Telegram CEO accuses Apple of crushing entrepreneurs | Hacker News Reader

Telegram CEO accuses Apple of crushing entrepreneurs

macrumors.com

109 pointsfirstSpeaker108 comments

I’m surprised nobody mentioned possible solution in this conflict from legislative perspective - forcing Apple and other payment processors to show cost breakdown to the user.

It should be in Apple Pay payment view overlay. Laud and clear. Very simple, it’s really not that hard to show the numbers.

I’m not saying going as far as to show to which budget money goest to from 30% tax, that will be the case in 50 years anyway, but as a consumer I’m really not interested in that information. I mean just a simple breakdown, like on receipts about tax amount payed to government on each purchase. Not just Apple of course - but all companies playing this game - stripe, PayPal, visa, Mastercard etc.

That’s because they act as a direct intermediary in such a fundamental branch of our economy, therefore society in general - money transfers.

Banks have to show the fees, why not payment processors? Again it’s obvious and simple to implement [1].

I assure you a lot of eyebrows will raise when seeing 30% on a receipt - it will force Apple to add an explanation. And a lot more people will start paying in cash again.

Now we need signatures and start lobbing governments. Maybe Europe is a better start because it seems government is more happy with adding regulations.

[1] https://nwlc.org/wp-content/uploads/2022/01/Brandys-walmart-...

Apple Pay charges approximately 0,15%, not 30%.

No no no, people are bamboozled into believing they can't get basic transparency, because <fill in some absurd excuse>.

Apple Pay charges 0.15%. App Store charges 30%. I want to see both on the receipt. This is not rocket science. I can see how much government charges right? The point is to show me all intermediaries which are getting a cut directly from the purchase. App Store clearly is an intermediary.

Tim Sweeney mentioned it as well - app developers cannot show cost breakdown in their own apps, it's an App Store rule [1]. I don't mean here to give users second option to pay without tax of course. Just showing information, so users understand pricing rules.

We could push it a step further - show me all intermediaries taking a cut from any purchase and oh boy, this will be fun :)

[1] https://twitter.com/TimSweeneyEpic/status/155341909648987750...

That kind of rule you linked should be made illegal.

Most payment processors do not calculate taxes on purchases, especially not online. The merchant of record does of course, and in this case apple would be both the merchant of record and processor so it's moot. But if you wanted to make this law, aiming at the processors wouldn't get you very far

Yeah I can see how this will quickly devolve into some kind of epic legal battle and I am not a lawyer.

However that is not the point. As a consumer, wouldn't you like to see cost breakdown like this?

App purchase: $10.00

Direct intermediary total: 30%

Payment processor total: 0.15%

Government total: 8.25%

PS. Software Engine total: 5%

PS. Patent uses total: 5.63% [1]

[1] https://news.ycombinator.com/item?id=32374976 - so finally we can put patent trolling issue to rest, that is to make it impossible for patent owners to prohibit it's uses and instead use appraisers to define value of a patent in it's particular use. This may mean forcing users to pay for a patent use, even in products which were initially free.

What then would be a fair commission? Credit card processing starts around 2-3% (though I'm sure Apple has negotiated a rate well below that, but it's not free). Hosting has value, as does marketing/discoverability (though apps like Telegram are big enough that it's diminished)

Telegram are the ones hosting the posts in this case.

Most apps have an API they use. Apple hosts the binaries to be installed, and hosts the payment APIs if they are use IAP. Perhaps it could be argued that each service that Apple provides should be billed separately.

This ignores the point that companies are required to use the App store to host the app and do payments though; I think plenty of companies would prefer to distribute the app and process payments externally to avoid the fee, but it's not feasible to provide apps to users any other way, and any external payment options are both not allowed to be communicated to users within the apps and not allowed to cost less than they do from within the app (making it impossible to pass the 30% on to users). Taking a cut of payments facilitated by your platform is a business model; forcing people to use your platform and then insisting on payment for your work is a protection racket.

So open platform, and Apple can charge whatever they want?

yes, allow installs outside of appstores, and allow people to make their own appstores, and yes, apple can charge what they want?

It’s not entirely about the %. The problem is that there’s no alternative. I have no real problem with someone like Google with the Play Store or Valve with Steam giving developers the option of shipping on their platforms for a commission like 30%, because you don’t need the Play Store to install apps nor Steam to install video games. In those cases it can actually be a decision about whether or not the hosting/visibility/platform is _worth_ the cut. But in Apple’s case there is no decision to be made. You can’t opt out. That’s why you see so much more flak thrown at Apple for this commission than you do other platform providers.

The question I've asked others is if they open it up, then 30% is fair? It seems to me that is what you're suggesting.

If they open it up, market forces (via competition) will determine what is fair. That equilibrium would probably be below 30% if serious competition occurs.

But yes, it would be fair for Apple to ask for 30% because others are free to offer the same service for less, and you as a consumer of that service have a choice between them - which will eventually force Apple to bring its commission down.

That hasn't been the case with Android.

Of course, I think most money comes from IAPs, not app downloads. The issue then is whether Apple would be forced to open the payment APIs, or if apps would need to implement a separate solution.

An alternative would be to open up the payment provider api to different processors.

For example if my bank implements the payment provider API, then let me use that. All the other apps need to care about is a payment request method which can be satisfied with whatever payment provider I have picked.

Apps would be able to ask the provider how much they’re gonna get after the payment processes etc, and decide if they want to reject it or not.

That's not how corporate commercial agreements work.. apple would better immediately bogged down in multiple, endless negotiations and trial periods. As a developer, I don't think you should want apple involved in your processor choice at all

Apple acts as the API provider, they don't need to "bless" anything here.

I think so. If apps could do their own payment processing and still decide to use the apple one, it means it was a fair deal. Rather than it being forced on them.

The problem is large companies bundle too much market power together. If you want to avoid paying App Store fees currently you have to pull off a Herculean effort no company in existence is capable of.

Zero. Apple tries really hard to pretend they own the relationship between the user and the app developer, when in reality they do nothing to deserve it. Most app developers, Telegram included, treat the app store as a nuisance, pain-in-the-butt of an obstacle they have to clear to have presence on iOS devices. It provides negative value to them. All the discovery features are irrelevant to them. They do their own marketing and could as well have done their own distribution if Apple allowed sideloading.

Apple created the platform in which the apps run, and without which (or an alternative platform, which can and do exist) the apps could not exist. That has to count for something.

A similar example would be gaming consoles. The console makers definitely take a cut of all the games that are released on their platform

Would you be OK with Chrome blocking all websites that do not use Google as a payment processor, and them taking a 30% cut? They built the platform where websites run, and other platforms exist..

False equivalency as chrome doesn’t host the websites.

Neither does Apple. Beyond providing initial download the apps run on phones paid for by users and any back end runs on servers paid for by developer.

Apple hosts the apps binaries and provides the services for reviews and payments.

If they don’t like it they can focus on Android, and if iPhone users don’t like apple’s policies they can switch to android or pine phones as well.

I assume you’d feel the same way if your cellular networks or internet provider started charging fees for all purchases using their networks. How about a refrigerator monopoly charging for food you put in your refrigerator?

Not really the same. It’s be more like complaining that you have to pay to put your games on the PlayStation store or sell them at Walmart.

Terrible comparison and a lack of intellectual honesty

I wouldn't be okay with that, but it wouldn't be completely unjustified either.

Google has put an incredible amount of effort into creating the delivery channel for websites/webapps. Not just as in "let's make a good browser", but "let's have feature parity with the OS, while still having the security and ease of use that the OS can't match". (There was a giant Chromium team googlesheet somewhere tracking which features are still missing, but I can't find it at the moment.)

For example: let's say you're selling stuff online. How does Chrome help you?

* HTTP/3 makes your site load faster. HTTP/3 stems from QUIC, which was a Google thing.

* CSS improvements mean that you can make it prettier. Google works on pushing new features into CSS.

* Advanced video/image codecs mean that you can show higher-quality pictures to your customers (assuming constant bandwidth). Google works on codecs.

* The very concept of evergreen browsers (I think Google has also put a lot of effort into making into happen?) means that you can save your money developing the website.

* At the checkout, Chrome autofills the card and/or lets the customer use Google Pay. The card is synced between the customer's devices, using Google's servers. This is good for you. Easier payments = better conversion rate for you.

* If the customer creates an account (which will help you sell them more things later), they might be logging in via Google. Or they might be using a password, which Google also autosyncs. Both options are good for you. It's you who derives extra money from the customer being able to easily log into their account and buy shoes etc.

* Finally, if the web was insecure, people would be more hesitant to use it to buy stuff. Google works on making the web more secure (Google Project Zero and just in general a ton of security work being put into Chromium).

This is not counting stuff that is Google and not Chrome per se.

I'm not going to say that you have to pay Google for simultaneously working on 10–20 different areas of infrastructure that enables you to sell things and services to people. And heck, they also benefit from it (because ads). But if tomorrow Google said "everybody who makes money on the internet have to give us a cut", I would feel like they actually have a good case for it, having contributed to very large chunks of the infrastructure that enables me to do business on the internet.

We do need common grounds to function as a society, I don’t understand why some people like to look at companies like they are some Gods to us. Roads, railroads, electricity cables, etc are probably a better analogy to this whole ordeal.

True. Imagine if John Deere was a monopoly and insisted upon 30% of all crops that are harvested using their machines. Or if AT&T insisted on 30% cut of all sales performed on their phone network. Or an innovative prosthetic developed by a medical company insisted on 30% of income generated when using the prosthetic. Should this be allowed and does this damage the economy in general allowing for these companies to suck money out of transactions when using their devices?

that platform is nothing magic. it's just a general purpose computing device for your pocket.

"Just"? A general purpose computing device for your pocket is a kind of a huge achievement.

Sure. And I have paid quite a huge sum for this thing so I should get to decide how I want to “general purpose use it”.

iPhones already cost money. That certainly covers all the R&D that went into them. Then there's also the $99/year for the developer account.

> That certainly covers all the R&D that went into them.

Ref?

On the contrary, it's likely that getting rid of the Apple Tax would mean needing to significantly reduce development and maintenance of the software.

Think also of how the incentives work: If Apple is paid only when people buy a new phone, that adds pressure to shorten the lifespan of the software on the phone. If Apple is paid on an ongoing basis as the phone is used, this pressure is reduced, leading to longer-life phones.

iOS is already feature-complete and has been for quite some time. No one would be especially sad if it stopped updating except for security patches, new hardware features, and bug fixes.

I would be sad. Passkeys, built-in OCR, "Sign in with Apple", offline Siri are all from the past three years.

But also.. over the past several years I've grown to regard all new features as "god, _of course_ computers should be able to do that". So from my point of view iOS is neither "feature-complete" nor even "good enough". I'm annoyed that the future is coming much more slowly than it should, but I'm still thankful to Apple that it's coming.

One tiny example: "Lift object from background" seems like a gimmick, but in my head it's more like a completely natural feature that we just didn't have for whatever reason. For me, images are very naturally composed of _things_. All those standalone features like "face recognition", "dog breed recognition", "plant recognition", "lift object from background", "search by location" should just be one feature: the phone should see photos as collections of things in space, and it should know what those things are, because I know what those things are. Eh. One day we'll get there.

Proof is in the pudding. They have like a 40% profit margin. They are not just keeping pace with the cost of innovation. They are charging the absolute maximum the market will allow and squeezing suppliers for every nickel because no one can stop them.

Yeah: it isn't like Apple is spending their money on R&D or operations and they just have some extremely elaborate and overly expensive way of providing value to the customer that someone might value... they are literally just hoarding a ridiculous and almost embarrassingly large amount of cash. They have a money-printer that is being defended with anti-competitive lock-in mechanisms.

https://www.investors.com/etfs-and-funds/sectors/sp500-compa...

> Apple alone last week reported sitting on $202.5 billion in cash and investments. That's 7.4% of all the S&P 500's cash. And it's up nearly 4% from 2021.

Historically mobile phone hardware is a loss leader for the platform products that they afford access to. Just look at cell service providers giving them away for free, or at Amazon Fire Phone.

> Just look at cell service providers giving them away for free

In North America which is in a different universe in this regard compared to the rest of the world. Where I'm from, carriers sell SIM cards and that's it. Postpaid plans aren't a thing. You buy your phone separately in an electronics store, for full price. This applies to iPhones as well.

You ignored Amazon fire phone.

Another example would be gaming consoles. The console makers definitely take a cut of all the games that are released on their platform

There is a difference with games consoles, in that games do not compete with each other in the same way. Someone might buy Zelda by Nintendo, but also buy a third party RPG. Very few people will pay for Apple Music and Spotify at the same time.

I also see many people saying that they won't install WhatsApp, and will only use iMessage.

As long as Apple competes directly with its own customers the platform will be unfair.

> You ignored Amazon fire phone.

Yes, because I have no idea why it is so apparently special. I do know that they sell kindles so cheaply because they hope people would be buying books from them.

> Another example would be gaming consoles.

Except those are never marketed as general-purpose pocket computer devices like iPhones are. They are appliances. Getting your hands onto an SDK for a gaming console requires being a company, signing an NDA, and probably committing to lots of other conditions.

Why should the Amazon Fire Phone be looked at as an example for anything? It was a colossal failure by every major except for the amount of e waste it generated.

I'd like Apple to have more money than just covering the R&D, because I believe they can do unrelated cool things with it (VR, Mac improvements, Apple Car, whatever).

A similar example would be a road. Mobile phones are so ingrained in our every day lives, they shouldn’t be that controlled by a single private entity. The same way Facebook and the like shouldn’t be able to unidirectionally control what is and is not publishable on their platforms, because after a certain size these cute little “private company decides who it wants to do service with” rules simply break down.

Like, honestly, do you think it is fair that google and apple could potentially display any sort of message to pretty much the whole of society? They are crazy powerful entities to the point where they are a new pillar of power next to the standard Legislature, Executive, Judiciary.

Haha yes! And toll roads are very common, people do gripe about them, but they are generally accepted. Plus local businesses, that are connected by the roads to their customers, pay taxes to the municipality which built the roads.

Yes, this. If I was to switch from Android to Apple, I'd first re-buy the apps I currently own. I wouldn't be rebuying them because Apple had brokered the interaction in some way - I'd just be using the single option I have to get the apps I want onto the phone in my hand. There might be some new smart-phone user out there that buys apps based solely on recommendations from the store, but this is a minority (and maybe an argument for allowing paid promotion of apps, like everywhere else).

Stepping back to the point, I'm guessing 99%+ of Telegram users decided to use Telegram for reasons outside of the App Store. Seems ridiculous that Apple has any claim to the income those apps generate.

Maybe if US or EU wanted to fix this (without forcing apple to allow 3rd party installs), a solution might be to just get rid of 'free' apps. Say every app costs $1 to install (if kept for 12 months) and 10c a year to provide updates - and then it's up to the app dev to cover the costs to Apple if they want it to be "free" to the user.

that's a much worse idea especially for hobby or open source applications

They own the app store. The don't allow competing stores or side loading. They own the app certification and charge a fee for it. They don't license any software or permit VMs. They broke Flash and keep their browser a generation behind so anyone trying to deliver a good user experience needs a native app. They block data collection because it hurts Google. They've been anticompetitive for years and everyone just accepts it. They're as bad or worse than Google or Amazon but coast on their brand halo to get away with it.

Side note: the app store is literally beyond useless from a discoverability point of view. It will often fail to display an app which are almost perfect matches and may only show it on perfect string equality.. was that shit made by some junior in a naive way?

Oh and on the front page you get like the exact same selection of apps on the thousandth “our productivity picks” list.. I think they could probably significantly increase their app store revenue not by increasing the price, but by actually showing the users apps they would actually want to download..

This is a valid criticism. The app store provides little, if any, advertising or even ease of discoverability for 99.9% of apps on its app store. Charging 30% or any percentage of sales for that matter within apps when Apple provides little marketing value beyond producing the device and a simple catalog of apps is excessive.

>Hosting has value

Roughly $10 a month.

>as does marketing/discoverability

None of which the app store provides for you.

A fair commission is what the market decides after users are allowed to install whatever app store they want.

We don't know, but the Market would figure out if it were possible for other app-hosting platforms to compete.

Some would try to woo developers by taking less of a cut, and unprofitable ones would go out of business. Eventually, an equilibrium would be reached.

You think they deserve 30% of all content creators income because once upon a time a user downloaded the 125mb file? Seems a bit much.

For a $2.99 app? 90c to cover payment processing fees, hosting, and distribution sounds reasonable.

For a $29.99/month subscription? No way.

Hosting a 200mb executable has negligible cost. They don’t advertise anything. Nor do they make things discoverable. You can pay them separately to advertise your app, and increased discoverability comes from your own marketing efforts.

They offer nothing except a walled garden.

Link to original statement: https://t.me/durov/190

While such complaints can gradually put pressure on regulators, businesses should just take a stand and stop supporting ios. Pull a leaf out of Apple's book and do what they did to flash. We have a wonderful platform in the web. The web is truly universal, has stood the test of time and is in many ways, better than native applications.

Given how desktop technologies are slowly converging on web, I predict it is a matter of time before mobile apps follow suit. You might as well be the one to inspire this change. So stop complaining and be the change you want to see. If you run a half decent service your users care about, they will follow you to the web. Sometimes it only takes one for everyone else to follow.

There will be no super-apps in North America because Apple will not allow it.

Android is available in North America and Apple has no control over it whatsoever.

Apple delivers to Google some double digit percentage of search revenue ... Apple has a LOT of control over it. Not 100% perhaps, but a lot. I realise this comes from a different business line, but between the same 2 companies ... Apple can make Google lose A LOT of money if they wanted to.

Apple also gets billions of dollars for that search traffic from Google (they're not doing it as a nice favor), and they're already working on their own search engine. The argument that Apple has any control over Google because of search traffic hardly holds water at this point.

Apple charges a high rent, but would lowering that rent somehow make an app a "super-app"?

This is true but super-apps are bad. In this case Apple's monopoly is blocking another monopoly from emerging.

iOS is basically a super app these days.

Does Telegram charge their users a fee to post content on their platform or take a percentage of the fees their users charge on their channels?

Some users were using third party payment bots to sell access to specific posts content (paywall) and Apple didn’t like not getting cut of it.

Sorry, my statement could have been more clear.

I was interested in whether Telegram itself gets a cut of these transactions on their platform outside of the Apple cut. If so, it would seem hypocritical to criticize Apple for doing the same thing.

Good thing the digital markets act will fix this, at least in the EU.

tl;dr: whinging about Apple’s 30% commission

It’s a ridiculous cut, whichever way you look at it. Modern day rent seeking.

What would be fair?

No restrictions on what software people can run on their devices.

In that case, Apple's 30% would be fair then?

It seems like most proposals from companies actually making money on the platform (as opposed to folks like you and I in the cheap seats) are to keep the experience the same for the users, with the same amount of value, only charge less.

Okay. I wrote the driver for network equipment you very likely used to get this post to ycombinator. The same driver you used to order that Apple app store fitness/note taking/goal/... app.

Where's my 30%? Because the value I provided was critical to that transaction, to that experience, to the value provided. Others could have provided that value, but didn't.

I can make the same argument you make. But I'm not a trillion dollar company. That's the real difference.

No, that’s just a start. I don’t care about “fair” — there isn’t really such a concept at play here. The fact that Apple’s reaching through Telegram into the third parties using the communications platform is really lame. It’s not just a direct relationship between Apple and an app. It is recursively affecting how two people who aren’t Apple or Telegram are able to conduct themselves.

An open market with more than one or two players.

Fair enough, but the topic was whether Apple was charging too much. Are you suggesting that if Apple opened up their platform to additional app stores or allowed sideloading, the 15% or 30% would be fair?

Yes. Take Google for example with exactly this approach. You can elect to put your apps on the play store with commission, or you can put them somewhere else under other terms.

Stores can then actually compete on merit.

Yes.

See that's the thing about actual competition is a price can be determined by the market, especially in the case that you have many players rather than a duopoly. In my case Apple could charge whatever they wanted, 30%, fine. But me the app maker could go to the A+ store and pay 10% instead.

Is it not an open market? You don't have to buy an iPhone...

Private companies having a direct say in what products are allowed to exist is a big issue by itself. At the very least they should only charge what it costs them and run the app store as non-profit.

Obviously this is wishful thinking, but given how smartphones are a mandatory part of our social life, stores being a public service would make much more sense.

If we are going to make a stink about "rent seeking" should we start with mobile apps or landlords?

Personally as someone that pays 50%+ of my monthly income for my government subsidized apartment, I don't think mobile apps should be the priority.

The issue is not the commission itself, but the absence of alternative ways to install and pay for apps.

If you read his original post it was mostly about how long it takes for apps to get reviewed by Apple, sometimes weeks. The argument was Telegram was one of the biggest apps in the app store so if they get poor treatment it must be even worse for smaller apps. The commission comment was just to say they should already have the money to handle it

It's not that long. Though the commission is mentioned, the primary "harm" mentioned is the obscure review process.

Does Durov really call himself a 'CEO'?

Is he not? Telegram is an LLC, and he is head.

You can establish a LLC for about $500 online and update your LinkedIn to reflect your new position as CEO fyi.

yes, and?

The point is, it is not like it is some grand undertaking to go through. Literally anyone can found a company and become its CEO.

Yes, It means that the barriers for entry are low and innovative people knowing something can easily found a company. That's a good thing.

100 percent agree on that.

Seems to me that's more of a problem with those that convey an inflated meaning to CEO than those using the title.

This is the first time I've seen someone address Durov as Telegram's CEO. I don't remember him ever calling himself one either.

I do know he had the CEO position at VK but I'm not so sure about Telegram.

Does telegram even have a web app? If they wanted they could circumvent apple entirely. They could also just remove their stuff from the App Store and focus on android without Play.

https://web.telegram.org

Web applications on iOS can't currently send push notifications, which are basically required for a messenger app.

They will soon, but even if they couldn’t you could notify via SMS or email, or you know, follow apple’s rules.

Funny how quickly a company that invents something that enabled people to do things never before possible, gets accused of crushing people's dreams like it's a human rights violation, all based on a percentage.

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