Apple Raises Indonesia Investment Offer to $1B Amid iPhone Ban

[FlyingDutch]

No, it is not "still" blackmail.

Call it extortion if you prefer.

And by the way Apple can still sell/offer its products and services in dozens of alternative countries.

They are already doing that

Yes, thanks to EU DMA. Are you suggesting what Apple was doing related to the App Store prior to the DMA and still does in other countries/regions is blackmail?

No, it was a commercial choice. They are offering a product. You don’t have to buy it if you don’t like it

 

[Mitochris]

Apple must be going "i wish we could build all these products by robots" then could do it anywhere 24 hours a day without unions or worker rights groups interfering."

Who would be buying the products then? You do understand that in principle economics is a cycle of production, wages, and consumerism. From the profits of consumerism you pay production and wages. Wages buy the product you produce. If you disrupt this by not putting profits into production or wages then you have a problem. If Apple makes phones without paying people for it, it relies on others to pay the people to buy Apple products.

 

[webkit]

The fact that you don't see a difference between taxes and licenses and "give us a billion dollars or else" is shocking. I suspect if a certain once and future President of the US said something similar for a foreign company to do business in the United States there would be worldwide outrage.

The only thing "shocking" here is that you or anyone else had considered it blackmail. As far as being a shakedown, an app developer selling an app/in-app product has to pay Apple up to 15% to 30% commission OR ELSE they won’t be able to do business in the App Store or iOS (except perhaps in EU where alternative iOS app stores are allowed).

In both cases, Apple and the app developer don't have to pay anything...unless perhaps they want to do business in the respective "territories" (country, OS, etc.).

 

[webkit]

Call it extortion if you prefer.

I wouldn't consider it extortion. Indonesia has a 40% domestic content requirement and Apple is essentially trying to satisfy that requirement via some sort of investment/payment. If they can’t satisfy the requirement, they shouldn’t be allowed to do business in Indonesia.

Apple has an up to 15% to 30% commission requirement for app/in-app purchases in the App Store. If an app developer can’t satisfy that payment requirement, they shouldn’t be allowed to do business in the App Store.

No, it was a commercial choice. They are offering a product. You don’t have to buy it if you don’t like it

And Apple doesn't have to sell its products in Indonesia. No one is forcing them to do so.

 

[FlyingDutch]

I wouldn't consider it extortion. Indonesia has a 40% domestic content requirement and Apple is essentially trying to satisfy that requirement via some sort of investment/payment. If they can’t satisfy the requirement, they shouldn’t be allowed to do business in Indonesia.

The simple fact someone is FORCED to invest or pay in order to do business is an extortion. Apple and everybody else should left Indonesia to its own devices and services: I’m sure they will prosper for long.

Apple has an up to 15% to 30% commission requirement for app/in-app purchases in the App Store. If an app developer can’t satisfy that payment requirement, they shouldn’t be allowed to do business in the App Store.

You keeping make a parallel with that is utterly ridiculous. Apple is just asking money for a Store THEY invented and managed, where developers are making good money.

And Apple doesn't have to sell its products in Indonesia. No one is forcing them to do so.

Indonesian customers are asking for that. I don’t know the nation you are coming from, but the word freedom seems to be unknown to you.
Apple, Samsung or whoever doesn’t have to pay nothing else than taxes in order to make business.
Commercial compensations already exists in every country, since Apple is giving jobs to employees in Apple Stores, in logistics, carriers and whatever orbit around iPhone ecosystem…

 

[macfacts]

Apple, Samsung or whoever doesn’t have to pay nothing else than taxes in order to make business.
Commercial compensations already exists in every country, since Apple is giving jobs to employees in Apple Stores, in logistics, carriers and whatever orbit around iPhone ecosystem…

some one above mentioned apple has zero stores in Indonesia. zero support to customers in Indonesia. zero taxes to the Indonesia government. basically apple is a freeloader.

 

[surferfb]

The only thing "shocking" here is that you or anyone else had considered it blackmail. As far as being a shakedown, an app developer selling an app/in-app product has to pay Apple up to 15% to 30% commission OR ELSE they won’t be able to do business in the App Store or iOS (except perhaps in EU where alternative iOS app stores are allowed).

In both cases, Apple and the app developer don't have to pay anything...unless perhaps they want to do business in the respective "territories" (country, OS, etc.).

You win. I concede extortion is a much better word than "much closer to blackmail" as I said in my original reply. It is absolutely extortion.

Again, the 15/30% covers many services that Apple provides to the developers. If developers do not want to pay Apple, they do not have to and can still serve customers. See: Spotify, Netflix, Kindle Store, etc. What services will Indonesia be providing Apple for the $1 billion investment? And what is the process for Apple to do business in Indonesia without paying off the government?

I can't believe I have to say this, but if the mob comes by and says to a new shopping center's owner "it's a nice shopping center you have here, it'd be a shame if someone smashed all the stores' windows. You should really consider donating to our protection fund to make sure that doesn't happen." that isn't the same thing as the shopping center's owner charging rent to the stores.

some one above mentioned apple has zero stores in Indonesia. zero support to customers in Indonesia. zero taxes to the Indonesia government. basically apple is a freeloader.

Hard to pay taxes when you're not allowed to sell the product without giving the government "investing" a billion dollars first. And even if Apple didn't invest one cent, any Apple Products sold in Indonesia would of course be subject to taxes which go to the government.

 

[macfacts]

...


Hard to pay taxes when you're not allowed to sell the product without giving the government "investing" a billion dollars first. And even if Apple didn't invest one cent, any Apple Products sold in Indonesia would of course be subject to taxes which go to the government.

youre taking about sales tax, and the customer pays that. end result , apple is freeloading. not even paying 15%. apple can try selling to the citizens of Mars.

 

[surferfb]

youre taking about sales tax, and the customer pays that. end result , apple is freeloading. not even paying 15%. apple can try selling to the citizens of Mars.

How is Apple freeloading? What government services are they using that they should be compensating the government for?

Why should Apple be paying taxes to Indonesia if they don't have any stores there? Why is that reason to ban others (i.e. phone carriers) selling Apple's products in the country? The US doesn't require foreign countries to "invest in the US" before they're allowed to sell their products. Plenty of "Made in Indonesia" products are sold here without their companies having any presence in the US. Are those companies "freeloading" off of the US?

 

[Mitochris]

You keeping make a parallel with that is utterly ridiculous. Apple is just asking money for a Store THEY invented and managed, where developers are making good money.

Yes, Apple made the AppStore. Who do you think “made” all the customers Apple is trying to sell to?

 

[Mitochris]

Again, the 15/30% covers many services that Apple provides to the developers. If developers do not want to pay Apple, they do not have to and can still serve customers. See: Spotify, Netflix, Kindle Store, etc. What services will Indonesia be providing Apple for the $1 billion investment? And what is the process for Apple to do business in Indonesia without paying off the government?

They offer the entire consumer base. That’s what Apple is paying for. In one way or the other Apple is asked to contribute to the economy and not just exploit it.

I can't believe I have to say this, but if the mob comes by and says to a new shopping center's owner "it's a nice shopping center you have here, it'd be a shame if someone smashed all the stores' windows. You should really consider donating to our protection fund to make sure that doesn't happen." that isn't the same thing as the shopping center's owner charging rent to the stores.

You know that every mall charges the retailer to have a shop in it. Let’s say you own a mall. You paid to built the building, parking lot, toilets, etc. you make advertisements so that people come to your mall and you pay to keep it clean. In return, you charge the shops in your mall money for them to sell in your mall. After all, how would you make money otherwise to feed your kids? Now one retailer, keeps coming in and sells their product without paying you. For how long would you or the other shop owners tolerance this?

 

[macfacts]

How is Apple freeloading? What government services are they using that they should be compensating the government for?

Why should Apple be paying taxes to Indonesia if they don't have any stores there? Why is that reason to ban others (i.e. phone carriers) selling Apple's products in the country? The US doesn't require foreign countries to "invest in the US" before they're allowed to sell their products. Plenty of "Made in Indonesia" products are sold here without their companies having any presence in the US. Are those companies "freeloading" off of the US?

I don't personally know of any iOS software developers from Indonesia but they can't sell in the iOS app store without first paying apple and then giving a 30% cut. If apple wants to sell iPhones in Indonesia, they have to follow the rules. Apple also bans 3rd party app store, so why can't Indonesia ban carriers from selling iPhones?

The US doesn't allow Canada to sell softwood lumber and steel in the US without tariffs.

 

[surferfb]

I don't personally know of any iOS software developers from Indonesia but they can't sell in the iOS app store without first paying apple and then giving a 30% cut. If apple wants to sell iPhones in Indonesia, they have to follow the rules. Apple also bans 3rd party app store, so why can't Indonesia ban carriers from selling iPhones?

You didn’t answer my question. My dinner plates were made in Indonesia and sold to me by an American company. Is the Indonesian company that made the plates freeloading off of America? Is America justified in asking the company that made the plates to pay a million dollars before the American company I bought them from is allowed to sell their plates?

To your point above, I’m not arguing Indonesian isn’t allowed to do this. Of course they are. I’m arguing it’s extortion and corrupt. Which it is. There is a huge difference between charging a commission for services rendered and use of Apple’s property and “you’re not allowed to sell in this country without paying us off.”

The US doesn't allow Canada to sell softwood lumber and steel in the US without tariffs.

Tarrifs are paid by the company importing the good, not the company who is selling the good. So if you think sales taxes paid by the consumer when they buy a product don’t count, tarrifs paid by the importer don’t either.

They offer the entire consumer base. That’s what Apple is paying for. In one way or the other Apple is asked to contribute to the economy and not just exploit it.

How is Apple not contributing to the economy? They are selling phones to Indonesian retailers and mobile phone companies who are the selling those phones at higher prices, making money for the retailers, and sales tax revenue for the government. The advertisements for the iPhone make money for Indonesian media and billboard companies, which I am sure is also taxed.

And that’s before you account for the services offered in Indonesia which include:

Indonesia

• Apple One
• App Store
  • Apple Arcade
• Apple Music
  • Apple Music Classical
• iTunes Store Music purchases
• Apple TV app
  • Apple TV+
  • MLS Season Pass
  • Movie purchases
• Apple Fitness+
• Ringtone & Tone purchases

I find it highly unlikely Apple isn’t paying tax to Indonesia on purchases in the App Store, Apple One, Apple Music, etc. So again, not freeloading.

You know that every mall charges the retailer to have a shop in it. Let’s say you own a mall. You paid to built the building, parking lot, toilets, etc. you make advertisements so that people come to your mall and you pay to keep it clean. In return, you charge the shops in your mall money for them to sell in your mall. After all, how would you make money otherwise to feed your kids? Now one retailer, keeps coming in and sells their product without paying you. For how long would you or the other shop owners tolerance this?

Again, what is Indonesia providing that Apple isn’t paying for? Apple having Indonesian companies selling the iPhone costs the Indonesian government nothing. In fact, they make money from taxes on the sales of iPhones, accessories, advertisements, etc. Not to mention all the tax revenue on the above.

 

[Tomasulu]

…

You know that every mall charges the retailer to have a shop in it. Let’s say you own a mall. You paid to built the building, parking lot, toilets, etc. you make advertisements so that people come to your mall and you pay to keep it clean. In return, you charge the shops in your mall money for them to sell in your mall. After all, how would you make money otherwise to feed your kids? Now one retailer, keeps coming in and sells their product without paying you. For how long would you or the other shop owners tolerance this?

This is not the point about apples App Store! The analogy is flawed because in apples case they don’t allow developers and creators to sell in other app stores. Imagine the mall owner in your example forbidding their tenants to sell in another mall. That’s an abuse of monopolistic powers and it invariably leads to higher prices.

 

[macfacts]

You didn’t answer my question. My dinner plates were made in Indonesia and sold to me by an American company. Is the Indonesian company that made the plates freeloading off of America? Is America justified in asking the company that made the plates to pay a million dollars before the American company I bought them from is allowed to sell their plates?

To your point above, I’m not arguing Indonesian isn’t allowed to do this. Of course they are. I’m arguing it’s extortion and corrupt. Which it is. There is a huge difference between charging a commission for services rendered and use of Apple’s property and “you’re not allowed to sell in this country without paying us off.”


Tarrifs are paid by the company importing the good, not the company who is selling the good. So if you think sales taxes paid by the consumer when they buy a product don’t count, tarrifs paid by the importer don’t either.


How is Apple not contributing to the economy? They are selling phones to Indonesian retailers and mobile phone companies who are the selling those phones at higher prices, making money for the retailers, and sales tax revenue for the government. The advertisements for the iPhone make money for Indonesian media and billboard companies, which I am sure is also taxed.

And that’s before you account for the services offered in Indonesia which include:

Indonesia

• Apple One
• App Store
  • Apple Arcade
• Apple Music
  • Apple Music Classical
• iTunes Store Music purchases
• Apple TV app
  • Apple TV+
  • MLS Season Pass
  • Movie purchases
• Apple Fitness+
• Ringtone & Tone purchases

I find it highly unlikely Apple isn’t paying tax to Indonesia on purchases in the App Store, Apple One, Apple Music, etc. So again, not freeloading.


Again, what is Indonesia providing that Apple isn’t paying for? Apple having Indonesian companies selling the iPhone costs the Indonesian government nothing. In fact, they make money from taxes on the sales of iPhones, accessories, advertisements, etc. Not to mention all the tax revenue on the above.

I agree it is extortion and corrupt, but that is the pot calling the kettle black, apple charges software devs selling to iOS customers. So why can't Indonesia charge apple for selling to Indonesia 's citizens?
And to the long list of apple services they offer and advertising, the sales tax is paid by the customer, apple just collects it from the customer and passes it on to the Indonesian government.
Indonesia is providing access to sell iPhones to their citizens. Apple is "paying" for it now but reluctantly.

 

[I7guy]

I agree it is extortion and corrupt, but that is the pot calling the kettle black, apple charges software devs selling to iOS customers. So why can't Indonesia charge apple for selling to Indonesia 's citizens?
And to the long list of apple services they offer and advertising, the sales tax is paid by the customer, apple just collects it from the customer and passes it on to the Indonesian government.
Indonesia is providing access to sell iPhones to their citizens. Apple is "paying" for it now but reluctantly.

This is a disjointed argument . Commissions on sales have nothing to do with this but it’s thrown in as a red herring.

 

[surferfb]

I agree it is extortion and corrupt, but that is the pot calling the kettle black, apple charges software devs selling to iOS customers. So why can't Indonesia charge apple for selling to Indonesia 's citizens?

Trying one last time then I’m disengaging. This is not the pot calling the kettle black. The two scenarios are completely different.

Developers have to use Apple’s intellectual property (iOS) to make their apps. When developers use that intellectual property to sell digital goods and services, Apple (currently in most of the world) is compensated for that intellectual property use (and a few other things) by charging a commission of 15-30% on the sale. Developers’ apps literally do not function without use of Apple’s IP. In many cases, if Apple went away the developers would literally go out of business. So Apple is perfectly in their rights to charge a reasonable commission on the sale of digital goods that takes place on iOS.

Indonesia is providing nothing to Apple to make the iPhone function. The iPhone exists entirely without Indonesia’s involvement. If Indonesia went away nothing would change about Apple, the iPhone and iOS. This is just a shakedown.

And to the long list of apple services they offer and advertising, the sales tax is paid by the customer, apple just collects it from the customer and passes it on to the Indonesian government.

So? It’s economic activity that Apple is directly involved in and presumably wouldn’t exist (at least at the same dollar amounts) if Apple went away. And again, how is Apple “freeloading”? Why should they pay taxes directly to Indonesia if they don’t have offices there, don’t have stores there?

Indonesia is providing access to sell iPhones to their citizens. Apple is "paying" for it now but reluctantly.

Imagine if every county in the world operated like this. Pay up if you want to do business here.

 

[Mitochris]

This is not the point about apples App Store! The analogy is flawed because in apples case they don’t allow developers and creators to sell in other app stores. Imagine the mall owner in your example forbidding their tenants to sell in another mall. That’s an abuse of monopolistic powers and it invariably leads to higher prices.

Indonesia is preventing Apple from selling in other countries? That is just not true. Or do you mean Apple is preventing other developers from selling in other app stores? Well, that’s partially true, they are allowed to sell in Andeoid stores but this was about what Indonesia does to Apple not what Apple does to developers.

 

[Mitochris]

You didn’t answer my question. My dinner plates were made in Indonesia and sold to me by an American company. Is the Indonesian company that made the plates freeloading off of America? Is America justified in asking the company that made the plates to pay a million dollars before the American company I bought them from is allowed to sell their plates?

To your point above, I’m not arguing Indonesian isn’t allowed to do this. Of course they are. I’m arguing it’s extortion and corrupt. Which it is. There is a huge difference between charging a commission for services rendered and use of Apple’s property and “you’re not allowed to sell in this country without paying us off.”


Tarrifs are paid by the company importing the good, not the company who is selling the good. So if you think sales taxes paid by the consumer when they buy a product don’t count, tarrifs paid by the importer don’t either.


How is Apple not contributing to the economy? They are selling phones to Indonesian retailers and mobile phone companies who are the selling those phones at higher prices, making money for the retailers, and sales tax revenue for the government. The advertisements for the iPhone make money for Indonesian media and billboard companies, which I am sure is also taxed.

And that’s before you account for the services offered in Indonesia which include:

Indonesia

• Apple One
• App Store
  • Apple Arcade
• Apple Music
  • Apple Music Classical
• iTunes Store Music purchases
• Apple TV app
  • Apple TV+
  • MLS Season Pass
  • Movie purchases
• Apple Fitness+
• Ringtone & Tone purchases

I find it highly unlikely Apple isn’t paying tax to Indonesia on purchases in the App Store, Apple One, Apple Music, etc. So again, not freeloading.


Again, what is Indonesia providing that Apple isn’t paying for? Apple having Indonesian companies selling the iPhone costs the Indonesian government nothing. In fact, they make money from taxes on the sales of iPhones, accessories, advertisements, etc. Not to mention all the tax revenue on the above.

In the eyes of Indonesia, Apple is not paying enough to compensate for what Indonesia is providing. An economy in which people are able to pay for Apple products. As said earlier. In principle, an economy needs production, wages, and consumerism. Indonesia says Apple is not contributing to any of those three. It is not producing in Indonesia, it is not paying wages in Indonesia and it is not consuming in Indonesia.
Apparently, sales tax is 11% in Indonesia, which is paid by the consumer, not Apple. Import tax for Indonesia is 7.5%. Compare that to Sweden, where it is 25%. One can see that Indonesia might think that for the amount of money Apple is making in Indonesia it is not contributing enough to its economy. And Apple seems to agree because it is offering a 1billion investment.

 

[macfacts]

Developers have to use Apple’s intellectual property (iOS) to make their apps. When developers use that intellectual property to sell digital goods and services, Apple (currently in most of the world) is compensated for that intellectual property use (and a few other things) by charging a commission of 15-30% on the sale. Developers’ apps literally do not function without use of Apple’s IP.

And developers pay a yearly fee for that IP, it is Apple's own fault for bad research and charging such a low fee. That doesn't give them a right to double dip.

"Indonesia is providing nothing to Apple to make the iPhone function."
Indonesia is letting apple use their air waves, (whitelisting the iPhone's IMEI ) without that the iPhones are expensive iPod touches that very few people would buy.

 

[FlyingDutch]

some one above mentioned apple has zero stores in Indonesia. zero support to customers in Indonesia. zero taxes to the Indonesia government. basically apple is a freeloader.

Ok, if true this could be discussed: you want to sell goods here ? Provide support and stores in the major cities
Dont ask for money, ask for jobs

 

[surferfb]

And developers pay a yearly fee for that IP, it is Apple's own fault for bad research and charging such a low fee. That doesn't give them a right to double dip.

That is absolutely not true. The $99 developer fee is NOT compensation for use of Apple's intellectual property. If you read the terms and conditions of the program it clearly lays out what the $99 is for, and "a license to use intellectual property" is not listed. The terms and conditions do clearly state that if you sell apps or digital goods/services on the platform additional payment is required. It's Apple's property, they decide how to charge for it. So while they are not "double dipping," they absolutely have a right to if they wanted to. They could charge popular apps an additional "high usage" surcharge, they could charge apps with blue app icons 5% and any other color 75%. As long as they aren't discriminating for a legally protected reason (gender, race, disability, etc.) they can do whatever they want. Just because you don't like it, or wish the fee was lower, doesn't mean "they don't have a right" to.

"Indonesia is providing nothing to Apple to make the iPhone function."
Indonesia is letting apple use their air waves, (whitelisting the iPhone's IMEI ) without that the iPhones are expensive iPod touches that very few people would buy.

No, Indonesia is letting cellular and wifi providers use their airwaves. Also, the airwaves cost Indonesia nothing. So again, how exactly is Apple "freeloading"? What does their existence cost Indonesia? As far as I can tell, Apple contributes without costing Indonesia anything. And yet they get extorted into paying $1 billion. Shameful behavior by the Indonesian government.

 

[webkit]

The simple fact someone is FORCED to invest or pay in order to do business is an extortion. Apple and everybody else should left Indonesia to its own devices and services: I’m sure they will prosper for long.

Defining it that way, I guess you feel if an app developer wants to do business (sell apps/in-app products) on iOS in non-U.S. markets, they are forced to pay Apple (up to 15% to 30% in commissions) which makes it extortion.

Of course, it doesn't.

You keeping make a parallel with that is utterly ridiculous. Apple is just asking money for a Store THEY invented and managed, where developers are making good money.

And app developers are "FORCED" to pay it if they want to do business on iOS. If Apple wants to access Indonesia customers, they have to meet Indonesia requirements (e.g., 40% domestic content, some sort of investment, etc.) and if app developers want to access iOS app customers (at least for the non-EU markets), they have to meet Apple requirements and pay Apple.

Indonesian customers are asking for that. I don’t know the nation you are coming from, but the word freedom seems to be unknown to you.
Apple, Samsung or whoever doesn’t have to pay nothing else than taxes in order to make business.
Commercial compensations already exists in every country, since Apple is giving jobs to employees in Apple Stores, in logistics, carriers and whatever orbit around iPhone ecosystem…

Again, Apple doesn't have to sell their products in Indonesia just as app developers don't have to sell their apps in the App Store or on iOS. However, if they CHOOSE to do so there can be costs involved and those costs are NOT necessarily blackmail or extortion. Blackmail and extortion are illegal. What is illegal about what Indonesia is doing?

 

[webkit]

You win. I concede extortion is a much better word than "much closer to blackmail" as I said in my original reply. It is absolutely extortion.

Again, the 15/30% covers many services that Apple provides to the developers. If developers do not want to pay Apple, they do not have to and can still serve customers. See: Spotify, Netflix, Kindle Store, etc. What services will Indonesia be providing Apple for the $1 billion investment? And what is the process for Apple to do business in Indonesia without paying off the government?

I can't believe I have to say this, but if the mob comes by and says to a new shopping center's owner "it's a nice shopping center you have here, it'd be a shame if someone smashed all the stores' windows. You should really consider donating to our protection fund to make sure that doesn't happen." that isn't the same thing as the shopping center's owner charging rent to the stores..

It's not absolutely extortion. If Apple wants to do business in Indonesia and access Indonesia customers, they have to meet Indonesia requirements (e.g., 40% domestic content, some sort of investment, pay taxes, etc.) and if app developers want to do business on iOS and access iOS app customers (at least for the non-EU markets), they have to meet Apple requirements which includes paying Apple to sell apps/in-app products.

Both the Indonesia and iOS/app scenarios are legal, unlike blackmail and extortion.

 

[I7guy]

And developers pay a yearly fee for that IP, it is Apple's own fault for bad research and charging such a low fee. That doesn't give them a right to double dip.

To go on with the lack of critical thinking, yes it does. A dev can use any platform, if they want to use iOS they agree to the terms.

"Indonesia is providing nothing to Apple to make the iPhone function."

That’s true.

Indonesia is letting apple use their air waves,

Not for esat. But I’m surprised you didn’t mention the air the iPhone displaces.

(whitelisting the iPhone's IMEI ) without that the iPhones are expensive iPod touches that very few people would buy.

Irrelevant.