer choice to have Apple negotiate with Walmart on your behalf?
2. We'll see when the Dutch situation is finalized. Epic v. Apple was filed in the Northern District of California, which is separate from the Netherlands.
3. You're missing my point. For instance, if you already have an Amazon account and you purchase an e-book to add to your Kindle collection, Amazon would get this purchase information no matter how you pay, since your e-book purchase is linked to your Amazon account. Amazon would already have your payment method (unless you haven't purchased any physical or digital items directly from them beforehand). Paying through Apple would only expose your purchase information to Apple in addition to Amazon, and at a price premium. It would not prevent Amazon from having the purchase information.
4. Payment processors such as PayPal also allow cancelling recurring subscriptions in one click from a centralized page. Apple's payment system is not unique in this regard.
Developers should be able to offer multiple payment systems, so that customers can choose between them. Some customers do not want to use Apple's payment system for some of their purchases, and Apple's requirement deprives these customers of alternative options. Dutch regulators have found Apple's restriction to be anti-competitive.
That PayPal offers you a place to cancel subscriptions does not mean that Target must offer you the option of your preferred payment vendor. In order to achieve this, perhaps you might throw around your weight to negotiate with Target and such? You don't get to compel the use of PayPal unless Target agrees.
2. The reason why companies must pay IAP is for legal reasons, not Apple Pay. Since we're talking about the Netherlands, we can just view Epic as an example of how Apple's legal strategy has played out across the ocean, or not talk about them at all.
3. I think you have a technical misunderstanding if you think paying with Apple Pay means that the vendor has your financial information. They don't. With Apple Pay, Target wouldn't have any credit card information to leak. You are more exposed to financial risk with the numerous financial relationships you have. The reason why some companies already have your credit card information is because you couldn't resist giving it to them, perhaps because Apple wasn't negotiating on your behalf.
3. I'm not talking about Target, I'm talking about an e-book purchase on Amazon that gets added to the purchaser's Kindle collection. Amazon must know that the user purchased the e-book, since that is the only way the e-book gets added to their collection. If Amazon already has the buyer's payment information from a previous purchase, directly purchasing the e-book through Amazon would be strictly more private than purchasing it with Apple overseeing the transaction. Every purchase is a different situation, and in some situations, using Apple as an intermediary is worse for privacy than directly purchasing through the vendor. Not everyone prefers having Apple monitor all of their transactions.
This is precisely my point. Walmart's way or the highway. After all, the free market is a land of the negotiation of weight, and you don't weigh very much.
> Buyers are not entitled to use Apple Pay everywhere, just as they are not entitled to use cash, PayPal, or a particular credit card everywhere.
In the free market, you aren't entitled to anything you can't negotiate. Apple can do this for you. Apple has enough weight with the collection of customers behind them.
> I'm not talking about Target, I'm talking about an e-book purchase on Amazon that gets added to the purchaser's Kindle collection. Amazon must know that the user purchased the e-book, since that is the only way the e-book gets added to their collection.
A company doesn't have to know your financial data to know that you paid for a digital good. I am talking about Target, except Target is just an example of a company that already had a financial leak scandal. I also talked about Amazon, since there's enough room to talk about more than one company. My response was that you forked over your credit card information because Amazon had that power.
As you say, you're not entitled to choose the terms of your relationship with Amazon. Your choices were only Amazon or... not Amazon. I mean, not unless you can negotiate with Amazon. And then you have to do this for PopEyes and Target too, all while contemplating your entitlements as a customer.
So I ask again, where is the consumer choice to have Apple intermediate relationships on your behalf?
The Dutch antitrust regulator has determined that Apple is not allowed to force developers to exclusively use Apple's payment system. There is no antitrust principle that compels developers to offer Apple Pay or any specific payment option. But as I said before:
> Depending on how the antitrust situation is resolved, Apple may be able to require developers to offer Apple Pay, yet still allow developers to offer other payment options alongside it.
If that's not an option for Apple, then the burden is on Apple to offer a competitive payment processing solution to be accepted by both developers and users.
I am not talking about a customer's right to compel a developer to choose private and safe methods for payment. I am talking about leverage in a free marketplace. It's not that you don't have the right... you don't even have the weight as an individual customer to step into a negotiating room for a conversation. Apple does.
I am also far more sympathetic to consumer protection than whether companies should be able to choose Stripe or manage your financial information for their business benefit. This is the "unfavorable terms" you're talking about.
> Depending on how the antitrust situation is resolved, Apple may be able to require developers to offer Apple Pay, yet still allow developers to offer other payment options alongside it.
If this is the case then the conversation will be moot. But this is speculative, so I am arguing for the other side of your forward-looking statement.
Currently, iOS users have little to no leverage against Apple. To make certain kinds of purchases in iOS, buyers must pay a large price premium to subsidize Apple's fee regardless of whether they prefer to do so. The Dutch antitrust regulator recognizes this as a problem, and is instructing Apple to correct the situation. How Apple proceeds from here will determine the user experience on its platform, but continuing to violate antitrust laws harms both users and developers through market inefficiency.
> Currently, iOS users have little to no leverage against Apple. To make certain kinds of purchases in iOS, buyers must pay a large price premium to subsidize Apple's fee regardless of whether they prefer to do so.
Instead of chatting abstractly about high fees, why don't we put some numbers on the table? Apple Pay's "high fees" go to banks at 0.15% per transaction, or 15 cents per $100.¹
The IAP fee is not the same thing as Apple Pay. Apple Pay is a protocol for payment where neither Apple nor the store keep your credit card information. IAP is a revenue sharing agreement with Apple. Many people agree that the IAP is onerous, and as a business contract it is subject to various legal jurisdictions.
If you disagree with high fees, we should really be talking about the IAP and not Apple Pay.
> Apple's payment system offers no more leverage than a free disposable credit card that you can limit and cancel at any time.
I see this ordering of effects as backwards: first Apple uses its leverage, which derives from its hundreds of millions of more spendy users, and now we have Apple Pay, a private system of paying where even Apple does not store your credit card number on their servers, or other identifying information.² This differs from Privacy.com, where you may directly linking your debit account. Also note that you may wish to be careful when cancelling a "disposable" credit card when you have recurring charges.
An individual customer of insurance does not have leverage over the insurance company. As a collective, you have all the leverage, which in turn means more bargaining power for the insurance company. As an individual member of Costco, you have no leverage over Costco. As a collective, you have the only reason why Costco can demand better prices.
[1]: https://www.wsj.com/articles/apple-pay-fees-vex-credit-card-...
[2]: https://www.apple.com/legal/privacy/data/en/apple-pay/
Also, thanks for chatting.
95% of purchases through Apple's payment system (App Store + IAP) by volume are subject to Apple's 30% fee.[1] Sellers need to raise the price by ~42.9% to recover the 30% cut, and the cost of that fee is subsidized by the buyers. Those are hard numbers that have a negative impact on both users and developers.
Yes, I agree that Apple helps provide users with leverage against iOS developers when they overstep boundaries on privacy in some cases. But, Apple never provides users with leverage against Apple itself. Many users and iOS developers are too small to directly challenge Apple when it engages in anti-competitive practices, so that is where government comes in to provide leverage to users and developers against Apple.
Thanks for explaining your perspective.
[1] https://www.nytimes.com/2020/11/18/technology/apple-app-stor...
In some circles, maybe, but not here in the Netherlands (+/- 60%). Worldwide, the majority of phone owners still run Android.
This is one of the key arguments people use in Apple's defence, because the bigger their majority share, the quicker anti-monopoly laws would apply.
I agree with your point, though. The Apple/Google duopoly hurts the general public to ensure the profit margins for these companies' shareholders. Those with neoliberal convictions might not agree with me, but I believe that the free market needs regulation to prevent problems like these.
That said, if you were to deal with DisneyLand ice cream...