Apple's bad faith 27% tax on web purchases
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US developers can offer non-app store purchasing, Apple still collect commission - https://news.ycombinator.com/item?id=39020365 - Jan 2024 (1204 comments)
US Supreme Court declines to hear appeals in Apple-Epic Games legal battle - https://news.ycombinator.com/item?id=39014642 - Jan 2024 (199 comments)
Epic plans to contest Apple's 'bad-faith' compliance with ruling over App Store
https://news.ycombinator.com/item?id=39033686
US developers can offer non-app store purchasing, Apple still collect commission
Are they are somehow managing to force even payment links from ordinary web sites in an ordinary web browser (Safari?) to go through them as payment processor? (How?) Or is this a new rule for app store apps (what is the new rule?) Or a new payment structure for in-app purchases? (what was the change?) Or no change, but pointing out how awful the status quo is? Other?
And there is more to this issue than people realise.
Apple has had major lawsuits over the years [1] due to kids racking up large credit card bills via in-app purchases. And similar concerns exist for gambling apps. So this explains why they need to show such a large warning because they don't want to be held responsible for actions of a third party. Which is fine because most companies do this.
It will also likely be their argument (whether it's true or not) about why they won't allow developers like Epic to offer a third party, one-click, in-app purchasing system and instead force users to go to the home page and take deliberate actions to buy the product.
[1] https://appleinsider.com/articles/14/01/15/apple-settles-app...
b) People have been conditioned over 15 years to treat all app purchases as being managed by Apple. So they expect refunds, disputes etc to be done in the App Store. This is changing. And so it's completely reasonable to clearly inform users about this. Because we have a long history of IAP being a major addiction vector.
No they don’t. Biometric only is the default for all IAP/in app subs.
Android is the only one who makes you enter a password to subscribe, because Google is incompetent.
Biometrics is offered as an alternative after the first time, but it is opt-in.
If you restore or transfer settings then it’ll ask for password first time and then honor biometric preference if that’s what you opted-in for on the other device.
They do. Passwords are required for every purchase, they just give the user the option to either disable this or to use biometrics by default instead, which is considered a password analogue in the security chain of Apple.
But if you don’t have biometrics setup then you’re always asked for a password and if you do have it setup then after the first time asking for a password it’ll ask if you want to use biometrics instead going forward.
Even on a new device, if you’ve transferred your settings eland other stuff, it’ll still ask for your password the first time before honoring your transferred setting to use biometrics instead.
> Following this logic, letting people complete payments outside of Apples control should absolve Apple of the legal liabilities between payments made between the user and a third party.
It should absolve them of liabilities, but that doesn’t stop people from trying to sue Apple and being able to point to a warning will increase the changes of getting a summary dismissal.
> If this is not the case, can you sue Apple for unauthorized payments made over Safari?
You can sue Apple for any reason. I can sue you too tomorrow for whatever reason I think warrants a suit.
In fact, it is standing practice for trial lawyers (and they’re welcome to pitch in) to sue any party that remotely can be tied to a cause of action as a co-defendant, especially if they have deeper pockets than the party that would be the most logical primary defendant.
This increases the chances of a pay out and there’s a marginal effort and cost to lump them into the case while you’re at it.
So in an example related to the matter at hand it’s very likely that someone would sue the third party developer and Apple, regardless of their precautions. Because the world’s most valuable and richest company (or second most valuable company, courtesy of MS) is great to have on the other side to take a shot at, if only because they might simply settle because the cost/benefit analysis on their side to litigate it might favor a quick settlement.
Apple is still requiring they also make Apple in-app purchases available for the same digital goods. And also being pretty restrictive on how to link out. I have no idea if that is in the spirit of the ruling, but I think so, because the law that was cited had to do with allowing links to app publisher’s site for alternate payment, and that Apple couldn’t deny apps including such links.
So they know total app installs as well as the installs purchased from the App Store.
> IAP is the method by which Apple collects its licensing fee from developers for the use of Apple’s intellectual property. Even in the absence of IAP, Apple could still charge a commission on developers. It would simply be more difficult for Apple to collect that commission.
> In such a hypothetical world, developers could potentially avoid the commission while benefitting from Apple's innovation and intellectual property free of charge. The Court presumes that in such circumstances that Apple may rely on imposing and utilizing a contractual right to audit developers annual accounting to ensure compliance with its commissions, among other methods. Of course, any alternatives to IAP (including the foregoing) would seemingly impose both increased monetary and time costs to both Apple and the developers.
It's unclear how how Apple-the-middle-man can insert itself to effectively rent seek from customers/developers now.
One is by tracking outgoing links via a specific framework that needs to be used, the ruling only provides for Apple having to allow linking out, no restrictions on Apple’s part for requiring a certain way of doing it.
The other is the courts explicitly affirming Apple’s right to audit as a part of them stating that the commission will still be owed regardless.
The latter is important because it allows Apple to claim a legitimate interest in defense if somehow a case is brought specifically about Apple’s requirements on how to link to a URL outside the app.
Think: “Judge you said the commission would still be owed and you stated we can audit, you even lamented on how cumbersome it would be for all parties involved to settle the commission owed to us if third party payment options would be used, us requiring a specific framework to be used to link outside the app alleviates some of that. We have a legitimate interest in imposing these requirements because it helps us measure links to external purchase flows, which in turn helps us automate measuring these external transactions.”
If you read the appellate court’s judgment, the annoyance towards the district court is palpable. Because the district court both stated the unlawfulness of the anti-steering provision under California statutes as well as stating how cumbersome after the fact collection is of the commission as well as stating that the commission is still owed.
All of this is marginally contradictory, but because the district court didn’t err in sufficient ways for the appellate court to step in and all of it ultimately is in line with the law and standing jurisprudence, the appellate court’s hands were tied, because the appellate court isn’t for do-overs, it’s merely there for significant errors that cause harm.
SCOTUS refused to take up the case, so until further notice the law of the land is that a) developers are allowed to steer users away from the the app while b) Apple remains entitled to their commission regardless because c) there's nothing inherently illegal about Apple's commission because d) it primarily is a payment mechanism for usage of Apple's IP by virtue of how it's structured in the developer agreement and e) as such it's legal because Apple can't be forced to give away their IP for free.
I’ve read enough case law to notice when jabs are made between the lines, but it’s not always clear what the desired alternative is by the writer.
In this case the repeated mentioning by the appellate court that the district court brought up an alternative scenario of… well exactly this, that developers use alternative payment methods and that Apple would have to audit them, only for the district court to brush it aside because it’s too complicated, conveys an annoyance.
These alternative options were brought up by the district court on their own initiative. Normally courts only consider what parties bring up in arguments, but it’s not disallowed or anything for a court to come up with their own suggestions. I think the appellate court didn’t like the fact that the district court brought it up on her own and that it added a bit of complexity as a result.
The real issue or weirdness if you will, is that 99% of the case that is based on federal laws says that everything is kosher on Apple’s side, it’s only the California statute that bans anti-steering and in doing so, creates a bit of a schizophrenic outcome in which anti-steering isn’t allowed (the California part) but commission is still owed because all the rest is fine (federal law).
Here are some quick examples from the appellate judgment of what I’m talking about in terms of the appellate court’s annoyance:
> On its own initiative, the district court floated the idea of Apple permitting multiple in-app payment processors while reserving a right to audit developers to ensure compliance with the 30% commission. But it quickly rejected that as an alternative because it "would seemingly impose both increased monetary and time costs."
> Apart from any argument by Epic, the district court "presume[d]" that Apple could "utilize[e] a contractual right to audit developers... to ensure compliance with its commissions. But the court then rejected such audits as an LRA because they "would seemingly impose both increased monetary and time costs."
Quick translation: LRA = less restrictive alternative.
It’s pretty common terminology in antitrust cases, when one party complains about the other party’s actions but those acts are argued to be legitimate or necessary (e.g., we have App Review for safety reasons) the complaining party tries to counter that by offering up an LRA (e.g., well they can ensure safety by doing X, Y or Z instead and it would be less restrictive to us).
Here the district court recognized that IAP are a legitimate way of collecting the commission that due for using Apple’s IP, but instead of Epic bringing up an LRA to collect the commission, it was the district court that brought it up. I think that annoyed the appellate court because it highlighted the cumbersome outcome.
Here’s their entire judgment by the way if you’re interested in reading it: https://cdn.ca9.uscourts.gov/datastore/opinions/2023/04/24/2...
If I owned a large payment registers company or similar type of capital that is hard to switch immediately, I'd be licking my predatory lips.
In fact increasing the switching cost either monetarily or in other ways (e.g., time sink) is a very common way of locking customers in.
That’s why cancellation fees are so common in many industries.
Tim Sweeney should also be mad about having to pay a quarter of a billion dollar fine “for tricking users into making unwanted charges” [1].
[1] https://www.ftc.gov/news-events/news/press-releases/2022/12/...
2. As part of that entitlement, you agree to pay Apple a 27% commission on any purchases made when users click those links, for up to 7 days after the link is clicked.
3. You agree to send Apple monthly sales reports.
4. You agreed to give Apple a right to audit your books at anytime.
That's the meat of it. It's a self-reported cost-per-conversion, which isn't exactly unheard of. Developers are in arms because they don't believe Apple deserves any money for distributing their app on their App Store.
That's the heart of the disagreement.
Apple believes they have a right to charge developers a fee for access to the users who shop through the App Store.
There are developers who believe that the App Store should exist as a free-thing Apple provides to developers, to encourage them to write software for the iPhone. They're willing to accept a nominal processing fee, but anything more is "anti-competitive".
So if the publisher says, "Click here for a renewal reminder and a 10% discount" and then sends a renewal E-mail on the 8th day, they're in the clear.
Rephrased - Developers are up in arms because the cost of distribution on iOS is artificially high. It's artificially high because the cost is not subject to market forces. It's not subject to market forces because Apple has a vertical monopoly on hardware and software distribution. Vertical integration is illegal.
It's not a monopoly. Other phones and ecosystems exist.
> It's not a monopoly.
I believe you have accurately described a cartel, however.
That said, gas stations and grocery stores deal in commodity products. The video game companies are much more integrated with many games that will only run on one system, stores will only run on one type of hardware, and games are not transferrable between competitor systems. Competition is extremely restrained because of these exclusive and limited distribution agreements. The fact that they all maintain the same line on prices is a very clear signal of cartel behavior when you take the context into account - they are using control of a distribution chokepoint to control competition and pricing power. That's the essence of why antitrust laws passed in the first place.
Epic had to pay developers, a lot, to bootstrap the Epic store so that there were games there that mattered. And even now, with a decent selection, most PC gamers still use Steam. Because all their games are on Steam already. And every game they care about is on Steam.
So Steam can charge 30% and Epic can charge 12% and nothing really changes.
Steam also doesn't collect 30% for distribution (ie developer issued keys for things like bundles)
On Windows I can buy a digital copy on the devs website and MS gets nothing.
On Steam, I could buy the game in another storefront (GOG), or Direct, and Valve would get nothing.
On Android I could use a separate AppStore and Google would get nothing…
In other words, in all those platforms devs can opt in to participate on a centralized store taking 30%, or keeping an alternative channel with higher revenues. On iOS, not so much.
Years ago, Apple had a loving relationship with Devs. Now Apple is an over demanding Karen yelling over her alimony payments every end of the month.
There is no way, on any major console, to "opt out" of the fee.
Mac has the same options available to developers as Windows.
Steam's third-party redemption mechanic is notable, and awesome.
On Android, different third-party stores have different fees. Samsung, for instance, charges the same 30% as Google. Epic's store charges 12%.
Is it? The only related info I could find is https://www.investopedia.com/ask/answers/012615/what-are-leg..., which says it _can_ be illegal (in the USA) if it is achieved through a merger.
https://en.wikipedia.org/wiki/Vertical_integration mentions quite a few examples of existing vertically integrated companies, mentions a few court cases, but doesn’t say it’s outright illegal.
Also, if vertical integration is illegal in the USA, somebody should tell Musk he should split up Tesla and SpaceX.
> if vertical integration is illegal in the USA, somebody should tell Musk he should split up Tesla and SpaceX.
How are those companies related in terms of market power? I don't see it. Plus, space is so capital intensive and reliant on government contracts that pursuing it would be pointless.
If Apple's platform doesn't work for their profit margins they are free to sell their software elsewhere, including a plethora of phones from a diverse set of manufacturers. But they don't want to do that because Apple's platform makes them a fuck load of money. They just want more of it.
How about this: Apple can charge Epic the same outrageous* 12% that Epic charges game developers. Do you think that would alleviate Epic's concerns?
> Vertical integration is illegal.
Can you provide a legal document or explicit law that states "vertical integration is illegal"?
* It's outrageous because Epic provides even fewer services (SDKs for example), still requires developer fees $100/submission, and has a much smaller user base. They're also not really doing anything. At least Apple makes the iPhone and improves the capabilities of it each year...
65% of domestic App Store revenue is on iOS, and the Apple app store is the only distribution channel. What market forces affect Apple's pricing power on commissions?
> Can you provide a legal document or explicit law that states "vertical integration is illegal"?
No, because like all things, it's about how you use it. Per the FTC - Exclusive dealing and exclusive distribution arrangements may be anticompetitive, however, if they are used to raise rivals' costs, exclude (or foreclose) competition, or facilitate tacit collusion. Exclusive dealing contracts may raise rivals' costs when the contracts are made with so many retailers, and lock up so much capacity at the retail level, that competing manufacturers are unable to attain minimum efficient scale in either the production or the distribution functions.
Apple is dealing with itself - maybe that argument holds in court (certainly has a shot with the current junta). It would certainly help if Congress would update the law for the 21st century. It's close enough to the line that it can be argued, and they are clearly nervous about it.
> How about this: Apple can charge Epic the same outrageous* 12% that Epic charges game developers. Do you think that would alleviate Epic's concerns?
Be mad at someone else. I don't know or care about Epic and I don't play Fortnite. I just know that private companies should not be able levy a tax or unreasonable tolls in restraint of commerce. It's hard to justify a 30% toll on 65% of a $100B+ market without at least knowing if a third-party marketplace would offer better rates and service.
That just proves that Apple provides a lot of value through its platform and that developers are hungry to develop for it despite the platform fees, it doesn't prove that Apple's App Store isn't "subject to market forces".
> No, because like all things, it's about how you use it. Per the FTC - Exclusive dealing and exclusive distribution arrangements may be anticompetitive, however, if they are used to raise rivals' costs, exclude (or foreclose) competition, or facilitate tacit collusion.
This broad definition would apply from any company ranging from Nintendo to Walmart to Tesla. It's not convincing. If you are going to make the claim that "vertical integration is illegal" you should provide factual evidence stating this instead of just your broad interpretation of "Per the FTC".
> Be mad at someone else.
Something something Apple tax, Junta, illegal something something.
That's really an argument for court. It could mean they've locked in a dominant market position they are abusing. Not for me to say, but you haven't made an argument otherwise.
Raising the rev share they take makes the developers less incintivized to develop for the platform. Lowering the rev share makes developers more incentivized to develop for the platform. Apple is competing against other app platforms over developers of which there is a limited amount of.
So for Apple to lower the amount they take there would need to be another platform that is stealing developers from Apple's ecosystem. If developers stop developing apps for Apple's devices then that makes them less desirable for users so they would be incintivized to let developers keep a bigger portion of the revenue.
The case is primarily about Epic's Fortnite game. Fortnite is free to play, but makes billions of dollars based on in-game microtransactions for things like in-game cosmetics. Apple charges developers 30% on each of these transactions. Epic didn't like this and so started offering users a way to pay on their own site instead of going through Apple, with a large discount. Apple responded by kicking Fortnite off their app store, and so Epic sued them for anticompetitive behavior.
The gist of the trial and appeals (to date) is that the judge ruled that Apple must allow developers to advertise non-apple means of payment. So Apple responded to this by allowing developers to include exactly one reference (in the entire program), in plain text (non-hyperlink), to an an outside payment site, and has changed their terms to require that developers must now also pay them 27% off all revenue from these outside transactions as well.
Epic is now claiming that this was a bad-faith compliance of the court's ruling, and this will 100% end up in court again. And that's where we are for now.
But at the same time they put in as much friction as they could, including reframing the charge to developer as a lead commission - and the net cost to developer is HIGHER than using Apple.
Of course epic is going to challenge the spirit of the implementation but this definitely makes it murkier - can you still claim a monopoly if developers can technically allow purchase outside and have a choice?
In any case it buys Apple more years of high rents, and possible indefinite victory (forever rents).
Ultimately not great for users (as any monopoly isn’t) but I don’t expect a large business to act any different. I can respect though how they approached a potentially large setback for their business.
it's borderline contempt of court
> I can respect though how they approached a potentially large setback for their business.
I'd be pretty mad if I was the judge, they might like my 2nd ruling even less
I don't see how that's the case when judge explicitly mentions that apple is entitled to be paid for their IP.
"Even in the absence of IAP, Apple could still charge a commission on developers. It would simply be more difficult for Apple to collect that commission."
"The Court presumes that in such circumstances that Apple may rely on imposing and utilizing a contractual right to audit developers annual accounting to ensure compliance with its commissions, among other methods."
Yes, antitrust activity isn't solely based on the market concentration (HHI) but also on the _actions_ taken by large players. Monopolistic or monopsonistic activity results in net loss to consumer welfare.
Are we pretending this giant abusive corporation is some cool movie gangsta or something? What is to respect here? Some c-suits dodging laws? The cult of apple never fails to surprise me - it's not that special lol.
Not at all. Both the district court as well as the 9th circuit who affirmed the district court’s judgment explicitly stated that only the anti-steering guideline needs to be scrapped, that Apple is still entitled to their commission because it serves as payment for their IP and that Apple would be entitled to include an auditing provision in their developer agreement.
In fact, the courts noted how cumbersome this auditing process and after the fact collection of the commission would be.
In other words, this is not only fully sanctioned by the courts, but the expected outcome.
> But at the same time they put in as much friction as they could, including reframing the charge to developer as a lead commission
There was no reframing. It was always defined as such. Or to be more specific, the developer agreement always designated Apple as an agent to the developer, akin to a literary agent, and explicitly defined the commission as a payment for those agent services and Apple’s IP.
The commission has also never legally been tied to IAP or payment through the App Store, but rather directly tied to sales in general.
All the big parties that are now acting “shocked” that Apple would do this, such as Epic and Spotify, etc, have well paid legal departments that explained all of the above to the people in charge, so none of this is a surprise to any of them.
They just bank on you not knowing so you’ll be a willing pawn in their push to make their profits go up.
> Of course epic is going to challenge the spirit of the implementation but this definitely makes it murkier - can you still claim a monopoly if developers can technically allow purchase outside and have a choice?
There’s nothing to challenge. The courts have spoken and SCOTUS declined to hear the case.
It’s the law of the land and honestly, spelled out in a crystal clear plain language way in the judgments. None of this should be surprise to anyone.
Epic charges $100 per game in their store, vs. Apple's $99/yr for access to the store, and the latest tools. This is pretty much a wash, unless you're not regularly releasing games.
Epic charges 12% for their game store. For most developers, those earning less than $1M, Apple charges 15%. So again, pretty much a wash.
Epic doesn't take a fee for DLC if games use their own payment system, but presumably takes the same 12% if you use them (it's not at all clear)... but one of the benefits Apple gives customers is that you don't give your payment details to everyone, decreasing the odds it gets mishandled. Again, smaller devs aren't going to have a lot of DLC, or DLC revenue, and would have to pay someone to handle all the transactions.
Epic also uses its market power to direct large customers to use their store. It waives Unreal Engine fees for anyone using Epic as a payment processor, which would normally be 5% if you go over $1M in sales.... for those large customers:
$1M+ Using unreal:
Apple would be 30%, plus 5% to Epic. + 30% DLC
PC/Steam would be 30% to steam, plus 5% to Epic. + 30% DLC
PC/Epic 12% to Epic for Epic store+Unreal. + 12% DLC
Apple would be 30%. + 30% DLC
PC/Steam would be 30% to steam. + 30% DLC
PC/Epic 12% to Epic for Epic store. + 12% DLC
Does that make Apple evil? Epic would have you think so. But Epic also just needed to layoff a bunch of people, despite Fortnite being a money printing machine, despite their Engine royalties, and despite their own store's fees. Sure, Apple has cash to spare, but should we really be legally forcing Apple to adopt a business model that is failing Epic itself?
I'm not so keen on forcing successful businesses to ruin themselves. Especially when the claimed reasons for doing so don't seem to make any sense, and don't benefit who they claim to benefit. This isn't about helping all the small devs... it's all about Epic wanting a bigger slice from the big devs. They're just trying to get enough small devs riled up that lawmakers think this is a change they need to make.
Plus having to buy development hardware from Apple, which is a pretty significant cost for small developers.
> but one of the benefits Apple gives customers is that you don't give your payment details to everyone, decreasing the odds it gets mishandled.
If they think that's worth an extra 15%, they can compete for it on a level playing field.
> Does that make Apple evil? Epic would have you think so. But Epic also just needed to layoff a bunch of people, despite Fortnite being a money printing machine, despite their Engine royalties, and despite their own store's fees. Sure, Apple has cash to spare, but should we really be legally forcing Apple to adopt a business model that is failing Epic itself?
What kind of backwards logic is this? If company A is swimming in cash, and company B is running out of money, it's far more likely that company A is ripping off its customers than company B. Yes, we should be forcing Apple to compete for customers like everyone else has to. Given real competition the market will converge on a fair rate where a hardworking publisher/store maintainer can make a decent but not excessive profit, and we might see some better stores out of it as well.
I have to build an Apple App Store app. Apple controls access to over half of US customers. Not just gamers. All customers of all types.
My posts go from +4 to -1 overnight.
I don't really have a problem with that if they can't play nicely with others. Businesses come and go. But ultimately companies need some incentive to not fuck over the consumer, and "forcing successful businesses to ruin themselves" strikes me as a better option than fines at this point.
Steam does not sell iOS software. They sell games for Mac, Windows and Linux which you can buy also directly or at a competitor such as GOG, if the developer chooses to.
To sell into the iOS ecosystem as a Dev you can only do it via Apple so far. Epic wants to sell their own iOS multiplayer games and in app lootboxes without forking 30% to Apple.
I do wonder: anybody knows if Amazon pays Apple for the things I buy through their iOS app?
However, this iPhone is my device and I should be able to install whatever app I’d like on it. Without that freedom, Apple has no competition and can set their fees as high as they please.
But regardless of that, they have no competition in iOS app distribution.
Keeping my fingers crossed that the EU will help solve that problem.
The problem I'm highlighting is that the EU itself hasn't created any phone OSes that have survived to this point. If it were more conducive to that, then regulation, which is a very poor substitute for actual competition, wouldn't be needed.
i’d personally rather have security and peace of mind that the company holding my information will not use it nefariously. is the EU thinking of the consumer in that regard or just focused on the simple minded “more competition is more better”?
Edit: In case you're wondering why "Android app distribution" can be considered a relevant market whereas "iOS app distribution" was rejected even though they both sound like the same thing, the key difference is "iOS app distribution" is a single-brand aftermarket, and single-brand aftermarkets have stricter requirements in order to be accepted by the courts.
No need. Market is functioning reasonably well, as Android, PineOS, FirefoxOS, and similar alternatives exist.
Just because someone purchased a product doesn't mean they were coerced into the purchase. Apple products still function fine and legally, if not ongoing service isn't exactly ethically run by the company management.
I'm not sure I'd like a government (whom at least in theory, exists to protect & provide as much collective good for their constituents as possible) to approach the situation in such a cold strictly economic fashion. Hundreds of millions of people unfairly being taken advantage of to the benefit of a small privileged few is exactly what I think governments ought to be trying to prevent.
>Just because someone purchased a product doesn't mean they were coerced into the purchase.
So what if they weren't coerced? Should government really have to wait until an apple exec points a gun to someone's head while they make a purchase before they can try and help? Isn't it possible a lot (I'd argue most) of these people don't realize all the financial nuances they've unwittingly become party to when choosing a phone. Think about all the grandparents who opted to get iphone because that is the one their grandchildren uses, think of all teenagers who chose IOS because that's what their friend group uses, heck think of all the literal children using IOS because that's what their parents gifted them for Christmas. Should the government really just turn their heads while children, teenagers, elderly, and so on are unwittingly agreeing to participate in a financially abusive arrangement.
I think you and I are running into the classic "is" vs "ought" disagreement. While I agree with you that this is currently legal, I also believe that it ought not to be due to the negative impact it has on hundreds of millions of people.
No, where Apple goes wrong and will lose the market is through the exercise of market access to developers, as they lock the currently largest market down. It's also a implicit tax for purchasing.
But the legal remedies are already stymied. We are stuck with the stupidity of the decision for awhile despite the minor migration inconvenience.
Thus ends the House of Jobs, not with a fight but with a pyhric win.
>Fundamentally, I disagree with the assertion that because a minor consumer purchase goes south and charges an unarguably illegal processing fee (for interchange) now deemed legal for hardware providers that the usual moral justification for this, consumer welfare, is harmed as the BATNA is simple - get a different maker's phone. Varying qualities of substitutes are easily attainable.
Honestly we may just have to agree to disagree. Both from my own personal experience helping friends and family as well as professional experience working in IT the act of switching away from apple is always an incredibly stressful and more often than not a significantly disruptive event for the user.
A good example here is the elderly. The energy and effort that goes into learning how to use a new phone is significant for most people 70+ and a huge factor when they're trying to decide to upgrade or switch their current phone. Very often, this daunting task is legitimately not worth it for them even if it that means letting apple take advantage of them simply because they don't think or truly know that they don't have the bandwidth to take on learning another smart phone.
Here you have a vulnerable class of people who just can't simply switch over to another OS even when they have the means, ripe for financial abuse. Apple is a multi-trillion dollar company and governments ought to be doing whatever needs to be done to protect the millions of people who are functionally stuck using their platform from being abused.
In regards to the rest of your comment I don't feel knowledgeable enough to comment. All I really wanted to say is:
(a) millions of people are negatively impacted by this to the benefit of a small few.
(b) a huge majority of those people likely aren't aware that they're being taken advantage of and even if they did, a meaningful amount of them couldn't do much about it without some help and/or incurring considerable amounts of stress throughout the switch.
(c) What Apple is doing here is exactly the behavior I believe governments ought to be trying to prevent.
Can you justify this? These sorts of phones were unthinkable only 20 years ago, even for a billionaire and now they're extremely affordable. That is a net positive impact all of this seems to be at best a tiny dip in.
> a huge majority of those people likely aren't aware that they're being taken advantage of
Let's wait until they are aware, and let them choose. We shouldn't assume other people's choices and "act in their best interests".
> What Apple is doing here is exactly the behavior I believe governments ought to be trying to prevent.
We have endless periods of time where the setup wasn't conducive to the sort of innovation that's happened over the last 20 years in phones. Governments are indeed great at that. It's just hard to notice until you see a country with a government that is conducive to innovation, and then they start creating entirely new industries, and you wonder what happened.
Perhaps I worded this poorly, but I was specifically talking about the 27%-30% apple tax. The tax burden inevitably is either absorbed by the developer entirely leading to less profits and funds for them to innovate or they off board some of that tax burden by bumping their app's cost for the customer. I don't see how anyone but apple benefits in either of these situations.
>Let's wait until they are aware, and let them choose. We shouldn't assume other people's choices and "act in their best interests".
I'm confused... when did I recommend removing someone's choice? All I want is for the millions of people who have chosen apple to be taken advantage of less.
>We have endless periods of time where the setup wasn't conducive to the sort of innovation that's happened over the last 20 years in phones.
Yes and often those times coincide with awful exploitation. Industrial revolution was great for innovation, bad for the children who died working 12h a day in factories. Ideally we can strike a balance here and when it comes to preventing apple from charging 27%-30% for developers to innovate on their platform, a reasonably strong argument(s) can be made that it wouldn't prevent innovation.
Apple handles this quite well, having all your subscriptions in one place easily canceled and non of this shenanigans about losing access if you cancel mid subscription.
Have you app store social justice warrior types thought of this and how to protect consumers against that type of scumbaggery? Or is it more likely you don’t care about the consumer at all and just want alternative app stores for your own desires?
If apple were abusing their position, you may have a point. But you’re preemptively regulating them when they’ve been nothing but pro consumer. It’s clear this has nothing to do with the consumer.
Hey there friend, I really don't appreciate your assumptions and negative tone. I never once mentioned alternative app stores as they have nothing to do with what I am talking about.
I believe a 30% fee for other developers to innovate on their platform ultimately bad for everyone but Apple. Either the developer eats the cost and thus has less resources to work with or they offload this cost onto their consumers which results in artificially high costs for the consumer, the only one that truly benefits here is Apple.
Here you have a market used by hundreds of millions of people controlled by one company with practically zero government oversight. Even if we take the optimistic view that no one in Apple is currently taking advantage of these people (unlikely as that may be) what protections do we have should Apple ever start taking advantage? (Let a fox into the hey pen as it were) To me it's ridiculous that consumers don't have any meaningful financial protections in this market given the sheer size, scale, and daily activity it sees.
Then how is Apple to continue development of the platform? Is your point that Apple should spend the money developing something hundreds of millions of people use, literally inventing smart phones as we know it, and they shouldn’t be able to make money on it to maintain it?
> what protections do we have should Apple ever start taking advantage?
In general, it’s illegal to punish someone or something for an action they have not taken. You are preemptively attempting to regulate with no damages. If this were a lawsuit, it’d be thrown out and used as the new definition of frivolous.
Now answer my question. Who do you trust more to be pro consumer? The company with the proven track record and a great reputation to lose or “Random Shady Company, LLC, were totes not gonna scam you”?
That is not my point, no. I'm saying that apple should only be allowed to make a healthy profit off of the hundreds of millions of people that use/develop on their platform. Should apple be able to profit off people using their platform absolutely, but they shouldn't be allowed to price gouge their customers and developers.
>In general, it’s illegal to punish someone or something for an action they have not taken. You are preemptively attempting to regulate with no damages. If this were a lawsuit, it’d be thrown out and used as the new definition of frivolous.
I was being generous by taking the position that apple has "never" been taken advantage of, but you're right in that it would be frivolous. So let us both take off our rose-tinted glasses and see if Apple has ever done anything to warrant regulation...
- Walter Peters v. Apple Inc (where they were sued for deceptive advertising about subscription management service you mentioned in your orignal post)
- United States v. Apple Inc. (where Apple was found guilty for price fixing e-books)
- France v. Apple Inc (Where they were found guilty of quietly sending out planned obstinate updates that destroyed older iphone battery life)
- FTC v. Apple (Where Apple was payed out 35 million to refund parents due to all of the in-app purchases apple allowed children to make without notifying the cardholder within a reasonable time frame)
https://en.wikipedia.org/wiki/Litigation_involving_Apple_Inc
Hopefully these several lawsuits where apple has already been found guilty of taken advantage of their consumers is a convincing argument that apple consumers deserve to be protected from being taken advantage of.
>Who do you trust more to be pro consumer? The company with the proven track record and a great reputation to lose or “Random Shady Company, LLC, were totes not gonna scam you”?
You're begging the question here as I'd like to have both options and be able to make my decision on a case-by-case basis. But if you insist that I answer, I'd personally use whichever one provides the smoothest checkout experience w/ a reasonable cost. (I'm not going to pay $5 more because apple's checkout is easier but I'd probably pay an extra $1 if it meant not having to leave the app.)
But again, what the heck does this have to do with my post. I'm beginning to feel like a broken record, I genuinely do not care if apple forces all payments to go through them or requires all apps to be downloaded from their store nor am I arguing that this shouldn't be the case. 3rd party app stores/payment solutions are not a required belief for me to be concerned with Apple price gouging developers that innovate on their platform. Even if they magically made both these options available right now, the reality is that 99% of users would likely still use their store and thus cause for concern.
However I don’t see any reason Apple should be compelled to help you in using it with your own software.
But you do bring up an interesting point by mentioning sideloading.
The courts have established in this case that Apple can charge their commission regardless on the premise that it’s a payment in exchange for the use of their IP. All in all not a shocking decision really because it just continues on the standing law regarding property rights.
But it might have ramifications for sideload apps, unless you really want to get down and dirty those will be using Apple’s IP as well and in some cases there’s not even an alternative unless the iPhone is jailbroken.
Because the developers of those app will be using Apple’s IP, Apple can extract payment from them.
Perhaps not the full 30% because presumably they wouldn’t have agreed to Apple’s developer agreement, but it won’t be $0 either.
Similar legal gaps exist in the impending EU regulation. Believe it or not, they too have well established property rights surrounding IP and there too there are courts who will be the final arbiters in this.
Many seem to think that just because the EU says or does something it’s the law of the land, but like with legislation in the US it can be fought and I’d say even more so there because a lot of the regulations originate from the EU Commission, which is just the EU’s sparkling executive branch.
While the dust is starting to settle here in the US, we will more than likely see some cases starting in the EU.
I do not want to take a side in this fight.
I honestly feel bad for the left. Given everything their news media tells them is under threat they seem legitimately scared about a nonissue. The power of the news cycle.
> See: bin Laden's letter to America doing rounds in the internet in 2023.
> False equivalency. Most people like living in America and tons of people want to move there, while only religious fanatics would be okay living in a country built and controlled by Al-qaeda
Without question, the comparison is equivalent. Portraying it as either-or is ignoring the root sentiment of "everyone has faults", regardless of who you think is superior in an example.
But that’s just me, being European and grandstanding on the orange website.
Christianity and islam are quite a bit different, the latter literally convinving people to convert by sword.
And here I thought HN got rid of bigoted comments like this.
Unlike such famously gentle Christian coercions like the Spanish Inquisition or the Crusades. :P
Which is my point, your average non-religious person does not understand the difference between religions. Be it Islam vs Christianity, or Christianity vs Catholicism.
If you're going to tar all of Islam by their worst members ("the latter literally convinving people to convert by sword"), you can't object if someone applies the same logic to Christianity.
> Christianity vs Catholicism
Catholics aren't Christian? Sounds exactly like some of evangelical nuts I grew up around. Most of the world views Christianity as a big umbrella, with Catholics and Protestants being two of the major flavors. (Somehow I highly doubt you're Eastern Orthodox.)
> your average non-religious person does not understand the difference between religions
And apparently, neither do you, my evangelical wingnut in Christ.
If it's just a chill little tea shop that doesn't advertise or go crazy on social media, focuses more on good tea and a comfortable space, keeps things affordable without trying to upsell or be pretentious, then lucky you. Those sorts of lifestyle businesses are very rare these days, they're being outcompeted by predatory hyper-efficient modern businesses to the detriment of all.
Epic also has their own game store that they will happily charge 30% once they have more marketshare. They also want to be able to put their own game store on iOS.
I don't know. They haven't done as much with UE or any other tools, outside of actually charging for non-games (I'm honestly surprised that the Mandelorian was able to be made with no kick back to Epic at all).
Historically Epic has been relatively lenient for how it taxes developers. Say what you want about Sweeny and Fortnite and the Games Store, but I can definitely tell he still takes pride and empathizes with being in the gamedev trenches once upon a time. Can't say that about too many other gaming execs of today.
Don't think for a second that they wouldn't charge 30% once they get enough market power. In fact, in the Apple lawsuit, it was revealed that the Epic Game Store was operating on a $300-$400m loss in order to acquire marketshare. Epic has to increase commission fees in order to break even and make a profit eventually. Epic isn't a non-profit.
Here's a preview how they might treat customers of their own app store if they have market power:
Epic Games, the company responsible for Fortnite, agreed to pay $245 million to settle FTC allegations related to in-game purchases. According to the FTC, the company charged parents and gamers of all ages for unwanted items and locked the accounts of customers who disputed wrongful charges with their credit card companies.
I think it’s rather optimistic to believe the Epic Games Store going to overtake Steam. If that’s the criteria for raising their cut, I wouldn’t expect it to happen anytime soon. Outside of annoying exclusive distribution rights on some games, having another store has given game developers another way to sell and players a way to purchase games cheaper. With that said, I’d guess their real gambit is to create enough pressure to drive the standard 30% down.
Maybe 30% made sense at one point. Maybe it does now. It strikes me that there have been efficiencies that haven’t been passed along to the consumer. Having a competitive market would let us find out.
If you believe because the cut is less on epic store (assuming a developer uses all the methods available to a game developer to reduce it) that they then charge less on the epic store you are mistaken. Prices are the same between the two stores.
We’re in a promotional period for EGS right now. The free games and coupons won’t continue.
>Here's an example showing how they're just like any other company:
They aren't really too special on the consumer facing front, I agree. But I still assert they've been pretty goo on the dev facing front. I've heard very little bad about them on the dev end.
i don’t see epic making any meaningful impact in steams user base
some indeed. It's another network effect and it is indeed useless to try and grab people away from something even if EGS had every feature of steam. So I get why Epic didn't try to be a social network (it could do game tracking reports if it wanted to. But that's not selling anyone).
traditionally, storefronts live and die by its library, pricing, and especially exclusives, So I understand how and why they focused on what they did.
That's not true. I'd say it's virtually impossible to lose money if you are charging 10% of the price of games.
Their store is losing money because they are giving out a ton of free games, in the hope of attracting clients.
Opinions should be based on principles that could be applied those you like and dont like.
Meanwhile the idea of an OS and how open it should be will probably be a battle for decades to come, for old, new, and yet to be made companies. May as well nip it in the bud now.
So basically your stance is that you are ok with, or at the very least indifferent to, illegal behavior as long as it’s against people you don’t like.
That’s the basis of as lawless a society as one can get.
and unfortunately the path the US is headed down these days. dark times ahead indeed.
I also like how he hasn't updated his Twitter profile image in 20 years. He's probably riding his 'rati in sunglasses at his age of 50+ thinking he's still got it. And what if he doesn't? Somebody needed to file this lawsuit sooner than later, and I'm glad he did. Big Sweeney boy is scoring relative high on my list right now.
Now open that can of popcorn and watch two corporations trying to defend their own turd. Apple's new UX/tax on third-party payments is an incredible sucking of the MBA's cock on behalf of whoever implemented that. And watching people here still defend them is even better. Why do people pay a $19.99/mo Netflix subscription when you have real life?
iOS is more ubiquitous than macOS yet more restrictive--it cannot last. This entitlement is so restrictive -- it just seems vindictive. Apple's market share and success means additional responsibility. The argument that it's their App Store and therefore they can do whatever they want is a dubious defence. They owe their loyal developers more than this.
I believe there are leaked emails floating around which pretty much irrefutablly confirm this.
Have you ever gotten stuck with a monthly fee for something that's hard to cancel? It's a real pain the butt, no?
But that never really happens on Apple devices, because Apple makes it incredibly easy to cancel subscriptions. You don't have to call anyone, you don't have to struggle with a bad website -- you just click cancel on your phone and it's done. And it's all in one place too -- no bank statement required.
They are also a check on other dark patterns, like silently increasing charges without a clear notification to customers. I don't even get spammed because Apple proxies my emails from app developers.
One of the main reasons I buy things from Apple (on my device) and Amazon (if it's a physical good) is so that I have a company I sorta trust to do the right thing if things go sideways (cancelations, returns, fraud, etc.).
Once every app developer is pushing me to enter my credit card on their website, that all goes out the window. Dark patterns common on the web and on Android will take over the iOS ecosystem too.
I also am going to take an unpopular opinion and say that Apple probably earns that fee. The fact that Android isn't that valuable to app developers proves that Apple's reputation and standards are what drives a lot of their app store revenue. App devs feel like they're providing all the value, but I suspect it's often not truly the case. I know this is an unpopular opinion amongst us devs.
I don't even know if I truly buy these arguments, but I thought it'd be more interesting here if there was at least one comment defending Apple.
Re Android:
* Android has the same 30% fee * Android controls the Play Store IAPs (dark patterns) almost identically to Apple
- Mobile dev of 3 years
How many times has their default messages app changed? It's nuts. Being an Android developer seems like an exercise in frustration. I'm sure it happens on iOS to some degree but I've seen people online brag about never buying an Android app; piracy is rampant.
We desperately need a third option.
Who cares? If you're developing for Android, you don't need to care about Google killing off Stadia.
> How many times has their default messages app changed? It's nuts. Being an Android developer seems like an exercise in frustration.
Again, who cares? I'm using the same messaging apps that I was using 10 years ago.
And it's not like Apple is any better. It has standardized on iMessage, but you can't do anything with it as a developer. It might as well not exist for you.
One of my best friends who was using Allo. Or Duo. Or Hangouts. Or Meet. Or whatever. He really loved one of those apps and it got removed/changed/or something.
My point was that as a developer, I'd want to ensure users like the platform they're on enough to buy my app. This same friend? He moved to some launcher and just uses Discord and Element now. As I understand it, using a launcher prevents you from using the Google Play Store, so you're not buying apps.
EDIT: See also: https://www.theverge.com/2021/6/21/22538240/google-chat-allo...
Android is the number 1 platform in the world. Except in the US, where Apple is manipulating teens using "blue bubbles".
LOL WOW
I'm going to chalk it up to you not knowing about Android, but swapping launchers is basically changing your home menu, it doesn't affect Play Store access and you'll likely need it to buy the Pro version of certain launchers, the most common one being Nova Launcher Prime[0]. And if he did something more drastic, like changing to custom ROMs (akin to OS images), then Play Store access is up to him.
And honestly, I don't think Google free apps and services coming and going will impact app ownership numbers. Android being more popular in low income, developing countries (with big population numbers) will have a bigger impact overall.
[0] https://play.google.com/store/apps/details?id=com.teslacoils...
Hey now, there are dozens of developers making apps for iMessage. Dozens!!
All kidding aside, there is actually quite some stuff you can do with iMessage, but other than the occasional runaway hit like Game Pigeon, not many devs are interested in pouring resources into it.
You don't have a choice, from Apple. With Amazon you can buy your Purina and flip-flops off a third-party, but where else do you buy a calculator app for iPhone?
The problem with this steelman is that giving third-parties more options should change nothing for you. If you're ideologically opposed to anyone that doesn't use Apple's or Amazon's fulfillment system, it doesn't matter where the competitors are anyways. In a post-sideloading world you'd keep using Apple's App Store the same way millions of Android users never enable Developer Mode. Both sides get what they want.
"Hi, this is the company that owns your mortgage. You can now only pay through our app which you have to sideload because it's also a rootkit."
Why do consumers have the attitude "I will buy apple specifically to make you suffer through the apple app store approval process, and I don't give a shit if they take 30%?" The answer is 20 years of abominable behaviour by corporate app teams.
> The answer is 20 years of abominable behaviour by corporate app teams.
I feel like you're not going to like my answer to "Why Apple is facing multinational antitrust scrutiny" then.
Not at all, credit card charge-backs are easy. I don't need Apple at all.
In fact, Apple acting as the intermediary makes things worse, because if I wish to dispute/chargeback a payment with a particular app, I have to do that to Apple, which could have unrelated negative effects on my other purchases through them.
Now, as part of the chargeback process the merchant may cancel your subscription, but they’re also likely to ban you as a customer from ever using their services again.
If things have reached the point at which I'm doing a chargeback, I'm clearly not too concerned with, or interested in, remaining their customer.
The court from the start basically declared that this is what everyone else does. Epic themselves operate this way - check out the licensing model for Unreal Engine.
There was no antitrust issue being litigated here. We can all believe that there should be, but there isn’t, and this isn’t the right type of court for that issue.
Technically, the court granted Epic’s wish, Apple is now giving you the freedom to choose a different payment processor and deducting the market rate cost of doing so. The only bit left to resolve is whether Epic’s argument that Apple’s compliance is not in good faith sticks.
The judge forced Apple to unbundle their payments. Apple's solution to that is probably overly restrictive. And I suspect that you're right that 27% is too large a cut to survive.
With both of those points granted, though, your argument seems to be that Apple should be obliged to host, distribute, and market apps (including the burden of moderation and malware prevention) for free. That any commission is too much of a commission.
Can I ask you to elaborate on why you believe that Apple should be singled out and mandated to perform a service for free?
I don’t see that being killed soon. The 3% for payment processors is a lot higher than the 0,2% or 0,3% limits for debet/credit card payments within the EU (https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-..., and AFAIK no payment processor decided to leave the EU market because they couldn’t earn money anymore.
There also is ‘prior art’ for that 3%/27% split in the case of dating apps in the Netherlands, where the Dutch regulator declared that OK (https://techcrunch.com/2022/06/13/apple-dutch-dating-apps-pa...). AFAIK, there hasn’t been further action on that front.
Also, PayPal is more than a payment processor. It also is a broker (and, effectively, also a shop).
OR, you know, let me use an alternate store that has the policies I approve of.
And I want to put my product in Walmart for free while Walmart pays for the warehouse, staff, marketing, returns, and product inspection.
Insofar that Walmart extracts margin out of its small suppliers, we don't see a lot of third parties sitting on the sidelines telling suppliers trying to negotiate better contracts that they need to shut up, pay up and that the third parties are "on Walmarts side".
To the extent that small suppliers wish to negotiate better contracts or apply pressure to a behemoth company for a better deal, I say 'have at it'.
Nothing nonsensical about developers wanting better treatment or a better deal from a company asking for 30% of their gross margin.
Of course you could. Apple would simply have to enable it. The fact that you can't download an app through Safari on iOS is simply an arbitrary decision by Apple.
> If side loading is important to you, get an Android phone or maybe a niche OS phone.
This has little to do with individual user preference about side loading. This is about developers who want to get their apps into customers' hands. While I'm sure a lot of developers and companies would be tickled pink to not have to develop mobile apps, its their customers who expect those apps and a very significant number, if not a majority of those customers, are iOS users. So while we can say it is a choice to develop iOS apps, it is, for all intents and purposes, a competitive requirement for many developers.
So even if a customer is already aware of you, already aware of your app, even if you have no need for Apple to distribute, market or host your app, you are required to have them do so and pay Apple's 15% or 30% fees on everything between you and that customer, in perpetuity, just because that customer is forced to use Apple's app store to locate and download your app.
It's worth noting the contrast between that situation, which is the source of most of the derision over Apple's fees, and a situation where a developer is producing a mass-market iOS game from scratch, in which the app store listing is actually an asset, in which they DO rely on Apple's distribution, in which they DO rely on Apple's marketing, etc. yet they get away with paying $99/yr, which Apple apparently considers adequate compensation for the above services they provide, and Apple doesn't touch any of their ad revenue, regardless of how successful that app is.
Even putting aside the completely unnecessary and arbitrary walled garden, that inconsistency in Apple's taxation of developers is worthy of criticism.
Thats the root of the problem. Apple has a monopoly on the social status associated with their devices, and leverages the monopoly in many unscrupulous and toxic ways. I consider Apple the most cynical and toxic of all the tech giants.
Status-signaling consumer products are always overpriced. It's what makes them useful as status signals. You used to buy expensive impractical clothes to show you could afford to buy expensive impractical clothes. Now you buy Apple devices to show that you can afford to buy overpriced tech.
If you bring the price of the status symbol down to a more natural level it ceases to be a status symbol.
Apple's defense of their control over the platform (and the higher-than-necessary prices they charge) isn't destructive to consumer welfare, it's the very thing consumers are paying for.
Let's just assert that it's false, then. Let's say 30% is unreasonable, and that iPhones would be as successful even with yet more unreasonable developer fees.
50% of your revenue, for delivering up to 140 bytes to a phone. Note that delivering a message was the only thing they did. You had to write the code to handle the incoming SMS message and send the reply. You had to host this service and serve the downloads (meaning you had to also pay for hosting and bandwidth). You also had to set this up for every single country you want to offer it in. None of this was discoverable, so you had to advertise your game/app as well. Also, the development tools were absolute shit (and you had to pay for those as well).
In comes Apple, who lets you keep 70%, provides excellent dev tools (I know it’s trendy to hate on Xcode, but even early versions of Xcode were heaven compared to the absolute shit show we had to deal with before). They host the app, they make it discoverable in their app store, they handle payments and make it all available worldwide.
So yeah, I’d say it was more than reasonable. Is it still reasonable in today’s market? Hard to say.
This might be due to a slightly different era and/or market, but I recall in the WAP and i-mode era, 50/50 would’ve been amazing.
More often than not, you’d be lucky if you got 30%, and you’d brag if you’d get 40%. In most cases, you’d be left with a measly 10%, and none of it included payment processing, which ate up a few percent more.
The worst part wasn’t the revenue split, though believe it or not, it was negotiating with multiple carriers over every little thing, and it could take months to get things going.
Discoverability was a bit better in this era than what you describe because carriers would have a little directory in which they listed apps. Of course, being listed in this directory, especially in a helpful way, would eat up more of your revenue share.
Carriers were also acting in a dirty way. If something was wrong and a customer complained, they’d charge you a refund but wouldn’t pass it along to the customer. Essentially, telling the customer they’re SOOL while telling the developer to pay up because their app didn’t work and then pocket that money.
The barrier to entry was also high and costly. Developer tools were shit, as you said, and the pipeline from development to sales was nearly non-existent.
So yeah, of course, in comparison, Apple was some kind of utopia, not despite the 30% but because of it, not to mention how hassle-free it is and, like you said, the excellent tools provided. I genuinely like Xcode despite the hate it gets, and I’d say that it’s been significantly improved over the last decade or so.
Similarly, the improvements and development of frameworks in the last couple of years are tremendous. I’d say all of it is well worth the 30%, but at the 15% I’m at now, it’s close to a steal.
Without exaggeration, the latest developments in frameworks really make my life easier, and some of what I do wouldn’t even be possible without it.
The framing around the commission is starting to irk me the wrong way.
In part because these big developers such as Epic, Spotify, and the like claim to speak for me, to make it look like they fight for “the little guy” and drum up support when they plainly don’t. Their interests and mine are miles apart and only marginally overlap and, in some cases, contradict each other.
In part, it is also because the effective rate for most developers is 15%, regardless of Apple’s motivations behind that discounted rate.
15% in exchange for the low barrier of entry and the solid tools that allow you to spin up an app and publish it on the App Store within a day or two is a pretty solid deal, in my opinion.
But what's happening is that this 30% is more or less a lock-in cost for the only official way to do business on IOS. And before this ruling, you weren't even allowed to mention in the app that consumers can also pay on your website. And now we come to this article saying "okay, you can show your website were still going to charge you 90% of our rate despite handling none of those transactions". And that's where things get really dicey.
With this new perspective, the question shifts to "is apple's 27% for distribution (minus payment processing) reasonable?" and I'm less sure. Especially when Apple can throw out my app for any reason whatsoever.
To use android for comparison, I can throw an APK up to download with relatively minimal effort, with zero regards for Google's rules and I owe Google 0% of my revenue. They still take 30% for using Google play as distribution. But it's nice knowing I could theoretically host it elsewhere if I don't agree with Google's pricing (minus some bribing issues Google is currently being taken to court for). There's none of that for Apple. Firefox is just a Safari skin because Apple says so. Emulator apps are in flux based on Apple's whims. Your app may be taken down for nudity as Apple profits millions from a few dozen games that barely try to hide it.
> this 30% is more or less a lock-in cost for the only official way to do business on IOS
As an app developer you're pretty much "screwed" TBH. You don't have a choice as to what platform your users choose (as long as you want to be in the market). Let's say Apple allows sideloading, but it is somewhat tedious and most users choose to stick to the official App Store -- then you're back to where you were, because you still want to sell your app/services to the users who stick to the official app store, and presumably your app is not so essential that users will actively switch if you dropped support for the official App Store.
If as an app developer you could influence the platform your users choose, then you would have asked them to move to Android and directly download your APK already, instead of bickering with the App Store (or even Google play store). The fact that you aren't proves that you're still at mercy to your users decisions, and whether they decide installing your app via sideloading is worth the trouble.
I'm not trying to denigrate you, but I suspect you might have unrealistically rosy expectations of the world where Apple is forced to allow sideloading.
There is no reason that sideloading is tedious. If it is, then that is a deliberierte choice, going from no sideloading to no sideloading that anybody will care to use. Just as Microsoft was forced to suggest alternative browsers to users instead of simply bundling Windows with Internet Explorer and Edge, one could even imagine to force Apple to let the user pick an alternative app store during setup.
In the absence of a competitive market we don’t know whether 30% is reasonable but it’s unreasonable (or naive) to suspect that a closed system has hit on an efficient fee structure, from the end users point of view.
More broadly — a competitive market would allow innovation on many many variables, not just different rent-taking numbers.
Part of what Apple sell app developers is that piracy is hard on the App Store.
It also benefits developers and users that tweaking apps to cheat in games is as good as impossible.
A cloned or patched iOS that allowed users to install anything could change that by no longer checking app signatures.
This would be just as impossible in a well-designed version of iOS that allowed arbitrary app installation - iOS could do client-side attestation, and app developers could choose to prevent users from playing online matches with app versions that aren't attested by Apple (or a hypothetical Steam for iOS, for instance).
None of these properties are compromised by allowing arbitrary user-space code, which is what is one of the parents thought would happen.
With that in mind, I should be able to run any operating system on an iPhone I bought. Apple should not be required to actively support this, put in extra work to document things or whatnot, but they should not be allowed to actively make things harder.
Do you see how silly the above statement is?
But I still disagree. Why does Apple have to allow a different OS to run on their hardware? That's absurd.
I don't demand that my refrigerator let me run my own software if I want to - nor do I demand that of my headphones, car, microwave, etc.
Because they feel like they own the relationship between the user and the developer by virtue of it happening on a device they made, regardless of how much their contribution, if any, was to the formation of that relationship in the first place.
As a developer you need to pay the 30% commission similar to how if you're using Unreal Engine you need to pay 5%.
You can legitimately argue this fee is way too high but the courts have already said that they are allowed to charge it.
Apple charges 30% if you do choose. Epic charges 5%.
Apple argues that what you're paying for includes SDKs. Epic does too.
Yes, you are. If you're writing a mobile app, you HAVE to support iOS or go bankrupt.
There are no other options.
Welcome to the land of monopolies.
you are forced to pay Epic 5% of sales (if your game makes more than $1 million), so pretty much like Apple (fees are lower of course)
And I'm not arguing that apple needs to reduce the fee. They can charge whatever they want for their IAP system. But, other companies that have software/services that are cross-platform, should be allowed to use their own payment processors without paying additional fees to apple imo. Apple should be able to put up the message that hey, you're leaving our ecosystem, you're on your own, blah blah. But I don't see a reason why they should also get a cut at that point.
Nothing similar is the case for Unity vs Unreal; the customer base is the same either way.
And with Epic, you don't have a choice if you want to use the Unreal Engine. How can this argument go on and on and on? All your arguments can be used in reverse with the Apple competitors. Nobody is forced into anything, especially not developers.
only if you want to release your app on Apple's platform; you're free to release it on Android, Windows, Linux, Unreal, etc., each of which has their own set of fees (or none)
27% is absurdly high, for sure, but you seem to be arguing from a position that it should be free...?
The other large discussion thread has already been linked with more specifics. The very short version is that Apple has been arguing the fees are to run their services, and the commission has historically been a convenient way to collect them. This is them collecting those fees outside of their payment systems, because legally they have to allow such a thing.
So you could release an app for "free" on the app store, and require side channel payment to really use it. You're just going to have to pay for the quotation marks.
Because the judge's ruling still left the option open for Apple to continue to charge a commission fee for external payment processors.
Over 2 years ago, observers correctly predicted that Apple would still charge 30% for external payments. Example story:
https://9to5mac.com/2021/09/14/apple-can-still-charge-its-ap...
So Apple's new policy in 2024 is no surprise and the only difference is that Apple is charging 27% instead of the predicted 30%.
> First, and most significant, as discussed in the findings of facts, IAP is the method by which Apple collects its licensing fee from developers for the use of Apple’s intellectual property. Even in the absence of IAP, Apple could still charge a commission on developers. It would simply be more difficult for Apple to collect that commission.
> In such a hypothetical world, developers could potentially avoid the commission while benefitting from Apple's innovation and intellectual property free of charge. The Court presumes that in such circumstances that Apple may rely on imposing and utilizing a contractual right to audit developers annual accounting to ensure compliance with its commissions, among other methods. Of course, any alternatives to IAP (including the foregoing) would seemingly impose both increased monetary and time costs to both Apple and the developers.
I am continuously shocked at how supportive the HN community is of Apple collecting these tolls.
Just some of the problems:
* You cannot issue a partial refund.
* Actually, you can't refund a customer at all. Customers have to contact Apple to request a refund and it's entirely at their mercy of their whims.
* If Apple declines the refund for whatever reason, you and the customer are just screwed. Literally had to buy a gift card to give a customer so we could make them whole.
* You cannot offer a discount and free trial at the same time.
* When trying to create a different subscription group to A/B test our pricing, we somehow got cursed with a reviewer who did not understand the concept long after it was released. New app builds with bug fixes completely unrelated were getting rejected. It took weeks of escalations before they finally relented.
* Promotional pricing is so frustrating to setup between Introductory Offers, Promotional Offers, and Offer Codes.
* You cannot generate ad-hoc pricing for anything.
* You cannot generate human readable / human memorable coupon codes to distribute to your users, like NEWYEAR24 etc.
Instead, the codes are long random gobbledygook, single use only, and they can’t be redeemed within the app — only in the App Store itself.
It’s like they made this difficult and useless on purpose.
They’re called “custom offer codes” and codes have been made redeemable within the app as well, if you care to implement the sheet of course.
In fact, custom codes need to be redeemed either in app or via URL/QR because if multiple apps use the code “NEWYEAR24” the App Store wouldn’t know for which app it is redeemed. The URL contains your bundle id so that the App Store knows which app’s custom code the user is trying to redeem.
Here’s a tech talk on it: https://developer.apple.com/videos/play/tech-talks/110150
You’re approaching this from the premise that you pay a commission for payment processing, when in actuality the primary purpose of the commission is to collect payment for the use of Apple’s IP. All the rest is secondary to that.
Nevertheless, even from the payment processing premise there are some questions that come up when reading your comment.
> You cannot issue a partial refund.
True. It’s either all or nothing.
Closest thing to a partial refund would be pushing the renewal data back on subscriptions, either individual or for all subscribers of a specific product e.g. if you had a widespread issue
> Actually, you can't refund a customer at all.
Nope you can’t directly refund a customer.
You can have a say in refunds for consumables by informing Apple if the consumables have been consumed and you can offer a refund sheet in your app so that the customer doesn’t have to contact Apple themselves, but ultimately Apple’s decision mechanism is the final arbiter.
In my experience both by keeping tabs on users reached out to CS to ask for a a refund, tracking refund requests via the refund sheet in apps, analyzing refund history and notifications and personal experience of me as a user and that of others in my circles, refunds are issued generously, close to 100%.
It seems they have a “Yes, unless” policy, where the unless is mainly tied to having a history of requesting refunds.
A decent amount of developers actually complain about how easily Apple gives refunds going by posts I see on different forums, but I prefer it this way.
> If Apple declines the refund for whatever reason, you and the customer are just screwed. Literally had to buy a gift card to give a customer so we could make them whole.
This seems like a rather extreme solution. Was there a big issue with your app that compelled you to do this?
> You cannot offer a discount and free trial at the same time.
Depends on what you mean by this.
If you mean a free trial and after that a discounted rate you can just create a new product at that discounted rate and enabled the free trial.
If you mean a trial and then a temporary discount then no, there’s no direct native way of doing this. Presumably because you can just calculate the discount into the introductory offer instead of confusing the user with having to track two time periods, the period of the free trial and the period the discounted rate is in effect.
But close to native is using offer codes and enabling eligibility for introductory offers. Then your users will get the introductory offer first (i.e., free trial) and renew at the offer tied to your offer code (i.e., discounted rate). You can also use this to give longer free trials during certain periods, the introductory trial will stack with the trial set on the offer code.
Nevertheless, I was partial to utilizing the DeviceCheck framework before all of this was possible. Check if this device is new, if so, enable free trial and after that trial offer discounted introductory offer.
Benefit of this was that users appreciated not having to initiate a purchase flow to get access to the free trial, risking a charge at the end if they forgot.
Downside is that it’s tied to device and not Apple ID, so technically users can get a free trial on multiple times, if that’s something you’re concerned about.
> When trying to create a different subscription group to A/B test our pricing, we somehow got cursed with a reviewer who did not understand the concept long after it was released. New app builds with bug fixes completely unrelated were getting rejected. It took weeks of escalations before they finally relented.
That’s a shame. What did they get hung up on? Not being able to see certain products in the app?
> Promotional pricing is so frustrating to setup between Introductory Offers, Promotional Offers, and Offer Codes.
What did you find frustrating about it?
> You cannot generate ad-hoc pricing for anything
Depending on how “ad-hoc” you’re talking about, wouldn’t offer codes fulfill this desire?
The IP I'm paying for is all tied to their payments platform. I would rather use none of it. I'm also paying separately for the right to develop and publish on their store via their annual fee.
> A decent amount of developers actually complain about how easily Apple gives refunds going by posts I see on different forums, but I prefer it this way.
We have a subscription offering, so the consumables experience may be different.
> This seems like a rather extreme solution. Was there a big issue with your app that compelled you to do this?
No. We have a freemium model with a subscription pro tier. The user was on the paid plan for a few months and messaged us that he actually gets enough value out of free tier features and would like a refund. It's very understandable that many decision makers in that position wouldn't issue a refund. But a single negative review can hurt us a lot, so we try to go out of our way to avoid that happening.
> If you mean a trial and then a temporary discount then no, there’s no direct native way of doing this. [...]
Yeah, this is the scenario I'm describing. Creating new products is laborious with setting international pricing and replicating for different discount levels across monthly and annual recurring subscriptions.
> Depending on how “ad-hoc” you’re talking about, wouldn’t offer codes fulfill this desire?
The use-case was to enable "Pay what you think is fair" pricing with a slider. Similar to what TrueBill/RocketMoney does.
Take dumb phones before iOS came along, like on Symbian or Windows Mobile. Every carrier had their own App Store, their own awful SDK, their own rules and approval processes, and 50% was the minimum share.
It wasn’t just the apps either. It was the OS itself requiring carrier approval - something Apple managed to dodge through sheer clout, but that hereditary disease still plagues Android to this day.
Clearly someone is being abused. I'm aware they do bring customers, I guess. Not to _you_, specifically, to someone... Maybe you.
Of course digital store fronts do not have many of the costs associated with physical retail, but there is still value in them bringing the customer to you.
This is inherently in conflict with having a single store for everything, because the everything store would then have all of your competitors in it too.
It also doesn't explain why you still have to pay when you do your own marketing through some other means and the customer is already looking for you in particular.
I think what you're really asking is: Where's the value if I want to (or have to) do my own marketing anyway? The answer is trust. I'm more likely to trust you with my money, with you executing code on my device, if Apple allows you on their store. Even the big brands like Epic get this value, because who is judge that whatever "I look for" isn't being hijacked by some impersonator? Perhaps that trust is misplaced, but the effect is real, thus the value is there.
Apple considers this worth a 30% commission, and 100% of developers on the App store agree, or they wouldn't be on there. The question whether you couldn't get more value by doing it all yourself doesn't even ask itself, because there is no alternative. Whether that is anti-competitive in the legally prosecutable way is a very interesting question that we're all eager to hear answered by the courts.
Personally, I do find that a 30% (or 27%) commission on out-of-band purchases is outrageous and that phone platforms should be cracked open, but I can also see the argument from the other side, comparing e.g. to video game consoles or set top boxes.
This is where you get it wrong.
If there were other stores for iOS apps and the difference was only Apple's vetting and developers were still choosing to pay Apple 30% vs. much less for some alternative, then you could say that what they're paying for is trust.
But everybody including Apple knows that isn't true in general. As soon as there were other viable stores and developers could put the same app there for a lower price, the large majority of customers would take the lower price over whatever "trust" Apple is ostensibly providing. Unless Apple were to charge substantially lower fees for it.
Which is the only reason they preclude the other stores. If customers actually wanted trust and it could only be provided by Apple then customers wouldn't have to be precluded from using alternative stores because they just wouldn't choose to.
And when that isn't possible, you can't say that people are choosing Apple's store because of trust, when there is no choosing happening because there is no alternative installation method to choose.
Would they though? Side loading exists on Android, but good luck foregoing the Play Store for some third party store or even marketing yourself. It exists, sure, but it does not eliminate Googles similar (but weaker) value proposition.
Would the possibility of side loading put pressure on Apple to be more competitive in terms of fees? Possibly, but Apple users tend to be less adventurous.
For Apple, there are various other reasons not to open up, like the brand image. It is really hard to make a naive user (like a child) completely screw their iPhone. Also, remember when porn videos were all Flash, and the iPhone could not display them? Steve Jobs literally told people to buy an Android phone.
Google recently lost an antitrust case over this. They allow the alternatives on paper and then suppress them from becoming viable.
In general to make this argument you would need to explain why the platform company would be the only store the users trust. Why Google but not Microsoft or Disney or Samsung or Amazon or Epic or Mozilla and so on?
> It is really hard to make a naive user (like a child) completely screw their iPhone.
This could be straightforwardly solved by allowing the device to be put into a mode where no new stores can be added without a passcode or a factory reset. Then the parent or IT department or what have you chooses a set of stores that they trust and the naive user can't add any, but the owner of the device can.
> This could be solved if…
It can not. The brand damage comes from the sum of incompetence of all users (not just the diligent ones) multiplied by the capability to do damage. Plus, if you made it a hassle, the anti-competitive argument you raised with Google rears its head.
Value is relative. Oxygen is extremely valuable if you don't have any, but it's also commonly available.
If Epic had an iOS app store that charged 10% instead of 30% and a reputation among users for not allowing malware, who is going to pay Apple 30%? It doesn't matter how good Apple is in absolute, it matters how good they are relative to the alternatives. Which makes prohibiting the alternatives a means to extract undue rents.
> Beyond that, there would be value in it being the platform that comes preinstalled, even if side loading was a thing.
But this is just the evil to be prevented.
> The brand damage comes from the sum of incompetence of all users (not just the diligent ones) multiplied by the capability to do damage.
The assumption here is that it's legitimate to blame the brand for your own actions, which is absurd. If your self-driving car drives itself into the sea, you can reasonably blame the manufacturer. If you get drunk and drive your car off a pier your own self, this is not the fault of the Ford Motor Company and any attempt to divert blame will be rightfully met with skepticism and ridicule.
Now, you can have a poor design and get blamed for that. For example, the way software is installed on Windows is much worse than the way it is on Linux.
On Windows the default is to run random opaque binaries from arbitrary websites. Windows is full of malware, and it's not just because it's "more popular" or whatever.
On Linux the default is to install software from the system package manager, which contains vetted packages. But you're not in any way limited to one of them. If you want Firefox nightly builds, Mozilla has their own repository. You can install the Nix package manager from the Debian package manager.
You can also download source code from github and compile and run it yourself, which can be dangerous, but that's quite technical and unusual for unsophisticated users to do, and is different from the usual way they install anything which makes them rightfully wary. And this combination works great because you can simultaneously do whatever you want and yet be confident that if you're only doing things in the default way, someone has vetted these things and it's highly unlikely to be malware.
> Plus, if you made it a hassle, the anti-competitive argument you raised with Google rears its head.
We can distinguish between making it a hassle to install random malware and making it a hassle to install a competing store from an established organization the user could plausibly trust to do the vetting for them instead of Apple.
The Epic store on Windows is actually a good example to prove my point: They take only a 12% cut, they pay you to become an Epic exclusive, and they pay to literally give games away to acquire users. Steam does none of that and takes a 30% cut. Steam doesn't even come pre-installed on Windows. How does Steam get away with it? People are lazy. They already know Steam, they already have Steam, they already have a Steam library, they hesitate to get yet another account. They prefer Steam out of habit. They don't care if the developers lose another 18%, and most developers can't afford to not be on Steam just because of those 18%.
> The assumption here is that it's legitimate to blame the brand for your own actions, which is absurd.
It doesn't matter whether it's legitimate, if it's a real effect. People don't read past the headline. Windows is a pretty secure operating system if you use it properly, but people just don't, thus Mac gets the reputation of being "more secure", even if that's wholly unjustified on a technical level.
> On Windows the default is to run random opaque binaries from arbitrary websites.
Same as Mac OS. You get a warning if the binary is not signed.
> On Linux...
Nobody uses "Linux" and nobody ships software for "Linux". If there was a distribution of Linux that was comparable to Windows in terms of market penetration and users, it would be a similarly vulnerable platform. Actually, that distribution exists: It's called Android, where malware and scams proliferate.
> You can also download source code from github and compile and run it yourself...
I can. They can't. I won't. It's wholly irrelevant.
> making it a hassle to install a competing store from an established organization
So, who gets to decide who is "established"? Isn't that the whole point of side-loading, that you don't have a gatekeeper? If you have an open platform, your chain of trust can be as good as you want, if your kid wants to download "cheats for Fortnite", nature finds a way.
By not having any walls.
Games on Steam are allowed to be sold elsewhere, for a different price. The developer can even sell Steam keys for their game via a different channel without giving Valve a cut. As a result, there is little reason for a developer not to add a 30% markup to their game and sell it on Steam and let price-sensitive customers buy the lower priced key via some other channel.
If they tried to charge 30% and prevent you from selling your game any other way, they'd have fewer games, and so fewer users, and so not be able to charge anybody anything.
> It doesn't matter whether it's legitimate, if it's a real effect.
It isn't, and even if it was, it would be unavoidable.
If you throw your iPhone into a wood chipper, it will be damaged. Idiots can blame Apple for that but it isn't Apple's fault and there is not really anything Apple can do about it. Moreover, not many people are going to blame Apple for that, because that's ridiculous.
> Windows is a pretty secure operating system if you use it properly, but people just don't, thus Mac gets the reputation of being "more secure", even if that's wholly unjustified on a technical level.
Windows is a pretty secure operating system if you don't install random things from the internet, but then you're expected to install random things from the internet in the normal course of using it, and unsophisticated users don't have a good way to distinguish between what is and isn't sensible to install.
Mac avoids this by not having that much esoteric third party software to begin with, so installing Putty from "chiark home page" isn't a regular occurrence and doesn't condition users to do that.
> Nobody uses "Linux" and nobody ships software for "Linux".
Tens of millions of people use Linux on the desktop. That thing Valve charges 30% for ships for "Linux" and so do a large chunk of those games. And Firefox and Chrome and Maya and Blender and probably a higher proportion of open source software than even ships for Windows.
> If there was a distribution of Linux that was comparable to Windows in terms of market penetration and users, it would be a similarly vulnerable platform. Actually, that distribution exists: It's called Android, where malware and scams proliferate.
Actually, that distribution exists, it's called Android, and it has far fewer problems with malware than Windows despite the ability to side load apps.
> I can. They can't. I won't. It's wholly irrelevant.
It isn't irrelevant. It's an important part of the lifecycle of many apps.
The first version will barely compile and be full of bugs. Installing it will be a huge pain, it will have thirty seven worldwide users who are all tech workers, and those people will submit bug reports and patches and cause it to be improved into the state that it makes it into some kind of distribution repository where ordinary people can install it.
Unless you make it so people can't install such things on their devices even if they know what they're doing, at which point it has two worldwide users who are actually only the original developer with two devices and it withers on the vine and never comes to anything.
> So, who gets to decide who is "established"?
Granted it's hard to make an objective determination in edge cases, but is this supposed to be a difficult problem in the common case? Epic is an established company. Amazon, Google, Valve, Canonical, Mozilla -- these are not difficult to answer in the affirmative.
> Isn't that the whole point of side-loading, that you don't have a gatekeeper?
Side loading should be possible. It isn't the thing you have to make easy.
Installing the Epic Games Store should be easy. But you won't find "cheats for Fortnite" in it.
They really only changed their tune when Fortnite became so successful they could print money via skins.
Help me understand how this is different?
So you were paying one cut to the software distributor, and another cut to the retail chain.
Then there were costs things like creating and shipping physical inventory, swapping out the unsold inventory in the stores when you did a major version update, shared advertising costs, etc.
You definitely were not getting to keep anywhere near 70% of the price consumers paid for your product.
- Apple charges a ~30% fee to publish on their store. It's a high fee! I also understand people make money there (more than on stores with lower fees).
- Apple also has a pretty sophisticated set of financial products you can use through your account with them. It makes sense you wouldn't be able to use those in the same with with another payment processor.
- Apple also doesn't want this to be an avenue for leaking personal details.
My read of the support link[1] are that you owe apple 0% of any purchased that are not made "...after a link out (i.e., they tap “Continue” on the system disclosure sheet)...". Presumably, if your app is on multiple platforms, users can use another platform to buy things. It doesn't appear that you would owe apple money for those purchases[2] though of course you must still charge the same price to every platform.
Fundamentally I disagree with how apple runs their iOS platform so I don't own any devices that on it. Choosing not to own iOS devices is occasionally annoying but it doesn't seem like a real disadvantage to me. However I also think that the concerns Apple has about their user experience (information leaks, compromises, etc) are real and that they genuinely do better than most other players.
I think the case that Apple must allow side-loading is much stronger than the case that all of this behavior is somehow wrong in essence. As pointed out elsewhere in this thread, Epic takes 5% of all revenue (over $1m). Would they drop all their objections if Apple just dropped their fees?
[1] https://developer.apple.com/support/storekit-external-entitl...
[2] I am not a lawyer
If anything is expensive, is creditcard fees
I know costs and prices are somewhat independent of each other, but even the 12.5B seems like a lot. I wish I knew how much App store's technical infrastructure costs.
0. https://www.statista.com/statistics/296226/annual-apple-app-...
What's next - pay 30% Apple tax for purchases made through Safari?
I'm deeply embedded in the Apple ecosystem. From phone, to computer, to home automation stuff. I have no desire to use a secondary app store. But I want that option to be be available. And there is no good reason for Apple to be charging anything extra for infrastructure they do not provide, and in fact actively discourage and fear-monger about. Come on.
I do not take away from Apple that their customer service is top notch and for many users that matters as much as how good the SW is.
Their margins on laptops are thinner but the AppStore is not as relevant there.
The situation is the other way round - it’s the App Store that makes the iPhone useful. Windows Phone (the remake one) had good hardware, it literally was killed by lack of apps. I had one, I miss it.
Epic? Which never released the Unreal Engine for Windows Phone and now cries the loudest about the status quo.
Or the 1000’s of developers who abandoned pre App Store distribution models in favor of Apple’s hardware, software and APIs, happily signed up to 30% revenue share with Apple that didn't change in 15 years? (other than go down to 15% for 90% of sellers who do under a million of annual revenue)
MICROSOFT played the hugest part in Windows Phone demise. I still had a Palm Pre at the time and was waiting for a particular yellow Nokia Windows Phone to release for Sprint. My recollection is muddy after that but Windows Phone was no more so I got an iPhone.
For me, developers played a huge part.
There were a lot of popular and new apps missing in the windows store.
Microsoft had to even co-fund app developers to build apps for windows phone, without much luck or being too late.
E.g. Instagram for Windows released 18 months after Android. Did YouTube ever release on windows phone?
This played a big part in people choosing iOS/Android instead.
I haven’t looked into this for years, but that’s my recollection of early/mid 2010s.
The Verge seems to confirm my historic bias:
> If you’re wondering why none of Microsoft’s many strenuous Windows Phone efforts ultimately paid off, the key answer lies in the platform’s chronic failure to attract third-party app developers. Every time Nokia launched a new Windows Phone, it had to dodge and duck the question of when there’ll be an Instagram app for the OS. Even as Microsoft was beating Google at providing a smoother and slicker first-party app experience, Google was winning handily in having the more essential apps and the more enthusiastic third-party ecosystem.
https://www.theverge.com/2017/10/10/16452162/windows-phone-h...
You just unlocked a memory for me. I totally forgot that IG was never released for Windows Phone. Damn.
I rescind my previous comments, you're absolutely right. I think they could have a better go at it, this time. It's not Ballmer's Microsoft anymore (FWIW, I enjoyed aspects of his era).
I’m usually skeptical of companies with this many users because of the potential to mine and sell data. I’m glad Apple hasn’t had to focus on that to stay profitable to the extent others have.
Combined with Apple's love of walled gardens (and therefore very limited interoperability with other platforms), switching out would cause too much friction.
Similar to how while I can buy my parents new Android phones as upgrades, they'll just go back to the old ones if they can't have the old school navigation bar they're used to. Unlike me they're no longer willing to relearn how everything works every few years.
It's always kind of annoying seeing this "just don't use it" argument, as it completely ignores that part of the point of the walled garden is that it gradually forces people to be so invested in the garden that it becomes increasingly expensive to leave it. It's a similar network effect as what keeps abusive platforms like YouTube alive despite no one really liking it.
My personal experience doesn't leave me super convinced of this, which is why I asked. I don't think I use any apps I've purchased on the regular anymore. There are a few I subscribe to, but that's an ongoing fee I could continue to pay on Android (if the app exists) and I'll buy a game every now and then, but I rarely go back to them, so I'm not sure that I'm personally losing a ton of sleep over the loss of access to Magic Research. The cost of moving is going to be my time in migration.
The issue you describe (parents preferring iOS over Android) sounds rather distinct of an issue to a walled garden.
What I'm referring to as a walled garden issue is that they've learned to use the "included" features like iCloud etc, those are walled in (ie using it on Android isn't as smooth). Thus when you switch away, you're expecting them to learn the new UI and to get used to different services (eg google drive) and their associated menus.
I suppose it's better described as vendor lock-in, similar to how before you could easily transfer your phone number between carriers, the number itself acted as a form of lock-in, if you used the number on anything important you were stuck with the number until you could get the number updated.
Yes. It's only fair that Apple should get 30% of your income, because an Apple computer obviously made it possible for you to earn your income.
- anti competitive to force users to use their *Payment Processing* platform.
- not anti-competitive to charge 30% for purchases made from the app
The justification is that you're getting access to Apple's network of customers as "leads" and by referring them to you for purchases, Apple is justified a 27% commission.
Similar, other major digital market players such as MS, Google, Nintendo, Sony, Valve all charges 30% as a platform commission fee.
The end result is what you see now. Payment flows originating from the App, Apple is entitled to 27% (-3% which was judged to be an appropriate transaction fee for the Payment Processing).
Apple will not charge you 30% for any purchases made organically through Safari. This was not in the ruling and this remains functionally as it is now.
You can debate about the 30% being too high, especially on top of an annual fee. But claiming that all Safari purchases will incur 30% is a strawman.
It’s actually more poignant than that. The court established and the appellate affirmed that the commission is primarily payment for Apple’s IP:
“First, and most significant, as discussed in the findings of facts, IAP is the method by which Apple collects its licensing fee from developers for the use of Apple's intellectual property. Even in the absence of IAP, Apple could still charge a commission on developers. It would simply be more difficult for Apple to collect that commission.”
All the rest is bonus.
What’s the typical markup on a gallon of milk or a frozen dinner?
I’d bet that Apple’s 27% isn’t as egregious as it sounds.
A better comparison might be a flea market or fair where the organizers take 27% of gross receipts from each vendor, even if the customer went to the vendors store outside of the fair to buy. Which sounds egregious to me, moreso if it was the only fair that existed for a large demographic.
Why would a brand pay extra to be on a shelf in a supermarket? Isn't the store already making a markup? Does the store have a monopoly on food sales?
Everyone carries on about "monopoly" and thinks Apple pricing will plummet.
OK, explain Valve and Steam. With many stores, shouldn't the price be a fraction?
Here's a comment from July '23:
It's outrageous that Valve takes a 30% cut from every game sale on Steam without providing much in return.
We don't get marketing, PR, or advertising unless our game is already popular. If you're an unknown developer, you'll never get discovered. Support? Hardly. Their mandatory return policy, while beneficial for customers, can actually harm shorter games. Aside from facilitating product returns, they provide minimal assistance in other areas.
Valve doesn't offer funding or act as a traditional publisher, providing guidance or support during development. Steam is the sole platform for distribution, limiting our reach and revenue potential.
They offer no help with QA or testing. Even with their new alpha/beta system, the burden of reviewing any data falls on developers. Valve's main contribution is distribution, but the process is frustratingly outdated.
We need to demand better from Valve: more value for their cut or a reduction in percentage.
https://www.reddit.com/r/gamedev/comments/1408ng4/valves_30_...
Or, there's some value people aren't thinking about, and "the market [of developers] will bear it"...
“The value of a large network like Steam has many benefits that are contributed to and shared by all the participants. Finding the right balance to reflect those contributions is a tricky but important factor in a well-functioning network,” the company wrote in a statement on the Steam Community page. “It’s always been apparent that successful games and their large audiences have a material impact on those network effects so making sure Steam recognizes and continues to be an attractive platform for those games is an important goal for all participants in the network.”
https://www.theverge.com/2018/11/30/18120577/valve-steam-gam...
They’re only one party who was acting and sueing in bad faith and that’s epic
Imagine in a future not far away that car ownership has been replaced by car subscription, and all remaining 6 car manufactures decide to tell you that since you ride their fabulous IP, you must now pay a 30% surcharge on gasoline you use. What happens when you have low income and cannot afford a car?
Then your ISPs, then your health services, then your grocery stores, etc…
I think the crowd at HN is very smart for some things, but incredibly self-centered and out of touch with the broader reality on many topics. Not everyone makes hundreds on thousands of dollars on Tech jobs, not all devs sell millions of copies, and neither you will make that for the rest of your life.
As I said somewhere on the page, Apple owes large part of what it is today to the dev environment (Things,Devonthink, etc) which created attractive products only available on Mac. IOS or MacOs without third party apps is pretty boring.
Apple now has divorced developers and screaming for their share of alimony every month.
What a strange example. Over the past few years gas prices have fluctuated by 100%. Your idea comes pre-disproven.
You can’t really compare commodities with consumer discretionary spending.
> For those who see a perpetual take of 30% of your revenues (pre costs, pre taxes) as a reasonable ask
I think 30% is barely reasonable, 15% is very reasonable however and if you’ve gained enough success that you pierce through the $1M revenue ceiling, then 30% becomes more reasonable.
> I cannot wait to see you on the other end of the pointy stick…
Let’s examine your pointy stick.
> Imagine in a future not far away that car ownership has been replaced by car subscription
I need clarification on your stick. Am I already paying to use these cars through a subscription?
What kind of subscription is it? Is it a flat fee of $99 a year? Or is it a higher and/or monthly fee?
These things matter for me to understand your pointy stick.
> and all remaining 6 car manufactures decide to tell you that since you ride their fabulous IP, you must now pay a 30% surcharge on gasoline you use
In lieu of that subscription fee? In addition to an annual $99 subscription fee? I need more information.
Also, surely the smaller consumers of this service get a 15% rate, right? It’s only the big corporate users of this car service that pay 30%, no? Otherwise this analogy is already diverting a lot from what it aims to mirror.
As for the gasoline, am I earning a revenue on this gasoline consumption? What exactly is the analogy for the 85% (or 70%) in earnings as a developer?
> What happens when you have low income and cannot afford a car?
You tell me.
The situation you’re trying to capture in this analogy provides for this.
If I have low income as an app developer I pay my 15% over a lower amount, so the absolute amount I owe is also lower. I don’t see a similar mechanic in your analogy.
> Then your ISPs, then your health services, then your grocery stores, etc…
The same questions I asked above come up in those situations as well.
The real answer to your faulty analogy is that people wouldn’t use a service that charges a monthly subscription and a percentage based on consumption without any revenue that is inexplicably tied to said consumption and competitors would be tripping over themselves to offer an alternative to such a ridiculous product offering.
“Aha!” I can hear you say. “But there wouldn’t be a possibility to alternative options and this is simply the status quo as it has developed”. But that’s just fantasy.
Antitrust actions would’ve been triggered long before that, because in those case market power has been explicitly abused to attempt to create such abysmal conditions.
Which makes it entirely different than Apple’s case. The reason why Apple didn’t slapped around with antitrust remedies is because everything that you and others hate about Apple, Apple did before they gained their market power.
When they were a nobody in the relevant markets. They are merely maintaining what they then did, and in some cases even loosening the reigns. So there was no market power to speak of to be abused, which is why it doesn’t rise to the levels of antitrust.
In fact, they rose in market power despite (and in actuality because) of the rules they imposed and commission they charged, which to the courts signifies that the market didn’t actually mind it so much at the time and could withstand those elements.
If tomorrow Apple would introduce draconian measures and insist on taking 30% of every deal made on Apple devices and 30% of every purchase, physical or otherwise, on Apple devices and heck, for good measure, take 30% of everyone user’s paycheck, two things would happen.
1) the courts would rule that to be an antitrust violation because Apple, now that people are dependent on their devices and after they’ve gained market dominance, is imposing these restrictions
2) people would drop their Apple devices in a heartbeat and switch over to Windows and Android
The ramifications of 1 will be directly tied to the possibility of 2
If however Apple did this back in the early 2000s, number 1 would never happen but number 2 would, because Apple wouldn’t have enough market power to warrant #1 and the “natural balance” would be restored by #2
The more #2 is less feasible because of the market power, the more Apple is constrained in taking wild actions like that for fear of #1, but it will never be applied retroactively because the logic is that people wouldn’t have signed up in the first place if the “offender” doesn’t have market power because people would’ve chosen a different option.
> I think the crowd at HN is very smart for some things, but incredibly self-centered and out of touch with the broader reality on many topics. Not everyone makes hundreds on thousands of dollars on Tech jobs, not all devs sell millions of copies, and neither you will make that for the rest of your life.
All of this is completely irrelevant because we’re talking about a commission rate that is directly tied to the revenue of a dev. So if a dev doesn’t make any sales or or only a handful of sales, then they won’t be paying any commission or a minor amount in absolute numbers, especially when you consider that those devs would pay 15% instead of 30%.
You’re talking about this as if people owe 30% over something that isn’t directly correlated to their revenue and you analogy where gasoline usage is the main driver of what is owed, reflects this as well.
> As I said somewhere on the page, Apple owes large part of what it is today to the dev environment (Things,Devonthink, etc) which created attractive products only available on Mac. IOS or MacOs without third party apps is pretty boring.
True, but the inverse is true as well. It’s a symbiotic relationship, literally a rising tide that lifts both developers and Apple. If developers aren’t doing well, Apple isn’t doing well, if Apple isn’t doing well developers aren’t doing well. Which is why it’s a commission that’s tied to revenue. Apple gets more when I get more and Apple gets less when I get less.
I literally couldn’t do my work as a developer if Apple hadn’t provided me with the frameworks and tools I use on a daily basis.
We can argue if the value of what they’ve offered me is worth the 15% I pay or even 30%, but that’s a personal value judgement.
> Apple now has divorced developers and screaming for their share of alimony every month.
Another analogy.
You might overestimate how most developers, especially the small guys you seem so concerned about, care about the commission.
But since you like analogies so much, I think it’s more akin to Apple chartering a plane, providing a pilot, and renting out a hotel for us developers to get to a trade conference hosted by Apple to sell our stuff in exchange for a cut of the proceeds.
Now all of a sudden there are few people on the plane who have been making bank at prior conventions and they want to get off mid flight, because they prefer using their own private jet and mansions and host their own trade show.
All the while the people on the ground a yelling “Yeah! Let all those poor people get off the plane!” and I just want to get where I’m heading.