Apple Appeals Court-Mandated App Store Payment Rule Changes

[AppliedMicro]

That’s what Epic seems to be doing for any app developer who wishes to take them up on this offer.

No. You cannot purchase and download iOS apps from Epic’s store or web shop storefront.

Instead of paying with iTunes, consumers can presumably click on a link which would redirect them to an external payment option that eschews Apple’s 30% commission.

It’s merely an alternative payment option in the third-party developer’s app.

In my opinion, this is no different from me standing at the cashier of a computer hardware store and telling people they can purchase the same thing cheaper via Amazon, and that they should not buy from this shop instead.

The question is: whose store is it, really?

Do Apple develop, maintain, publish or operate the Spotify or Fortnite app?
Do they operate the online services you can access through these apps?
Do Apple bear the economic risk of it?

👉 No!

That’s why a store in the Spotify or Fortnite app is not Apple’s store.

 

[Stuwil]

If they don’t fight it they lose the right to fight it in the future.

Customer don’t know what the fee and commissions are. Unless the payment sent so, customers don’t know what the commission is on the iap.

It’s about the price all they will have to do is show a cheaper price point compared with IAP
Like for example it’s 7.99 on IAP
But 5.99 on payment link
That’s what I mean so naturally people will go for the cheaper option

 

[I7guy]

It’s about the price all they will have to do is show a cheaper price point compared with IAP
Like for example it’s 7.99 on IAP
But 5.99 on payment link
That’s what I mean so naturally people will go for the cheaper option

You believe a dev will lower the price for the customer. IMO, they won’t. Aside from YouTube which likes to poke Apple, are there any subscription apps that are cheaper when signing up outside of Apple. One would think that would be a piece of cake to research.

 

[Stuwil]

You believe a dev will lower the price for the customer. IMO, they won’t. Aside from YouTube which likes to poke Apple, are there any subscription apps that are cheaper when signing up outside of Apple. One would think that would be a piece of cake to research.

Because the developer gets to keep all the income from the payment link & not have to give a apple a cent that’s why it will happen
So the developer makes more money

Because it’s business why give Apple 30% when we can keep it all

 

[I7guy]

Because the developer gets to keep all the income from the payment link & not have to give a apple a cent that’s why it will happen
So the developer makes more money

So the answer is no. I’m glad we agree the customer will not benefit for it and for now the dev in the US lives off of apples hard work.

Apple is also entitled to their cut even if some disagree.

 

[Stuwil]

So the answer is no. I’m glad we agree the customer will not benefit for it and for now the dev in the US lives off of apples hard work.

Apple is also entitled to their cut even if some disagree.

The price will be lower originally because they no longer have to give Apple 30% fee for every transaction so naturally it will be cheaper to begin with
Then over time that will change

 

[surferfb]

The price will be lower originally because they no longer have to give Apple 30% fee for every transaction so naturally it will be cheaper to begin with
Then over time that will change

Why didn't app prices drop when Apple dropped its commission to 15% for the vast majority of the apps? Aren't you going to attack the developers for being greedy the same way you attack Apple for being greedy? Or is being greedy only wrong when Apple does it?

 

[Stuwil]

Why didn't app prices drop when Apple dropped its commission to 15% for the vast majority of the apps? Aren't you going to attack the developers for being greedy the same way you attack Apple for being greedy? Or is being greedy only wrong when Apple does it?

Because they still have to give Apple 15% so if they no longer have to do that then more than likely for example the app developer will show it cheaper on payment link to eventually get people to stop using IAP then over time remove it altogether
That is probably what Apple is scared about

Apple are greedy in this aspect it makes no odds to them if it’s 12% or 15% or 30% because based on their business model they are guaranteed to make big profits every year unlike most other tech companies that’s why it’s greedy

 

[surferfb]

Because they still have to give Apple 15% so if they no longer have to do that then more than likely for example the app developer will show it cheaper on payment link to eventually get people to stop using IAP then over time remove it altogether
That is probably what Apple is scared about

The price dropped from 30% to 15%, prices didn't drop by 15%. This isn't going to lower prices, it's going to make a handful or large, already profitable companies more profitable at Apple's expense. It's fine to be ok with that, but let's be honest here - it's not going to help consumers.

Apple are greedy in this aspect it makes no odds to them if it’s 12% or 15% or 30% because based on their business model they are guaranteed to make big profits every year unlike most other tech companies that’s why it’s greedy

So Apple is greedy even after voluntarily lowering their commission for everyone but the most successful of app developers, but developers aren't greedy for not passing along their savings to customers. Got it

 

[Stuwil]

The price dropped from 30% to 15%, prices didn't drop by 15%. This isn't going to lower prices, it's going to make a handful or large, already profitable companies more profitable at Apple's expense. It's fine to be ok with that, but let's be honest here - it's not going to help consumers.


So Apple is greedy even after voluntarily lowering their commission for everyone but the most successful of app developers, but developers aren't greedy for not passing along their savings to customers. Got it

You don’t get it
To get customers away from using IAP completely and having to give Apple a cent
Then developers will remove the 15% or 30% from the payment link to get people to stop using IAP completely so then they keep all the income and that will change over time
It’s not difficult to see

Why are they taken 15% or 30% fee
When they release new generations of devices every year that guarantee them a consistent flow of profit compared with any other tech business
That’s the point

 

[surferfb]

You don’t get it
To get customers away from using IAP completely and having to give Apple a cent
Then developers will remove the 15% or 30% from the payment link to get people to stop using IAP completely so then they keep all the income and that will change over time
It’s not difficult to see

I suspect the majority of developers who switch away from IAP will find that they actually make less money than they did before, due to conversion rates being lower. I'm a lot more likely to take a chance on the app if I don't have to set up an account, give personal information, pull out my credit card, etc. But maybe I'm weird/different from most consumers. I guess we'll see - I admit it's just speculation, and obviously won't apply to the Spotify, Netflixes, and Amazons of the world.

Why are they taken 15% or 30% fee
When they release new generations of devices every year that guarantee them a consistent flow of profit compared with any other tech business
That’s the point

You keep bringing this up but I don't think it has any bearing on anything we're talking about here. It certainly doesn't legally. Either 30% (actually 15% for almost everyone) is massively greedy and wrong because Apple provides no value (or the value Apple provides is significantly less than 30%/15%), or it's not.

 

[Stuwil]

I suspect the majority of developers who switch away from IAP will find that they actually make less money than they did before, due to conversion rates being lower. I'm a lot more likely to take a chance on the app if I don't have to set up an account, give personal information, pull out my credit card, etc. But maybe I'm weird/different from most consumers. I guess we'll see - I admit it's just speculation, and obviously won't apply to the Spotify, Netflixes, and Amazons of the world.


You keep bringing this up but I don't think it has any bearing on anything we're talking about here. It certainly doesn't legally. Either 30% (actually 15% for almost everyone) is massively greedy and wrong because Apple provides no value (or the value Apple provides is significantly less than 30%/15%), or it's not.

That’s because they won’t do it at first
They will still have IAP price for a certain amount
Then the payment link will be cheaper to get people to stop using IAP & once these developers get you in then IAP will end up getting removed because less people will use it in there app.
Just like another other company does if they want to shift people onto something else.

One of the reasons why epic took them to court regarding IAP fee is because in there eyes it’s pure greed because it doesn’t matter if it’s
15% or 30% based on Apple’s business model in releasing new generations every year compared with other tech companies that is one of the reasons they challenged it in court
And that is why Apple have not said ok it’s 15% figure for the payment link because they don’t want to
even going through the appeals process

 

[Mousse]

Apple is also entitled to their cut even if some disagree.

I agree with this 100%. Where opinion differs is what Apple's cut should be. For apps purchased from the app store and feature unlocking purchase--whether IAP or outside--I think Apple deserves a 30% cut. Apple is hosting the app. If the developer offers it for free on the Appstore and you pay to unlock it on their website, they're cheating Apple out of a fair cut for hosting a paid app.

For DLC that is 100% on the developer's servers purchased via IAP, Apple deserves a token cut of 10-25 cents per transactions. Whatever it cost Apple to process the payment plus a small profit. Certainly not 30%, sure as heck no free. If they purchase DLC from the developer's website, where is Apple's expense? They deserve nothing.

This ruling is unfair to Apple and Apple's system is unfair to developers.

 

[Stuwil]

I agree with this 100%. Where opinion differs is what Apple's cut should be. For apps purchased from the app store and feature unlocking purchase--whether IAP or outside--I think Apple deserves a 30% cut. Apple is hosting the app. If the developer offers it for free on the Appstore and you pay to unlock it on their website, they're cheating Apple out of a fair cut for hosting a paid app.

For DLC that is 100% on the developer's servers purchased via IAP, Apple deserves a token cut of 10-25 cents per transactions. Whatever it cost Apple to process the payment plus a small profit. Certainly not 30%, sure as heck no free. If they purchase DLC from the developer's website, where is Apple's expense? They deserve nothing.

This ruling is unfair to Apple and Apple's system is unfair to developers.

ok
But is that not what Netflix has done
By having the ability to download the app on iOS & Watch it on iOS
But you use there website to make payment then Apple doesn’t get a cut even if practically every is done on iOS

Where does it end next some people will be wanting Apple to get a cut if you purchase something using safari online

 

[I7guy]

The price will be lower originally because they no longer have to give Apple 30% fee for every transaction so naturally it will be cheaper to begin with
Then over time that will change

The price won’t be lower. Hasn’t been reported that after Apple lowered the commission to 15% for certain devs those devs lowered their prices by 15%. No it hasn’t.

People who believe the customers will benefit are looking at this wrong. This will enrich a handful of devs at apples expense.

 

[Stuwil]

The price won’t be lower. Hasn’t been reported that after Apple lowered the commission to 15% for certain devs those devs lowered their prices by 15%. No it hasn’t.

People who believe the customers will benefit are looking at this wrong. This will enrich a handful of devs at apples expense.

Because as a developer it is in there interests to stop you using IAP as then the developer will keep more of the income rather than having to give any to Apple the now
That’s why multiple businesses do it all the time to hook you in

Because that is why Apple don’t want payment links and no other reason

 

[surferfb]

That’s because they won’t do it at first
They will still have IAP price for a certain amount
Then the payment link will be cheaper to get people to stop using IAP & once these developers get you in then IAP will end up getting removed because less people will use it in there app.
Just like another other company does if they want to shift people onto something else.

My prediction is most developers won't see enough conversions on the payment link to ever justify removing IAP. We'll see if I am right or you are.

One of the reasons why epic took them to court regarding IAP fee is because in there eyes it’s pure greed because it doesn’t matter if it’s
15% or 30% based on Apple’s business model in releasing new generations every year compared with other tech companies that is one of the reasons they challenged it in court
And that is why Apple have not said ok it’s 15% figure for the payment link because they don’t want to
even going through the appeals process

I think you are making a lot of assumptions into what Apple is/isn't doing, and then treating those assumptions as fact, when they are actually opinions.

No one outside of Apple knows why Apple is or isn't doing anything related to the case. For all you know, they've submitted a new payment link commission structure to the judge and the judge is reviewing it. (To be clear, I don't think that's likely, but just pointing out your assumptions are just assumptions.)

 

[Stuwil]

My prediction is most developers won't see enough conversions on the payment link to ever justify removing IAP. We'll see if I am right or you are.


I think you are making a lot of assumptions into what Apple is/isn't doing, and then treating those assumptions as fact, when they are actually opinions.

No one outside of Apple knows why Apple is or isn't doing anything related to the case. For all you know, they've submitted a new payment link commission structure to the judge and the judge is reviewing it. (To be clear, I don't think that's likely, but just pointing out your assumptions are just assumptions.)

Worked in business for years buddy
Why would a company keep using IAP to continue to give Apple a cut
When they can implement a way to avoid it completely & keeping all the income to themselves over time
As I say companies do it all the time dangle something in front of you to hook you in
That’s not an assumption that’s a FACT.

Well what we do know is that Apple charge
15% IAP fee as you say
Then Apple as a company could easily do that with the payment links & still go ahead with the appeal
However we do know that Apple are appealing this payment link option without coming back with a figure
That’s not an assumption that’s a FACT

So this tells me that the things that
Tim Sweeney has actually said in interviews are correct in how Apple operates if you don’t fall in line.

 

[surferfb]

Worked in business for years buddy
Why would a company keep using IAP to continue to give Apple a cut
When they can implement a way to avoid it completely & keeping all the income to themselves over time
As I say companies do it all the time dangle something in front of you to hook you in
That’s not an assumption that’s a FACT.

So have I. If businesses are making more money paying Apple 30% than they make when they use the link out paying Apple 0, then they will continue to use IAP. My speculation, is that most developers will make more money when they pay Apple. We'll see if that speculation is correct.

Well what we do know is that Apple charge
15% IAP fee as you say
Then Apple as a company could easily do that with the payment links & still go ahead with the appeal

As of right now, the judge hasn't said anything about allowing commissions even if Apple comes in and apologies and provides an updated rationale. Again, for all you know they already have and the judge has said "nope - you messed up and so you're getting punished no matter what" or as I said earlier, maybe Apple submitted something and the judge is looking at it. Or maybe you're right, and Apple isn't going to submit anything. All I am saying is that is speculation.

However we do know that Apple are appealing this payment link option without coming back with a figure
That’s not an assumption that’s a FACT

Again, you don't know they aren't coming back with a figure unless you work inside of Apple or their lawyers' offices.

So this tells me that the things that
Tim Sweeney has actually said in interviews are correct in how Apple operates if you don’t fall in line.

I don't trust a word Sweeney says. More power to you if you do.

 

[I7guy]

Because as a developer it is in there interests to stop you using IAP as then the developer will keep more of the income rather than having to give any to Apple the now
That’s why multiple businesses do it all the time to hook you in

Because that is why Apple don’t want payment links and no other reason

That’s valid that Apple doesn’t want payment links. Hope that gets overturned in court and Apple is entitled to its payments. Which they ultimately will get. The devs now gets a free ride which is not tenable.

 

[Stuwil]

So have I. If businesses are making more money paying Apple 30% than they make when they use the link out paying Apple 0, then they will continue to use IAP. My speculation, is that most developers will make more money when they pay Apple. We'll see if that speculation is correct.


As of right now, the judge hasn't said anything about allowing commissions even if Apple comes in and apologies and provides an updated rationale. Again, for all you know they already have and the judge has said "nope - you messed up and so you're getting punished no matter what" or as I said earlier, maybe Apple submitted something and the judge is looking at it. Or maybe you're right, and Apple isn't going to submit anything. All I am saying is that is speculation.


Again, you don't know they aren't coming back with a figure unless you work inside of Apple or their lawyers' offices.


I don't trust a word Sweeney says. More power to you if you do.

That is WHY the payment link will be cheaper than the IAP price because they won’t have to then pay Apple a cent going forward
Hence why it will be cheaper than IAP to encourage the individual to use the payment link because at the start it will save the individual money because there is no Apple charge on top
That is how they will get people hooked in & then over time customers will stop using IAP
Because the developer has convinced them it’s cheaper
That is why Apple doesn’t want it because it will affect IAP in one or two ways
Because if it didn’t then they would have implemented it already.

Because there is nothing stopping Apple
From implementing a 15% payment link charge right now & that falls inline with the 15% IAP price then the payment link would be redundant because it’s the same price as IAP so then most would not use payment link option because it’s the same price
However because Apple aren’t doing that then that tells me that they are fighting this all the way because how dare a developer challenge US

Well Tim Sweeney is actually right that if you don’t fall inline with Apple that they suddenly slow down approving updates to your app and makes things difficult for you
Just like other companies have mentioned in court documents in other countries

 

[Stuwil]

That’s valid that Apple doesn’t want payment links. Hope that gets overturned in court and Apple is entitled to its payments. Which they ultimately will get. The devs now gets a free ride which is not tenable.

Why do you not want a company to include a payment link in there own app?

 

[surferfb]

That is WHY the payment link will be cheaper than the IAP price because they won’t have to then pay Apple a cent going forward
Hence why it will be cheaper than IAP to encourage the individual to use the payment link because at the start it will save the individual money because there is no Apple charge on top
That is how they will get people hooked in & then over time customers will stop using IAP
Because the developer has convinced them it’s cheaper
That is why Apple doesn’t want it because it will affect IAP in one or two ways
Because if it didn’t then they would have implemented it already.

I don't think you understand my argument, so I'll try 1 more time. It's estimated that IAP have a 5x to 30x higher conversion rate than link outs (yes I know that's a wide range). This table assumes 10,000 customers with Low/Mid/High conversion rate at $9.99 IAP vs. $6.99 Link. Even given the best assumption of link out conversions, and the worst assumption of IAP conversions, the developer is still significantly ahead with IAP vs. linking out. It's not even close.

The extra friction KILLS conversions. That probably doesn't matter for Spotify, Netflix, Amazon, etc., but it will absolutely matter for "random developer making a todo list app".

Because there is nothing stopping Apple
From implementing a 15% payment link charge right now & that falls inline with the 15% IAP price then the payment link would be redundant because it’s the same price as IAP so then most would not use payment link option because it’s the same price
However because Apple aren’t doing that then that tells me that they are fighting this all the way because how dare a developer challenge US

There is literally a court order stopping them. Show me where in the court order it says "if you come to me with a "reasonable commission" I'll let you implement it."

Well Tim Sweeney is actually right that if you don’t fall inline with Apple that they suddenly slow down approving updates to your app and makes things difficult for you
Just like other companies have mentioned in court documents in other countries

Again that is an opinion of Sweeney's, and one that is probably born out of him specifically and intentionally breaking a contract he agreed to.

 

[Stuwil]

I don't think you understand my argument, so I'll try 1 more time. It's estimated that IAP have a 5x to 30x higher conversion rate than link outs (yes I know that's a wide range). This table assumes 10,000 customers with Low/Mid/High conversion rate at $9.99 IAP vs. $6.99 Link. Even given the best assumption of link out conversions, and the worst assumption of IAP conversions, the developer is still significantly ahead with IAP vs. linking out. It's not even close.

View attachment 2508880

There is literally a court order stopping them. Show me where in the court order it says "if you come to me with a "reasonable commission I'll let you implement it."


Again that is an opinion of Sweeney's, and one that is probably born out of him specifically and intentionally breaking a contract he agreed to.

it’s estimated that?
That’s not a true reflection on society what we do know is if you show one product at one cheaper price and one at a dearer price
Then most people will buy it cheaper and that’s a fact because it’s human nature
That is why they don’t want payment links

Again if as you claim not many people would use payment links then why is Apple fighting it?

Judge Yvonne Gonzalez Rogers called Apple’s previous 27 percent “work-around” fee “a gross miscalculation” and ordered immediate compliance

What contract did he break with Apple that required his & other companies apps to get delayed for updates?
Not kicked off

 

[surferfb]

it’s estimated that?
That’s not a true reflection on society what we do know is if you show one product at one cheaper price and one at a dearer price
Then most people will buy it cheaper and that’s a fact because it’s human nature
That is why they don’t want payment links

If you're going to argue click through conversion rates are just the same as IAP conversion rates then we're not living in the same universe. Each additional step of friction reduces the likelihood of the customer purchasing the product. This is a well known, fundamental aspect of online businesses.

Yes, I will give you that if someone is determined to buy the app/subscription, in almost all cases they are going to pick the cheaper option. But the thing is, most users aren't determined to buy it, and even if they click through to the link, then stuff happens - they don't have their wallet on them and so close it out and forget about it. They take a look at the privacy policy and go "eh, no." They think the account setup process is too annoying. Etc. etc. etc. Whereas with IAP, double click a button and look at your phone.

Again if as you claim not many people would use payment links then why is Apple fighting it?

You'd have to ask Tim Cook. I've been saying for years now it seems to me to be really stupid of Apple to fight this so hard. I suspect because the companies who are the ones that avoid paying make the majority of the App Store revenue (free to play games) are the ones that are most likely going to have significantly better conversion rates (if you're already addicted to the game, then you're determined to buy the gems or whatever not going to care about signing up for an account, etc.), but that's just a guess.

Judge Yvonne Gonzalez Rogers called Apple’s previous 27 percent “work-around” fee “a gross miscalculation” and ordered immediate compliance

Yes, and said in the meantime Apple isn't allowed to charge any commission whatsoever. She didn't say "Apple can't charge 27% but can charge a reasonable number," she said they can't charge a commission at all. That won't change until the judge releases a new order, or an appeals court overturns her order. So again, even if Tim Cook has seen the light (which I am sure he hasn't), Apple can't do anything about it.

It's kinda like when my 4 year old misbehaves. If I tell him to stop throwing his toy or I'm taking it away until tomorrow, and he throws it again, I take it away until tomorrow. Even if he cries, and I can tell he is truly sorry, and he promises he won't throw it again, he's still not getting it until tomorrow.

What contract did he break with Apple that required his & other companies apps to get delayed for updates?
Not kicked off

I am saying I don't trust someone who does business that way to be honest when he says that his app updates were "intentionally slowed down." And even if that's true, what did he expect? I mean, if I am a CEO of a toy company I walk around screaming to anyone who will listen in the media about how Walmart are a bunch of greedy middlemen providing no value and stealing from toy companies, how much longer do you really think my toys will be on Walmart's shelves?