Apple Discussed 'Punitive Measures' Against Netflix for Dropping In-App Purchases

[deevey]

So, Netflix proceeded with an unauthorized A/B test and found they didn't need IAP's or a signup screen in order to get users to sign up to the service. I'd bet they are spending a good chunk of the saving on advertising, and obviously its working in their favor.

And sure of course Apple courted Netflix to try and keep them using IAP's in order to keep make money, there was Billions of dollars on the table. I bet your bank representative would do exactly the same thing when you suggest you want to close your account.

All I can see that it's now been proven is that there are other ways for companies to secure subscribers without paying 30% or changing the rules. (Epic and Spotify take note)

 

[ani4ani]

Servers, APIs, payments? All this stuff Downey cost nothing my friend

Netflix host the servers...30% for taking payments that nobody wants Apple to do? Yea great value

 

[PlayUltimate]

I honestly do not understand the logic that Epic (and their allies) are fighting about.
1) This is a store that Apple created.
2) All of the apps were developed using tools and software that Apple created.
3) Apple does not make anything on the Apple store until the developer makes a sale.
4) Netflix, Amazon, Uber, Lyft, AirBnB et al. have all been able to take advantage of the ecosystem that Apple created and Apple does not earn any revenue from them. (and the paltry developer fee does not really count).
5) Apple's consignment fee has stayed static from the beginning of time. (albeit for low revenue devs it went down recently)
6) And even though I personally dislike IAPs and am not a fan of them, with the trend for many applications to be sold as a low cost subscription rather than an expensive one-time fee, Apple needed close the possible loopholes and collect a fee regardless of the type of transaction.
7) Apple allows for off-App subscription payment systems. They just don't allow you to advertise your store in their store.

Please explain to me what Apple is doing wrong.

 

[MacFabulous]

****ing relax. We’re talking about a tech company, not a goddamn religion or your personal beliefs that guide your life. Jesus Christ.

Exactly. It’s just a company. Why be so bullish over ONE question in a company email? So let’s relax. And keep calm ;-) See..

 

[TheLinkster]

Exactly. Your comment will cause some hyperventilation here because MR is full of blind fans, but I cannot even imagine paying 30% of my income to someone, especially for something I don't even need.



Yes, and they also broke the license agreement with Qualcomm unilaterally because they considered it unfair, Apple did to Qualcomm exactly what Epic did to them and now they are complaining.

And how did that work out for Apple? There’s also a a slight difference between this and patents. Apple was asking for FRAND conditions on patents. Its beef was paying royalties on the sales price of the phone versus the value of the patent (in case you forgot). If you’d like to make a total reach here, maybe every app should pay based on its individual value if you think Epic is on the right side of the argument.

 

[I7guy]

Netflix host the servers...30% for taking payments that nobody wants Apple to do? Yea great value

1. who is nobody? Some of the poster that are criticizing Apple?
2. Apple is taking how much of netflix in fees and commissions?
3. Apple is bring 1 billion devices to an indy dev and corporate dev. So yeah, 30% is appropriate. Those observers who don't like that policy have options.

 

[incoherent_1]

Doesn’t the fact that this was discussed but ultimately shot down actually help Apple’s case? It supports the case that Apple’s culture and approval process is designed to stop these kinds of retaliatory reactions?

 

[ani4ani]

And how did that work out for Apple? There’s also a a slight difference between this and patents. Apple was asking for FRAND conditions on patents. Its beef was paying royalties on the sales price of the phone versus the value of the patent (in case you forgot). If you’d like to make a total reach here, maybe every app should pay based on its individual value if you think Epic is on the right side of the argument.

Beef or not, they signed a contract...seems to be the staple answer round here when the boots on the other foot

 

[Analog Kid]

an unauthorized A/B test

Did they need authorization? I didn't get the sense that Netflix did anything wrong here, nor did Apple, and the word "punitive" is getting a lot of attention but just doesn't fit the action described...

 

[GeoStructural]

And how did that work out for Apple? There’s also a a slight difference between this and patents. Apple was asking for FRAND conditions on patents. Its beef was paying royalties on the sales price of the phone versus the value of the patent (in case you forgot). If you’d like to make a total reach here, maybe every app should pay based on its individual value if you think Epic is on the right side of the argument.

It worked out well for both Apple and Qualcomm at the end, they ended up being best buddies again, Apple paid a few pennies, Qualcomm secured a large client. Only the user lost because Apple had to recur to use lower quality modems during the time they quarreled.

I must insist, it was Apple unilaterally breaking a license agreement, a contract... but you guys seem to have double standards.

 

[falainber]

I honestly do not understand the logic that Epic (and their allies) are fighting about.
1) This is a store that Apple created.
2) All of the apps were developed using tools and software that Apple created.
3) Apple does not make anything on the Apple store until the developer makes a sale.
4) Netflix, Amazon, Uber, Lyft, AirBnB et al. have all been able to take advantage of the ecosystem that Apple created and Apple does not earn any revenue from them. (and the paltry developer fee does not really count).
5) Apple's consignment fee has stayed static from the beginning of time. (albeit for low revenue devs it went down recently)
6) And even though I personally dislike IAPs and am not a fan of them, with the trend for many applications to be sold as a low cost subscription rather than an expensive one-time fee, Apple needed close the possible loopholes and collect a fee regardless of the type of transaction.
7) Apple allows for off-App subscription payment systems. They just don't allow you to advertise your store in their store.

Please explain to me what Apple is doing wrong.

It's easy. After Apple created App Store, they forced everyone to use it. Many developers do not need the AppStore (or they might have preferred an alternative app store). In that case, Apple could do whatever they want with the AppStore and most would not care.

 

[I7guy]

It's easy. After Apple created App Store, they forced everyone to use it. Many developers do not need the AppStore (or they might have preferred an alternative app store). In that case, Apple could do whatever they want with the AppStore and most would not care.

Apple forced nobody to use the app store. Devs wanted to use the app store and opted-in and agreed to the TOS because the devs realized there is a potential lucrative market. Devs who want alternative app stores have android.

Strictly opt-in. But kudos if one doesn't need the app and can get away with a website.

 

[tkaravou]

It's easy. After Apple created App Store, they forced everyone to use it. Many developers do not need the AppStore (or they might have preferred an alternative app store). In that case, Apple could do whatever they want with the AppStore and most would not care.

Outside of jailbreaking, there was no way to have an app on iOS before the App Store. On MacOS, they introduced the App Store and still allowed developers to build their apps outside of it.

 

[Ethosik]

Good job. You managed to completely miss the point.

Uhhh what?

You actually have to know how to allow installing unsigned apps first,

I provided how easy it is.

If we have to cater to the lowest common denominator at all times then we shouldn't have cars or kitchen knives or doors that lock for fear of what the idiots will do.

I explained we have police that helps with bad issues with cars, kitchen knives or intruders. So please instead of saying "you missed the point" how about adding to the conversation and say WHAT was missed. It does NOT require a Computer Science degree to know how to install untrusted apps, it is quite easy. Plus Epic will give very CLEAR and bulleted steps to do this in order to have people install Fortnite.

So again, what exactly is your point? People are too dumb to figure out how to toggle something in the Settings menu in order to get Fortnite as a side loaded app? That we should allow side loading because people are too dumb to figure this out?

People get their Windows PCs infected all the time, and you better believe I will NOT let them join my home network.

 

[Ethosik]

The ps4 is not a general purpose computer. That comparison has been made over and over.

This isn't the 1990s or 2000s anymore. Consoles do more than just play games. These are not SNES consoles. They DO have Apps.

 

[Krizoitz]

The ps4 is not a general purpose computer. That comparison has been made over and over.

And? Why does that matter? It’s a product made by a company which advertises a specific set of features, just like the iPhone. “general purpose computer” is not a legally relevant term. Nowhere in the Sherman Antitrust Act or related law does it say “except for general purpose computers” or “only applied to general purpose computers”. People keep using that categorization difference as if it somehow matters. It doesn’t.

Further, the limitations placed on the PS4 et al are arbitrary, just as the iPhones are. They are a result of the manufacturer developing an OS with certain features and limitations to create a product based on what they want to sell. A PS4 can (and has) be modified to run other OS code which supports other features it’s native OS does not. Further Sony could, if it so chose, implement those and other features themselves. There is no technical reason a PS4 can’t do more, it’s an intentional decision by Sony, just as the single AppStore is an intentional decision by Apple. If you are going to argue that Apple should be compelled to do arbitrary things because a developer wants them, there is no logical difference to saying Sony should be compelled to do the same. Or Nintendo. Or Microsoft. Or any other device maker.

 

[Ethosik]

Essential products and services are increasingly provided and distributed through mobile apps. Not only by private, for-profit enterprises but also by the government itself, quasi-governmental bodies and companies operating with government concessions. While you could argue people can live a without smartphones and mobile apps, it becomes less and less practical to do so (without becoming majorly disadvantaged, that is), if you look at the applications:

• Public transport with journey planning and mobile ticket sales.
• Ride-hailing and cab-hailing.
• Mobile banking and credit cards.
• Mobile payment.
• Medical / health services.
• COVID tracking and tracing.
• Customs declaration and clearance.
• Emergency and disaster alerts.
• Videoconferencing for job interviews.
• ID checking for residence permit / visa applications.
• Tax account administration.
• Personal messaging (iMessage, WhatsApp).

The majority of these apps is (at least in the Americas and Europe) distributed through just two "storefronts":
Apple's App Store and Google's Play Store, with the two companies (virtually) sharing a duopoly on the distribution of mobile apps.

As such mobile apps are becoming more pervasive such that people are - maybe not legally or technically but quite practically - forced to use them in their everyday lives, Apple and Google have become gatekeepers controlling public / consumer access to such services and products - and by extension to access to other media content (music, games, movies).

As such, the two companies' and their app stores should be regulated (rather than being allowed to operate on a it's-our-platform-take-it-or-leave-it attitude towards app developers).

And they will be.

These are not life and death REQUIRED apps to live. I still know people - my grandparents included - that use Jitterbug phones that don't have any of this. A smartphone is a luxury, not a right. A smartphone is not an essential product, a cell phone is. My grandparents function just fine without all those apps you listed, and even without a smartphone in general.

 

[mdriftmeyer]

Netflix host the servers...30% for taking payments that nobody wants Apple to do? Yea great value

When Netflix was transitioning from a DVD Distribution services to a streaming service they were hosting any servers. They relied on third parties. And the largest Point of Presence has been Apple since the iPhone was released. Apple relied on a series of third party OEMs to offload the demand.

Then Amazon wanted to be Apple.

Then Google started down the road

Netflix developed their FreeBSD and Linux based server centers over time that has taken a decade to develop. If Netflix saw no value in that In App system by Apple from Day one they wouldn't have used it. They needed to use it.

Apple is doing the same with AWS and others. Soon, they'll be using no outside DataCenters as they'll have them all around the globe.

 

[aaronhead14]

Apple's fierce policy regarding in-app purchases is extremely hostile, and causes the end-user experience to be very frustrating. This kind of crap is so annoying. An iOS/iPadOS device will always be crippled, until Apple gives us the same freedoms we have on computers.

 

[Ethosik]

Outside of jailbreaking, there was no way to have an app on iOS before the App Store. On MacOS, they introduced the App Store and still allowed developers to build their apps outside of it.

Nobody is FORCING me to develop my video game for Playstation, or iOS for that matter. I am developing it for Windows only. Nobody FORCES companies/Indies to develop software. They are free to develop on any or no platform they choose.

 

[Krizoitz]

Well, that's the point of antitrust regulation though: it's goal is to force powerful companies to do things they would not otherwise do as a way to limit their ability to distort competition.

Depending on your take on whether Apple is abusing a dominant position to distort competition, it's actually entirely reasonable to argue for it to be forced to do things differently and if the antitrust argument stands it might actually be forced to do exactly that.

Wrong. Anti-trust law is about SPECIFIC categories of power: collusion, cartels, and monopolies. None of which should apply in Apples case since it’s not colluding with anyone to set it’s rates for the AppStore (nor has Epic alleged it is), it’s not part of a cartel, and it doesn’t have a monopoly unless you narrowly define monopoly to be a monopoly on its own product, a ludicrous standard which would be unprecedented in anti-trust law.

Meanwhile, powerful companies leveraging their positions to get favorable deals is not inherently illegal, nor can it be because it would be unsustainable to try and run an economy where no person is ever in an advantageous position.

Obviously companies can be compelled to do certain things under the law, that’s not the issue here however. The issue here is that Epic (and it’s defenders) are seeking to compel Apple to do something because they simply want them to for their own advantage even though they have myriad other options. Epic are demanding Apple have to allow them to do whatever they want on the platform AND Apple has to help them do it. That’s wrong.

 

[Krizoitz]

Apple's fierce policy regarding in-app purchases is extremely hostile, and causes the end-user experience to be very frustrating. This kind of crap is so annoying. An iOS/iPadOS device will always be crippled, until Apple gives us the same freedoms we have on computers.

So buy an Android device which doesn’t have those restrictions or a computer which doesn’t have those restrictions. If you don’t like the product Apple makes you have a right not to buy one. You shouldn’t have the right to force Apple to change its product to suit YOUR demands, even if there are those of us who actually prefer Apples approach.
I find Apples in app purchases system to be a far superior to the alternative. Instead of having to juggle multiple, potentially untrustworthy payment systems, I get to deal with ONE system which I find far more trustworthy than the alternative. The end user experience on the iPhone compared to Android/PCs is quite pleasing to me and it’s one reason I specifically choose to keep using an iPhone. You want to take that choice away from me and others and force Apple to turn in to Android. I don’t want that. If you don’t like what Apple offers, fine, I have no problem with that, by all means BUY SOMETHING ELSE as is your right. This isn’t hard to understand, I fail to see why so many of you don’t get it.

 

[Krizoitz]

I own my house, I own my business and I own a house in another country, thanks for your concern. By the way Apple cannot tax people nor companies? That can only be done by Federal, State and Local authorities.

And when you bought those things you had to pay for them with your income. And you did because you felt it was worth it. You had a choice. Just like Epic has a choice whether the 30% cut is worth it or not.

And I never said Apple could tax you, not sure why you made that ridiculous claim.

This is a misconstruction of reality. Epic is developing their own system and are more than capable of dealing with their own payment system and electricity bill man. Paying 30% for distribution is exorbitant and unnecessary for them, they owe Apple nothing.

Great and they can use that system on any platform that supports them doing so. If they feel Apples fees are too high they have a simple choice, they can not offer their product on the iPhone. It’s quite simple. If you don’t like the terms of a deal, walk away or negotiate for better terms. The AppStore is not an essential service. Neither Epic or any other person has an inherent right to make apps for the iPhone. Apple could shut down the AppStore today and be within its rights.

This is a lie, show your evidence. Qualcomm never violated any agreement, Apple did because they didn't want to comply with their licensing system and simply stopped paying. Qualcomm was being unfair into forcing Apple to pay a license for things other than the modems and Apple just didn't want to pay because that was something they didn't need... So should Apple use Qualcomm's technology for free? You see it now?

Just because you don’t like a fact doesn’t mean it’s a lie. Apple objected to Qualcomm’s actions as a violation of FRAND. This is old news. Apple never ever said it should be allowed to use Qualcomm’s technology for free. You are lying by claiming it did.

 

[Krizoitz]

namely enforcing strict control on a platform where they enjoy dominant position

🤣🤣🤣
What a meaningless argument.
Of course they enforce strict control on their own platform. You know who else does that? Every other product owner! Toyota enforced strict control on Toyota cars, where it has a dominant position! McDonalds enforced strict control on its menu, where it has a dominant position! WalMart enforces strict control on its store shelves, where it has a dominant position!
Apple will always have a dominant position on the products it sells by definition.
🤣🤣🤣

 

[Krizoitz]

Of course Apple doesn’t want to change. When does a business ever give up an anticompetitive advantage willingly?

Also, two options isn’t exactly what I’d call the ideal amount of choice. It’s actually the bare minimum to even be considered choice in the first place. But I guess some of us just love not having options.

First, whether or not you like the choices doesn’t mean they aren’t choices. If both choices are terrible some 3rd party should be able to come in and offer a better alternative unless the other two are colluding to prevent that from happening (which there is no evidence of). Microsoft, one of the biggest and most powerful companies in the world tried and failed, not because they lacked resources or power or because Apple and Google somehow cheated, but because people chose iPhone or Android overwhelmingly.

Further, NOTHING about this case would increase competition in the smartphone market. Nothing. It would, in fact, REDUCE choice by forcing two competing models to become the same. Epic and it’s defenders want to reduce your choices from option A and option B into option A and…the other option A. You can have your Model T in any color you want as long as it’s black.