Apple Facing $1 Billion UK Antitrust Lawsuit Over App Store Fees

[Sophisticatednut]

Alternative: Apple allows 3rd party in-app purchases, in which case everyApp maker with an ounce of avarice switches to the "freemium" model, leaving Apple with 30% of nothing.
Make no mistake - this fuss about the App Store is 'astroturf' stirred up by a few big developers who want to lock people into their own App Stores/in-app-purchases without paying Apple for the privilege. The likely result of forcing Apple to allow 3rd party payments and App Stores is that they'll have to hike up the annual fees and lock out a load of small/amateur developers.

Or Apple provides a service developers want so they stay. Apple will just have to make it worth the developers money. And how will they get locked in if they can just publish the same app in a competitors store?

There’s zero history of this ever being an issue

There are plenty of alternatives: the iPhone only has about 20% of the smartphone market! If you don't like the Apple store, choose Android, Chrome OS, Windows, Linux... or run web-based apps on your iDevice. Most "essential" apps are available for at least Android as well as iOS.

You’re looking at phone competition and OS competition. This is a store and payment competition for the developers market.

Yes a natural monopoly. In the same way Honda has a monopoly on the accord.

Have some proof for the bold, because I know many households that are multi-operating system on the workstation side.

Anyway good luck to them winning.

First Honda have zero monopoly on the Honda Accord. Honda customers and manufacturers are completely free and able to engage. Honda stops nobody and doesn’t take a fee.

And to your bold text. They are still two separate market groups with zero competition. Example when steam enabled developers to sell Mac games in steam that made steam and Mac AppStore developers to be competitors as they actually shared the sam customer group.

Android and iOS developers are equally competitive as a gas’s station and electric outlets to someone who have a gasoline Toyota and electric Honda.

 

[tripsync]

I understand why the fees were set so high at launch, moving from boxed software (itself subject to large margins imposed by retailers) and into a digital-only model that Apple was not certain would take off, but with large platforms there are economies of scale and it seems ridiculous that Apple should collect 30% of a £2 app or indeed a £200 app. It is increasingly unjustifiable.

Reminds me, in a different context, how AWS was to pass on savings to developers as its own platforms scaled up. Some savings are passed on occasionally, some reductions in the costs of S3 storage for example, but AWS seems to have achieved a kind of giant bait-and-switch in which such savings do not get passed on to developers despite the growth of AWS and those early promises that savings would be passed on.

since launch
- Many free services were added like Apple Maps and CloudKit (fyi, Google charges a hefty dollar for Google Maps and Firebase)
- Apple expanded to China which sets up a completely different architecture for law compliance
- App review times have shortened from weeks to days
- Testflight service
- Automatic binary optimization
- Lowered fees, including eliminating multiple $99 membership fees

it's actually quite justifiable

 

[bluecoast]

Not a dev. Don’t know any devs.

Firstly, I think that initially, the App Store was amazing. That it stops a lot of malware / scam apps etc is probably very likely. In short, it does do a lot of good.

I think the issue is that Apple seems to want to take - I’d say ‘skim’ - money off for ever more. The %ages now seem excessive.

Plus there’s advertising on the App Store where devs have to pay even more money to Apple.

And because they have a monopoly on app distribution, devs are at the mercy of Apple’s review process too.

And despite Apple saying that it’s protecting its users, there are still a lot of scam apps, fake apps in the App Store.

All of this is ok-ish if Apple made a loss on its hardware. But we all know it makes at least 30%.

And finally, Apple seems to view devs as it is doing them a big favour. Try using the iPhone with 1st party apps only and see how you like it.

I’m a big fan of Apple. I wouldn’t be in this forum otherwise. But my gut tells me that this is not a great side of them on display here.

 

[I7guy]

No, I do not. Monopolies, including natural monopolies, relate more to the market level not the brand level. In the case of Honda automobiles, you'd be talking about the automobile markets where Honda does business which can include competitors like Toyota, Nissan, Mazda, Hyundai., Volkswagen, Ford, etc.

It does seem like apple has a natural monopoly on the IPhone iOS and the App Store. At least in the US but we will see about the UK.

Or Apple provides a service developers want so they stay. Apple will just have to make it worth the developers money. And how will they get locked in if they can just publish the same app in a competitors store?

There’s zero history of this ever being an issue


You’re looking at phone competition and OS competition. This is a store and payment competition for the developers market.



First Honda have zero monopoly on the Honda Accord. Honda customers and manufacturers are completely free and able to engage. Honda stops nobody and doesn’t take a fee.

And to your bold text. They are still two separate market groups with zero competition. Example when steam enabled developers to sell Mac games in steam that made steam and Mac AppStore developers to be competitors as they actually shared the sam customer group.

Android and iOS developers are equally competitive as a gas’s station and electric outlets to someone who have a gasoline Toyota and electric Honda.

I guess the bias is how narrow your view of the market is. We will see what the outcome is.

 

[bluecoast]

Why doesn't Apple charge 40%?

You tell me !

 

[tripsync]

meanwhile, Nintendo continues to take 30% and is the only digital distributor for Switch consoles.

weird how developers aren't complaining about that.

 

[Sophisticatednut]

Rumor has it that CPU's are rather flexible machines - I have programmed at a basic level (scientist) for macOS, Windows, and UNIX for over 4 decades.

CPUs can be as flexible as they want, doesn’t matter if the software prevents you from running anything without consent of the manufacturer bought and purchased through only their store.

Just look at Mac, they run the same cpu and have no problem if you want to write machine code or run anything outside the AppStore.

It's all just all variations on a theme. Plus, App Store developers can simply pass the costs on to consumers, as I mentioned above. This lawsuit is nonsense.

Pas on what cost? The development of a different product for a different market?

I'd love to have a list of the developers in the lawsuit so I can boycott them for threatening the Apple ecosystem and for being prats in general.

They have it. It’s: every developer in UK

Again, the sane approach to the app store fees should be to force companies that charge them to provide something to the consumer in return - quality control, security, and transparency (such as a rating system that cannot be gamed).

The only choice is to make it compete on the market. No other way to enforce it.

Just how steam forced Apple to make the AppStore better( they didn’t) or loose almost all game developers, as they did as just about everyone published it on the steam and abandon the AppStore.

And again how steam is facing competition from the epic store, and even with the Epic store having zero fees developers find steams fees as reasonable for what they get in return.

 

[Sophisticatednut]

You said they're a monopoly, and that Devs are at the mercy of Apple.

In the UK a firm is said to have monopoly power if it has more than 25% of the market share. So they are

So, you think Apple operates outside of market forces. If so, they could charge whatever they want, right? So why don't they charge 40% according to your analysis of Apple and Developers?

Well they are. What forces are affecting Apple? What will developers do if they take a 40% fee? 60%? 90%? Outside of legal scrutiny?

iOS users can only buy from the AppStore anyway.

But reader apps do have the option to use their own payment option of choice without paying a fee, or choose apples payment system.

 

[tripsync]

If developers did no longer bother to develop for Apple, the iPhone wouldn't sell either.

Inversely, if iPhone no longer supported the App Store, developers wouldn't be able to sell their iPhone apps. And?

"But developers would simply develop for Android"

Great, then go do that now. Leave Apple in masses, go to Android which will then cause Apple to change their policies.

Free market at work baby.

 

[tripsync]

I am not a fan of side loading. But if this is the only solution to avoid the monopoly, then it will have to exist.

Apple is not a monopoly.

 

[OneBar]

All of those selections, literally all of them except the apple app store offer alternatives within their own space.

All steam games on every supported platform have an option for other stores and direct purchase. Same with Epic and the rest.
All console games offer purchase of games via disc/cartridge in any vendor shop you choose.
All physical stores are essentially the same and kind of defy the point here, as the mere existance of choice there is the choice. Can shop where you want for product you wish at whatever sales they provide.
Now for mobile--
Android allows sideloading and multiple stores.
Apple only allows the apple app store. Only. Full stop. That's it.

Monopolistic behavior does not require a monopoly position, and is, in and of itself, a legal issue. There are people who claim we have a choice in what phone we buy, there are those who claim that Apple only has a ~20% market share in phones worldwide -- but the point is: what if it were 80%? At what point does bad behavior really mean it's bad? Apple does not allow competition for developers in the Apple space. And the consumer pays that price for not having choice -- choice drives the price down, monopolistic behavior drives the price up.

You don't have to love or hate Apple to really understand this position and the gamesmanship that Apple is playing here.

"But you can just buy Android!"
Yep. That's true. Really helps Apple as well, doesn't it? Understand that I come from a position of wanting to actually like Apple, but this behavior can only end badly.

Disregarding the majority of your text here, Android is the base OS for multiple platforms and devices, like Windows. They have to allow sideloading simply because of that. iOS/iPadOS only go on iPhones and iPads. Sideloading isn't necessary and offers literally no benefit. No developer is going to offer their app as a sideload option for less than is already being paid for on the App Store and they're going to have larger costs from having to front their own infrastructure support instead of Apple, as well as smaller profits. My bet is that if sideloading is forced and devs attempt it, you'll see a net 30% increase in app prices from what they currently are. But we'll have "options" so that's good right? Helping out the customer ftw...

 

[I7guy]

The moment I see people defending that cut I know this thread goes nowhere.

The moment I see people cheering the lawsuit I know this thread goes nowhere.

 

[Jay Tee]

So, the developers want AppStore and all the nice stuff (payment processing, family sharing, parental controls, gift cards, visibility, whatnot), but they want 100% of the sales? Or would they rather have side loading and handle everything on their own?

Well then you'll have the developers getting a class-action lawsuit compelling Apple to charge more commissions so that they can maintain the platform.

Obviously !

/s

 

[tripsync]

Pas on what cost? The development of a different product for a different market?

Example: Bear notes uses CloudKit for free.

Apple can simply charge the user a separate fee for apps using CloudKit. Or charge the developer a separate fee for using CloudKit.

If Bear Notes must now eat additional costs, it will be passed onto the consumer.

Same goes for Apple Maps.

 

[tripsync]

them: "if it weren't for developers, iphones wouldn't sell anymore"
me: "if it weren't for Apple App Store, developers wouldn't sell their apps"
them: "no, they can go to Android"
me: "they can go to Android now
them: "...um...uhhh....ummm, but monopoly"

🤣

 

[theluggage]

Apple do nothing in the design and development of an app that belongs to someone else. Apple provides all the tools and a place to put the app but the dev does all the hard work and Apple has the nerve to say they want a piece of that hard work for what? for Apple doing nothing!!!.

In other news, most shops (online or otherwise) do nothing towards the design and development of the products they sell, yet they still have the brass neck to expect their suppliers to sell them goods at a discount so that they can add a mark up and make money. Disgraceful!

What developers get for their 30% "Apple Tax" is to have their product listed in a major online store which is regularly searched by millions of customers. (Oh, and distribution, payment processing/credit card facilities etc. which all cost money however you do it).

"Developers" (aka: astroturfers for Big Software Corps who want to make their big-name apps exclusive to their stores ) really need to be careful what they wish for. Currently, one subscription gets your App available on the store used by all iPhone users. Break that "monopoly" up successfully and small developers will have to put their App on half-a-dozen App stores - probably each with monthly fees and per-sale fees - if they want to reach all iPhone customers. (Or, maybe, it won't make any difference - like on Android where there may be a choice of app stores but most people just use Google Play anyway because 'better the devil you know' - for which Google still faces accusations of market abuse).

 

[Ethosik]

Every app developer pay's Apple a yearly fee for using the app store and tools provide to develop apps and use the store and that should be enough for Apple but it isn't, they want more money and they way they do it is by only allowing one payment system if the dev's want to use in-app purchases in their app and that payment system is owned and run by Apple. Instead of including usage of Apple's payment system as part of the yearly app store fee, Apple worked out they could make bundles of money if they charge a percentage every time their payment system is used and what better way to make sure their payment system is the only one used? to write it in the sign up contract (Terms and Conditions) that only Apples payment system is allowed and no one else.

It still beggars belief how Apple is still allowed to get away with this. Shopping malls charge a yearly rent fee for individual shop owners to sell there goods in the mall. Market stall providers charge a yearly rent fee for stall holders to use a stall so they can sell their goods in the market. Neither the shopping mall or the market stall providers charge a fee for every sale made by individual shop or stall holder, so why should Apple be allowed run a system where not only do they get a yearly fee from every dev but also charge a fee for using a payment system devs have no choice but to use because Apple prevents other payments systems from being used. If shopping malls are not allowed to charge a fee on every purchase made from the shops within their mall, why is Apple allowed to charge a fee on all purchases made within their store?

Apple’s profits are far lower than people think. You can look this up and compare yourself. But Linus did it recently for you. Start at the 10 minute mark.

 

[theluggage]

You can't use a historical decision and claim that as defense. Like "well, maybe you shouldn't move to Florida if you didn't like hurricanes.... you had a choice!"

Sounds like common sense to me. Other geographical locations are available - although moving house tends to be a bit more expensive than changing phone. Perhaps someone should sue the state of Florida for not allowing competing weather providers?

 

[ender78]

It still beggars belief how Apple is still allowed to get away with this. Shopping malls charge a yearly rent fee for individual shop owners to sell there goods in the mall. Market stall providers charge a yearly rent fee for stall holders to use a stall so they can sell their goods in the market. Neither the shopping mall or the market stall providers charge a fee for every sale made by individual shop or stall holder, so why should Apple be allowed run a system where not only do they get a yearly fee from every dev but also charge a fee for using a payment system devs have no choice but to use because Apple prevents other payments systems from being used. If shopping malls are not allowed to charge a fee on every purchase made from the shops within their mall, why is Apple allowed to charge a fee on all purchases made within their store?

Wrong, mall rent indexed to sales occurs in physical retail.

https://www.lanardandassociates.com/blog/2022/01/understanding-percentage-rent-in-a-commercial-lease/

 

[ender78]

I have too long made the point that App store charges to developers are excessive. 15% to 30%? For what? For keeping up with the basic infrastructure which Apple also ultimately depends on to run their iPhone? C'mon!

If it's so insignificant, are you willing to do it yourself for free? Apple is not a charity.

Developers understand the arrangement. Any good business writes a business plan based on known costs. If the business is not profitable based on the 15-30% commission the developer should not develop the app.

 

[Sophisticatednut]

W

And again I ask you...how'd that work out? For you or developers?

Wel i present you exhibit: A) the M1/M2 Mac with OS X. We can download from the AppStore and shockingly download from alternative sources. And developers can chose to pay 0€ to Apple and be outside the store or pay their fees to be on the AppStore.

Exhibit: B) windows who also have a hugely successful AppStore and the alternative to not use it.

 

[ender78]

Yes it's almost as if the Appstore came into being all on its own, with no labour or capital expended on it. 🤔

Lol, its not as if Apple has tens of thousands of people working every day to improve said ecosystem.

 

[Ethosik]

There are tools that will compile your app for both stores.

Yep. Hello Xamarin and .NET MAUI.

 

[Ethosik]

This is my favorite table ever. I don't understand how these lawsuits go anywhere with this chart existing and everyone doing the same.

Agreed. And how people still say 30% is too much. Look at the table! Nearly everything is 30%!!!

 

[kognos]

Disregarding the majority of your text here, Android is the base OS for multiple platforms and devices, like Windows. They have to allow sideloading simply because of that. iOS/iPadOS only go on iPhones and iPads. Sideloading isn't necessary and offers literally no benefit. No developer is going to offer their app as a sideload option for less than is already being paid for on the App Store and they're going to have larger costs from having to front their own infrastructure support instead of Apple, as well as smaller profits. My bet is that if sideloading is forced and devs attempt it, you'll see a net 30% increase in app prices from what they currently are. But we'll have "options" so that's good right? Helping out the customer ftw...

Sideloading isn't the only option on android. There are multiple stores available across all the devices. The Google Play store is not the only store. So if you're going to try to spin this as if it's "valid store" vs "hacky sideload" that's not valid.

And yes, I don't disagree that sideloading is bad. That's not the argument. On IOS, there is one store. All apps on IOS only go through one store. That's it. Full stop. If you want an app on IOS you go through the Apple app store and pay their fee.

Android doesn't have to allow sideloading for any reason whatsoever. There's nothing short of the monopolistic practices that creates that prevents them from doing the same as Apple.