App Store Fee Cut Attracts Criticism From Major Developers Like Spotify and Epic

[MacAddict1978]

Actually, they cannot. Anti-trust laws are a real thing.

From the comments, I don't think most people grasp anti-trust regulation. Or that regulatory mesures to end some of these practices would drop the costs they pay and force Apple and Google to compete with lower subscription prices too.

I’m a bit confused , do they want Apple to provide a platform for free? If they sold physical music records then would they expect HMV or another record store to give them shop space for free too? I mean 30% is probably too high given that overheads are much lower than a physical store but 15% seems fair to me ok the big boys earning over 1mil still pay 30% but it’s still a step in the right direction for the majority

Apple and Google are facing global scrutiny because of their practices. This was not to be kind to small developers. It's a ploy that they hope will halt regulatory measures that are about to fall in the tech industry.

The profit margin on most of these services is LESS than 30%. Because Google and Apple have duopoly on the market, most of these companies don't have a choice in not putting an app in their stores because 80% of people breathing on the earth use one of the two. In some cases, they have to lose money to grow market share to boost profitable customers from other avenues.

Apple also forces an app developer to use their payment system vs. one they have contracted with. Apple would have no iPhone business without developers. This is not about your security as a consumer. A credit card processing agreement is usually 5%, not 30%.

Add to this, Apple created their own competing services for many markets (books, movies, music, etc.) as well as Google, and thus, because they don't have to eat 30%, make more profit dollars further squeezing competitors that have to charge higher prices to make up for losses.

Sure, a developer can not allow in-app purchases, but this isn't customer friendly. There are lots of alternatives Apple could take but elect not to. I don't feel bad for any of these companies getting spanked with anti-trust hearings and lawsuits.

 

[MacAddict1978]

If it applied to Apple, they'd already be buried for it.

They're being investigated currently (and Google) in multiple countries. This has been rather newsworthy.
It does apply to Apple and that's why they did this half arsed move hoping it might help their cause.

The scope of these investigations and hearings is just so big. Consumer data, charging competitors unfair prices that give your competing products an advantage, potentially having to divest said products (Apple Music for example), anti-competitive business practices, inconsistency in who gets deals and who doesn't, using a walled garden echo system for monopolistic purposes. The EU wants to strip them from even selling an iPhone that comes loaded with an App store because consumers can't pick their app store. (That's insanity but that's what they're driving for.)

 

[beastforum]

To **** these crybaby’s you, Apple just needs to say “Ok the fee is either £1 million a year to advertise your app with us and 0% commission on sales or the usual £0 for advertising and 30% as usual. Epic, Spotify and this other mug, want everything. They want no fee. They want Apple to plug their app for free. Get real.

 

[cardfan]

Sounds like apple shots themselves in foot again with this dumb move like I said earlier.

 

[jingbugle]

I would love for tax structure to be simple and promoting something similar .

 

[vipergts2207]

If it applied to Apple, they'd already be buried for it.

Yes, because if there's one thing government is known for, it's moving swiftly lmao. How many months have we been waiting for another COVID relief bill now? Some incredibly faulty logic you used the reach that conclusion.

 

[Kierkegaarden]

I believe if Apple dropped their commission to zero, these same serial complainers would demand reparations.

 

[Michael Scrip]

Apple just needs to say “Ok the fee is either £1 million a year to advertise your app with us and 0% commission on sales or the usual £0 for advertising and 30% as usual. Epic, Spotify and this other mug, want everything. They want no fee.

Agreed.

Also... lots of comments have compared the App Store to a shopping mall.

Well guess what... malls charge rent! You don't get to sell stuff in a mall without paying rent first, right?

So imagine if a developer had to pay $50,000 a month to even be in the App Store. That would be devastating to everyone except the largest app makers.

Thankfully it's not like that. You only have to give a percentage of your sales afterwards in exchange for Apple giving you all the tools to create your app. And Apple also provides payment processing spanning hundreds of countries and tax codes, AppleID services, server/CDN storage, push notification services, and so on.

 

[Dolmio]

From the comments, I don't think most people grasp anti-trust regulation. Or that regulatory mesures to end some of these practices would drop the costs they pay and force Apple and Google to compete with lower subscription prices too.




Apple and Google are facing global scrutiny because of their practices. This was not to be kind to small developers. It's a ploy that they hope will halt regulatory measures that are about to fall in the tech industry.

The profit margin on most of these services is LESS than 30%. Because Google and Apple have duopoly on the market, most of these companies don't have a choice in not putting an app in their stores because 80% of people breathing on the earth use one of the two. In some cases, they have to lose money to grow market share to boost profitable customers from other avenues.

Apple also forces an app developer to use their payment system vs. one they have contracted with. Apple would have no iPhone business without developers. This is not about your security as a consumer. A credit card processing agreement is usually 5%, not 30%.

Add to this, Apple created their own competing services for many markets (books, movies, music, etc.) as well as Google, and thus, because they don't have to eat 30%, make more profit dollars further squeezing competitors that have to charge higher prices to make up for losses.

Sure, a developer can not allow in-app purchases, but this isn't customer friendly. There are lots of alternatives Apple could take but elect not to. I don't feel bad for any of these companies getting spanked with anti-trust hearings and lawsuits.

Respectfully I don’t agree the original iPhone didn’t have an App Store and it sold well you can’t say that Apple wouldn’t have an iPhone business without developers at its outset. Apple invented the App Store as we know it and continues to develop iOS and the developer kit . Each new iOS version is given free to existing users which is a different model to how software was distributed prior where users often had to pay for A new OS cw Windows 95, XP etc . So Apple as part of the wider iOS system does a lot more than just process transactions . The continued development of iOS and the developer kit is more than the annual fee they charge abd therefore they recoup from the app fees .Is 30% too much possibly but who chooses what is fair ? Is apple a monopoly? Again probably not definately not in europe where iOS is much lower than android with the exception of the UK . So Spotify has the whole android market to compete in as well as iOS so it’s difficult to see that Apple’s practices restrict competition . When the majority of European residents don’t even have an iPhone !

 

[nitramluap]

Sounds like what we already have in the US. I prefer the flat tax idea myself.

Not quite. Your highest marginal tax rate is way too low (only 37%), it kicks in way too high (>$500k) AND you don't have a tax free bracket for the poorest wage earners - they still have to pay 10% in the USA as far as I can see (up to about $10k).

If someone here earns $18,000 they pay no income tax... and if they earn $20,000 they only pay $380 in income tax.

So you kind of have it, but it still punishes the poor & favours the rich. In Australia, if we earn even more we have to pay an extra 1-2% levy for public health funding and we don't get discounts for private health insurance; as it should be too.

But this is a huge topic and not really for here... but I like Apple's change

 

[Hammerd]

What's that old saying... "Let no good deed go unpunished"? $150k for advertising, distribution, instant access to a gigantic customer base and payment processing on $1m in sales is a damn bargain, no matter how you slice it.

Apple could be standing on a street corner handing out $100 bills and these people would complain.

15% (is still 30% for now) on the TURNOVER (not the profit) for processing payment is a bargain. Ok, let your bank know!

 

[Hammerd]

blah blah blah. Every online store and physical store charges a 30% fee. Quit your whining.

So what? What's your point?
You'd be the 1st whining if your bank took a 30% cut on your gross salary

 

[InGen]

It might finally be time for Apple to flex it’s muscles here’s and perma-ban Spotify from it’s entire platform in anyway and indefinitely for the disrespect. Don’t bite the hand the feeds you, even if it’s feeding you less than your appetite desires. Crush them Apple please destroy their entire company and take the loss of whatever customers leave the Apple platform in protest from your ban.

Me and many of your customers stand behind you if you did this. It’s time for a purge of Apple using individuals when they start becoming entitled to have a say in the company’s direction. Show them that these products and platform is not for them and remind them who the boss is. Flex please Apple!!

Apple users MUST COMPLY with Apples Rules. Buying and owning an Apple product or using Apple’s services doesn’t give you the power to start dictating how the company makes it’s products/services. Remove them Apple. Send them back to the Microsoft/Samsung/Android store where they belong!

 

[vipergts2207]

Not quite. Your highest marginal tax rate is way too low (only 37%), it kicks in way too high (>$500k) AND you don't have a tax free bracket for the poorest wage earners - they still have to pay 10% in the USA as far as I can see (up to about $10k).

If someone here earns $18,000 they pay no income tax... and if they earn $20,000 they only pay $380 in income tax.

So you kind of have it, but it still punishes the poor & favours the rich. In Australia, if we earn even more we have to pay an extra 1-2% levy for public health funding and we don't get discounts for private health insurance; as it should be too.

But this is a huge topic and not really for here... but I like Apple's change

There's a tax-free bracket, it's just done through the standard deduction. The first $9875 is "taxed" at 10%, but the standard deduction for an individual is $12,400. Though I certainly agree the US should have a more progressive tax structure, especially for the billionaire class.

 

[Abazigal]

I don’t believe for one moment that these companies are blind to the benefits the App Store has had on their customer acquisition, but of course, they are going to pretend that their financial success was entirely due to their own merit and their own merit alone and the iOS App Store played absolutely zero part in this.

Because it helps their narrative and because they stand to benefit financially from this.

These individuals and companies just want to burn the App Store to the ground. They aren't interested in helping independent iOS developers find sustainability.

And to think that there are actually some people who worship them as heroes and saviours.

 

[I7guy]

And that in and of itself makes Samsung not a monopoly or duopoly. Samsung is unable to unfairly impact the entire TV marketplace because they don't have the power or market position to do so. App developers can develop for and consumers can buy from: Sony, LG, TCL, Vizio, Hisense, Toshiba, amongst others. Conversely, consumers and developers only have Apple and Google to choose from for smartphone OS and app store. Decisions by either company have a huge impact of the entire smartphone marketplace and they certainly have the power and position to act in an unfair and anti-competitive manner. As you can see at the link below, unlike the smartphone OS and app store market, the TV market is very diverse. The biggest player is Samsung with less than 20% of the market.

Samsung leads global TV market for 14th straight year

Chinese TV makers are making inroads

www.flatpanelshd.com

So basically it's a sliding scale, and the regulators and court system have to define that line in the sand. Using the netflix example, probably available on many platforms. So the point is only a conversation as to what constitutes "anti-trust." However, in the Samsung example, they can disrupt the entire industry by offering cut-throat prices on their TVs.

One can say the smartphone market by manufacturer is diverse and no-one is stopping any of these manufacturers from having their own app store.

 

[The Matt George]

“By giving special 15 percent terms to select robber barons like Amazon....”

Huwa?! Can someone fact check this? Apple is giving AMAZON a rate of 15% and bitching about Epic wanting the same? This can’t be true.

 

[TheRealNick]

I’m a bit confused , do they want Apple to provide a platform for free? If they sold physical music records then would they expect HMV or another record store to give them shop space for free too? I mean 30% is probably too high given that overheads are much lower than a physical store but 15% seems fair to me ok the big boys earning over 1mil still pay 30% but it’s still a step in the right direction for the majority

The difference here is that Apple has already been paid for the platform, the consumer bought the iPhone.

it’s more like buying a house from a builder and then the builder telling a company that wants to sell something to owner that said company then had to pay the builder 30%.

 

[dragoon2745]

Even if Apple made it 10% for everyone, Epic and Spotify would still complain like a behemoth.

 

[nitramluap]

There's a tax-free bracket, it's just done through the standard deduction. The first $9875 is "taxed" at 10%, but the standard deduction for an individual is $12,400. Though I certainly agree the US should have a more progressive tax structure, especially for the billionaire class.

Seems a backwards way of doing it! How strange.

 

[vipergts2207]

So basically it's a sliding scale, and the regulators and court system have to define that line in the sand. Using the netflix example, probably available on many platforms. So the point is only a conversation as to what constitutes "anti-trust." However, in the Samsung example, they can disrupt the entire industry by offering cut-throat prices on their TVs.

One can say the smartphone market by manufacturer is diverse and no-one is stopping any of these manufacturers from having their own app store.

My position has always been that regulators and courts will be the arbiters of this. Conversely, you have a lot of people here saying that Apple hasn't done anything wrong and that developers can pound sand and go elsewhere if they don't like Apple's terms. The former is yet to be determined and the latter 'my way or the highway' position may be exactly what gets Apple slapped down.

Whether or not Samsung can disrupt the entire TV industry by offering excessively low prices depends upon the extent to which they do so. In the short-term there's no problem, consumers get a great deal. If in the long-term they succeed in their attempts to actually eliminate most other players, they could very well find themselves under an antitrust investigation.

"Predatory pricing practices may result in antitrust claims of monopolization or attempts to monopolize."

Predatory pricing - Wikipedia

en.wikipedia.org

The smartphone manufacturer market is diverse to be sure, but the OS and app store market is not. And while anyone can come in and launch new ones, the reality is that currently Apple and Google exist as a duopoly and may be subject to antitrust measures, hence the US and European investigations.

 

[MacBH928]

TBF 30% is a lot. Imagine you make $10M in sales, and Apple takes $3M just because it hosts the installer files. I don't imagine hosting costs that much.

On the other hand, Apple created this platform and gave you access to this gigantic worldwide amount of customers, if you don't like their rules sell it on your own platform.

The guy who invented the idea of charging people to sell on his platform must have been the devil, but its not a monopoly so all is fair. You would think the platform owner would be happy to have developers make apps for his platform so he can even sell more of his platform. My brain almost exploded when I learned that Nintendo does not make money from profiting on the console sale, they make money by charging a percentage on each game sold by every developer on their console.

I wonder why Windows didn't take similar approach, even Apple didn't take similar approach with OS 6->9 and then all the X's.

 

[Abazigal]

The difference here is that Apple has already been paid for the platform, the consumer bought the iPhone.

it’s more like buying a house from a builder and then the builder telling a company that wants to sell something to owner that said company then had to pay the builder 30%.

By that same analogy, where do the benefits stop? Is Apple supposed to provide the user with unlimited iCloud storage as well just because the user has presumably already paid for the iPhone? What about services like Apple Music?

To me, it's no different from owning a game console. I pay for the hardware upfront, but then I still have to purchase my games separately, and they aren't cheap by any means. And you can't even argue that consoles are deliberately priced low, because Apple too sells cheap hardware like the iPhone SE or 8th gen iPad.

If you want, attack them all evenly. Else, it just smacks of hypocrisy to me that Apple seemingly gets all the criticism even though they do more and offer more value for that money, while other platforms like Android and Playstation seemingly fly under the radar.

 

[jlseattle]

I don't feel as bad for the devs. They need to understand that the gate keeping that apple does (and others don't) help in protecting consumers and comes at a cost. If they don't want to sell on the platform others will step into their place.

Make good apps and the lost revues will be made up in more sales.

Apple does way more than just work on a place to host the files. Payment processing, administration, gate keeping, hardware, software and such.

I would rather be in this environment than a open environment where you don't know who you are buying the app from and it hasn't been vetted.

 

[jlseattle]

An analogy I give this is a consignment shop. The shop is wiling to sell your product. Part of the cut of the final sale will include the time the consignment shop took to look at your item, to post it in the shop, make sure it is to the quality of the shop, payment processing and then payment out to you. There is more to the cost of selling others your crap than just the payment.

I'll also argue that if you don't want to sell at the consignment shop then you don't have to. There are tons of devices you can pick to develop for. Someone else will sell there in your place or they will change.

But ranting and raving about it is pointless.