DoJ Claims Apple Implemented In-App Purchase Rules to 'Retaliate Against Amazon'

[Oletros]

I never said anything of the sort.

I simply said Apple does not do NOTHING. When you buy something through the Amazon app, Apple's servers ARE contacted for the request and the response of buying the 'in-app purchase'. Apple DOES do the credit card processing and eats the credit card fees. Apple DOES calculate sales tax and spends money to file with the proper states. Apple DOES transfer the 70% money to Amazon's bank accounts, which includes a bank transfer fee that Apple eats. Apple DOES discount their iTunes gift cards, which means the full 30% doesn't always go to Apple.

Apple takes the 30% to pay for these activities, plus as a 'convenience fee', - that you as the consumer can easily avoid Apple taking by going directly to the Amazon site on Safari and doing the same thing. Apple will get 0% that way.

Apple does that because Apple FORCES using its payment system so yes, why don't take a cut of ebay, Amazon app. It is exactly the same, Apple doesn't store the goods, Apple doesn't distribute the goods, Apple doesn't publicize the goods. If Apple forces using their payment processor will be exactly the same in both cases.

 

[Todd B.]

Good god, the DOJ needs to GO AWAY already. They're just becoming a pawn of Amazon... has it ever been more clearer that they're on the take for Amazon?

 

[Oletros]

It's being sold on an iPhone or iPad. Hence platform.

This is a joke, isn't?

 

[notabadname]

Huh?

Try to make sense next time.

Try to read next time.

Hmmmm, let me explain: The Judge said; that Apple's actions were to "retaliate against Amazon for competitive conduct that Apple disapproved of".

I simply find it ludicrous to expect otherwise from a successful company. Yes, Apple watches the marketing attacks against their business, and makes adjustments in its business model to counter those attacks. Saying Apple is wrongly "punishing" or "retaliating" against Amazon or being anti-competitive is just sort of humorous, to me. What would be expected of Apple (or any business) when their business is being encroached upon?

 

[TheHateMachine]

Better yet, is like a mall having an IKEA catalog and the mall trying to get a cut when I order from that catalog.

REally, do you people know what the IAP is and where the ebooks are stored? Apple doesn't have the ebooks, Apple doesn't distribute the ebooks so the Home Depot allowing a vendor to set up a shop is a deadly wrong analogy.

I wonder how many times people are going to use horrible analogies for this situation because they just plain don't understand the whole thing... What are we up to like 8 now?

 

[Michael Goff]

Try to read next time.

Hmmmm, let me explain: The Judge said; that Apple's actions were to "retaliate against Amazon for competitive conduct that Apple disapproved of".

I simply find it ludicrous to expect otherwise from a successful company. Yes, Apple watches the marketing attacks against their business, and makes adjustments in its business model to counter those attacks. Saying Apple is wrongly "punishing" or "retaliating" against Amazon or being anti-competitive is just sort of humorous, to me. What would be expected of Apple (or any business) when their business is being encroached upon?

And the defense of Apple's bad practices continues!

----------

Good god, the DOJ needs to GO AWAY already. They're just becoming a pawn of Amazon... has it ever been more clearer that they're on the take for Amazon?

Oh yes, they're obviously being paid by Amazon.

Anyone who disagrees with Apple's practices is being paid by somebody.

 

[aristotle]

Paying the 30% cut in the Appstore for in-app purchase is no different than the MTA charging a percentage of profits from their tenants at Grand Central Station.

Think of the Appstore as the mall and the apps as stores selling goods.

It is reasonable to expect for retailers to pay a percentage of sales generated in the mall but not pay for sales from online purchases from the corporate website with an in store pickup.

This is no different to how you can avoid the 30% fee if you don't allow purchases within the app and instead the customer has to go through their web browser to make the purchase and can pickup the purchased content in the app afterwards.

It is a reasonable compromise and this judge has to be on the take from Amazon. The DOJ also appears to be on the take as well.

 

[TheHateMachine]

What would be expected of Apple (or any business) when their business is being encroached upon?

Oh I dunno, maybe compete on pricing or something. You know in a legal way instead of taking an illegal route of collusion that they have been found guilty of.

 

[Michael Goff]

Paying the 30% cut in the Appstore for in-app purchase is no different than the MTA charging a percentage of profits from their tenants.

Think of the Appstore as the mall and the apps as stores selling goods.

It is reasonable to expect for retailers to pay a percentage of sales generated in the mall but not pay for sales from online purchases from the corporate website with an in store pickup.

This is no different to how you can avoid the 30% fee if you don't allow purchases within the app and instead the customer has to go through their web browser to make the purchase and can pickup the purchased content in the app afterwards.

It is a reasonable compromise and this judge has to be on the take from Amazon.

Except that the MTA is housing the stores on their land and IAP are not on Apple's servers. Amazon's books are not on Apple's servers.

Why do people insist on making analogies that involve a physical location with a limited space?

 

[lilianeloirinha]

Sometimes when I read all the replies that people post, I wonder if Apple is paying them. I know that this site is called MacRumors but wow, some people here are just shills. Things like "people take advantage of Apple" sound so silly. It's like y'all prefer to be abused by Apple. You actually like being abused by Apple. You are content that there's no competition. You're happy that you can only use Apple's apps on your iOS device if you want a good experience, and you're not at all bothered that Apple can charge whatever they want for a digital product that somebody else is offering for a cheaper price. You are happy that Apple is blocking another company from offering you the same digital product for a cheaper price by trying to make the buying experience faster for you. Wow, just wow. How ignorant of some people here. I find it great that Amazon tries to let me buy cheaper books directly from their app. Once I'm running Amazon's app, data is being pulled from Amazon's servers, Amazon is dealing with processing the payments and Amazon is delivering the content. Not once Apple needs to foot the bill for storage or delivery, so NO they do not deserve a 30% cut from the sale of the book. If Amazon was charging for the app, then Apple should be allowed to take a 30% cut because they are hosting, distributing and verifying the app for malware, etc. But the app is free. The sale of goods from within the app is not being handled by Apple, so they have no right whatsoever to get any cut. Stop acting like Apple is 100% correct in everything they do, because they're not. It's great to have competition, I for one don't feel comfortable that a business wants to set prices to whatever they like by blocking others from using their own infrastructure to sell content.

 

[gatearray]

That's a bad analogy.

Books sold on the Kindle App don't take up any space on Apple's servers. Those Smurf berries that people bought do not take up any space on Apple's servers. IAP do not take up space on Apple's servers.

Home Depot, on the other hand, has a limited amount of space that your mini store would be lowering.

It's not really about whether Home Depot has the "space" or not to accommodate an outside business setting up shop within its walls to capitalize on Home Depot's customer base.

If I have a lemonade stand in my front yard and business is slow, I can't very well say, "Hey, I've noticed that Wal-Mart has a lot of customers, why don't I just sell my lemonade in Aisle 6?"

Apple has built an ecosystem that has value, and they serve millions of customers, so if another business wants to take avantage of that they have to pay for it, so to speak.

It's like y'all prefer to be abused by Apple. You actually like being abused by Apple.

Well, which tech company do you prefer to be abused by— Google, MS, or Amazon?

 

[aristotle]

Oh I dunno, maybe compete on pricing or something. You know in a legal way instead of taking an illegal route of collusion that they have been found guilty of.

What collusion? Since when is an agency model that gives control to the individual publishers collusion? Apple gave up control over pricing of the goods. The agency model is a hands off model.

 

[bbeagle]

I'll never understand why some people always think it's okay for Apple to do wrong and get away with it. When Apple does something wrong, they get a pass and leniency. You have to understand that every corporate company does evil be it Google, Microsoft, Samsung..etc. and non of them should get away with it, esp if it benefits us as a consumers. Stop with the fanboy **** about everything. If they do wrong, regardless of how good they are or who they are, should be held accountable for wrong doing. Simple as that.

The issue with me is that Apple is doing NO WRONG in this issue. It's not any fanboy sentimentality, it's the truth in my opinion.

Apple has a walled garden. Apple's 30% is no issue at all. It's completely legal - for anyone to argue the 30% issue is not legal is just plain wrong. I don't know why it keeps being brought up. Many people don't understand retail. Amazon prices many of it's own books at 30% or more markup! It's normal in the industry. Apple can make whatever rules they want about what apps are allowed in their store, what aren't, and what the fees are. You might not like it, but it's all completely legal.

The only questionable issue is Apple's insistence that the price you sell something inside an app in the App Store must be the same as the price you sell them outside their ecosystem. I can argue both sides of this point, and see truths and falsehoods on BOTH sides. It's very controversial. However, the PUNISHMENT is completely beyond anything normal, crossing the border into vengeance type punishment.

If I was Apple, I'm legally allowed to remove the Kindle app if I wanted to, and accept none of the 'punishments'. The judge does not recognize this.

 

[apolloa]

Kinda agree with the DOJ on this one. Why can't Apple just compete with Amazon based on prices? It's not like they don't have the money.

Yeah, and just how do you think they get 'this money'? Its not by being charitable to the customer or market.

 

[DaveN]

Kinda agree with the DOJ on this one. Why can't Apple just compete with Amazon based on prices? It's not like they don't have the money.

Because then like Amazon Apple would make zero profit?

 

[I.Love.Apple]

I don't get it. I don't use iBooks at all. I use the Nook app. When I want to buy a book I go to bn.com and purchase it and then pull it up on my Nook app on my iPad. Pretty easy to do.

It's easy but can be easier. That's the point. The system should favor the consumer.

 

[FlatlinerG]

Maybe it's time for Apple change their business model so that it becomes more closed to competitors. They could easily refuse to approve any app's that offer competitive products, such as the Kindle App, so that iOS users are required to purchase eBooks exclusively from iBooks/iTunes.

Yeah but then some jerk would try and sue claiming a monopoly of some sort.

 

[rydewnd2]

Never understood why Apple deserves 30% of IAP. Applications in general, but they don't need to host IAP content...

Are you arguing that the percentage is too high or that they shouldn't take a cut at all? The advantage with IAP is that Apple is providing you with a payment gateway that every single iOS user is credit card subscribed to. This is a very powerful thing especially when many of your conversions are spontaneous purchase, which IAP's often are. I'd argue, but don't have data in front of me, that conversions likely increase > 30% by having an integrated payment infrastructure. Imagine if you had to pull your credit card out and input cc info, billing address, etc.. each time you made an in app purchase, and receive a separate bill from each developers payment gateway. You might think twice before you buy that new plant in PVZ2.

 

[aristotle]

Except that the MTA is housing the stores on their land and IAP are not on Apple's servers. Amazon's books are not on Apple's servers.

Why do people insist on making analogies that involve a physical location with a limited space?

You are completely missing the point. What makes a presence in the Grand Central lucrative is not the "space" but rather the location which provides exposure to your products and services.

In the same way, Apple is providing you with free advertising and exposure on their app store in exchange for the cut. The space is a virtual presences on their highlighted apps sections of the store. The more popular an app is, the more it is going to be highlighted in the "What's hot" section.

 

[Michael Goff]

It's not really about whether Home Depot has the "space" or not to accommodate an outside business setting up shop within its walls to capitalize on Home Depot's customer base.

If I have a lemonade stand in my front yard and business is slow, I can't very well say, "Hey, I've noticed that Wal-Mart has a lot of customers, why don't I just sell my lemonade in Aisle 6?"

Apple has built an ecosystem that has value, and they serve millions of customers, so if another business wants to take avantage of that they have to pay for it, so to speak.

...

How does your post even make sense? If you're selling lemonade within the store... you're using their space. It's like you're willingly ignoring my point just so you can continue rambling about how Apple is right to try to get 30% on something they have nothing to do with.

If you went inside Wal-Mart and sold something? They'd be hosting your content within their store, it makes sense. Apple is not hosting IAP.

 

[genovelle]

Kinda agree with the DOJ on this one. Why can't Apple just compete with Amazon based on prices? It's not like they don't have the money.

Why should they have to compete with a competitor on their own site that they promote and support? And amazon is not competing they are leveraging one industry to support another and destroy any competitors. I would like someone to look at them for anti competitive behavior. I'm sure there are some daming emails about maintaining their power over publishera

 

[Oletros]

It's not really about whether Home Depot has the "space" or not to accommodate an outside business setting up shop within its walls to capitalize on Home Depot's customer base.

They are not doing that.

 

[apolloa]

Sometimes when I read all the replies that people post, I wonder if Apple is paying them. I know that this site is called MacRumors but wow, some people here are just shills. Things like "people take advantage of Apple" sound so silly. It's like y'all prefer to be abused by Apple. You actually like being abused by Apple. You are content that there's no competition. You're happy that you can only use Apple's apps on your iOS device if you want a good experience, and you're not at all bothered that Apple can charge whatever they want for a digital product that somebody else is offering for a cheaper price. You are happy that Apple is blocking another company from offering you the same digital product for a cheaper price by trying to make the buying experience faster for you. Wow, just wow. How ignorant of some people here. I find it great that Amazon tries to let me buy cheaper books directly from their app. Once I'm running Amazon's app, data is being pulled from Amazon's servers, Amazon is dealing with processing the payments and Amazon is delivering the content. Not once Apple needs to foot the bill for storage or delivery, so NO they do not deserve a 30% cut from the sale of the book. If Amazon was charging for the app, then Apple should be allowed to take a 30% cut because they are hosting, distributing and verifying the app for malware, etc. But the app is free. The sale of goods from within the app is not being handled by Apple, so they have no right whatsoever to get any cut. Stop acting like Apple is 100% correct in everything they do, because they're not. It's great to have competition, I for one don't feel comfortable that a business wants to set prices to whatever they like by blocking others from using their own infrastructure to sell content.

They don't call it 'The Cult Of Mac' for nothing buddy.

 

[I.Love.Apple]

What collusion? Since when is an agency model that gives control to the individual publishers collusion? Apple gave up control over pricing of the goods. The agency model is a hands off model.

The model itself is not a collusion. And nobody is saying this. Apple and the publishers colluded to introduce the model. Without this collusion individual publishers were afraid to go with this model because if other publishers would not do the same, they would lose money. With collusion, they all raised prices simultaneously. But of course, Apple did nothing wrong

 

[Rocketman]

1. DoJ is a "regulator" and thus has the "presumption of correctness" when its actions are being reviewed in court. Must be nice. In other courts the standard of justice is "beyond a reasonable doubt", "preponderance of the evidence" and others. Nowhere but in administrative court with a regulator as a defendant does any entity in the United States have a "presumption of correctness". This is anti-constitutional. and is not justice, and is contrary to the "rule of law" IMHO. It is NOT sovereign immunity.

2. The headline states, "DoJ Claims Apple Implemented In-App Purchase Rules to 'Retaliate Against Amazon' ".

The DoJ is SPECULATING as to motive in an issue which is commerce where the "motive" is obvious. Market access and profit. They implemented the agency rule because market access was harmed by the existing "dumping" practices of Amazon, a vendor so dominant with an almost 80% market share, it could rightfully be considered a monopoly. This is who the DoJ is defending when they go after Apple!

3. This government is too in the face of business generally, but have a spacial place in their hearts and DoJ's for "fine-able" targets. I would LOVE to see the list of top 50 fines issued by FEDGOV in this Presidency. It would be instructive.

Rocketman