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

[ksec]

"We do not retaliate or bully people. It’s strongly against our company culture.” - Tim Cook.
So that was a lie under oath.

I remember there were at least two other incident previously. In Apple defence they could of course argue it is not retaliation but "standard" procedure.

But this is not the first time Tim Cook lying by omission or not in good faith. ( Qualcomm and IMG )

 

[ksec]

If Apple wasn't offering their streaming service, I'd be on Apple side, but since they also offer Apple TV, I'm on Netflix side. It's unfair for Apple TV to offer at practically discounted price compared to netflix. What if Apple does another new business that would hurt already established business through apple platform?

Rare sanity on MR.

 

[ksec]

Just because they didn’t do it doesn’t mean it shouldn’t be opened up for discussion. Regardless of your view, it’s messed up that they were even considering punishing them. That’s going too far.

What Apple want, if that every app needs to have sign up button in their apps in the name of user experience ( which is fine ), but only allow one form of signing up and also collect 30% when they sign up.

The term for it is called Rent seeking.

 

[ksec]

And in case anyone has not realised,

The “voluntary churn issue” that Oliver refers to is that Netflix has a higher amount of “voluntary churn” among those paying via the App Store.

That is because Apple will refund those purchase. And Netflix has no say in that. People could watch whatever they want and simply refund on iOS.

 

[Unregistered 4U]

No, it didn’t come from epic. It doesn’t take much to put that together on your own. It doesn’t take much to look at iOS and the switch OS to realize, outside of how they look visually, the purpose of each is wildly different with iOS being insanely more capable than what the switch can do.

Yes, it did come from Epic. Look for his original statements on the matter. This is a statement made by someone attempting to pretend as if they have a point. I mean, unless you’re telling me that a system like the Playstation 5 can’t run arbitrary code… that ALL the code for it is game code. Did they cripple the CPU/GPU? OR, can it execute code for purposes OTHER than games, it’s just that no one is writing anything else for it?

Well actually, there ARE other apps written for it. Video streaming is there. As well as screen capture. And, wait, there’s Dreams that can be used to create whatever content you like, game, simple animation, any general thing you’d like. Oh, AND both the Switch and Playstation have a Korg app, same app that runs on the Mac/PC/iOS devices. So, yeah, it’s a specious statement and only matters to those who want to arbitrarily call out Apple as something “Other”.

 

[Unregistered 4U]

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

Well, I mean, going by the logic made here, the part of Apple that makes the iPhone is colluding with the part of Apple that makes the App Store, see? And, ahh, the part of Apple that makes the rules for the AppStore are colluding not ONLY with the part of Apple over the phone but ALSO the part of Apple that runs the infrastructure for the AppStore!

Once you look at it as absurdly as possible OF COURSE there’s collusion! /s

 

[Unregistered 4U]

They were AT&T and they broke them up because they got too powerful.

So, if you go and read WHY they broke up AT&T it had very little to do with how powerful they were. If you want to go actually read what it was about and post a snippet here showing where it says they were too powerful, I think that’d be enlightening.

 

[dsut4392]

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.

If you don't need in-app payment, don't use it and you won't have to pay the 30% fee. Simple really. Go and try to set up your own shop inside Fortnite and see how far you get.

The Qualcomm patents in question were argued to be standards-essential, and therefore required to be licensed under FRAND terms. Breaking the license agreement is the only way of getting arbitration on whether the terms offered by Qualcomm were FRAND. The Apple-Epic situation is entirely different from Apple Qualcomm because Epic could quite simply and legally avoid paying Apple a single cent by not using in-app purchase. This wouldn't stop Epic charging what they like for game add-ons, Epic would just have to handle payment itself outside the app. In contrast, Apple couldn't build LTE standards compliant phones _at all_ without either purchasing modems from Qualcomm, or licensing the tech from Qualcomm on Qualcomm's terms.

 

[bluecoast]

I remember when the App Store was first launched.

It was very much pitched as an easy way for any (big or small - but especially small) developer to get their work onto their user’s phones & Apple would handle the billing & payment.

Convenient for users and convenient for developers.

Importantly, the App Store was never presented by Apple as a money making machine in its own right but as a loss leader (or at the very least, a break even division) designed to help more iPhones to be sold each year.

This is far from the money extraction machine that it’s become now & it feels as if changes do have to happen.

 

[daleroe]

It's still important to take into consideration. An extreme example, but what if your employer discussed cutting your pay in half but didn't actually end up doing it? You'd still probably be frustrated and start looking elsewhere for employment. Sometimes the fact that something is even being considered is enough to cause concern.

But Apple didn't explore this suggestion in a vacuum — there was an action from Netflix that prompted it.

So, let's take your "extreme example" all the way and make it a fair argument: Netflix wanted all the benefits of being in the app store without giving anything in return.

In your example, the company would be exploring cutting the employee's salary in half because he wanted all the benefits of working there (paycheck, insurance, etc.) while giving nothing in return… not doing any work or even *showing up* for work.

In your example, I'd say giving that employee 50% would be generous.

 

[bluecoast]

This stuff always reminds me of Godfather 2, when the Deniro's character bumps off the boss that causing everyone misery. And now he collects tax off them because, guess what... he did the hard work!

Apple has done the hard work. That's why Jobs had that attitude to this. Why if you do the hard work to create a situation that everyone can eat off should you then just give it away for free. What if you didn't do that work? Where would everyone be? NOWHERE.

People have short memories. I remember it what software development was like pre the App Store for indie dev's. It was practically impossible due to distribution costs, piracy etc.. not to mention malicious files. The big companies selling boxed software had everything on lock so it was extremely hard for devs to setup on their own and sell software. You were in a similar situation that indie artists were in vs major labels.

Then the web came and changed the distribution model for software which was big deal. Subsequently Apple came and provided a streamlined service for actual exe's.

Apple basically solved the "friction" just like they did with iTunes music. They fixed the distribution issues, the piracy issues and the malicious code problem. And most importantly they used the trust they'd built in iTunes to fix the payment trust issue. No-one had done that all in one go. No one.
The even solved the pricing issue because dev's needed to account for piracy and would sell 1 app for multiple times its cost to cover piracy. Now you had so many devices to sell to easily with no friction you could sell an app for $3 or whatever and still make lots of money. Thats why we now have software synths that would be $100 sell for $4.99. This a miraculous achivement considering what was happening before.Essentially they gave software dev's who would normally HAVE to work for some crappy big company the ability to work for themselves.

So now everyone has amnesia and has forgotten what it was like before. And they pretend that this current App Store model was always going to happen. lol.. yeah. right! sure it was!

As for apple needing dev's to make the App Store happen. How about dev's needing Apple to create the setup in the first place! No one else did. What makes everyone think google or MS / Oracle etc.. were ever going to create anything like what Apple did for devs? Previously these companies have only liked to work with big companies (i.e. how the console business works). Dev kits used to cost thousands not 99 dollars a year etc...

I tell you, people forget the history as quick as they can when they want to make a buck...

I agree that the App Store massively benefitted indie devs. The recent move to 15% for them is great too.

I think this argument breaks down for medium sized/bigger companies who have their own payment systems, customer support and marketing budgets - and who could (presumably) pay Microsoft or Amazon to host their downloads.

The App Store for them then starts to feel like a mafia style made up tax - a ‘platform tax’, if you will.

Finally, what makes this cynical is that Apple really started to push services revenue growth when they saw that iPhone growth was slowing and they stopped reporting iPhone sales numbers.

If there’s anything that makes Apple feel ‘special’ it’s their devotion to producing innovative hardware and software.

The move to services as a focus has always felt a little bit of ‘ok we’re out of big ideas for now, let’s squeeze everything out of what we have’.

Finally: Apple are going to need all the help they can from third parties when they launch their AVR products.

Once bitten, twice shy?

 

[bsolar]

First, it's not "an article from the DoJ", it's a journal article from the Georgetown Law Review, and I've read it.

Second, what does it have to do with the discussion? It's not a policy document. It's not a law. It's some lawyers from the late '80s giving an opinion. And it contains no evidence of any minority player being sanctioned for anti-trust which is what you claimed and the question I asked.

You are right, I stand corrected.

 

[playtech1]

Reading the article it sounds like the question was asked 'should we impose punitive measures' but it seems the answer was 'no' in that Netflix seemed to continue on with business as usual.

I am of the view Apple does need to change its App store policies - and had they taken punitive action I think it would have further added fuel to that particular fire - but it seems in this particular instance Apple made the right call.

 

[Brian Y]

Again either Netflix feels like IAP and the 30% cut is worth it or they don’t. It doesn’t matter one bit how much or little code is in their app, this isn’t a merit based argument it’s “this is the fee if you want to participate”. Either it’s worth it to you or not. If not, fine, you can still put an App in the store for free, but it has to meet certain guidelines. If THAT isn’t ok then you don’t get your app in the AppStore. It’s a choice every developer makes, not one of them is forced to make an app OR ELSE. 100% voluntary.

100% voluntary? Those email chain clearly speak of "punitative measures". Voluntary and Punitative Measures don't really go together. Apple clearly doesn't see it as voluntary.

It's voluntary in the same way that paying protection money is voluntary. You don't have to pay it, but you lose alot more if you don't.

I know people, especially on MR, tend to not see any bad in Apple - but if you have honestly read those email chains, and cannot see the same evil that Apple pretends to be fighting against, then there's something wrong. That email chain describes predatory business practice, and quite frankly, that of a monopoly.

 

[Brian Y]

Reading the article it sounds like the question was asked 'should we impose punitive measures' but it seems the answer was 'no' in that Netflix seemed to continue on with business as usual.

I am of the view Apple does need to change its App store policies - and had they taken punitive action I think it would have further added fuel to that particular fire - but it seems in this particular instance Apple made the right call.

They did. In response to Netflix A/B testing removing IAP, Apple A/B tested pulling some of netflix's marketing. They also clearly threatened to pull marketing, etc, if Netflix did go ahead with a complete removal of IAP.

 

[Brian Y]

Yes I would be forced to use it because it would change the nature of iOS, and likely apps I can currently use now would be pulled and put in alternate App stores. Meanwhile my only alternative would be the same experience (Android) or no experience (no phone) so again you want to reduce people’s choice rather that buy a phone that already does what you want.
And I am under no impression you have the power to cause things to change but you still want it to be done. Supporting a terrible idea is worthy of criticism and you definitely do support a terrible idea.

That's really not how it works on Android. With very limited exceptions - App stores are alternatives. The vast majority of (popular) apps are available in the play store, in the galaxy store, in whatever Huawei's one's called. The only thing I've ever noticed which is available only in one is the default samsung apps specifically for their phones - which are only in the galaxy store.

In this case, Netflix would probably just have a copy of the app without in-app sign up in the App store, and one that has it in another app store. There is no loss to the consumer - the only loss is to Apple's cut.

 

[bluecoast]

I’ve had a look at nearly all of the posts on this thread and so many are pro Apple (I really like Apple, but as a ‘friendly critic’.

To those defenders: answer this question though:

1. How come I can buy items on the Amazon app without the 30% being applied?

(Unless Amazon is swallowing this 15% on behalf of their customers… Yeah, right).

2. But then why are micropayments for loot boxes etc within games ARE subject to the 30% Apple cut?

The physical goods/services vs digital services difference of treatment seems utterly arbitrary & unfair.

It’s obviously to do with various confidential deals that Apple is striking with various companies & seeing game micropayments as a lucrative bit of revenue for the App Store.

Fair and transparent it does not appear to be.

I doubt that senior management team at Epic are pleasant people. However, they do seem to have a point.

 

[Pezimak]

I find it interesting the lengths at which Apple was prepared to go to in order to keep its 30% cut. Lots of special deals and offers being awarded to pursued Netflix in app purchases to stay. Because I don't doubt that Apple would never offer these same incentives to anyone else, unless they were the size of Netflix. I can certainly understand why Netflix refused Apples offers. This isn't a good look for Apple and could leave a bad taste in some competitors mouths who are never offered similar incentives to keep in app purchases, just threats of punitive measures.

 

[tann]

I’ve had a look at nearly all of the posts on this thread and so many are pro Apple (I really like Apple, but as a ‘friendly critic’.

To those defenders: answer this question though:

1. How come I can buy items on the Amazon app without the 30% being applied?

(Unless Amazon is swallowing this 15% on behalf of their customers… Yeah, right).

2. But then why are micropayments for loot boxes etc within games ARE subject to the 30% Apple cut?

The physical goods/services vs digital services difference of treatment seems utterly arbitrary & unfair.

It’s obviously to do with various confidential deals that Apple is striking with various companies & seeing game micropayments as a lucrative bit of revenue for the App Store.

Fair and transparent it does not appear to be.

I doubt that senior management team at Epic are pleasant people. However, they do seem to have a point.

This is one of the biggest issues!!!

People argue, well Amazon is a store and sell physical goods, so they deserve to avoid paying more commission, so they can use their own payment system. Whereas an IAP or lootbox is a digital good (despite Apple in no way facilitating the creation of that digital good, above and beyond what Amazon utilise, e.g. developer tools), and because it's digital, they need to use Apples payment solution, because of... no real reason?

 

[msackey]

Charging 30% is too high. That’s almost a third! Apple is being greedy. I can see charging about 8 to 10 percent

 

[AndiG]

I'm quite interested to know what rules you are making tho. I'm only aware of customers voting with their money to buy products/services any company makes/provides. I'm not aware that normal folks can also dictate what a company can/should and cannot/shouldn't do. Do tell so that everyone can start exercising their rights.

C'mon, really?

1. Smartphones have evolved to the main source of information and to the main device to access the internet and to communicate.
2. There are only two companies controlling the Smartphone OS market. Apple and Google.
3. It is important that everyone is able to use those devices.
4. Apple cannot be platform owner, gatekeeper and competitor to other services.
5. So that is why anti competitive agencies tune in.

"normal folks can also dictate what a company"

Ever noticed that there is something like democracy? Goggle was doing the same with its search engine. Google Ads and services were preferred and the first search results. So Google was regulated and had to pay a fine (as far as I remember).

Microsoft was regulated to open its OS to third party browser.

And Apple WILL be regulated. The authorities (elected by the people) will (hopefully) dishonour and regulate such a behaviour. Right at the moment the European trade commission has a close look at Apple and Spotify, and oh boy, will Apple be regulated by the EU (and this is just the first case).

Antitrust: Commission sends Statement of Objections to Apple on App Store rules for music streaming providers​

Antitrust: Commission sends Statement of Objections to Apple on App Store rules for music streaming providers

The European Commission has informed Apple of its preliminary view that it distorted competition in the music streaming market as it abused its dominant position for the distribution of music streaming apps through its App Store.

ec.europa.eu

 

[quarkysg]

C'mon, really?

1. Smartphones have evolved to the main source of information and to the main device to access the internet and to communicate.
2. There are only two companies controlling the Smartphone OS market. Apple and Google.
3. It is important that everyone is able to use those devices.
4. Apple cannot be platform owner, gatekeeper and competitor to other services.
5. So that is why anti competitive agencies tune in.

"normal folks can also dictate what a company"

Ever noticed that there is something like democracy? Goggle was doing the same with its search engine. Google Ads and services were preferred and the first search results. So Google was regulated and had to pay a fine (as far as I remember).

Microsoft was regulated to open its OS to third party browser.

And Apple WILL be regulated. The authorities (elected by the people) will (hopefully) dishonour and regulate such a behaviour. Right at the moment the European trade commission has a close look at Apple and Spotify, and oh boy, will Apple be regulated by the EU (and this is just the first case).

Antitrust: Commission sends Statement of Objections to Apple on App Store rules for music streaming providers​

Antitrust: Commission sends Statement of Objections to Apple on App Store rules for music streaming providers

The European Commission has informed Apple of its preliminary view that it distorted competition in the music streaming market as it abused its dominant position for the distribution of music streaming apps through its App Store.

ec.europa.eu

I don't think you have answered my question tho. I see a lot of deflections.

Until Apple is indicted of breaking any laws, they are deemed to be operating legally under the countries' laws they are operating in. You saying so does not make it true.

Now, may I know what rules we can make that can be enforced upon commercial companies? I very much want to know.

 

[quarkysg]

Microsoft was regulated to open its OS to third party browser.

I think you have a very contorted view of history. Microsoft is found to be abusing it's monopoly power becuase Microsoft forced/threathened OEMs to not pre-install rival browsers or risks not getting a Windows license for their beige boxes. They are then forced by authorities to make users choose their default browser (in a random order) upon first login, if memory serves. This is because they have been found guilty of abusing their monopoly power, not because Windows is a monopoly.

 

[PlayUltimate]

Really?

hmm. Apple creates 3 awesome platforms with years of support to both developers/companies and the end users:
OS support (TVOS, iOS, iPadOS),
SDK always updated and if your code is good or great your app will work,
Distribution and Bandwidth - developer/company uploads 1 time (NO COST), and reaches over a billion devices and users!
Marketing - 1 simple writeup and Apple helps you continually advertise, relate to your competition towards end users, vastly superior search for your wares. Again at NO COST to you or the end user really. VERY important if your logo or your app is similar to others.

+ auto-inform customer on app software updates and then deliver the update to the client

 

[AndiG]

I don't think you have answered my question tho. I see a lot of deflections.

Until Apple is indicted of breaking any laws, they are deemed to be operating legally under the countries' laws they are operating in. You saying so does not make it true.

Now, may I know what rules we can make that can be enforced upon commercial companies? I very much want to know.

Are you trolling? I guess - well the EU anti trust commission can decide whatever the want to decide. Apple is selling its products within the EU so the trade commission could force Apple that it is not legitimate that Spotify has to pay 15-30% to Apple while Apple Music doesn't has to pay any transaction fees.

But since it isn't possible that you don't know about the power of anti trust agencies ... ><(((º>