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Comment by SllX | Hacker News Reader

I’m not sure Epic actually has standing anymore.

They did back when they were part of the developer program. If they can make their case that it is bad faith compliance as part of their original case before the Court goes “c’ya, we’re done here”, they might have something, but Apple revoked Epic’s membership for violating their terms in the developer program worldwide and at the conclusion of this lawsuit, Apple has not been ordered to reinstate it. So Epic can’t really argue that they have or will have suffered a harm under these new terms since they’re still in a position where Apple isn’t doing business with them and their lawsuit under which they did have standing is basically at its conclusion.

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IANAL, but at face value, that seems like it would be, well, quite insane? To emphasize, I've seen plenty of insane stuff in the legal system, but if the argument is basically that Epic doesn't have standing because Apple won't let them be in a position where they could have standing, yet they generally offer that position (dev program membership) to the public at large, that seems like some sort of Catch-22-ish nightmare.

Again, little surprises me in the legal system these days, but I have to think courts would be very skeptical of an argument where a potential defendant controls the gates that decide whether a potential plaintiff has standing.

They're not in a position where they could have standing, though, since they were in that position and violated the terms of their agreement. The judge has not ordered Apple to reinstate Epic's account and the termination was found to be legal.

It’s not that difficult to follow. As I recall, and feel free to correct me on the chronology if I get something out of order, it went something like this:

- Epic pushed an update to Fortnite at some point to the App Store that would allow them to issue an update from the server side to enable a flag to offer Epic’s own payment processor where you could buy in-game currency from them instead of IAP. They then issued a server update toggling this flag and began advertising it to Fortnite players immediately.

- Apple removed Fortnite from the App Store for violating their policies.

- Epic files suit almost immediately and begins a PR and advertising blitz they had clearly prepped far in advance. In other words, picked a fight. Epic has standing for this suit because they have suffered a harm (Apple removed their app).

- After a grace period in which Apple explicitly laid out to Epic that they were risking their developer account, offered them time to get back into compliance and resubmit Fortnite to the App Store, they terminated Epic’s developer program account. This ended Apple’s business relationship with Epic.

- That lawsuit has now concluded. Apple took it on the cheek for the anti-steering provisions and has come up with a plan to comply which they are now implementing, all appeals have been exhausted, and Apple and Epic no longer have a business relationship.

(I’m missing some details, and the language is vague because I honestly can’t remember the full timeline of events and would rather be vague than wrong here, but that should the gist of it.)

Put another way, when you choose to be in a business relationship with Apple, Apple is also agreeing to be in a business relationship with you. Apple has not chosen to re-enter a business relationship with Epic, and has rejected Epic’s offers to do business with them. It’s a simple as that. So how can Epic now argue that they have standing for harm caused by Apple’s plan for compliance that affect the way they do business with developers in their developer program when they are no longer in Apple’s developer program?

Once the judge decides they’re done and there’s no more avenues of appeal or additional grounds for appeal, they’ll have no more standing than some random guy off the street who has never signed a single agreement with Apple, not even an iTunes ToS agreement. From what I gather, the Judge wants to be done here too, Epic has had their days in court with the full due process of law but there are other cases to be heard and Epic doesn’t get to hold up the courts any longer because they didn’t get the W they were looking for.

Somebody else, if they think they can do it, can try to have a go at Apple next, but even with the one L they took on anti-steering, I think without some new laws being written their entire business model just got a lot more legally resilient.

Now why is standing important? Put simply, in theory, you can basically file suit against anyone for anything, but if you didn’t actually suffer a harm, and you can’t convince a Judge in the jurisdiction in which you allegedly suffered the harm that you did, then they’re going to throw out your case. It’s a waste of the courts time if there’s no case to be made, you filed suit in the wrong jurisdiction, or you filed suit under the wrong provisions of the law under which you are arguing you suffered a harm.

> Apple has not chosen to re-enter a business relationship with Epic, and has rejected Epic’s offers to do business with them. It’s a simple as that.

Apple's public comments to the point have been that Epic is free to resume publishing under the developer program if they abide by the developer agreement, and Epic's CEO has stated they have no intention to do so.

Agreeing to the program terms would seem to put them in a position where they can either argue they have standing or that they have been caused harm, but not both.

Really? How recent is this? I was pretty much under the impression that Apple was done with Epic, but I would be happy to be wrong here. If they can’t come to terms, they can’t come to terms, but it would be nice if they could.

> Agreeing to the program terms would seem to put them in a position where they can either argue they have standing or that they have been caused harm, but not both.

Agreed.

Google got slapped in their case with Epic because they offered inconsistent terms, and promoted the idea of alternative app stores while taking business measures on the back-end to prevent them.

Apple gives much more consistent terms.

The speculation is that the 15%-after-first-year subscription change was something they had actually negotiated with Netflix in an attempt to keep in-app subscriptions, which they then rolled out to everyone rather than keep as a Netflix-only deal.

I'm sure Apple is not sad Epic is off their platform, because they are a bad partner. But they would still let them back under the same terms as everyone else, if they agreed to actually abide them this time.

Okay, but in your prior comment you made it sound like Apple had made public comments that they would allow Epic back on the App Store if they agreed to abide by their terms.

The issue is the last time I recall them saying that was before they terminated Epic’s developer accounts. That was a couple of years ago at this point.

So my question was not about any of that, none of it is new to me, my question was the following: how recently, to your knowledge, did Apple say they would let Epic back in the program? I tried searching around but I didn’t turn up anything recent, or anything from after 2021, but I don’t think Apple’s statements from before they terminated the relationship are applicable at this time, so I was hoping you could provide some additional information that I am lacking.

You missed where Epic was ordered to pay the 30% cut they "saved" when using their own payment processor. It was ruled this cut is completely legal. Now that Epic lost appeal with Supreme Court that ruling sticks.

Apple is likely asking for 27% cut for non-IAP w/Apple because they are saving 3% by not processing credit cards directly. They don't need devs complaining it's MORE expensive to use their own payment processor.

> So how can Epic now argue that they have standing for harm caused by Apple’s plan for compliance that affect the way they do business with developers in their developer program when they are no longer in Apple’s developer program?

Maybe they want to be the competing payment processor for third party developers who are in Apple's developer program, but don't have the resources to litigate against Apple themselves.

Eh well, that’s an angle for standing I suppose, but it’s a bit hard to argue a harm against a service they don’t actually offer. It’s especially hard to argue it before a Judge that already ruled that even under California’s anti-steering law, Apple has a right to collect their commission (that 12 or 27% after the 3 percentage point discount payment processing discount). Apple’s argument would then also be easy: Epic can offer payment processing if they want, that’s between developers and Epic, but Apple is still going to collect their commission no matter what deal Epic does with iPhone developers.

Maybe the argument would be that Apple is actually charging more than 3% for payment processing and is continuing to charge the difference even when you use a third party payment processor, to discourage anyone from doing so. Which could provide a new chance to raise the issue of their high fees, if this is the first time Apple has tried to declare a split.

And doesn't Epic Games Store already do payment processing for third party game developers? We know they want to offer the whole store on iOS but if that isn't yet possible then you do what you can.

> And doesn't Epic Games Store already do payment processing for third party game developers?

Yes, but they don’t currently offer it for iPhone apps and games. Just to reiterate, I think this is the best argument for standing I’ve seen, but it’s not an easy sell and if Epic does get into this business, it leaves them in a position of basically trying to undercut the 3 percentage points that Apple is valuing their payment processor at.

> Maybe the argument would be that Apple is actually charging more than 3% for payment processing and is continuing to charge the difference even when you use a third party payment processor, to discourage anyone from doing so. Which could provide a new chance to raise the issue of their high fees, if this is the first time Apple has tried to declare a split.

Judges don’t usually want to get into the business of setting prices for private businesses. Judge Yvonne Gonzalez Rogers has already determined that Apple has a right to collect their commission, and Apple has already had to define the value of what the payment processing portion of what that is in the Netherlands. ~3% is also generally what you can expect to pay a payment processor to begin with which is why it never, even from the beginning of the App Store, for people to interpret “30%” as Apple’s payment processing fee because even back then, that’s not what any reasonable payment processor charged. If needed, Apple could probably produce documentation showing what they pay a processor.

> Yes, but they don’t currently offer it for iPhone apps and games.

Isn't the whole premise that they want to be in that market and Apple precludes it?

> ~3% is also generally what you can expect to pay a payment processor to begin with

But that's kind of the point. If Apple is charging more than that for payment processing but then only refunding the ordinary amount when you don't use their service, it precludes anyone else from competing with them on price because the customer is still paying Apple the remainder of Apple's payment processing fee which isn't refunded.

The way to evaluate this isn't to look at what payment processors charge, it's to look at what the rest of what Apple ostensibly charges for would cost in a competitive market.

At which point the first thing you'd have to ask is, why is this still a percent of revenue? It is for payment processors because their fee has to account for fraud risk, which scales with the amount of the payment being processed.

Fees as a percent of revenue are quite unusual for providing any kind of hosting services or marketing or development tools etc. Even sales commissions are a percent of the sales attributable to the salesperson, not a percent of all sales including the ones via other sales channels.

Charging a percent of revenue is a strong indication of a monopoly rent because it's so hard for anyone but a monopolist to get away with it. Even when Visa does it, the fraud risk is more of a fig leaf and the truth is a big chunk of that amount is going to fund credit card rewards programs intended to get people to prefer credit cards to other payment alternatives and the credit card networks only get away with charging it because of the weak competition.

And in any event the balance of what Apple provides is typically extremely inexpensive. Development tools are widely available for free, search engines don't charge to be included in search results (and the fee can't be for search advertising when it's paid by everyone), the per-download hosting cost for an average-sized app on Amazon S3 rounds to zero cents. What are they doing that could explain 27% if it isn't a monopoly rent? Why is it 12% for smaller entities, when economies of scale go the other way?

> Judges don’t usually want to get into the business of setting prices for private businesses.

Which is why the better solution is to prevent this kind of tying of products and services together, so the prices can be set individually by the market instead of trying to disambiguate the price of each service when they're all tied together.

I think where this could work with Epic is if they can convincingly argue that the reason they no longer have a business relationship with Apple is because of the issues still under dispute in front of the court. No idea if they'd win that argument, but if standing ends up being a question, that's probably where they'd have to go.

Judge Yvonne Gonzalez Rogers already knows Epic no longer has a working business relationship with Apple—the developer account termination happened under her watch after all—and from the court’s perspective, that’s really more Epic’s problem. The trial is over. The appeals are exhausted. Stick a fork in this lawsuit, it’s done. The best Epic can do going out the door is try to spite Apple and piss in their cheerios a little more.

Why can’t developers bring a class action lawsuit or someone else just open a case?

They did so in Cameron vs Apple and Google … and settled I believe !

They can. They have little interest to. Very miniscule reward (the only ones winning in a class action are the lawyers... I am due for a solid $20 from Google though!) for a huge risk.

I'm repeating the words of another commenter, but most app devs aren't competing against Apple but other devs. They aren't billion dollar businesses that stand to benefit by trying to get a lower rev share.

But you've just described the dynamics of every single class action lawsuit. It doesn't matter that the individual devs have little interest, the lawyers have huge interest because winning a sizable class action for a lawyer is equivalent to a having a startup that hits.

Class actions benefit a lot from certain amount of devs cooperating with the lawyers. I'm unsure how many would in fear of retaliation.

There are hundreds of thousands of developers with apps in the App Store. They only need a couple class representatives.

The purpose of this class action would be to force Apple to change policies going forward (which would presumably give choices to developers that would allow them to save money and increase their profits). Any cash distributed in the settlement would be a bonus.

But I do agree that most developers probably wouldn't be interested. They don't want to stand up their own payment processor, or don't care to do integrations with a bunch of third parties, and tolerate the fees to use Apple's payments platform. And for many of these developers, their entire business is built on their relationship with Apple. Getting their developer accounts terminated would mean shutting down entirely.

What would the suit entail? That Apple is giving a new option where they charge less than the previously agreed upon percentage?

I agree. As much as I disagree with the ruling the courts made, they definitely decided Apple was allowed to ban Epic for their store permanently, and so Apple's fees no longer are Epic's problem, legally speaking. Someone else would have to be willing to invest the funding on the legal battle, with pockets as deep as Tim's and the same willingness to go up against a Goliath... one that already won against Epic, and won't be bought out a special deal. Tim Sweeney was uniquely concerned with getting fair treatment for everyone here and that is shockingly rare in billionaire CEOs.

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