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Comment by GeekyBear | Hacker News Reader

> CEO Tim Sweeney said he believes those should be “super super minor fees”

He seems to be ignoring the part of the ruling finding that Apple is entitled to "some compensation" for the use of its intellectual property.

> The appeals court recommends that the district court calculate a commission that is based on the costs that are necessary for its coordination of external links for linked-out purchases, along with "some compensation" for the use of its intellectual property. Costs should not include commission for security and privacy.

https://www.macrumors.com/2025/12/11/apple-app-store-fees-ex...

Apple wanted 27% and Epic thinks it should be 0%. The lower court will have to pick a number in between the two.

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Maybe next they can decide what Epic’s 12% fee for their own marketplace should be

I get your point, but looking at it at a glance without any other context, 12% feels like a pretty reasonable amount IMHO.

Like, if all major marketplaces only charge 12% from the get-go, we probably would have had much less fuss and lawsuits over this.

This issue was always the disproportionate size of the fee, not the fact that they charge a fee.

How about making it 10%? As a modern-day "tithe".

I don't think a percentage makes any sense at all. Is it proportionately more expensive to host a $50 game than a $25 game? It's only a percentage Because They Can.

On consoles, a review costs several grands. That’s the alternative.

Well it's based on sales, not cost. In theory, a more popular game is a larger stress on servers, so charging them more makes sense.

The scaling also helps so that some (probably most) games aren't losing money to be hosted kn a store. That would be catastrophic as at some point games would need to remove themselves to name financial sense.

>It's only a percentage Because They Can.

Do you object to other sorts of royalty-based compensation, like for Unity engine or Unreal engine?

Yes. No to rent seeking.

There should be caps overall and under the caps there should be the option to choose between lump sum and royalties.

Nobody should be collecting unlimited revenue for a brilliant idea at the start and benefit from cheap or free scaling.

This entire model is ripping apart the fabric of modern society.

And yes, I known this is blasphemy on this website.

Why isn't this applied to income taxes first? Does the government deserve a percentage with no cap of whatever you make? Your government services don't get better for you the more you pay.

That is the hill you want to die on? The fact that at income levels greatly above the median income, taxes aren't capped?

You should look at it the other way, where ANY income or income equivalent, of any kind, should be taxed like income.

So when Bezos spends $5bn per year, that means he made $5bn per year (at least), so his tax statement should show him paying $2bn or whatever the top tax rate would imply.

I agree. Charging a blanket percentage of gross revenue is an extremely inexact way to monetize what is a broad basket of services that were previously separate including: electronic software delivery, software security verification, marketplace, transaction processing, DRM, etc. Since 2009, first on Apple's app store and then Google's, these services have all been arbitrarily bundled together despite having vastly different one-time, fixed and variable costs. People are only used to it in this context where every marketplace has been controlled by a monopolist gatekeeper.

Doing it this way makes no economic sense for either the seller or the buyer but it's coincidentally the absolute best way for a middleman to maximize the tax they can extract from a two-sided marketplace they control. In competitive markets, blanket taxing on total gross revenue generally only occurs when there's a single fundamental cost structure tied to that revenue, or the amounts being collected are so small it's de minimis. App stores are highly profitable, multi-billion dollar businesses.

Perhaps the most perverse thing about this is that electronic transactions for purely digital goods which occur entirely on real-time connected digital platforms make it trivial to price each service for maximum efficiency. It's easy for the price a 2GB game with frequent updates pays for electronic delivery to reflect the cost they impose on the infrastructure while a 100k one-time purchase app can pay a vastly smaller amount. And that's exactly the way the competitive marketplaces evolve - from moving shipping containers around the planet to residential propane delivery.

It’s proportionally more expensive to run a credit card charge for twice the amount, yes.

I'm by no means defending the percentage they take, but I would suggest that it's a percentage because it's simple:

Pick 3 imaginary games for sale priced at $1, $10 and $100. Any one of those games could be a million download a month success, and any one of them could be a complete dud.

What flat rate would you suggest to:

* Pay the developer for their work (ongoing per sale)

* Review each game and ensure it meets store guidelines (once per update)

* Host said game regardless of how popular it is (ongoing)

* Process transactions for the game (ongoing)

The alternative would be pricing based on revenue tiers (similar to what Unreal Engine does now), which aren't known in advance and don't take global variance into account (USD$200 in Eastern Europe might be a month's salary).

Percentage is just simpler. It also means that they'd be taking a loss on every free app or in the case of Free-to-Download In-App purchase apps - until users start transacting.

Personally I would rather transparent pricing. For each service the store offers, add a cost of appropriate type and value for that.

This.

If something gets super popular, it presumable costs Epic more. But does 100 sales cost 100x more than 1 sale? That seems unlikely.

If Epic deserves a 12% cut of a Windows game sold through their store (despite not having paid the costs associated with developing and maintaining Windows) how large a cut should you get when you did incur the additional costs of creating and maintaining the platform?

The cut should definitely not such that your profit margin for the service is a multiple of your costs.

So where does 12% fall when you provide nothing but optional DRM, hosting and payment processing?

Does Microsoft earn their 30% cut on Xbox since they do provide the OS, hardware development and gaming APIs?

> So where does 12% fall

Wherever competing services drive it. If Epic can charge 90% margins while remaining attractive to users, more power to them.

> Does Microsoft earn their 30% cut on Xbox

It's an irrelevant comparison. No serious person can accuse Microsoft of having a gaming monopoly.

Yes, if Epic sold an Epic computer which had > 50% marketshare and and you could only purchase products from their store.

The only other category you can really compare this to is game consoles, but the hardware is sold at a much smaller margin and they still (for now) support physical media.

12 sounds fine. I won't object to lower but 3-6 % is what most other modern digital platforms charge. Adding your own 3-6% on top a payment processor as a platform hostong content sounds reasonable.

Why are payment processor fees 3-6%? The court should investigate that too, it can't cost more than a few cents to process that charge.

The court is going to be pretty busy with all these investigations going on!

EU courts did cap payment processor fees, so yeah that is intended. We can't have companies bottleneck and take excessive fees and thus stifle progress, when a company gets too powerful the government has to step in.

I'll never say no to properly auditing our systems. So sure.

But I also recognize that few out there are pressing strong opposition to the idea of paying 3% for someone else to manage their financial transactions, or to host their own business. If I make a million dollars, paying 50k to Patreon or Kickstarter for hosting the service seems to make sense in my mind

Every single PC developer is fully able to release PCs games to customers without paying Epic a dime.

So, to you answer your question, the fee that Epic should take is exactly the same as Apple's. It is exactly Zero dollars for all apps that do not go through their app store. Thats already how it works though.

It, of course, would be absurd if Epic was able to force you to pay them money for apps that don't involve Epic in any way and dont go through their app store!

Doesn’t Epic charge a 5% royalty for any games developed on Unreal Engine regardless of where or how the money is collected or what app store it’s installed from? Why can’t Apple collect fees for any apps that are built on their software AND hardware?

> Doesn’t Epic charge a 5% royalty for any games developed on Unreal Engine regardless of where or how the money is collected or what app store it’s installed from?

"Royalty". It's common to charge a royalty when allowing someone to distribute your copyrighted property.

> Why can’t Apple collect fees for any apps that are built on their software AND hardware?

Because that's not a royalty - you aren't distributing Apple's copyrighted property when you send someone an iPhone application.[1]

When you send someone your game built on Unreal Engine, you are sending them Epic's copyrighted property.[2]

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[1] If people could side-load iPhone apps, that is. I don't believe that they can.

[2] If you sell someone code to your game and tell them to to download Unreal Engine, then compile and/or link it against Unreal Engine themselves, then sure, Epic won't get a dime. But your customer might still have to pay for that, depending on whether Epic makes single-user no-sale licenses free (I believe they do).

Thats after you make a million dollars though. It's free until then.

"0% Store Fee For First $1,000,000 in Revenue Per App Per Year Starting in June 2025, for any Epic Games Store payments we process, developers will pay a 0% revenue share on their first $1,000,000 in revenue per app per year, and then our regular 88%/12% revenue share when they earn more than that. "

Epic's fee for 3rd-party payments is 0%.

12% is if you sell directly through Epic's platform - nobody is claiming Apple shouldn't get a cut of that for their own platform.

> Maybe next they can decide what Epic’s 12% fee for their own marketplace should be

Aren't Epic's 12% fee less than half of what is usually charged?

Since courts work on what is reasonable, what makes you think that they will reduce it?

It's a little more nuanced than simply "some compensation" - and IANAL but it seems like the court is saying this fee should as Sweeney posits be very small:

> Apple should be able to charge a commission on linked-out purchases based on the costs that are genuinely and reasonably necessary for its coordination of external links for linked-out purchases, but no more.

> In making a determination of Apple’s necessary costs, Apple is entitled to some compensation for the use of its intellectual property that is directly used in permitting Epic and others to consummate linked-out purchases.

> In deciding how much that should be, the district court should consider the fact that most of the intellectual property at issue is already used to facilitate IAP, and costs attributed to linked-out purchases should be reduced equitably and proportionately;

> Apple should receive no commission for the security and privacy features it offers to external links, and its calculation of its necessary costs for external links should not include the cost associated with the security and privacy features it offers with its IAP;

https://fingfx.thomsonreuters.com/gfx/legaldocs/lgvdqxweopo/...

0.27% + credit card interchange fees feels more than fair to me. Apple should be thanking their lucky stars that the court isn’t forcing them to spin off the App Store business and pay back every stolen cent from their criminal bundling scheme. This makes IE + Windows look so innocent in comparison. Hardware manufacturers shouldn’t be allowed to mandate a monopoly on software distribution. Full stop.

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