Apple Failed to Comply With App Store Court Order, Epic Tells Judge

[Exception0x0e]

So, you think Apple should be free to run their business how they see fit, but also not free to run their business how they see fit?

Apple can of course do their business the way they see fit. However, it costs Apple $501 to make an iPhone 14 Pro Max, and the company sells it at a base price of $1099. That makes it my non-subsidized iPhone, with which Apple has made a nice and even fully deserved profit. But.... what I do with my iPhone is, and should not be, Apple's business.

 

[Rogifan]

This isn’t about what it costs to run the App Store or develop iOS. Looking at Apple’s financials it’s clear the App Store is a huge money maker for them. And surely a $1000+ iPhone covers the cost of developing iOS.

This is Apple saying ‘we built the platform and if you’re successful it’s because of us so we deserve a cut of your success’. One can argue about the cut they’re asking for or the method they’re using to get the cut but it’s not more complicated than that.

 

[RSmith2023]

Epic needs to accept that they lost and move forward. They have lost more in potential revenue by being out of the App Store than they would gain at this point. They are never going to get to keep 100% of the in-app purchase revenue.

 

[Rogifan]

Apple is the reason Epic is making such profits in the first place. Apple’s AppStore gave them access to a captured market they would’ve spent a lot of money to advertise to. Now after making money from Apple’s customers… they want to act like they made their profits on their own?

This is the rub. Epic and others disagree with Apple that their success is because of Apple.

 

[static.void]

So you think Epic should be allowed to have their apps hosted on Apple servers, downloaded from Apple servers, available in the Apple App Store, using Apple API's and development tools...all for $99/year? Do you run a business?

Apple are not in the dev tools business. They’re in the selling iPhones and services business. Compare to Microsoft where the charge for their IDE and related tooling. They don’t charge to use their SDKs or APIs.

 

[Rogifan]

Why does Apple have the right to decide who or who I do not do business with my on my personal hardware, that I bought?

Apple would argue you own the hardware but not the software and the software is bound by the EULA.

 

[BaldiMac]

Apple can of course do their business the way they see fit. However, it costs Apple $501 to make an iPhone 14 Pro Max, and the company sells it at a base price of $1099. That makes it my non-subsidized iPhone, with which Apple has made a nice and even fully deserved profit.

What does the price or estimated manufacturing cost have to do with anything?

But.... what I do with my iPhone is, and should not be, Apple's business.

As long as you don't interfere with the rights they have to their IP and services, then it isn't.

But similarly, the contracts that Apple enters into with developers should not be any of yours.

 

[jlc1978]

Epic are right on this, Apple basically think they have done the minimum they think they can get away with

That’s all they are legally required to do. In the end,Apple should just tier the developer fee structure. Free apps with no purchases in or out off app at $99, up to millions for apps like Epic’s.

 

[mcled53]

I agree with Epic. I don’t understand how this is different 😂

I think it's different because the 3rd party is no longer using Apple's payment system... which is what Epic asked for and it is 3% cheaper.

 

[paulovsouza]

It’s so funny, these companies thinking they pulled one on Apple. Did they think they’d just sit there and take it, and loose millions.If anything they made matters more complicated for themselves, wasting their money and resources.

 

[duffman9000]

Why should Apple be allowed to charge Epic for transactions made outside of the Apple ecosystem? It's not like Apple allows them to just go and use a different store to sell their "goods"! Also, what are they (devs) paying the 99 bucks for? The whole thing is kind of ridiculous. Apple needs App Developers and App Developers need Apple. Both are nothing without each other.

Probably for the same reason that Nintendo, SONY, and Microsoft use to charge developers a commission regardless where a game is sold.

 

[spazzcat]

Are you familiar with concept of "monopoly" and "extortion"?

Are you aware that AppStore is virtually nothing without, well, apps?

Apple needs developers and developers need Apple (in a way) but the relationship is very unbalanced...

It really isn't unbalanced. Apple provided a large amount of assets for $99 and year + a commission on any financial transactions. A big one Apple handles for that commission is support for transactions.

 

[spazzcat]

"The market" doesn't exist on the iOS system, nor does the "the market" work without referees.

Until the app market, on every single platform, is as open as the pc/mac, I consider it unacceptable. I don't trust Apple nor do I trust Google to do the right things. I should be able to install whatever I want, without any involvement from either company in any fashion.

It's my hardware.

Its not your software though.

Fine, charge me per update. I'll pay it.

Remember when Apple charged iPod Touch users for OS updates? Pepperidge farm remembers.

Most people will not pay.

Apple can of course do their business the way they see fit. However, it costs Apple $501 to make an iPhone 14 Pro Max, and the company sells it at a base price of $1099. That makes it my non-subsidized iPhone, with which Apple has made a nice and even fully deserved profit. But.... what I do with my iPhone is, and should not be, Apple's business.

That phone is pretty useless without that OS.

 

[WarmWinterHat]

Its not your software though.

Then separate the two. Can I remove Apple's software? Why can't I do that, at least, when the device is no longer supported?

This all seems a little one-sided..

 

[laptech]

Apples justification for the percentage fee on in-app purchases is due to the app store terms and conditions of use that anyone wishing to use in-app purchases must use Apple's payment system. Not allowing app developers to inform their users of cheaper prices elsewhere was seen as being anticompetitive (the only thing Epic won on) meaning app developers can now put links in their app's to their own websites telling users of cheaper prices/cheaper alternatives but here we are seeing that Apple still intends to charge a percentage fee for app developers to have the privilege of informing their users of cheaper prices elsewhere. So just what exactly is app developers using differently that justifies the fee?, they will not be using Apples payment system so it cannot be that. All they will be doing is putting a link in their app, a link and it be a link that the app developers would have to code into their app. Apple has no involvement anywhere in this but yet they are saying that going to charge a fee for links being added into apps.

Apple's behavior is extremely disgraceful over this. Epic are right and they should take the matter further. We just need to ignore the delusional Apple fans and their rant over Epic.

 

[ios-dan]

Epic's only real complaint is that they think Apple charges too much. Maybe 30% is too high? I don't know.

So, let's have a hypothetical. Let's say that Apple allows apps to charge for digital content outside of the AppStore. Then immediately Apple's fees from Epic go from 30% of sales, to 0% (plus an annual $99 developer fee). So, for all the traffic, reviews, search results, etc, Apple gets $99, and Epic gets _all_ the money from their sales. That's certainly not fair to Apple.
So, I would wager that nothing short of a court order, specifying what percentage Apple is allowed to charge, will get Apple to change. And the courts will never do that.

 

[sw1tcher]

So you think Epic should be allowed to have their apps hosted on Apple servers, downloaded from Apple servers, available in the Apple App Store, using Apple API's and development tools...all for $99/year? Do you run a business?

Well, Apple is okay with the $99/yr that Uber, Lyft, Starbucks, Bank of America, Chick Fil A, McDonald's, etc pay and Apple doesn't get a cut from any of their transactions, right?

If Apple allows all those apps to be "hosted on Apple servers, downloaded from Apple servers, available in the Apple App Store, using Apple API's and development tools...all for $99/year," then yes, Apple can do the same for Epic.

 

[Mrkevinfinnerty]

This is the rub. Epic and others disagree with Apple that their success is because of Apple.

Hmm

No idea about Epic but in the case of say Spotify, who have also been a vocal critic, you don't think they would've been fine without Apple?

If iOS never existed there wouldn't be a market for streaming music?

 

[Timo_Existencia]

Well, Apple is okay with the $99/yr that Uber, Lyft, Starbucks, Bank of America, Chick Fil A, McDonald's, etc pay and Apple doesn't get a cut from any of their transactions, right?

If Apple allows all those apps to be "hosted on Apple servers, downloaded from Apple servers, available in the Apple App Store, using Apple API's and development tools...all for $99/year," then yes, Apple can do the same for Epic.

The logical end of your argument is not that Apple would then charge nobody for these things, but that they'd then charge everybody for these things. I'm not sure it's the "gotcha" argument you and others think it is.

But the bottom line is that Apple has chosen a model to fund their business. It's well known. Epic lost in court.

If you're just here to talk about a fantasy world in which Apple operates how you want them to, that's a different discussion.

 

[Remy149]

Why does Apple have the right to decide who or who I do not do business with my on my personal hardware, that I bought?

I have no interest in Epic, per-say. I've never played anything they produce, nor do I even play video games in any capacity, but I don't think Apple should be able to kill the connection of a business (developer) and the end-user.

The same reason console makers have the right to what games are certified and sold on their hardware

 

[Timo_Existencia]

This all seems a little one-sided..

How is it one sided? Did Apple offer you a product at a price? Did you pay the price for that product?

The price you paid is balanced by the product and services you bought. That's the equality.

 

[Remy149]

Apple can of course do their business the way they see fit. However, it costs Apple $501 to make an iPhone 14 Pro Max, and the company sells it at a base price of $1099. That makes it my non-subsidized iPhone, with which Apple has made a nice and even fully deserved profit. But.... what I do with my iPhone is, and should not be, Apple's business.

You do know you agree to all types of terms and conditions when you setup your phone.

 

[Timo_Existencia]

It's tedious to argue long-settled intellectual property law for those fantasizing that the world were different.

 

[sw1tcher]

Here's all you need to know about this case.

1) Epic wants something that Apple provides.
2) Epic doesn't want to pay for it.
3) Apple is a business.

Except Epic does pays Apple. They pay Apple $99/yr for Apple's services, just like Uber, Lyft, McDonald's, Starbucks, Bank of America, Walmart, etc. do. And Apple doesn't get a cut from their transactions.

The issue is Apple thinks it deserves a cut of a transaction that Apple plays no part in as it's processed outside of Apple's App Store. This is like Visa or Mastercard wanting a retailer to pay them a transaction fee even for transactions made using cash, American Express, or Discover card.

Apple doesn't get a cut of Netflix subscription transactions processed through Netflix's website. But suddenly Apple thinks it should be able to collect a fee just because there's now a link within the app that directs you to the developer's website to make a payment?

From the MacRumors summary:

The commission applies to transactions for digital goods and services that take place on a developers website within seven days after a user taps through an External Purchase Link to an external website.

 

[spazzcat]

The logical end of your argument is not that Apple would then charge nobody for these things, but that they'd then charge everybody for these things. I'm not sure it's the "gotcha" argument you and others think it is.

But the bottom line is that Apple has chosen a model to fund their business. It's well known. Epic lost in court.

If you're just here to talk about a fantasy world in which Apple operates how you want them to, that's a different discussion.

Not only did Epic not win, but the Judge ruled Apple can charge a commission on transactions outside of their processor.