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

[kognos]

But Android does exist. You can't make the argument in a world we don't live in. We live in a world where there are many options for software solutions. Apps. This "what if Apple actually WERE a monopoly" is a wholly different discussion.

But, out of curiousity, name me 5 apps you can find on Apple's App Store that you can't find on the Android stores? Apps that you're being denied. Your argument is that you are being denied Apps; so, which apps (or their equivalents) are you looking to use that you can't find outside of Apple?

I can because the market that exists in IOS is unique and has its own boundaries. This isn't a hypothetical where I'm claiming aliens exist, I'm saying that if IOS was dominant, this would be a anti-competitive position where no other stores exist and everything had to go through the apple app store.

 

[Zest28]

Harrods (posh UK retail store) has a net profit margin of around 30%. Why is the UK not going after it's own stores too?

 

[Zest28]

Do you think Apple would be more or less successful if there were 3rd Party Stores?

Nope, iOS > Mac in terms of security.

Some sensitive software only works on iOS and not on Mac as a result of this.

 

[4odomi]

Apple has become the target of a £785 million ($1 billion) class action lawsuit on behalf of over 1,500 developers in the UK over its App Store fees, reports TechCrunch.

The suit accuses Apple of abusing a dominant position by charging a 15% to 30% fee on in-app sales in the App Store, a policy that has been criticized by antitrust regulators in other countries.

It also argues UK consumers are missing out because developers are being deprived of money that could be spent on research and development to help drive app innovation.

The lawsuit is being brought by Sean Ennis, a professor at the Centre for Competition Policy at the University of East Anglia, on behalf of app developers.
The lawsuit is an opt-out class action. In other words, UK-based developers don't have to register to be included in any potential winnings, which would be calculated based on their app business.

Apple has been accused of or investigated for anticompetitive practices in several other countries over the past few years, including France, Germany, the Netherlands, South Korea, Japan, the United States, and more, with many of the complaints related to the App Store. As a result, Apple has been forced to make changes to the App Store in some countries, such as allowing developers to offer alternative payment systems in South Korea.

Apple's App Store terms and conditions are also being probed by the UK's Competition and Markets Authority (CMA), which opened its investigation in March 2021.

In the European Union, Apple is gearing up to accommodate the Digital Markets Act, which will require it to allow apps to be downloaded on the iPhone using sideloading or alternate app stores in iOS 17.

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

Sounds to me as though someone is trying to redefine the word monopoly!
Fact 1, Apple Store is not the only App Store available to developers, so it's not a Monopoly FULL STOP.
Fact 2, Only developers turning over $1 million get charged 30% ($700k for developing an app eh) poverty stricken they are 🤣
Fact 3, They were fully aware when they signed the contract, what the fees were and no one forces them to sell their goods in the App Store.
Fact 4, If you want to sell something in my store to my customers, then I decide what I charge you for that service and you decide whether you want to accept it.
Fact 5, Those developers would be paupers and not millionaires if it wasn't for the Apple App Store.
Apple should kick all off them off the App Store, like they did with fortnight 😡

 

[AppliedMicro]

Do you think Apple would be more or less successful if there were 3rd Party Stores?

On iOS?
They would lose some app sales but maybe gain some hardware sales (for availability of certain apps that they won't distribute themselves). Overall effect? Probably a bit less successful, financially.

 

[AppliedMicro]

Harrods (posh UK retail store) has a net profit margin of around 30%. Why is the UK not going after it's own stores too?

Maybe you should ask the CMA that.

That said, 21 million GBP in profit on 654 million of turnover doesn't make for a 30% profit margin.
It makes for about 3%. Your figure seems off by a factor of 10.

Also, I've recently been to Harrods and can assure you that there is plenty of competition nearby.
I could have easily „sideloaded“ most of the products on offer from other, non-Harrods stores.

 

[4odomi]

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?

They pay that fee for apple development tools and they have no other up front costs, as they would if they didn't use the App Store, before App Store they were lucky to get 30% rather than 70%.

 

[Zest28]

Maybe you should ask the CMA that.

That said, 21 million GBP in profit on 654 million of turnover doesn't make for a 30% profit margin.
It makes for about 3%. Your figure seems off by a factor of 10.

Also, I've recently been to Harrods and can assure you that there is plenty of competition nearby.
I could have easily „sideloaded“ most of the products on offer from other, non-Harrods stores.

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"The vast majority of retailers, discount stores and pound shops will work on a markup percentage between 30%-40%"

You really think Harrods only has a markup of 2%? Not a chance.

In the UK, it's typically 30%-40%. Some are in the 20%-30% range.

 

[4odomi]

The problem is not that Apple charges 30% in their store. The problem is the monopoly. If YOU pay a lot of money for your iPhone, you should be able to install on it what you want from whatever source you choose.

Imagine a car manufacturer would tell you where you can drive with your car an where not. And if you used your car as a taxi, the manufacturer would demand 30% of the money you make with it.

That one billion is peanuts. If those fees were against competition laws, Apple should pay back every Cent they made with those fees over the years.

The consumers are not suing Apple, because we all know, we can't side load on an iPhone, so we make an informed decision when we buy it!
As do the developers when they sign up with the App Store !

 

[I7guy]

...so much, that their customers can't buy iOS apps anywhere else.

There's a feasible consumer alternative to the Mall and any business can easily set up one.
That's not true for app ecosystems.

And you can’t buy most manufacturers products except through the manufacturer.

Given how important these mobile platforms have become, and how much consumers and other businesses are relying on them to conduct their own business (and sell their products), yes, I absolutely want the government to regulate access to them.

No bad metric to determine private enterprise regulation. I absolutely want the government to stay the hell away.

It's not as if Apple wouldn't make enough money from hardware sales alone or would need to depend on these software sales. I'm not against Apple running their own storefront and charge commission on it. But consumers shouldn't be tied to and locked into it.

Buying an iPhone is not the same as the health care industry. You dont have to buy an iPhone to make a cellular call.

I'm very happy with the economics of the macOS ecosystem where there is competition between Apple's App Store and third-party developers selling their apps directly. And I've been using both ways to purchase software, depending on the most attractive (competitive) offer.

Good so use your mac to your hearts content.

👉 iOS and Android have outgrown the state where they can or should be left at the sole whim (and commission setting) of their developers.

Then let the government create its own phone and App Store.

 

[4odomi]

That's interesting but irrelevant. Apple is being sued because there are no alternatives. In most if not all of those cases, with the exception of Apple, you can acquire and install software (or product) using other means. Apple holds the unique position of saying "You have an Apple device? 100% of all developers absolutely, positively, must pay these extra fees to install any software on our device whatsoever, no exceptions."

And apple hides behind those stances in the name of security, but that is a seriously weak argument. Apple has always utilized security-by-obscurity instead of even attempting proper device hardening all in the name of maximizing profit. Sideloading would've saved them here, required Apple to toughen up security, and yes, diminish Apple's massive profits derived from all app sales that absolutely must fork over a percentage to Apple... on every. single. purchase.

Of course they're going to spin the messaging here to maintain their highest profit line item with operational costs so low (100mil a year to run the Apple Store, with nearly 17bil in profits). Big of them.

All consumers & developers are aware of this, no one forces them to either buy or develop for an iPhone 😏 and yes, there are plenty of alternatives, in fact Android has 80% of the world market, anybody can buy one or develop for Android instead of APPLE 😊

 

[AppliedMicro]

You really think Harrods only has a markup of 2%? Not a chance.

Don’t think so, no.
But I’m sorry, you (literally) don‘t know what you were talking about:

Harrods (posh UK retail store) has a net profit margin of around 30%

1. Net profit margin
2. Markup

👉 Two very different figures.

 

[4odomi]

The market isn’t phones, it’s iOS customers. As they can only be accessed by the AppStore

I think UK have the same way as in EU, and the lawyer firms don’t have a right to the fees granted as compensation. The fee is already settled before.

Nope, come back when I can write a game in Xcode and use it on Xbox, tell me when a game made in Unreal or unity can just be sold in the PlayStation store, Xbox store, Linux, windows or Mac.

Because this is currently an impossible choice. The day it’s the equivalent is when developers can sell the same game on steam, Walmart, GOG and their own website.

That’s when it’s a choice, now they make a different version for each platform.

Se above comment. You can take your bread completely unchanged and sell it in any store. Every store doesn’t need a unique compatible bread to be sold.

They want the choice to chose competing solutions.

The majority of Spotify customers bought the the AppStore untill they removed it many years ago. And the book app is like under apples new other services

Not an argument, especially when it’s outdated. Epic store have 0% and windows store also have 0% for all apps excluding games.

The monopoly is the iOS market, iOS developers don’t compete with android developers. Just how mac developers don’t compete with windows or Linux developers as they don’t share the same customers

Ahhhh Ok, so the IOS developers haven't got the skill set to develop for another operating system and somehow Apple is responsible for that? 🤣

 

[Zest28]

I’m sorry, but you (literally) don‘t know what you were talking about.

1. Net profit margin
2. Markup

👉 Two very different figures.

You don't know what you are talking about.

Apple is charging the same prices as UK stores like Harrods.

So why is the UK not going after big stores like Harrods who are charging 30%-40%?

 

[1284814]

Wow nice.

 

[4odomi]

That's not an alternative.

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!"

When you live in the Apple ecosystem you have no choice. Apple wants to have a dominant position in the market, and you can't say once Apple has won that position, that the Apple app store is anything fair. It's not. And that's what you have here. There is no easy egress, there is no choice once you're in. And if you take this to its extreme you can easily see that. That's monopolistic behavior, which does not require a monopoly position.

Edit: I still stand behind those other options have choices once you're on those platforms. Apple is the only platform that - once you're on that platform - locks you in. Web-based apps? Don't make me laugh. That's why all the engines are Safari and that particular avenue has been tightened so much as to be pointless. It's not like you're going to see Candy Crush as a web app either.

But everybody has a choice to be in the Apple Eco System and everybody knows, before they make that decision what's involved.
You kind of missed that one in your arguments 😊

 

[4odomi]

I'm curious, what percentage would Mr. Ennis retain? What percentage would the lawyers retain?

Around 30% 🤣

 

[AppliedMicro]

You don't know what you are talking about.

Just own up to it:



Thirty percent may be a markup, but it’s certainly not „net profit margin“.

Apple is charging the same prices as UK stores like Harrods.

On hardware sales price?
Or as a markup on App Store on software sales?

Here’s the thing: Apple isn’t doing brick & mortar retail with their App Store. Not even distance selling. They don‘t keep (expensive) inventory. They aren’t paying for apps, they don’t bear the business risk of apps being sold or remaining unsold.

Apple are more or less (somewhat simplifying) paying fixed costs for serving and infrastructure. And relatively low variable costs for developer support and services (approval etc.). Their costs don’t even nearly scale as much with extensive product range and „inventory“ as Harrods‘ do.

Harrods sell one physical item from stock they own 👉 they have one less to sell remaining. Their stock depletes.
Apple sell an app 👉 they‘re just copying a few megabytes of data from storage and transmitting them to your device. Their „stock“ never depletes.

That’s a difference between retail of physical goods - and selling software on commission.

 

[4odomi]

But as you seemed to acknowledge above, the UK laws and courts could be wrong. And again, you seem to think there is a "right" way for this to be determined. But there is no universal "right" here.

Now there's a monopoly that doesn't answer to anyone and dominates the market completely. The Courts (In every country)

 

[4odomi]

Just own up to it:

View attachment 2237354

Thirty percent may be a markup, but it’s certainly not „net profit margin“.


On hardware sales price?
Or as a markup on App Store on software sales?

Here’s the thing: Apple isn’t doing brick & mortar retail with their App Store. Not even distance selling. They don‘t keep (expensive) inventory. They aren’t paying for apps, they don’t bear the business risk of apps being sold or remaining unsold.

Apple are more or less (somewhat simplifying) paying fixed costs for serving and infrastructure. And relatively low variable costs for developer support and services (approval etc.). Their costs don’t even nearly scale as much with extensive product range and „inventory“ as Harrods‘ do.

Harrods sell one physical item from stock they own 👉 they have one less to sell remaining. Their stock depletes.
Apple sell an app 👉 they‘re just copying a few megabytes of data from storage and transmitting them to your device. Their „stock“ never depletes.

That’s a difference between retail of physical goods - and selling software on commission.

Neither do the goods sold in both stores (ie; cost scale), a percentage is not a fee, it's just a percentage 😊
Apple should just put up their fees, so that developers are left with the 30% they used to get for their products, pre App Store 😊

 

[4odomi]

The problem you and everyone fails to see, if I don’t want to sell in Walmart for their fees and prices to reach my customer base, I can go to Costco down the street and sell the exact same thing to the exact same customer base.

iOS developers can only sell on apples terms. No it’s no buts. Zero options.

They can stop being IOS developers and ply their trade on Android, besides both stores offer tools that make the apps compatible with the other

 

[4odomi]

What is deeply problematic is any professor spending so much time in a court case rather than teaching. Sad really.

I suspect he's being rewarded by a couple of big developers, no prizes for guessing which ones 😏

 

[SFjohn]

It's not necessarily just about a fee amount but rather how much dominance a company/product/service has in a particular market and if they offer alternatives (such as no fee sideloading). If Apple had only 25% of the smartphone or tablet OS market (where the App Store resides), for example, it wouldn't likely be an issue. At least not one worthy of an antitrust class action lawsuit such as this.

Apple is not a monopoly, and in essence you’re saying if a company is too big it should be treated differently (punished for its success). The only reason governments are after Apple is because they want access to all the data on those devices. Everything else is a smokescreen. First they tried CSAM and when that didn’t work now they claim antitrust.

 

[4odomi]

I run 13 Airbnb's. What is a moral percentage above my costs that I can charge for my homes?

Whatever you decide, if the customers decide that's too much, they'll simply not stay at your Airbnb's 😊
Unless off course your's are the only airbnb's in the area, then some court tells you what you can charge 🤣

 

[4odomi]

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

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.

UK law is wrong on many things, especially the changing of the definition of a monopoly, by Common Law, which is basically an interpretation of actual law, by a judge who answers to no body and can not be removed from his office, regardless of how many bad laws he passes