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Comment by LeanderK | Hacker News Reader

how far will apple take their in-app purchases? It's really getting ridiculous. Will they also request their share if I transfer some money from my bank account via app? Buy a new sofa? A share from airbnb if I rent a spare room? I bet airbnb lets me manage set up the whole experience in their app.

We slowly turn into a world where everything can be managed via an app and apple getting their share on everything is quite ridiculous.

EDIT: I completely forgot that the apple tax is 30%. Unbelievably high.

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> how far will they take it

Apple's been consistent: digital goods and services.

The debate with Facebook reported in WSJ back in August (https://www.wsj.com/articles/inside-the-apple-vs-facebook-pr...) Apple was saying "boosts" are a service to raise the profile of your dating profile or media posts, while FB was saying they were ads to avoid paying for them. All other apps (TikTok and the dating apps) consider it a service, only FB/Insta were playing this game.

This clarification shouldn't have been necessary, FB was playing a game, and Apple closed the loophole.

> unbelievably high

It's not unbelievably high, go have a look at what any platform charges. Also, remember the rate drops in year two, and for those making less than a threshold, etc. etc., so it's not 30%, it's considerably less overall.

They'll take it as far as necessary to to make the same off providing app store services any platform makes for distribution, such as Steam makes off providing Steam.

The problem with IAP is that at 0% for the app itself, Apple cannot offset the costs of the platform they are providing for distribution. So if they take their cut off app sales, then apps give themselves away for free, and charge the price as an IAP, Apple's stuck. They have no choice but to take it off IAP.

> Apple's been consistent: digital goods and services.

Transferring money between banks accounts via an app seems like a digital service. How is it not?

Transferring money between bank accounts is not a service you pay for.

You make a good point.

My bank charges for wire transfers, I think that's pretty standard in the US.

Or feel free to stub in an example from a brokerage app, eg selling shares of a mutual fund that charges an early redemption fee.

As noted in the reporting, Apple does not take a % for services that happen entirely outside of the app.

Instructing your bank to wire money to another bank, you use the app to communicate to your bank for free, then the service is entirely between non digital entities entirely outside of the app and outside of the app's backend.

This distribution fee, the writer of the post and the reader of the post it got distributed to are both in the app.

. . .

> Transferring money between banks accounts via an app seems like a digital service. How is it not?

My prior job, I spent a billion dollars working to make that digital. If you look around, you'll see that across the entire banking system it's still almost entirely not. Even when it is end-to-end electronic, it doesn't at all happen "in the app".

The app is a glorified front-office teller and tellers don't charge you a fee. The money movement service happens in the back office, and may have a fee.

> Even when it is end-to-end electronic, it doesn't at all happen "in the app".

This delineation still seems unclear. I might write something in an app, and someone else read it in the same app, but it doesn't all happen in the app either. There's a backend, and the app is a glorified typist.

Does your bank take 30% of your money every time you transfer it between accounts?

> It's not unbelievably high

Stockholm syndrome?

I think it’s high, but it’s also industry standard.

Steam is pretty beloved in PC gaming, and they take 30%. Microsoft and Sony take an equivalent percent for any game to run on their respective consoles. Google takes 30% from the Play Store for anything over $1M.

There is some nuance and discounts for all these platforms depending on volume but the economics are mostly the same. 30% goes to the platform.

We should all be scratching our heads and wondering how the entire industry seems to have coalesced around 30% or how competition isn’t driving it down at all. Hmmm.

85% used to be the industry standard when it was book publishers or floppies.

I would love to see competition on that 30% rate … but there’s a reason we have phrases like “industry standard”.

Competition does driving it down on PC where competition exist. Steam now takes 25% for revenue after first $10,000,000 and 20% after $50,000,000.

> Steam is pretty beloved in PC gaming, and they take 30%.

> 30% goes to the platform.

The platform is Windows, not Steam. (Or arguably the platform is Dell, HP, Lenovo, etc., but in any case not Steam.) You don't need to be on Steam to be on PC.

The issue isn't the App Store cut per se, the issue is having to be in the App Store to be on the iPhone. You never had to do that on Windows or Mac.

>The platform is Windows, not Steam.

When it's the only distribution channel, I disagree. It's a pedantic point, either way.

>The issue isn't the App Store cut per se, the issue is having to be in the App Store to be on the iPhone. You never had to do that on Windows or Mac.

...but you do have to do it with Xbox, Playstation, and Switch. You technically don't have to do it on Android, but only technically. In reality you have to be in the Play Store for market reasons. Truly the only exception here is desktop operating systems.

> Truly the only exception here is desktop operating systems.

Why are desktop operating systems the exception rather than the rule? Desktop preceded mobile by decades. They are the precedent.

I don't think game consoles are a good comparison, because they're an entirely different beast for several reasons. For one, a game console has only a few thousand games total, which is completely unlike general purpose computing platforms.

From a developer perspective, being in a store with only 2 thousand games and being in a store with more than 2 million apps is like day and night. You might as well be invisible in the crApp Store.

So it’s a 30% tax on the digital economy? The first iPhone didn’t even have an App Store, it can be a viable business without all this.

No, it is a 30% price for using their service. The digital economy is not completely owned by Apple.

I get that the article called it a tax, but Apple isn't a state, they respond to market pressures, if people don't like it they can do business elsewhere.

That's what Apple's lawyers argue. The 30% is to pay for Xcode and the APIs. It's BS; Apple's providing an iPhone SDK willingly in order to make the iPhone a viable product.

The argument completely falls apart when you consider that Windows devs don't need to pay Microsoft a per-unit sale tax, beyond paying for Visual Studio Enterprise licenses (which are completely optional; there's many other IDEs). Microsoft charging devs for Windows APIs would be nonsensical.

Running the App Store is just a cost of doing business. Again, nobody forced Apple to. It benefits them tremendously, and benefits users as well. Why gouge devs?

I don't buy the argument really that it is "to pay for" Xcode. It is just another revenue stream and they charge what they can get. Microsoft would charge for their product if people were willing to pay for it.

Sure. The Xcode argument is Apple's.

> It is just another revenue stream

No different than the iPhone itself. Apple has already paid for the iPhone out of their coffers before you buy it. Your purchase is nothing more than another source of revenue that replenishes those coffers. It is just a colloquialism to say that the money you spent was to pay for the iPhone, as it is for Xcode in this case.

> if people don't like it they can do business elsewhere

in a pedantic sense sure, but in the real world no product that ignores the (affluent) 50% of mobile phone users has a chance in hell of surviving.

The OS that comes with their hardware basically ensures the digital economy is owned by Apple if you want to use an Apple product. I challenge anyone to distribute any moderately UI-heavy software to iPhone users without using the app store.

So consistent it took 14 years for them to extend it to ads boosts that existed this long on the platform.

> Apple cannot offset the costs of the platform they are providing for distribution.

Well, there's the $40 billion in iPhone hardware sales last quarter...

the consistent part about Apple is that they always exploit their leverage to the hilt in pretty much any B2B or B2C relationship they have.

Absolutely monstrous IMHO and I have no idea how they appear to avoid half the flak M$ got for being just like this in the 90s.

> This clarification shouldn't have been necessary, FB was playing a game, and Apple closed the loophole.

That's objectively untrue. This is a new rule, and as The Verge correctly says, "it’s the first time Apple has directly taxed advertising in iOS apps".

Facebook's app was charging advertisers directly for years, without IAP, and Apple approved it. They simply never had an issue with it. Now, they're forcing FB to comply with a brand new rule.

The notion that Facebook was exploiting a loophole is outright Apple PR-speak. Apple was forced to frame is as a brand new policy, otherwise they'd face scrutiny for letting Facebook supposedly "evade" the previous rules.

And that WSJ article documents a disturbing trend of Apple trying to use their leverage to destroy Facebook. Hurting Facebook ads, and then actively pressuring Facebook to switch to a subscription model that Apple would take 30% from, is very dodgy.

I've bought "digital gold" quite a few times from apps (in India). So they could demand 30% out of that as well? Apple's greed is now getting to ridiculous levels.

Again, 30% is market rate across the board. You can find analysis on what a quality marketplace trusted by users costs, it's much more than people think. And the benefit to an app of being in a trusted market is high.

In the US, public companies have a fiduciary obligation to shareholders to earn.

It's unclear to me why Apple should keep money out of the pockets of teachers and firemen invested in them through pension funds, just to charge below market rates for the most trusted marketplace where devs make (by far) the most money.

> at's objectively untrue. This is a new rule, and as The Verge correctly says, "it’s the first time Apple has directly taxed advertising in iOS apps".

Whole point is that is not objective, it's subjective, and FB is in the minority for considering it true. It's bad reporting by Verge to report it so, but good for their clicks and controversy. There's no story otherwise.

The Verge sentence is the untrue statement, if the position is that a user boosting the user's reach is a service, not an ad. It never occurred to me that tapping to give my post more visibility was an ad, but rather distribution or shelf space.

Goods in a grocery store, brands can pay for shelf space. If you see one mayo placed at eye level, vs. one by the floor, is that an ad? I'd argue it is not. The thing in the TV or magazine or back of your receipt is an ad.

Similarly the "pay for play" radio payola scandal was not considered ads, it was considered unfair/deceptive/monopolistic, but not ads.

Apple is doing none of the things Verge tossed out as clickbait, or you allege as bad faith. After pressing FB to behave, for a while, they eventually closed a loophole. This happens in business contracts routinely.

This is why almost all legalese is a Chesterton's Fence:

https://en.wikipedia.org/wiki/G._K._Chesterton#Chesterton's_...

>It's not unbelievably high, go have a look at what any platform charges.

That's because they are all monopoloies and that's the monopoly rate.

I would gladly host a competing app store to apple or steam where I took less than a 30% cut. In fact, I would do it at cost. So what's preventing me?

Don't you dare say that apple doesn't have a monopoly here.

>Will they also request their share if I transfer some money from my bank account via app? Buy a new sofa? A share from airbnb if I rent a spare room?

Honestly, why not? I mean if the justification for app store apps handing over a cut currently is "Apple provides the infrastructure and frameworks your app relies on" well that same infrastructure is used when I order a pizza in Uber Eats, when I book an AirBnb, when I do a bank transfer. Why does Apple only get a cut of someone those and not others.

Not defending it more pointing out the argument doesn't hold up when it applies to some but not all transactions.

Well, I was serious in my argument. It is a somewhat realistic next step in my point of view but I consider it absurd, hence the next sentence that we move slowly to a world entirely managed by smartphones and apple honestly just can't get 30% slice of everything just because it's a transaction on an app.

Where is the point where monopolies extract too much value? We have broken up companies before because they treated other unfair and it can be done again if they escalate beyond reason.

Think we're in agreement might have worded my post poorly, on a long enough timeline having to pay Apple a 30% cut of your holiday rental of pizza as absurd as it sounds to some people today just sounds like the logical conclusion when we already pay them 30% of say an videogame item or app subscription.

"The App Store is now called Apple Stores, a touchphone that sells everything (provided by our third party resellers). If you dont like our stores go shop elsewhere.

I wonder if there is a legal case here, by apple forcefully escalating the business relationship from neutral/orthogonal transactions to one where facebook is forced to be a partner of apple. (And monopoly issues arising from the fact that Apple now has a business interest in increasing facebook's ad sales)

> And monopoly issues arising from the fact that Apple now has a business interest in increasing facebook's ad sales

This is the real downside here. Apple is incentivized to want people to use Facebook boosts and only takes 30% of there revenue away -- so 70% goes toward reinforcing this awful surveillance system.

If you find a new job via the LinkedIn app on your phone, Apple is going to want 30% of your salary. It's only fair.

I think Apple already does get your share, because almost everything in the Apple Store is more expensive than it is otherwise, because companies pass the tax down onto consumers.

I think the first few lines are fear mongering. Apple is obviously not going to ask for a cut when you transfer money in a banking app, pretty sure that will borderline be illegal. Same goes for E-commerce.

> We slowly turn into a world where everything can be managed via an app

Is it not fair then, for a company creating a platform for the app, making your app available to billions of users, while also keeping the platform safe and providing new features and capabilities consistently to ask for a cut of transactions made on their platform?

I would say no, because of the lock-in. Your argument would make more sense if I could go off and browse any one of a hypothetical 20 competing platforms, but that's not the case.

> making your app available to billions of users

As an App Store developer, I eagerly await those billions of users.

Marketing is hard, and expensive. I don't expect Apple to do my marketing for me — and they don't — but let's not pretend that Apple is providing customers. Potential != Actual. Moreover, the existence of 3rd party apps is a selling point for Apple devices. Do we developers get a cut of Apple's hardware sales?

> while also keeping the platform safe

The crap store is full of scams. And now it's advertising gambling all over the place, even in the listings of non-gambling apps.

Is it fair to consumers that they pay a lot of money for a new shiny Apple device, but after they take the device home, Apple continues to demand a cut of things that consumers do on those devices, forever?

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