Apple Says App Store Changes Go Too Far in New Epic Games Appeal Filing

[surferfb]

You understand there is no difference in purchasing through apple’s iOS payment and through a 3rd party payment link

Of course there’s a difference. With Apple’s system, the purchase runs through their APIs, fraud detection, parental controls, refund handling, and account protections. With a 3rd party link, all of that disappears you’re dumped into a web flow that Apple doesn’t control or secure, that could have been compromised or have poor security, etc.

And when something goes wrong, the average user will blame Apple: ‘I clicked on it in an app, it should’ve been safe. Apple says iPhone apps are safe, but that app stole my credit card info/I got hacked.’”

 

[Rogifan]

I do see the logic of the decisions that went into App Store pricing.

In order to boost the vitality and vibrancy of the iOS App Store, you want to attract as many developers to release apps for iOS as possible. This is where a percentage cut based on how much money you earn makes sense. Make no money, and you don't have to pay Apple a cent (beyond the initial $99 annual fee). Make more money, and you pay more to Apple. It's similar to how taxation works. Earn below a certain wage bracket, you don't have to pay the government a cent in taxes. Conversely, the more you make, the more you pay in taxes.

The money that comes from your top-grossing apps goes back into maintaining the App Store for everybody. I believe Apple when they say that the vast majority of apps in the App Store are free and make Apple no money. Yes, maybe some of you feel it is unfair that companies like Epic are indirectly subsidising the makers of free apps, but the counterpoint is that it is another challenge altogether to differentiate an app like Facebook which makes money off ads, vs another free app which doesn't make any money at all. Apple has no insight into how much ad revenue a developer would make, and I don't think anybody here wants Apple to go there.

So far, we are only hearing complaints from your larger developers such as Epic and Spotify, who believe they have outgrown the App Store. We have not heard anything from the smaller developers who do find Apple's App Store terms reasonable.

I go back to other app stores with a similar business model like the Switch and PS5. If there is a way for game developers to get out of paying Nintendo and Sony their 30%, I am interested to know how it is done. I genuinely feel that in the very least, all games should pay Apple 30%, be it paid, or IAP. Similar to how it is charged on other game consoles.

Second, correct me if I'm wrong, but while the Spotify app is available on the PS5, there is no option to subscribe to the service within the app, only to log in (which means that you are expected to have created your account and paid for your subscription elsewhere). This seems to mirror the reader category on iOS, where Spotify and Netflix at least have the option to direct users to their website to create an account (and therefore avoid Apple their 30% cut). I similarly did not find a way to pay for Premium in the app on my Switch as well.

If I were running Apple, my line in the sand would be - continue charging games 30%, everything else 0% (eg: that Fantastical or Play or Infuse subscription made via iTunes, minus payment processing fees). I get to retain the bulk of my App Store revenue, while exempting most developers from the cut.

But that's just me.

So basically you’re saying games should subsidize everything else. What if we go back to what Steve Jobs said in 2008 when he said Apple intended to run the App Store at breakeven? Would Apple need to charge anyone 30% to do that?

 

[Dirk Pieters]

Of course there’s a difference. With Apple’s system, the purchase runs through their APIs, fraud detection, parental controls, refund handling, and account protections. With a 3rd party link, all of that disappears you’re dumped into a web flow that Apple doesn’t control or secure, that could have been compromised or have poor security, etc.

And when something goes wrong, the average user will blame Apple: ‘I clicked on it in an app, it should’ve been safe. Apple says iPhone apps are safe, but that app stole my credit card info/I got hacked.’”

Exactly. I never had a customer that said “I want my money back and it doesn’t work”. In fact, I never had to deal with customer payments during the 12 years my apps were in the App Store.

Apple took care of it. Apple took care of the hosting and Apple built a platform that gave customers worldwide access to my apps. When I saw the difference in income before and after the 30% there were times when I thought “it sure would be nice if *all* that money was for me” but - hey - those are the rules for playing.

Without the AppStore I would never have made that money.

 

[Rogifan]

And Netflix is free to not include IAP. So not only does Apple distribute the app to millions of people everyday around the world (including the updates), they have human reviewers to look at every update to make sure there isn't any "obvious" malicious thing going on. Even if it may be security theater, it still gives users a piece of mind, increasing the likelihood of downloading the app.

Apple loses money distributing Netflix ($99/year is not going to cover human and bandwidth costs).

So hardware sales don’t cover the cost of running the App Store at all?

 

[Rogifan]

give the almost weekly data hacks where customer data is stolen i think maybe you are at more risk buying outside the Apple environment.

i like paying with ApplePay because the stores dont even get my card number.

there have been more than a few times ive asked why a company is storing my card or personal details years longer than they need to get payment. even one of my banks asked for verification of my account - which i did when opening the account. but this time it went a lot further: lots of demographic questions. nothing too personal but the need to collect it wasnt about verifying me. it was about getting data for free. i will be closing that account soon. not happy at all.

Ok well I buy stuff outside “Apple’s environment” all the time (I do use Apple Pay whenever it’s available) and I’ve never had an issue. Just curious, have there been any widespread issues with people buying non-digital goods via iOS apps? I’m not aware of problems there.

 

[wbeasley]

What old chestnut 🌰
So do you purchase things on the internet outside the iOS App Store it’s a simple question because if you do then your obviously not having that many issues then with security.

Again that’s not a valid point if you don’t like it go to android because it’s got bugger all to do with security by including a payment link it’s all about maintaining apple’s status quo unless you are admitting that apple don’t have the tools to do it.

every single time we get on the EU or alt appstores or IAP payments... that old chestnut.

we spend PAGES of comments and nothing resolves.

i do buy outside because i use webpages and subscribe to products... yeah.
and then sign in and get access... it isnt hard. not even difficult.
there's no reason to have external payments really and then those products keep 100% of the amount you pay them.

but sadly, people liek Epic and Spotify decide they NEED in app purchases.
boo hoo, because nasty Apple wants a cut doing it that way...

allowing external payments does require changing code, fact.
and anything linking outside is open to exploitation. also fact.

and frankly from years of buying apps through the AppStore I do trust Apple.

on my Android devices I buy a gift card and use that because frankly I dont trust giving my card details to PlayStore.
i'd rather keep it anonymous.

and before you say it, i have bought Apple gift cards too when they have been on sale and get me 20% more value.
but that doesnt seem to happen any more here.

 

[Abazigal]

So basically you’re saying games should subsidize everything else. What if we go back to what Steve Jobs said in 2008 when he said Apple intended to run the App Store at breakeven? Would Apple need to charge anyone 30% to do that?

It’s no different from taxes being used to pay for infrastructure which benefits everybody.

I have no insight into what percentage Apple needs to charge in order to break even, but I suspect it’s nowhere as low as everyone is making it out to be.

Ballpark - 15-20% at least.

Besides, it’s all gachas and IAPs these days. Apple could charge them 50% and I wouldn’t shed a tear.

So hardware sales don’t cover the cost of running the App Store at all?

There is no law which states Apple is obligated to use hardware profits to pay for the App Store and not allowed to make a cent of profit off it. What’s wrong with Apple enjoying the best of both worlds and having both profitable hardware and a profitable App Store and well, just being able to extract handsome profits from every aspect of its ecosystem?

 

[wbeasley]

Ok well I buy stuff outside “Apple’s environment” all the time (I do use Apple Pay whenever it’s available) and I’ve never had an issue. Just curious, have there been any widespread issues with people buying non-digital goods via iOS apps? I’m not aware of problems there.

how about when I buy something from Amazon, the next week i get at least one "purchase" email that is a scam.

someone is accessing that i bought something on Amazon and feeding it to a scammer.
my partner also gets them. "Oh, i've bought another iPhone 16 Pro so i better click on that link in the email".

it happens.

 

[wbeasley]

So hardware sales don’t cover the cost of running the App Store at all?

it matters not whether hardware covers something else.

how Apple choose to break up their groups is neither known by us nor needs to be.
its a for profit business. end of story.

you can bet each area has funding and expectations of income as KPIs.

 

[wbeasley]

What old chestnut 🌰
So do you purchase things on the internet outside the iOS App Store it’s a simple question because if you do then your obviously not having that many issues then with security.

Again that’s not a valid point if you don’t like it go to android because it’s got bugger all to do with security by including a payment link it’s all about maintaining apple’s status quo unless you are admitting that apple don’t have the tools to do it.

sorry i see you joined today so maybe arent aware of the long history on this topic and similar.

perhaps search on any of the EU DMA postings and you will see endless circular postings on the topic of changing iOS to allow certain things.

 

[Bigbuddy1]

Of course there’s a difference. With Apple’s system, the purchase runs through their APIs, fraud detection, parental controls, refund handling, and account protections. With a 3rd party link, all of that disappears you’re dumped into a web flow that Apple doesn’t control or secure, that could have been compromised or have poor security, etc.

And when something goes wrong, the average user will blame Apple: ‘I clicked on it in an app, it should’ve been safe. Apple says iPhone apps are safe, but that app stole my credit card info/I got hacked.’”

Again I purchased something online from
Arsenal’s store and nothing went wrong with the transaction no stolen details and I just contact them if there is an issue
So what’s the issue then because people make purchases online all the time because believe it or not you can’t purchase everything through the iOS App Store

 

[surferfb]

There is no law which states Apple is obligated to use hardware profits to pay for the App Store and not allowed to make a cent of profit off it. What’s wrong with Apple enjoying the best of both worlds and having both profitable hardware and a profitable App Store and well, just being able to extract handsome profits from every aspect of its ecosystem?

In fact, using iPhone profits to subsidize the App Store is textbook anticompetitive behavior: using dominance in one market to distort competition in another.

If Apple dropped fees to near zero and said “hardware pays for it,” I guarantee you’d immediately see the EU accuse them of stifling competition.

 

[Abazigal]

In fact, using iPhone profits to subsidize the App Store is textbook anticompetitive behavior: using dominance in one market to distort competition in another.

If Apple dropped fees to near zero and said “hardware pays for it,” I guarantee you’d immediately see the EU accuse them of stifling competition.

Hey, while we are at it, let’s petition Apple to give away Apple Music for free and drive Spotify out of business.

 

[Bigbuddy1]

sorry i see you joined today so maybe arent aware of the long history on this topic and similar.

perhaps search on any of the EU DMA postings and you will see endless circular postings on the topic of changing iOS to allow certain things.

Again that is irrelevant whether I joined today or 10 years ago
It makes fundamentally no difference to security and privacy if there is a 3rd arty payment link as individuals purchase things online all the time from like the arsenal store and there is no issue whatsoever.
It’s only privacy and security when it suits apple’s argument to maintain their status quo

 

[Bigbuddy1]

Hey, while we are at it, let’s petition Apple to give away Apple Music for free and drive Spotify out of business.

Is that not the argument as to what apple are doing anyway regarding Apple Music vs Spotify in the EU anyway that’s getting looked into through the courts there.

I’m pretty sure that epic said apple shouldn’t receive nothing for processing IAP

 

[surferfb]

Again I purchased something online from
Arsenal’s store and nothing went wrong with the transaction no stolen details and I just contact them if there is an issue
So what’s the issue then because people make purchases online all the time because believe it or not you can’t purchase everything through the iOS App Store

That’s not the same thing. When you go to Arsenal’s site in Safari, you know you’re on the open web and you take on that risk yourself. Inside an app, most users assume the transaction is still covered by Apple’s protections fraud detection, parental controls, refunds, etc. because that’s how it’s worked for almost 20 years now. If something goes wrong in-app, people will blame Apple, and Apple’s brand promise of safety, security, and privacy is harmed.

And at the end of the day, it’s Apple’s platform. They get to set the rules. If you don’t like them, you can develop for or buy something else. The reason apps want in-app purchases is because there’s huge value in being inside Apple’s ecosystem; they just don’t want to pay for it. That’s natural, nobody likes paying. But if you’re using someone else’s property and they want to be compensated, you don’t get to say “nope.”That’s not how the world works.

 

[wbeasley]

Again that is irrelevant whether I joined today or 10 years ago
It makes fundamentally no difference to security and privacy if there is a 3rd arty payment link as individuals purchase things online all the time from like the arsenal store and there is no issue whatsoever.
It’s only privacy and security when it suits apple’s argument to maintain their status quo

the point of joining today was refering to you not realising this topic has been covered many times in the past.

Apple have always differentiated themselves on privacy long before the appstore.
you arent the product unlike Google who use your data.
so it's not just "when it suits them".

quick Google check, arsenal store is the football/soccer app?

 

[Dirk Pieters]

Again I purchased something online from
Arsenal’s store and nothing went wrong with the transaction no stolen details and I just contact them if there is an issue
So what’s the issue then because people make purchases online all the time because believe it or not you can’t purchase everything through the iOS App Store

I’d say the issue is that Apple can guarantee 100% that someone who wants money back from a wrong app purchase will get it back.

The fact that there are plenty of safe purchases outside the AppStore is irrelevant in the discussion. What bothers Apple most is that they have no guarantee of customer happiness regarding payments when the payment system is out of their control.

The entire premise of the App Store is customer safety when it comes to app content, payments, refunds etc. That premise is no more when payments and refunds are outside of Apple’s control.

If you have a company that does bathroom renovations and you’re fantastically good at it, and someone decides that the shower installs should be done by someone else - not you - then you can no longer guarantee a perfect bathroom renovation.

 

[Bigbuddy1]

That’s not the same thing. When you go to Arsenal’s site in Safari, you know you’re on the open web and you take on that risk yourself. Inside an app, most users assume the transaction is still covered by Apple’s protections fraud detection, parental controls, refunds, etc. because that’s how it’s worked for almost 20 years now. If something goes wrong in-app, people will blame Apple, and Apple’s brand promise of safety, security, and privacy is harmed.

And at the end of the day, it’s Apple’s platform. They get to set the rules. If you don’t like them, you can develop for or buy something else. The reason apps want in-app purchases is because there’s huge value in being inside Apple’s ecosystem; they just don’t want to pay for it. That’s natural, nobody likes paying. But if you’re using someone else’s property and they want to be compensated, you don’t get to say “nope.”That’s not how the world works.

It’s always very telling when one has a legitimate argument against Apple the default response from certain apple fans is this if you don’t like it go to android and you wonder why people have this perception.

Yeah that because most individuals don’t understand because of how it’s marketed that’s why

 

[Bigbuddy1]

I’d say the issue is that Apple can guarantee 100% that someone who wants money back from a wrong app purchase will get it back.

The fact that there are plenty of safe purchases outside the AppStore is irrelevant in the discussion. What bothers Apple most is that they have no guarantee of customer happiness regarding payments when the payment system is out of their control.

The entire premise of the App Store is customer safety when it comes to app content, payments, refunds etc. That premise is no more when payments and refunds are outside of Apple’s control.

If you have a company that does bathroom renovations and you’re fantastically good at it, and someone decides that the shower installs should be done by someone else - not you - then you can no longer guarantee a perfect bathroom renovation.

So what your saying is epic doesn’t have the ability to offer a refund if you purchase something from them?
It’s only apple that can facilitate a refund on digital transactions safely and secure they are the only company that can do it.

 

[Dirk Pieters]

So what your saying is epic doesn’t have the ability to offer a refund if you purchase something from them?
It’s only apple that can facilitate a refund on digital transactions safely and secure they are the only company that can do it.

No.

What I’m saying is that - if Epic screws up refunds enough - the AppStore will no longer be the safe haven that Apple guarantees. And Apple’s entire premise of the AppStore being a safe haven when it comes to content, payments and refunds will become void, due to a 3rd party screwing up.

Just like the premise of your company being the best bathroom renovators will become void if 3rd party shower installs are done badly.

 

[Bigbuddy1]

the point of joining today was refering to you not realising this topic has been covered many times in the past.

Apple have always differentiated themselves on privacy long before the appstore.
you arent the product unlike Google who use your data.
so it's not just "when it suits them".

quick Google check, arsenal store is the football/soccer app?

Yes arsenal have an online store and if you purchase things from them the transaction is done with them and if you want a refund you go through them not apple and guess what there is no security problem so it makes no fundamental difference if a 3rd party link is there or not
This is all about Apple maintaining their status quo by hiding behind privacy and security

 

[DEMinSoCAL]

iOS, the APIs, and the App Store are the property Apple is referring to. Under existing Supreme Court precedent, forcing Apple to let others use that property for free runs into serious constitutional problems. Apple is also allowed to charge different companies different prices (or no price at all); that’s not unusual in licensing.

To be clear, that doesn’t mean Apple automatically wins. Precedent can shift, and courts can carve exceptions, but it’s a much stronger argument than a lot of people here give it credit for.

Free ? Don't developers pay a fee to become a developer and use the Apple-mandated API's to write their apps?
If the fee is too little, maybe Apple should charge more for that, but getting money for doing nothing isn't the solution. iPhone would be nothing if there were no apps, btw...maybe developers should get paid by Apple for the favor of writing apps people want to buy an iPhone for?

 

[neuropsychguy]

So basically you’re saying games should subsidize everything else. What if we go back to what Steve Jobs said in 2008 when he said Apple intended to run the App Store at breakeven? Would Apple need to charge anyone 30% to do that?

We can’t know if Jobs wanted it to always be a break even part of Apple. It’s not worth speculating about what he would or would not want for it.

Is 30% needed? Not to break even (see my long comment about this earlier in this thread where I work out the math). 10% is likely around that point (maybe — Epic is losing money with a 12% store fee but it’s also trying to compete with Steam so it spends a lot of money giving away games). 15% is likely the point that would allow Apple to make a decent but relatively small profit, margins-wise.

The last thing I’ll add is that Steve Jobs was a fan of high margins — or at least allowed the company to have them. If you dig through old Apple data from the early 1990s (requires some leg work to find the news articles from old papers), you can see high margins back then.

Apple margins were not high in the 1990s (1994, for example was gross around 25% but net was only about 3.5%) until after Jobs came back to Apple. Under his leadership gross margins got back to 40%.

 

[wbeasley]

Yes arsenal have an online store and if you purchase things from them the transaction is done with them and if you want a refund you go through them not apple and guess what there is no security problem so it makes no fundamental difference if a 3rd party link is there or not
This is all about Apple maintaining their status quo by hiding behind privacy and security

well then that just like using Temu or Amazon so it's a store front for buying physical goods.
as has been discussed also many times.

not the same as buying digital in app items.

i'll let you go through the post history for the long debates on that...