Apple Retains Gibson Dunn Lawyers From Samsung Case to Combat Epic Games

[gnasher729]

It is near impossible for the "average( developer to make any money these days, becuase of the 30% "Apple Tax", the monopolistic restrictions mandating, how where and to whom you can distribute your work.

Just don't tell my boss that. We are making good money, of which 0% goes to Apple. Well, $99 a year goes to Apple

 

[grjj]

All the people rooting for Apple here - are any of you actually developers that sell apps or In-App Purchases?

I can’t imagine anyone that has put in the thousands of hours of work to make an app, then thinks it’s cool that Apple does virtually nothing but receives a 30% cut.

What Apple does here is rent seeking, plain and simple. They’re a leach providing nothing of value. They’re a middle man to an actual payment processor which would charge less than 3% (and Apple has likely negotiated for a much lower rate than the 3% an independent developer would pay.) Apple charges 10x while adding absolutely nothing, just because they can.

The practice is without a doubt immoral, and I expect that at least some courts in the world will find it illegal.

So if Apple took away their app store, just for sake of argument, you'd have the resources to reliably host your app for download, market it, collect payment and provide the security and support services to deal with refund requests and make sure no-one is tampering with your app before customers download it? You'd have a way to do all that for free? Power, space, Internet connection, etc? I pretty much guarantee that isn't the case. Amortize those costs out for personal hosting vs your sales for most developers and I'd bet it's comes out much higher than 30%.

Yea, Apple make running the app store look easy to the developers and world at large. Have you seen any of the stories about the data centers they run to keep those services running? Do you think all that hardware, power and admin is free?
I can't argue that it's worth 30% in total but I know it's not free, and it's certainly more than the 3% you cite for processing fees.
This is a lot like the argument on drug prices: the second pull costs $1, the first one costs millions to billions. The app store process is only "free" when you ignore all the capital investment to set it up and support resources to maintain it in an operational state 24/7.

 

[gnasher729]

All the people rooting for Apple here - are any of you actually developers that sell apps or In-App Purchases?

I can’t imagine anyone that has put in the thousands of hours of work to make an app, then thinks it’s cool that Apple does virtually nothing but receives a 30% cut.

I have an app (mostly produced because it does something that I wanted, plus something that I can show in a job interview), and it's on the store as a paid app (not because it makes any reasonable amount of money, but because I decided that if you can't even pay $0.99 then you don't deserve to have it). Guess what: I have paid downloads from countries all over the world, South East Asia, Africa, lots of countries that I could never, ever have sold to because of all the tax rules etc. for all these countries.

 

[Apple Knowledge Navigator]

Personally I agree with EPIC here, not necessarialy the manner in which they started this fight, but what they are fighting for. It is near impossible for the "average( developer to make any money these days, becuase of the 30% "Apple Tax", the monopolistic restrictions mandating, how where and to whom you can distribute your work. People have said if you don't like it, don't use it. Well unlike in the past, you have no choice.

Well guess what? No-one is being forced to become a developer.

But considering there are millions upon millions of apps already available on Apple's iOS store, then that's because people must really like developing and, in some cases, make a living from it. That's why they exist in the first place.

There's a point that needs to be made here; what drives innovation isn't making the umpteenth clipboard manager with a stupid name that makes no sense, it's about finding untapped services and gaps in the market. And when developers do, the rewards are there, as has been proven countless times.

The moral therefore is that if anyone is seriously concerned with the profit margins for releasing software on Apple services, then they should do themselves a favour and research their market properly before entering it. Epic in this instance has no excuse to complain. Apple have marketed Fortnite plenty and Epic continues to make a fortune.

 

[m7ammed]

People also forget that apple provides services (hosting...etc) for free apps as well. Why is nobody talking about those? They don't take any money from apps that have ads in them as far as I know. Its only paid apps and in app payments.

 

[cmaier]

Personally I agree with EPIC here, not necessarialy the manner in which they started this fight, but what they are fighting for. It is near impossible for the "average( developer to make any money these days, becuase of the 30% "Apple Tax", the monopolistic restrictions mandating, how where and to whom you can distribute your work. People have said if you don't like it, don't use it. Well unlike in the past, you have no choice. To service the Apple market, you are subject to their rules. And unlike a "brick and mortar" store, the "cost" of maintaining a digitial market place is pennies per app .

And I wonder if/when DISNEY will become involved... as they have a horse in this race. The new STAR WARS "Galaxy Edge" at the California and Florida Theme Parks has a HUGE investment in the Epic Unreal Engine (it powers the Milliemum Falcon and other attractions), not to mention used in the production of "The Mandalorian".

So what? Just because Disney is an epic customer does not give Disney a reason to care about the App Store.

And the reason developers have difficulty making money is that there are too many of them, and they all charge too little. In the early days we charged reasonable, sustainable, amounts. Then 10,000 kids in their living rooms clone ideas and charge nothing (but shove ads in). That’s the developers’ fault. Not apple’s.

 

[grjj]

Because those facts are inconvenient to their view and argument. If you look at the entire picture the service charge makes sense. It's only when you ignore all the underlying facts that any argument that 30% is extreme makes any sense whatsoever.

 

[shapesinaframe]

It seems that for the vast majority of developers, parting with 30% of the revenue of their apps is well worth it. I wonder what the tipping point is when developers would rather pay a fixed price instead of a percentage to get the same access and benefits of the platform?

 

[mrcloaked]

That's not the point.

 

[nylonsteel]

good to see Florian Mueller - a good source
aapl good move to select dunn firm

 

[I7guy]

The actual point will be decided in a court of law, not a thread on the internet.

 

[Foggy82]

All the people rooting for Apple here - are any of you actually developers that sell apps or In-App Purchases?

I can’t imagine anyone that has put in the thousands of hours of work to make an app, then thinks it’s cool that Apple does virtually nothing but receives a 30% cut.

What Apple does here is rent seeking, plain and simple. They’re a leach providing nothing of value. They’re a middle man to an actual payment processor which would charge less than 3% (and Apple has likely negotiated for a much lower rate than the 3% an independent developer would pay.) Apple charges 10x while adding absolutely nothing, just because they can.

The practice is without a doubt immoral, and I expect that at least some courts in the world will find it illegal.

If this is the approach they will have in court, Epic will have very hard times .
Apple will take 2 minutes to dismantle the idea that they are the "payment processor".

Just look at the Developer accounts situation, I don't see why Epic should be worried of loosing them. Why would you expect your "payment processor" to provide you Developing tools or Developer accounts?

Apple can easily say "we heard you. From now on, we will take 3% as transaction fee. If you want to use our Developer tools, instead of the 99usd/year that's gonna be 15% of revenues. If you want to be advertised in our app store, is gonna be 12% of revenues. You are welcome".

 

[Thoradin]

All the people rooting for Apple here - are any of you actually developers that sell apps or In-App Purchases?

I can’t imagine anyone that has put in the thousands of hours of work to make an app, then thinks it’s cool that Apple does virtually nothing but receives a 30% cut.

What Apple does here is rent seeking, plain and simple. They’re a leach providing nothing of value. They’re a middle man to an actual payment processor which would charge less than 3% (and Apple has likely negotiated for a much lower rate than the 3% an independent developer would pay.) Apple charges 10x while adding absolutely nothing, just because they can.

The practice is without a doubt immoral, and I expect that at least some courts in the world will find it illegal.

Its not like Apple provides one of the worlds biggest storefronts for developers, a secure payment system, massive server capacity, tools with which to develop apps for the platform or even a HUGE audience that can only install apps from their specially curated App Store is it?
What the hell do you think the 30% pays for? Just one solitary staff member and the card processing fees?
Get real, people commenting about Apple making massive profits for doing no work obviously have no idea the amount of work that goes on behind the scenes.
Would you expect to pay less than £100 a month for rent in a huge retail shopping centre for your hip and trendy clothing store?
Storefronts cost a huge amount of money no matter what business you happen to be in.

 

[mrcloaked]

Let's quiet down.

 

[dguisinger]

So if Apple took away their app store, just for sake of argument, you'd have the resources to reliably host your app for download, market it, collect payment and provide the security and support services to deal with refund requests and make sure no-one is tampering with your app before customers download it? You'd have a way to do all that for free? Power, space, Internet connection, etc? I pretty much guarantee that isn't the case. Amortize those costs out for personal hosting vs your sales for most developers and I'd bet it's comes out much higher than 30%.

Yea, Apple make running the app store look easy to the developers and world at large. Have you seen any of the stories about the data centers they run to keep those services running? Do you think all that hardware, power and admin is free?
I can't argue that it's worth 30% in total but I know it's not free, and it's certainly more than the 3% you cite for processing fees.
This is a lot like the argument on drug prices: the second pull costs $1, the first one costs millions to billions. The app store process is only "free" when you ignore all the capital investment to set it up and support resources to maintain it in an operational state 24/7.

Seriously, people make such dumb arguments about hosting.
If there was no App Store and Apple allowed you to install your own Apps......
Sure... developers would do it easily. As they have for 20+ years on Windows and Mac.

People seem to think hosting an app for download is incredibly hard.... people around here are really pampered to think putting a binary online is either difficult or expensive. Same with payment processing. I realize a lot of you are too young to have actually used a real computer, but its not that hard.

Apple's biggest value here is the ease in which you can find and download... but you know how I find and download at least half my apps? From company websites that have a button for downloading their app from the app store. I don't actually NEED Apple to even get in the middle of that, nor do app developers. Its just a convenience. A convenience of which doesn't round up to costing Apple a single penny since digital distribution is cheaper than dirt.

Sure, very few were side loading Fortnite on Android. But again, that is a cultural issue in my mind. Because anyone playing Fortnite on PC or Mac is side loading.

I'm not arguing for getting rid of the app store, just some of these arguments that keep coming up are pitifully weak and overused. Having an ecosystem of Apps helps Apple sell devices, devices don't sell Apps. People don't buy an iPhone for the experience of having Netflix or Youtube or Fortnite or any other app. If Apple didn't have the most popular cross platform apps, people wouldn't buy Apple. People around here seem to think if Apple kept building iPhones that worked like the first iPhone (Which I owned from day 1) and didn't have a library of apps, that they would have sold 1.5 billion devices.

 

[ruka.snow]

If this is the approach they will have in court, Epic will have very hard times .
Apple will take 2 minutes to dismantle the idea that they are the "payment processor".

Just look at the Developer accounts situation, I don't see why Epic should be worried of loosing them. Why would you expect your "payment processor" to provide you Developing tools or Developer accounts?

Apple can easily say "we heard you. From now on, we will take 3% as transaction fee. If you want to use our Developer tools, instead of the 99usd/year that's gonna be 15% of revenues. If you want to be advertised in our app store, is gonna be 12% of revenues. You are welcome".

Apple can do one better and give itemised hosting and download costs. These are what made apps infeasible for many of us before the AppStore. AWS and CDN’s don’t let you host applications and update packages for free. It costs thousands for a small developer and now you have to direct people specifically to your website and pay for ads to get people there and the certificates so people have some trust in buying your product and then the licensing server or service.

 

[cmaier]

Apple can do one better and give itemised hosting and download costs. These are what made apps infeasible for many of us before the AppStore. AWS and CDN’s don’t let you host applications and update packages for free. It costs thousands for a small developer and now you have to direct people specifically to your website and pay for ads to get people there and the certificates so people have some trust in buying your product and then the licensing server or service.

And you have to get people to trust that when they download from you they aren’t downloading malware. And if they are buying a service from you, they won’t have to spend hours getting the runaround on the phone in order to cancel, only to find out that you keep billing them anyway.

The advantages of apple’s approach greatly exceed the hosting and payment processing they provide.

 

[dguisinger]

Its not like Apple provides one of the worlds biggest storefronts for developers, a secure payment system, massive server capacity, tools with which to develop apps for the platform or even a HUGE audience that can only install apps from their specially curated App Store is it?
What the hell do you think the 30% pays for? Just one solitary staff member and the card processing fees?
Get real, people commenting about Apple making massive profits for doing no work obviously have no idea the amount of work that goes on behind the scenes.
Would you expect to pay less than £100 a month for rent in a huge retail shopping centre for your hip and trendy clothing store?
Storefronts cost a huge amount of money no matter what business you happen to be in.

Oh yea, those tools........ gotta milk developers for those tools. God only knows how successful Apple would be if they didn't make tools that could write their internal apps.... or how many thousands of phones they could be selling (instead of billions) if they didn't have 3rd party apps.

And poor, poor Apple.... having to run a server farm.... its so hard and expensive, no one else has ever done it..... except literally every major company. Sure, its expensive, what isn't? But digital distribution IS CHEAP. Very cheap. Hundreds of downloads for a penny cheap. In a competitive environment, you would be hard pressed to see anyone charging above and beyond actual-costs for downloads.

 

[78Bandit]

If this is the approach they will have in court, Epic will have very hard times .
Apple will take 2 minutes to dismantle the idea that they are the "payment processor".

Just look at the Developer accounts situation, I don't see why Epic should be worried of loosing them. Why would you expect your "payment processor" to provide you Developing tools or Developer accounts?

Apple can easily say "we heard you. From now on, we will take 3% as transaction fee. If you want to use our Developer tools, instead of the 99usd/year that's gonna be 15% of revenues. If you want to be advertised in our app store, is gonna be 12% of revenues. You are welcome".

Sounds fair if it is applied to all developers. Get 27% of Uber app revenue, 27% of Walmart purchases, and 27% of McDonalds meals, etc. and see how far it goes. That's Epic's real issue, other developers can distribute free apps with their own payment processing system built into the app while Epic gets banned when it does the same thing.

Ultimately I do think Apple is going to have to unbundle their payment processing system from the AppStore. Developers will have the freedom to get paid by whatever means suits them best. Some developers will be perfectly happy to pay Apple a percentage of revenue to collect the payment from the customers and remit it back to the developer. Others will find it more efficient to do it themselves. Developers will be treated equally without the arbitrary distinction between digital goods and every other thing sold through an app.

Apple may dismantle the idea they are only the payment processor, but they are going to have a harder time justifying why they are only charging certain businesses for their developer tools and Appstore distribution.

 

[kobaltz]

People arguing that Apple provides value by providing the platform tend to forget that the apps are what makes the platform valuable. Would you want an iPhone/iPad if it didn’t have Facebook, Instagram, YouTube, Netflix, Google Maps, Waze, SnapChat, you banking apps, investment apps, smart home apps, security apps, Slack, MS Office, WeChat, Zoom, Hulu, Disney Plus, Amazon Prime Instant Video, and much more?

Imagine if literally ALL of these third party apps ceased to exist on iPhone and iPad. The platform would be worthless.

So yes, Apple needs third party developers quite badly. They should treat them better.

I'd be okay with the App Store going away almost entirely in favor of proper PWA support. Most apps on the app store, not referring to games, shouldn't be apps. They'd be better suited as a PWA, but since Apple lacks proper PWA features and support, it's worthless.

 

[dguisinger]

And you have to get people to trust that when they download from you they aren’t downloading malware. And if they are buying a service from you, they won’t have to spend hours getting the runaround on the phone in order to cancel, only to find out that you keep billing them anyway.

The advantages of apple’s approach greatly exceed the hosting and payment processing they provide.

I just don't understand people like you. Do you live in constant fear?
Having used the internet since 1994, and downloaded thousands of applications and tools...... malware? Maybe its been an issue once. Countless hours getting the runaround on the phone? Muhahaha, you clearly haven't had my experience with the "buy an apple product, get a free year of AppleTV+"..... that was several hours on the phone being bounced between every department in Apple until they finally gave up and shipped me a FREE AppleTV which also came with a subscription because they couldn't figure out why their system wasn't activating from my MBP16. Don't act like Apple is unique and that you never have to pick up a phone and get involved.

 

[Thoradin]

Oh yea, those tools........ gotta milk developers for those tools. God only knows how successful Apple would be if they didn't make tools that could write their internal apps.... or how many thousands of phones they could be selling (instead of billions) if they didn't have 3rd party apps.

And poor, poor Apple.... having to run a server farm.... its so hard and expensive, no one else has ever done it..... except literally every major company. Sure, its expensive, what isn't? But digital distribution IS CHEAP. Very cheap. Hundreds of downloads for a penny cheap. In a competitive environment, you would be hard pressed to see anyone charging above and beyond actual-costs for a service.

You have no idea how a business works do you? Nobody that wants their business to be sustainable in the long term charges cost prices for anything.

 

[cmaier]

Sounds fair if it is applied to all developers. Get 27% of Uber app revenue, 27% of Walmart purchases, and 27% of McDonalds meals, etc. and see how far it goes. That's Epic's real issue, other developers can distribute free apps with their own payment processing system built into the app while Epic gets banned when it does the same thing.

Ultimately I do think Apple is going to have to unbundle their payment processing system from the AppStore. Developers will have the freedom to get paid by whatever means suits them best. Some developers will be perfectly happy to pay Apple a percentage of revenue to collect the payment from the customers and remit it back to the developer. Others will find it more efficient to do it themselves. Developers will be treated equally without the arbitrary distinction between digital goods and every other thing sold through an app.

What other apps are selling digital goods (as opposed to real world goods and services) using their own payment processing system?

 

[cmaier]

I just don't understand people like you. Do you live in constant fear?
Having used the internet since 1994, and downloaded thousands of applications and tools...... malware? Maybe its been an issue once. Countless hours getting the runaround on the phone? Muhahaha, you clearly haven't had my experience with the "buy an apple product, get a free year of AppleTV+"..... that was several hours on the phone being bounced between every department in Apple until they finally gave up and shipped me a FREE AppleTV which also came with a subscription because they couldn't figure out why their system wasn't activating from my MBP16. Don't act like Apple is unique and that you never have to pick up a phone and get involved.

I have never had to call apple to cancel a subscription, get a refund, etc. I have never downloaded malware of the App Store. I can trust that my less-technically-inclined family members don’t have to worry about these things either.

Are you too young to remember what it was like before the App Store?

 

[78Bandit]

What other apps are selling digital goods (as opposed to real world goods and services) using their own payment processing system?

That's the whole point. The distinction between digital goods and everything else is 100% arbitrary on the part of Apple. Why should a developer who sells car rides be treated any differently than a developer that sells games?