I don't necessarily agree with Apple here, but couldn't your same arguments be made against Epic? They want to "stick it" to Apple and are harming their customers in the mean time?
What this comes down to is an argument over money, and what percentage apple should get of that money. I don't think either company has a moral high ground in their negotiations on what percentage apple deserves.
Epic is the customer here also and they want to be able to provide a convenient and cheaper way for their customers. Their asks are not only reasonable, they are consumer friendly.
The judge did say Apple has a right to collect a commission , but did't rule if 30 % was fair.
"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.
Indeed, while the Court finds no basis for the specific rate chosen by Apple (i.e., the 30% rate) based on the record, the Court still concludes that Apple is entitled to some compensation for use of its intellectual property. As established in the prior sections, Apple is entitled to license its intellectual property for a fee, and to further guard against the uncompensated use of its intellectual property. The requirement of usage of IAP accomplishes this goal in the easiest and most direct manner, whereas Epic Games’ only proposed alternative would severely undermine it. Indeed, to the extent Epic Games suggests that Apple receive nothing from in-app purchases made on its platforms, such a remedy is inconsistent with prevailing intellectual property law."
Yeah - I think Apple's 30% cut is a racket and a bad incentive for them. They should make money by shipping incredible products, not taxing everyone who builds for them.
That said, I like the app store rules they can enforce like IAP - I just don't think they should be taking a cut. If they want to charge a flat one time fee of like $100 to publish then fine, but profit sharing seems wrong to me.
My worry is their aggressiveness in defending their tax will cause blow back that damages their ability to leverage their rules. A worse outcome is one where they keep the tax, but app devs are allowed around the rules. This is starting to happen (an admittedly tiny bit) by them being forced to allow links out to sign up off of the phone.
If they just forced people to use IAP for their user's benefit (easy cancellation, easy account subscription tracking and privacy, easy payment), but didn't take a cut that would be the best outcome for their users and it'd be an easier argument to win in the public eye.
Commission does not matter. It could be 300%. What matters is whether users can use another method of payment without artificial difficulties. If I can press "Apple Pay" and pay $120 or I can press "Paypal" and pay $40, I'd choose Paypal. If it would be $41 vs $40, I'll consider Apple. But that's me. Some people surely value Apple services more than me. So when competition is allowed, Apple will be able to price their commission competitively.
Apple only was slapped down on anti-steering to other payment options, NOT in collecting a commission.
That includes potentially changing their developer agreement to now require developers to meter and perhaps even audit external payments to submit Apple's commission.
Because they can no longer differentiate payments made independent of the app (because the anti-steering clauses are gone) this could result in required commission to apple in cases which it formerly was not required.
Imagine you want to sell a valuable, consumer friendly product that is cheaper than some alternatives and will save people money, but in this case, in a brick and mortar store.
The brick and mortar store says "we agree to stock your product, and will take 30% off the top for our troubles."
Would we be saying the same things? It's the same dynamic, in my view.
Except that it's not. The ruling clearly stated that Apple has to allow other payment providers inside the apps, but obviously anything sold on the App Store can still attract the 30% payment fee.
In your example, it's like if you bought a TV from Walmart, took it home, and then any content you wanted to buy on that TV had to have a 30% fee paid to walmart since....that's where you bought it originally? It doesn't make sense there, and it doesn't make sense here. When epic sells you a fortnite skin within fortnite, apple provides literally no value to this transaction, other than being a gatekeeper between two legitimate sides wishing to engage in a business transaction - so that's why Epic wanted to make sure they can process their own payments within the app(and the court has agreed).
What about in app payments in XBox or PS4? It will not surprise you to know they also take 30%.
I can't help but notice that Fortnite is also available in the PS4 store as well.
This is simply Epic doing their own money grab against the the platform they can most afford to alienate:
>The documents show that from March 2018 to July 2020, the
>breakdown of Fortnite revenue by platform was as follows:
>PS4: 46.8%
>Xbox One: 27.5%
>Android, Switch, PC: 18.7%
>iOS: 7%
This is a flyer for Epic to try to take a bigger percentage from their ecosystem partners and devalue them. Commoditize your complement. And they simply started with the one they could afford to alienate.
I don't have links handy but Sweeny directly addressed this. Sony and Microsoft are willing to negotiate with Epic. They get to find a middleground that both sides are happy with. Apple does not negotiate, a developer that has $5 in sales get's the same deal as Epic. Sweeny stated that if Apple had been willing to negotiate similar to Microsoft and Sony then we wouldn't be here.
That's a good point. Not a big Apple fan, in fact I hate most what they do, but for that particular thing I don't agree with Epic. Those things are anti-competetive and hurt everyone else.
> What about in app payments in XBox or PS4? It will not surprise you to know they also take 30%.
What about it? It's the same kind of anticompetitive practice. Except that Apple devices are used by billions every day across whole software market and consoles are entertainment devices used with much narrower market impact. Punishing them is less urgent.
What if the TV manufacturer didn't even need retail distribution because they have their own warehouses, trucks, etc and will gladly send you a TV for $0 and charge on-device subscription fees to cover it.
But sadly, you bought your home in a neighborhood with an HOA, and even though you own your home, the HOA requires all retail purchases have to go through them, and they take a 30% cut of everything and they won't let you order that TV directly from the manufacturer to put in your house.
But this is ok, because this is what you agreed to when you bought your home.
Then you’d have a different situation. The warehouses, trucks etc are the app store and iPhones. In order for that TV manufacturer to have their own, they’d have to build their own devices, OS and cloud services.
The iPhone is your house -- you own that. The HOA is Apple -- the people who make the rules. The trucks and warehouses are the servers and the internet.
Epic already runs a store they don't need the app store to distribute their apps and do payments. They're only required because Apple gives them no other option.
Apple isn’t an HOA, HOAs dictate what people can do with houses that the HOA had no hand in building. Apple built the houses and the logistics network that made building and selling them possible.
Also, the majority of people do not own their houses, banks do. Try financing a house and then stop servicing your loan. That’s essentially what Epic has done: breached contract.
Epic’s “store” is an app, and evidently they do need Apple to distribute it to Apple devices, unless you can tell me how to install it right now on my device?
You're muddying the issue here on purpose. Mortgages are irrelevant to the analogy. The logistics network is irrelevant. If you buy a TV, there is a big logistics network in making and building them too -- so what?
> unless you can tell me how to install it right now on my device?
This is the dictionary definition of begging the question. You can't install apps on the iPhone because you can't install apps on the iPhone -- that's not an argument.
Software distribution and installation, historically, not required an "app store". That's a relatively new invention.
They definitely entered into that contract without duress.
But the majority of other neighborhoods are also run by HOAs with similar terms. There are a few neighborhoods that are completely free of HOAs that but those houses are not as nice and neighborhoods not as nice. If you want a nice house in a nice neighborhood, an HOA is your only option.
I'm positive some people, if they had the option, would prefer to buy their current house free of the HOA. Others, on the other hand, like that HOA protects their neighborhood and don't care that they can't paint their house a different color or buy TV's directly from manufacturers.
Sadly, the house and neighborhood you want determines whether or not you'll have to enter into that contract with a particular HOA.
> There are a few neighborhoods that are completely free of HOAs that but those houses are not as nice and neighborhoods not as nice.
I think the HOA tries to argue that this isn't coincidence - its the HOA's policies and governance that have resulted in the niceness (we can cite examples that both support this and contradict this, of course, so its hard to assess whether this is true).
Folks might argue that it isn't fair that the most desirable goods are encumbered, but then its kind of up to them to create or support institutions that can manufacture the unencumbered version. That's the promise of a market opportunity where we can create brand new neighborhoods to test your hypothesis that people will prefer the nice-but-no-HOA version (I think the recent buzz around the Framework laptops is an example of this).
Well but that TV requires power lines to operate, and fiber to get its content. Insofar as the neighborhood (or whoever) paid for those, they deserve a cut too.
The HOA forces you to use their power and fiber, so in that case sure. But if you could get power and fiber directly from the TV manufacturer or someone else, then the HOA doesn't need a cut.
In this case, the TV manufacturer already has all that infrastructure and they use it in neighborhoods without an HOA. It would be no cost to you or the HOA for you use it but the HOA just doesn't allow it. For obvious reasons, of course, because then they wouldn't get their cut.
You want a nice home in a nice neighborhood or a nice phone with a nice OS. Maybe you want to avoid an HOA but the home/phone you want isn't available without it. You can always choose another phone/home in another HOA controlled neighborhood. Or alternatively you could get a PinePhone or a crack house.
> The ruling clearly stated that Apple has to allow other payment providers inside the apps
This was widely misreported as true, but is in fact not what the judge ruled. If you read the full ruling rather than just the single page injuction, it seems that the only thing that Apple is being forced to allow is in-app communication about / linking to places outside the App where purchases can be made.
In fact, the Judge goes so far as to say that Apple can still legally use their contracts with developers to require Apps to pay commission on out of app purchases. This case was a far bigger win for Apple than was initially reported.
To fix this, we need new legislation. The courts seem clear so far that they can't reign in this behavior using the existing laws on the books.
> The ruling clearly stated that Apple has to allow other payment providers inside the apps, but obviously anything sold on the App Store can still attract the 30% payment fee.
Incorrect.
The ruling said that Apple cannot have anti-steering provisions that prevent developers from advertising alternative payments on content outside the app (web pages, emails).
- Apple is still allowed to forbid in-app purchasing through alternative systems
- Apple still has the option to require commission on purchases made externally in the future. Currently they do not, but they were previously able to draw a clear line using anti-steering provisions.
Apple has used other techniques like minimal usability to pressure apps to support in-app payments - e.g. Hey.com was rejected because their app was unusable on download because they did not support in-app subscriptions and anti-steering meant they did not refer people to instructions on how to sign up. Presumably anti-steering solves this - right up until Apple changes their rules to say that the external payment needs to result in a commission payment.
There are only two chains of brick and mortar store in the world and one with double digit market share (Apple) has decided to take 30% off the top for all goods sold in all of their stores and have banned products from having any indication on their packaging that they can be purchased elsewhere for different pricing. Entering any store also requires an extremely expensive chain-specific device that most people purchase on credit every few years, eliminating the ability to easily shop around at both chains.
If this were to happen outside of tech, the perpetrator would get crushed by anti-monopoly legislation.
An App distributed on the immensely popular iOS platform can be used to advertise alternative platforms at different pricing. The “fair” price if this was allowed to happen would be a 0% cut since no one in their right mind would pay any amount extra if given the option.
The only real restriction Apple currently has is that apps should do no such advertising of alternative platforms (payment methods).
> An App distributed on the immensely popular iOS platform can be used to advertise alternative platforms at different pricing. The “fair” price if this was allowed to happen would be a 0% cut since no one in their right mind would pay any amount extra if given the option.
Prior to the recent ruling, this was untrue (unless I'm mistaken).
It's even worse than that, because each of the stores are in different cities and if your customers want to patronize the other store they first have to move to the other city.
Disagree. Adding 100 files on an FTP site is nowhere near as complicated as adding 100 boxes of frozen yogurt in a grocery store. Physical goods occupy space, need (sometimes) specific storage conditions, packaging, etc. We need to re-evaluate these concepts for digital-only goods. I'm not denying that running a store has costs, but grabbing 30% of sales for a digital-only good is immoral IMHO.
To make the analogy accurate it would need to be stipulated that this brick and mortar store is the only place that customers can go to buy products.
edit: I wouldn't even say "two chains" like a sibling comment suggests because the reality is that customers have to invest hundreds of dollars on an exclusive membership to one or the other, picking and choosing from both is not an option.
> What this comes down to is an argument over money, and what percentage apple should get of that money
A lot of things have been litigated in this dispute, this is not one of them. What this comes down to is questions about control over iPhones and contents of apps, questions the court was asked to answer were things along the lines of:
- Whether Apple can restrict iPhones to only installing software received via Apple.
- Whether Apple can control how software installed through their platform collects in app payments.
- Whether Apple can control how software installed through their platform informs users about not-in-app ways to pay.
...
Not "what cut is appropriate". That wasn't the legal or moral point.
What this comes down to is an argument over money, and what percentage apple should get of that money. I don't think either company has a moral high ground in their negotiations on what percentage apple deserves.