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

[J InTech82]

I hope apple loses. 30% or even 15% for payment processing is criminal. In addition they don't even support our license type and so for years I had to go through this huge headache with apple almost every time we have a major app update.

If Apple was reasonable and said 5% or 10% nobody would have batted an eye. Their greed has put them in this position.

Is your app on the iPhone or iPad App Store? Yes? Oh. How much are you paying for Apple's developer tools? How much are you paying to use any Apple API's? How much are you paying to have your app hosted and distributed by Apple on the App Store? How much are you paying Apple to develop the operating system your app is designed for?

Everyone has fees buddy. Get over it. Did you know, when you go out to eat, the Point of Sale that is used to take your food order, also has a credit card fee per transaction? This is not a free world. How much do you think it would cost you to develop your own hardware, your own software and host your own App Store with millions of hits to your servers a day? More than the 30% or even 15% that is coming out of your profits, that's for sure. Why don't you just give your software away for free, than you wouldn't have to worry about fees. Oh wait, because you have a business to run and profits to make. I guess Apple doesn't.

 

[svish]

Waiting to see what will finally happen. Think Apple should be allowed to collect at least a small portion of the amount. Would like to see Apple win this.

 

[grammatica]

LOL

 

[platinumaqua]

The line is too arbitrary. Why is it OK to use 3rd party payments for services or physical goods but it's not subscriptions or digital goods?

 

[Abazigal]

I hope apple loses. 30% or even 15% for payment processing is criminal. In addition they don't even support our license type and so for years I had to go through this huge headache with apple almost every time we have a major app update.

If Apple was reasonable and said 5% or 10% nobody would have batted an eye. Their greed has put them in this position.

Do you also agree that Nintendo and Sony do not deserve to charge 30% for apps sold on their platforms?

 

[macfacts]

So where does the line get drawn? Can apple demand 15% of Uber rides?

 

[MilaM]

So where does the line get drawn? Can apple demand 15% of Uber rides?

If you follow Apple's interpretation of IP law and accepted the TOS, then yes.

 

[Mr. Nice]

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.

Apple does business in different parts of the world and must comply with local laws.
Therefore, they cannot do what they want.

The fact is that they allow everything on Mac that they demonize and prohibit on iOS.

The fact is that what Apple does with iOS, Microsoft could never enforce with Windows because the EU would fortunately intervene and I'm sure other countries would too.

 

[Abazigal]

So where does the line get drawn? Can apple demand 15% of Uber rides?

Not impossible (Apple does own their platform, after all). But at the moment, Apple seems to draw the line between the delivery of physical goods and services (these do not get charged a cut) vs digital services which are consumed on your device.

There is some internal consistency to be found here. Digital goods often have low or zero marginal costs, compared to an uber ride or Amazon delivery which have costs involved in the delivery of said product.

Personally, I would say just tax games 30% (similar to what game consoles do) and exempt the rest. So yes to Epic still having to pay Apple 30% of IAPs.

Games make up the bulk of App Store revenue anyways, so excusing companies like Play and Fantastical would generate a large amount of goodwill at very little financial cost to Apple, I feel.

 

[Avidos1]

So you agree with me. What on earth is APPLE getting 30% for when I'm on amazon's website/app? Or any other developer. I'm not talking about paid apps, i'm talking about being in the app. Apple did nothing. Either they get 30% from everyone or something is fishy.

No I am not.
Your example is amazon a shop. They get a cut of the sales, thevapp store is apples shop, they should get a cut of the sales or why provide a store for you to do business in in the first place
My example was to show how an app in the app store functions if it is selling all goods directly even though it wouldn’t brbanle to do so without the existence of the app store

Hope that clarifies

So amazon should get a cut AND apple should get a cut if I buy from a Mac right? Both are supermarkets in your example.

We are talking about the app store not the platform.
As long as the store owner, in this case Apple can gain income from those putting thier goods in Apple’s store then the store continues, if the store owner simply provides a space for others to do business then the model is unsustainable.
There is no easy answer.

 

[10anta]

There is a very simple solution to this problem: raise the developer fee.
Apple already gets compensated for their IP via the developer fee.
It is your "licensing cost" to use the App Store, why should there be additional costs?

Raising the developer fee would fail on two levels:
1) It would deter smaller developers by imposing a higher proportional cost on them and raising the barriers to entry, this reducing competition between developers and apps, damaging consumer choice and application quality
2) It ignores the fact that costs of hosting and running a store scale dependent on demand and traffic - it costs Apple more to provide an app to thousands or millions of customers, and it’s fair that the most downloaded and used apps provide scalable higher reimbursement for the costs they impose

 

[jlc1978]

So it’s unconstitutional for Epic to not have to pay Apple 30% but not Netflix or Spotify?

It's Apple's platform so they should get to decide the rules. Expecting Apple to host an app for free is unreasonable and no matter whose side you're on it is a bit scary to think the government can dictate pricing.

I hope apple loses. 30% or even 15% for payment processing is criminal.

It covers more than just payment processing. To put it another way, would you be better off if Apple decided to close the App Store and allow side loading? Would that generate more revenue at a lower cost to you?

Do you also develop the same app for Android? How does the profits compare?

My questions may sound snarking, but I am serious. Does the App Store offer nothing for you beyond payment?

 

[PowerButton]

I hope apple loses. 30% or even 15% for payment processing is criminal. In addition they don't even support our license type and so for years I had to go through this huge headache with apple almost every time we have a major app update.

If Apple was reasonable and said 5% or 10% nobody would have batted an eye. Their greed has put them in this position.

Their “greed” has also put you in the position of being an iOS developer. If you don’t like it, develop on Android — unless you’re actually making a profit and are greedy yourself.
You can’t have your cake and eat it too. 🍰

 

[jlc1978]

Raising the developer fee would fail on two levels:
1) It would deter smaller developers by imposing a higher proportional cost on them and raising the barriers to entry, this reducing competition between developers and apps, damaging consumer choice and application quality

The current model offered a very low barrier to entry and reduced the costs of bringing an app to market significantly. Developers do not need to upfront the costs of marketing, hosting, etc.; they only have to pay if and when a sale is made. Changes to that model would potentially costs developers a lot more upfront, making it harder for one with little capital to bring an app to market, as you point out, in hopes it will make enough to cover those costs and a profit.

2) It ignores the fact that costs of hosting and running a store scale dependent on demand and traffic - it costs Apple more to provide an app to thousands or millions of customers, and it’s fair that the most downloaded and used apps provide scalable higher reimbursement for the costs they impose

I think they would adopt some variant of the EPIC license for their engine, based on revenue generated and downloads. They could set thresholds so small developers don't take a big hi while the big ones pay a lot.

The price should be on the value the store adds, not the costs of providing the service, just like any store.

Once alternate stores come in to being Apple also should be free to decide not to carry any app for any reason.

 

[wbeasley]

So in your view, if Im on amazon.com on a Mac, amazon should take a cut AND Apple should take a cut because im on an Apple device. Correct?

That's just weird given you now compare a webpage to an appstore.

Apple dont control the internet.

So i'd say that doesnt make your comment correct

 

[SpotOnT]

It is interesting that Apple’s PR is all about privacy and security and ‘scare sheets’ but in court filings it’s about IP. But how do they make this argument when it only applies to digital goods and they get to exempt certain digital goods. So it’s unconstitutional for Epic to not have to pay Apple 30% but not Netflix or Spotify?

As far as I know, a person or company can discriminate all they want against their client/customers as long as it’s not based on immutable traits (ie racist/sexist discrimination).

But if a store wants to charge one customer $10 for a a license and another customer $50 for a license, there is nothing illegal about that.

 

[maximage77]

The issue I have with all these comparisons between the App Store and physical stores that everyone is making, is that everyone seems to be forgetting that physical stores don't provide shelf space for free nor allow you to walk out with product for free. Not legally anyway. There is always a charge, so they get a cut.

The App Store does. So if they are supplying all the shopfront and back end servers and data etc for free, shouldn't they at least get some of the income generated? Epic, and many other devs, have worked out they can hook you into a game for free (and piggy back off the free upfront service provided by these various stores) but then make their money in the background by selling you digital items within the game instead. Smart? Maybe, but that shouldn't have to be at Apples (or Androids, etc) cost to supply. In the past you used to have to pay for the game up front so the shopfront could exist by getting it's cut, but now Apple (and other respective front ends) are now wearing the costs of this altered method of business. You don't get to walk in to EB Games and walk out with a copy of a game for zero cost.

Maybe the end result will be a tier of free Apps that do not have any external linking (allowing all the little free widget style apps to still exist), but if you have an app that links to external payments, then there is an upfront charge as well for Apple hosting it. Whether the consumer cops this charge as an individual consumer or the developer, who knows.

 

[klrobinson999]

Finally, Apple takes the gloves off. Epic may have bitten off more than it can chew.

 

[djphat2000]

I bought something on amazon.com on my Mac, APPLE SHOULD GET 30%!!! I bought something on Ebay app, APPLE SHOULD GET 30%!!! It's done on Apple's device and they should get a piece of every transaction!!! Oh wait, doesn't make ANY SENSE and they've made BILLIONS. I wish someone would sue them and give us developers our money back WE EARNED by a user going to our website/app and buying something.

No free loading.

 

[Rogifan]

As I said, companies are allowed to set different licensing terms for use of their property. There are legitimate arguments for treating digital goods and services differently than physical goods and services, but whether you agree with those arguments or not, in the US it doesn’t matter much. Companies have very wide latitude to set pricing on use of their property.

That’s why a judge saying “you can’t charge at all” is on shaky constitutional ground. Th fifth amendment is very clear: “nor shall private property be taken for public use, without just compensation.” Courts have repeatedly ruled that intellectual property counts as property when it comes to the fifth amendment, and that requiring access to property counts as taking property when it comes to the fifth amendment.

It doesn’t mean Rogers was necessarily wrong, or that Apple is guaranteed to win, but this weakness in her ruling was flagged from day one (and even she acknowledged it by trying to head it off in her order).

Just curious what you think the legitimate arguments are? Especially for things that exist across many platforms (i.e. not some drawing app that takes advantage of the Apple Pencil and only exists on iOS).

 

[surferfb]

Apple does business in different parts of the world and must comply with local laws.
Therefore, they cannot do what they want.

Never said Apple doesn’t have to comply with local laws or “they can do what they want.” But we’re talking about a ruling in a US court that applies in the US.

The fact is that they allow everything on Mac that they demonize and prohibit on iOS.

macOS and iOS were built in different eras with fundamentally different assumptions. macOS has been open for 40 years, serves ~100M (with a large contingent of power-users and developers), and was designed to tolerate complexity and risk. iOS was deliberately built as a closed, tightly-managed ecosystem to serve 1–2B everyday consumers who expect security, privacy, and simplicity out of the box.

A vulnerability that hit only 5% of iPhone users would be equivalent to a vulnerability affecting half of all Macs. The scale is totally different and so a different model is warranted.

The fact is that what Apple does with iOS, Microsoft could never enforce with Windows because the EU would fortunately intervene and I'm sure other countries would too.

Windows had an actual monopoly when the EU intervened. Like 90+% of the market. Apple doesn’t. And we’re not talking about the EU anyway, we’re talking about a specific US court case that applies in the US.

 

[Rogifan]

It's Apple's platform so they should get to decide the rules. Expecting Apple to host an app for free is unreasonable and no matter whose side you're on it is a bit scary to think the government can dictate pricing.

What does hosting an app have to do with giving Apple 30% of digital purchases? The vast majority of apps on the App Store are free to download and don’t require IAP to use.

 

[nikon1]

Am I only person who tired of Epic Fails?

NOPE! Personally I hope the entire infrastructure around Epic fails, there whole business plan is not about FAIR … it’s all about developing but not wanting to pay for delivery. Bankrupt them and send their whiny CEO packing!

 

[djphat2000]

Like I said, equally, all concept of licensing software must cease to exist. If someone purchases a software product (i.e., if they pay for that software), there should be no IP and they can do what they want with it. Paying money must mean ownership of whatever was paid for.

Ownership implies something different than your right to use it.
You have every right to "use" the device (iPhone) and software as you see fit.
You do not "own" the IP that went into making either the device or software that created it. That will forever be the property of Apple and or software maker.

Think of it like you're a "User" on a computer system. You have read/write access. But, you're not an Admin or root of the computer system. Even though you could "gain" privileges higher than a typical user level. You do not have the right to redistribute or reverse engineer either device or software to others without some kind of permission to do so. That permission comes at a cost or a consequence (legally). If for your own purpose "only" that cost is $99 a year and whatever a mac computer you purchase. For the ability to offer it to the broader world. It comes at the previous cost and an addition of up to 30% sales. Exceptions are made for certain types of applications.

 

[djphat2000]

What does hosting an app have to do with giving Apple 30% of digital purchases? The vast majority of apps on the App Store are free to download and don’t require IAP to use.

The ones that do pay the fee support those that don't pay the fee. That "haves" are subsidizing the "have nots". In most cases. This allows those free apps to be "free" on the store and enjoy the same access to the end user as does an app from a well know developer like Microsoft etc.