Epic Games and Spotify Say Apple's Latest DMA Changes Are 'Illegal'
macrumors.com
macrumors.com
[*] "Notarization" for iOS is a misnomer and imposes a laundry list of requirements in addition to "the app isn't malware". The guidelines aren't even a separate document; they're quite literally a subset of the App Store guidelines (notice the "only notarization requirements" checkbox):
https://developer.apple.com/app-store/review/guidelines/
Compare that to the macOS notarization requirements, which are quite succinct and are anything but a subset of the macOS App Store guidelines: https://developer.apple.com/documentation/security/notarizin...
(macOS of course still allows you run apps that aren't notarized after passing through several scary warning screens.)
These extra unnecessary guidelines, along with the fact that you still need a paid Apple Developer account at $100/year to submit your apps for notarization (even if you just want to use them on your own device and distribute them nowhere), shut out FOSS entirely and render the DMA nearly useless from my point of view.
It kind of sees to me that Apple is doing as much as possible to teeter the line , to see how much they can get away with. It is definitely a burden on the European Union just to make this one company comply; though it has always been this way with Apple. Anyone remembers how USB-C would "hinder innovation" on the iPhones?
I hope the European Union sees through this malicious compliance and gets Apple in line. But honestly, it just shows how monstrously big companies like Apple are. I do think these problems pile up and eventually they're going to be fined a big sum of money for the repeated offenses. We'll see though, maybe they get away with it.
I hear this a lot, but what’s the precedence?
These fines tend to ratchet up quickly for repeat offenses. The maximum for the DMA is 10% of global revenue, which for Apple would be like $40B or almost half their global operating profit for 2023
It’s just not instant.
They've already invited enough scrutiny and regulation into their niche.
Do they think this is the US where the DMA will be ruled unconstitutional or the Commission will be defanged by the ECJ? It ain’t gonna happen.
The judge got annoyed but did anything came out of that?
Apple isn't really incurring any costs for this. They don't make any of the content, they don't write any of the software, they do host the 'applications', but they only deliver the tiniest parts of the app (they host a small binary, but they aren't hosting the videos on Netflix or YouTube, for example, or the major assets in an MMO game or such) and a lot of the labor they do "provide" isn't necessarily valuable (their "review" of the apps, for example).
The 30% figure seems to be pulled from gaming console markets, but it was never really justified over there either, and the previous economics that made it work (like subsidized hardware) never applied to Apple's ecosystem. (iPads aren't like, $99 each, and priced at that point, with the expectation that Apple will 'make it up' via the 30% tax on app store sales, the way consoles once were)
For Epic this is almost entirely about Fortnite, where they're making ~$5 billion a year selling skins and emotes to children while not being in App Store or Google Play.
Epic wants the millions of users and IAP they would get by being on these platforms but they want to pay 0% to the platforms for it.
Of course not. That's why the ask has always been a percentage reflecting the economic value to the developer created by the platform, which is surely non-zero.
And even then - the Super Bowl ad pricing is directly correlated to the number of users that ad will be delivered to.
All of that becomes even more emphasized if there's an alternate app store experience.
Correct. The value is in the audience reach, not the opportunity cost of not being able to show another ad.
Epic stands to make billions from the audience reach of these platforms, but when it comes to paying for that reach it somehow computes the value to be zero. That's some Hollywood accounting.
The "App Store" is a platform that offers reach in distribution channels. The Epic Games store is a platform that offers reach in distribution channels. The iphone is not. If you buy software through the epic games store, then apple gets nothing but a middle finger.
Epic would not be fighting so hard to get back on iOS and Android if they did not expect to make piles of cash from the massive market those platforms created, but when it comes to paying those platforms, they say the fair value is 0. That's the same logic at play.
As for buying from the Epic Games Store, I think you may be a little confused. These terms are for link-outs from apps you first installed via the App Store. You're still getting the app via Apple with this.
I would argue that it's also entirely possible that if Apple had taken or being willing to negotiate a less usurious cut, that Epic would have been quite happy and not played hardball.
No you just don't understand accounting. Hollywood Accounting has nothing to do with hiding revenue. It obfuscates profit.
Epic standing to make money is not a problem. Apple made its money when it sold the phones to customers. It has no right to continue to extract taxes. That is completely unrelated to hollywood accounting.
The fees on links are just part of a broader problem that apple is preventing fair competition on software distribution.
This is more like the TV manufacturer demanding a cut of the ad revenue because they've demanded all incoming feeds go through their middleman software layer.
1) Apple should be able to charge as much as they want to use their app store. Even 100%!!
2) You should be allowed to install other app stores on the device you own, over which Apple has no control.
Anything else is a half measure.
In theory, if there's a truely competitive market (has such a thijg evwr actually existed for anything?) it shouldn't matter what a particular store charges as any other store could come in and charge a lower percentage and provide a 'better' service.
That can't happen without very open access to alternative app stores though.
In an idealized enviornment whoever could provide the best app store for the least amount of overhead and fees would be successful.
That said there's something about defaults and the many year headstart Apple has had with their own app store which makes me skeptical that even in a completely open environment that there could ever realistically be a mass alternative for everyone and expecting the average user to care about developer fees they don't understand is a hard sell.
You could decouple distribution from payment processing. Have an "app store" with only free apps, but they can have in-app purchases if they handle their own payment processing. This is basically just a CDN. We already have a very mature and open market for CDNs, and they're very cheap.
We also already have a mature, slightly less open market for payment processors. Stripe charges about 3% and provides almost all the features the App Store provides for 10x bigger fees. The one feature most people would probably miss is centralized subscription management, but there would be nothing stopping Stripe (or someone else) from offering the exact same basic feature, charging way less than Apple, and still making a huge profit for themselves
Imo, Apple should be allowed to charge what they want - I'm ok with that as long as I can sidestep their thrall and sideload whatever I choose at no cost. If I get burned, that's on me.
I think their costs in running the AppStore are the cost of doing business. They need this for their product. Without it, the product is nothing. And they get to suck 30% out of everything. Got to admire that.
Better would be a replacement OS but is that even possible?
How would apple recoup the costs associated with allowing third party app stores? Even ignoring the direct costs, they will probably get derivative costs such as extra support requests that they can’t do anything about but have to burn man-hours telling people that.
In order to recoup the costs they would have to increase prices elsewhere. Having third party access from the start as part of the value proposition would mean they had already priced that in like the others, but they didn’t, so they haven’t.
Something smaller, like under 5%, close to the cost of providing the service, would be more like a "finders fee" on the other hand shouldn't have such a duty.
I know, unrealistic, but a fun thought experiment.
Walk away from $21B profit on $86B revenue.
https://www.apple.com/newsroom/2024/08/apple-reports-third-q...
It's feels the exact same with the GDPR cookie banner nonsense where actually banning tracking is legally untenable so they tried the shame banner. Except that companies can't feel shame and this affected their revenue so they just added the banner and moved on, and users added the banners to their ad block and moved on.
Cookie banners are something the industry invented.
> and users added the banners to their ad block and moved on.
Which means no consent was given.
There is no "back and forth". The EU is not negotiating with Apple. Laws are not up for negotiation after they've been passed. This is the whole issue here - Apple thinks they're at a corporate negotiation table, but they're not. Laws that are in effect are meant to be followed - it's a one-way process.
??? Of course they are what are you talking about? Hell even criminal law is up for negotiation some 90%+ of the time with plea deals and DA's declining to prosecute certain crimes. It is unfathomable to me that you can look around and not see regulators working with companies to meet the company's business objectives and the regulator's compliance goals.
And of course this is the case, regulators would rather not spend time and resources suing and so will give more liberal interpretations of the law in exchange for the company willingly following it. It's the solution to the iterated regulators dilemma— if you have no give then companies will fight you at every step and make you spend years in court for the smallest things.
There's no negotiation there other than "we have codified that early mistakes get lower fines, do not make us believe they aren't mistakes".
Apple might be thinking they are negotiating towards some kind of a deal, what they are doing is burning through all the cut outs for howjst mistakes.
The problem is limited throughout available for actually suing the companies, partially because the paw has to be balanced in not applying huge hammer to small companies making a mistake - the point of the law isn't Draconian fines.
The constant back and forth on DMA is explained much better by someone at Apple either intentionally playing chicken and hoping they have cashed out by the time fines come, or complete cultural lack of understanding thinking they can get a "deal" while they are burning through all the "carrots and little sticks" till only the fine nuke remains.