Apple to Collect 27% Commission on Third-Party App Payment Systems in the Netherlands

[Maximara]

What you failed to mention:

This was Apple's own claim in their legal defence against Epic Games.
To which Epic made a counterclaim:

"EGS's 12 per cent transaction fee is sufficient to cover the variable costs of running EGS, including payment processing, customer service and bandwidth."

Epic is losing hundreds of millions of dollars in its war against Steam

In its bid to take on Steam with the Epic Games Store, the company behind Fortnite is burning through hundreds of milli…

www.eurogamer.net

As Hoeg explains many of these news reports were jokes and got basic facts wrong. I am citing the actual court record not what "journalist" thinks happened. Case 4:20-cv-05640-YGR Document 410 is also available online

360. Apple has always viewed Google Play as a significant competitor, including with respect to games transactions. Hitt TT; see also supra co X. There is evidence of platform competition with the Samsung Galaxy store, as well. Hitt TT; see also supra § X. And Apple competes with at least the three major game console platforms for game transactions. Hitt TT; see also supra § X.

384. Epic is attempting to cluster otherwise independent product markets in a single market. Such clustering permissible only if competitive conditions are similar for the individual product markets.

If you watch Hoeg's playlists (An Antitrust Epic and Epic v Apple: Just the Trial) you get a lawyer's prospective on this and he has some words regarding both Apple and Epic but more for Epic's antics than Apple's.

 

[I7guy]

I agree. But it's ultimately irrelevant. Mobile operators in many places around the world have been regulated and fined for anti-competitive practices, while in others there seems to be enough competition.

Cell phone service is somewhat regulated, although there are only 3 companies that own cell phone infrastructure...which is the point.

Let's just say, if we're applying a "reasonable" market definition of "cars", there's (maybe more than) enough competition in the automotive industry.

A car is a car and an app is an app? Is that the thinking. Any old car will do similar to any old drawing app will do.

Sales of iPhones and the margin Apple are making on them would fund it. Easily.

Maybe, but all I'm saying, is we don't know the internal accounting of the app store.

It's about as much an "integral" part of iOS as Internet Explorer or Windows Media Play has been of the Windows ecosystem (see the European Commission's finding against Microsoft on that).

Microsoft played very dirty with IE. Apple is not playing dirty and probably the reason the courts didn't find them a monopoly. (not to mention learning from M$FTs mistakes)

I'd argue mobile app downloads are "semi-essential" services nowadays.

See Blackberry, when they went belly up nobody noticed except the hardcore fans. Cell phones are definitely essential services these days. Being able run an app on a phone, is definitely a productivity enhancer. No doubt there are important apps available on multiple platforms. (ios, android, windows, windows arm, linux)

You can, in theory, do without. But your ability to compete will in many industries and for many businesses be severely hampered without mobile apps (due to customer expectations alone).

You're attempting to make the case that because ios is popular it should be regulated. I disagree with that thinking.

We obviously agree to disagree a bit on that one, I suppose.

In any case, assuming that the current market shares of smartphone OS and mobile app stores remain similar, the "essentiality" of being available on the dominating platforms (including the iOS App Store) will only increase.

If you give it another 10 or 20 years, there will be IMO little doubt or dissent whether such platforms need to be regulated (for pricing or access) for the "common good".

What we've seen so far is only the beginning of legal regulation and action against Apple.

Horses for courses. Those who want Apple to be regulated, may get their wish (or not). It doesn't mean there can't be opinions to the contrary. Horses for course, we live in a democracy (loosely speaking).

 

[Maximara]

Interesting analogy, but not applicable since the App Store is not a tax system: The small devs don't get anything out of the fact that the big devs are paying a lot more - all that ‘overhead’ goes to Apple, which is a for-profit corporation.

Except the small devs are getting improvements to the coding infrastructure be it Swift or Xcode which the big devs are paying effectively paying for. On a side note non-profits can make profits too - they just cannot distribute its profits to any private individuals.

If you are Amazon, you get to let your customers spend money on digital goods (movies) without paying a fee to Apple.

"Apple gets Amazon’s complete and total participation in the Apple TV features it cares about the most." so there isn't an exchange of money per say there is an exchange for service. "Apple also very much wants to get consumers to sign up for other channels like HBO or Cinemax through its Apple TV app. And that’s where the second Amazon concession comes in."

"Which means that Apple is getting a cut of the new subscriptions that start in Amazon’s app. Perhaps it’s the standard 30 percent in the first year, 15 percent after that. Perhaps it’s something better. Bottom line, new customers have their payments routed through Apple, existing Prime customers don’t."

"All of the above is why I’m comfortable saying that Amazon had leverage on Apple: Apple has clear incentives in the form of getting more participation in the Apple TV app and in getting a cut on the new subscribers it drives to Amazon. Amazon has the incentive of not paying more money to Apple" - Why Amazon Got Out Of The Apple App Store Tax, And Why Other Developers Won’t

Apple, unlike Epic, didn't go crying to the courts (and legislators) crying "monopoly" after breaking their contract like some little kid; they behaved like an adult and ate their humble pie because Amazon effectively was calling the shots and Apple didn't want to cut their own throat.

"THESE TERMS CONTAINS A BINDING, INDIVIDUAL ARBITRATION AND CLASS-ACTION WAIVER PROVISION." - Epic's Games Terms of Service. So Epic cuts off access to the very thing (civil court case) they are using against Apple. Wonderful.

 

[johnnytravels]

Except the small devs are getting improvements to the coding infrastructure be it Swift or Xcode which the big devs are paying effectively paying for. On a side note non-profits can make profits too - they just cannot distribute its profits to any private individuals.

Apple has as much interest in a diverse selection of apps. Also some of the biggest money makers on the App Store pay nothing through their free apps selling digital goods, which leads me to saying

"Apple gets Amazon’s complete and total participation in the Apple TV features it cares about the most." so there isn't an exchange of money per say there is an exchange for service. "Apple also very much wants to get consumers to sign up for other channels like HBO or Cinemax through its Apple TV app. And that’s where the second Amazon concession comes in."

"Which means that Apple is getting a cut of the new subscriptions that start in Amazon’s app. Perhaps it’s the standard 30 percent in the first year, 15 percent after that. Perhaps it’s something better. Bottom line, new customers have their payments routed through Apple, existing Prime customers don’t."

"All of the above is why I’m comfortable saying that Amazon had leverage on Apple: Apple has clear incentives in the form of getting more participation in the Apple TV app and in getting a cut on the new subscribers it drives to Amazon. Amazon has the incentive of not paying more money to Apple" - Why Amazon Got Out Of The Apple App Store Tax, And Why Other Developers Won’t

That you totally ignored most of what I wrote and just used on sentence as a starting point for a completely different story. It doesn't even matter if Amazon had leverage or not, that just explains it - the fact is that they are getting special treatment (and others as well, like I said in my post).

 

[turbineseaplane]

Side note: I find it amusing that US society is so vehemently against taxes and the potential for social security resulting from money that belongs to everyone, yet seemingly so apologetic of our tech giants using ‘security’ as a catch all for eliminating freedom in many ways.

So do I

(As an American citizen)

 

[Sophisticatednut]

And yes, governments, law and regulators are telling for profit organisations: Once a product has been sold (or given away for free) your rights are strictly limited. It's called the exhaustion or first sale doctrine.

I'm not saying that mobile app downloads are exactly covered by that - yet it is an example that there are legal limitations to how companies are allowed to control the aftermarket to their products. Even if they invented the underlying IP.

In EU this is covered. Exhaustion or first sale doctrine covers 100% of software in recent ruling

And that's true and no IAP is incurred as long as you don't run the app.

True as long as you don't run the app.

The web app is not using apple ip. Safari is open sourced based on standards outside of Apple.

Absolutely.

me opening up the app should not be relevant.
Exhaustion or first sale doctrine should make sure of this.

 

[turbineseaplane]

I posted some relevant comments on all this from G Rambo in the side loading thread.

Definitely all in here should check them out as its all somewhat intertwined

Sideloading Bill Would Allow 'Malware, Scams and Data-Exploitation to Proliferate,' Says Apple

From Guilherme Rambo (who knows every bit of what he's talking about) An absolute master class on the side loading and iOS/macOS security and side loading situation His tweet thread is starts below: 🧵 Thoughts on iOS sideloading. Apple (and people who defend Apple no matter what) make it out...

forums.macrumors.com

 

[Maximara]

Side note: I find it amusing that US society is so vehemently against taxes and the potential for social security resulting from money that belongs to everyone, yet seemingly so apologetic of our tech giants using ‘security’ as a catch all for eliminating freedom in many ways. I wonder why no one has ever come up with the argument that what Apple does is wholly unpatriotic...

It is a legacy of America's total slippery slope to anything socialist being the gateway to Communism. It is Make Mine Freedom and all those other little 1950s pro Capitalism (let's ignore all the bad things outlined in The Jungle or Midnight is a Place) cartoons dialed up to 11.

Funny thing is back when Marvel was doing 2099 comic they predicted a world where the countries of the world and Cooperations had a war and the nations lost and the world was this cyberpunk nightmare.

 

[I7guy]

[...]

me opening up the app should not be relevant.
Exhaustion or first sale doctrine should make sure of this.

Think you are "move around the goal posts" to show how your opinion is valid. But that is only, IMHO.

 

[turbineseaplane]

The Apple App Store™

...where phishing Apps get right through "App Review" and that also give Apple AD money to ensure they are the top spot!

yep!
Nothing beats the safety and security of the Apple App Store™

Source for above:

https://twitter.com/x/status/1490005085715271680

 

[AppliedMicro]

Source for above:

Why rely on Twitter screenshots?

It's right there for everyone:

Meta Business by Nguyen Phuong Linh
https://apps.apple.com/us/app/meta-business/id1603255418 (Advice: DO NOT INSTALL!)
with a first review from 24 January, that is 2 weeks ago

vs.

Meta Business Suite by Meta Platforms, Inc.:
https://apps.apple.com/us/app/meta-business-suite/id514643583

 

[turbineseaplane]

Why rely on Twitter screenshots?

Because it was somebody else tweeting.
I didn’t want it to seem like I had discovered this on my own

 

[Ethosik]

You statements really lead me to believe the core of what you think is "Since Apple created iOS, every app running on their phones and OS belongs to them".

Would people just stop putting words in my mouth. I have never said that. I have never said anything even remote to that. The IP, copyright rights and ownership of the app belongs to the developer. But, just like using Unity or Unreal, you need to pay to use APIs and libraries/frameworks that you use. And in order to distribute your game, the store can take whatever you want. I have no problem if Steam ups their cut to 60% for example. But in no way does this line of thinking mean Every and all apps now belong to Valve. That is just ridiculous.

iOS App Store is a storefront. Just like Target, Walmart, Steam, GoG, and many more. Storefronts have markup for any product you sell on them. Valve, Target, Walmart, Sony, Apple, Microsoft and anyone else is free to decide how much to mark up a product on their store. This does not mean every and all products are now owned by those companies. So please, stop putting words in my mouth.

 

[turbineseaplane]

you need to pay to use APIs and libraries/frameworks that you use

What you are really arguing for here is switching to a way to charge more directly for simply being an Apple developer.

That is certainly a discussion to be had.
Apple has never really wanted to do that or have that discussion.

Why?

Simple.
It benefits them financially (enormously) to muddy the waters on what the value and fee should be of that component alone.

They love to have everything all bundled together so that you never really get to see or think about how much they are really raking in.

And none of the above should necessitate granting them a monopoly on iOS App distribution rights.

 

[Ethosik]

That you totally ignored most of what I wrote and just used on sentence as a starting point for a completely different story. It doesn't even matter if Amazon had leverage or not, that just explains it - the fact is that they are getting special treatment (and others as well, like I said in my post).

Sorry, the world doesn't work this way. I will not get the same treatment as a company like Amazon or Google or Microsoft. Side deals happen all the time in the world.

 

[Ethosik]

What you are really arguing for here is switching to a way to charge more directly for simply being an Apple developer.

That is certainly a discussion to be had.
Apple has never really wanted to do that or have that discussion.

Why?

Simple.
It benefits them financially (enormously) to muddy the waters on what the value and fee should be of that component alone.

They love to have everything all bundled together so that you never really get to see or think about how much they are really raking in.

And none of the above should necessitate granting them a monopoly on iOS App distribution rights.

For goodness sake we are still on the "iOS App Distribution" monopoly argument? Do you also think Apple as a monopoly on macOS distribution? Or Sony has a monopoly on Playstation game distribution?

Note: Even though I could sell my PS5 game anywhere, I still need to go THROUGH Sony to even get approval and licensing for my game. Therefore, in an indirect way, Sony is still controlling Playstation game distribution.

 

[turbineseaplane]

After all the debate and discussion around this the last few days…I’m having a bit of reflection today on just how happy it makes me that we are finally getting a little closer to reigning in this situation

It’s so refreshing to see so many iOS Devs from all over the world discussing this and engaging and mostly all pushing for fundamental change.

In the long run this will make for a far healthier ecosystem

Just makes me happy

 

[AppliedMicro]

So please, stop putting words in my mouth.

I merely mimicked your very own putting words in other people's mouths. ?‍♀️

And in order to distribute your game, the store can take whatever you want.

Yes. And Apple has chosen to distribute many games for free (save for the yearly developer fee).

Which isn't entirely unreasonable, since it promotes adoption of their OS platform and sales for their devices.

you need to pay to use APIs and libraries/frameworks that you use

If I subscribe to Spotify or a dating app service in their iOS app, they don't need to use Apple's libraries or frameworks.
It can be done entirely outside of Apple's realm. And the content they're delivering isn't developed by Apple either.
Same for in-app enhancements or coins.

Literally the only thing forcing developers to use Apple's libraries / APIs for that is Apple's contractual terms.

 

[Ethosik]

I merely mimicked your very own putting words in other people's mouths. ?‍♀️

How did I put words in other people's mouth?

They said:

If they'd adjust to reasonable terms

I asked for proof. How is it unreasonable now? What is the financial breakdown? If you state something, you need to provide proof.

 

[I7guy]

After all the debate and discussion around this the last few days…I’m having a bit of reflection today on just how happy it makes me that we are finally getting a little closer to reigning in this situation

It’s so refreshing to see so many iOS Devs from all over the world discussing this and engaging and mostly all pushing for fundamental change.

In the long run this will make for a far healthier ecosystem

Just makes me happy

There’s an old expression about “not counting your chickens…”. Or: “it’s not over till it’s over”.

 

[turbineseaplane]

There’s an old expression about “not counting your chickens…”. Or: “it’s not over till it’s over”.

Certainly Apples hubris agrees with you.

I hope they get slammed.
They’ll deserve it

 

[I7guy]

Certainly Apples hubris agrees with you.

I hope they get slammed.
They’ll deserve it

I hope this hubris goes south. They deserve it to run their business legally. Let’s be honest…different strokes for different folks.

 

[AppliedMicro]

How did I put words in other people's mouth?

Yeah, strictly speaking you merely put it in their thoughts rather than words:

And all this discussion really leads me to believe the core of what people think here "Apple should not be allowed to set their own prices for their own products"

There’s an old expression about “not counting your chickens…”. Or: “it’s not over till it’s over”.

Goes both ways, with the court rulings that have been partly in favour of Apple.

 

[Sophisticatednut]

Think you are "move around the goal posts" to show how your opinion is valid. But that is only, IMHO.

Not at all.
In USA first sales doctrine doesn’t cover software, but only tangible goods.

But in EU first sales doctrine or Exhaustion of IP rights and first sale exhaustion cover software and hardware equally.

What does Exhaustion of IP Rights mean?​

The “Exhaustion of IP rights” refers to the level of control an owner of intellectual property has over the distribution of his or her products.

Under the exhaustion of rights principle, once goods are sold in a specific market by the owner or with his or her consent, they will not be able to prevent the resale of such goods in that market by others – i.e., the exclusive right of sale becomes “exhausted.”
For example, national exhaustion considers that once a product has been put into circulation in the domestic market with the consent of the owner (the first sale), he or she cannot prevent its resale, claim a respective profit, or sue for infringement of IP rights.

Supreme Court of EU(CJEU) ruled that software supplied electronically can be considered “goods” and that, if the copy of the downloaded software is accompanied by a perpetual license for use, this must be considered “sale of goods”.

A perpetual software license is a type of software license that authorizes an individual to use a program indefinitely. Generally, outside of termination, a perpetual software license allows the holder to use a specific version of a given software program continually with payment of a single fee.

The ECJ ruled that the EU Software Directive 2009/24/EC, Article 4(2) applied:

The first sale of a copy of a program by the rights holder or with their consent in the EU exhausts the distribution right of that copy within the EU

This means multiple things

1. Software sold on the AppStore is provided with a perpetual software license
2. The moment apple sells this product to a consumer they have relinquished their rights and ownership of the software
3. The moment apple/reseller sells you an iPhone, both parties with the sale relinquished any ownership and control of any software included we in the sale such as iOS

This makes it hard to claim any rights when legally speaking it’s not theirs anymore.

 

[I7guy]

Not at all.
In USA first sales doctrine doesn’t cover software, but only tangible goods.

But in EU first sales doctrine or Exhaustion of IP rights and first sale exhaustion cover software and hardware equally.

What does Exhaustion of IP Rights mean?​

The “Exhaustion of IP rights” refers to the level of control an owner of intellectual property has over the distribution of his or her products.

Under the exhaustion of rights principle, once goods are sold in a specific market by the owner or with his or her consent, they will not be able to prevent the resale of such goods in that market by others – i.e., the exclusive right of sale becomes “exhausted.”
For example, national exhaustion considers that once a product has been put into circulation in the domestic market with the consent of the owner (the first sale), he or she cannot prevent its resale, claim a respective profit, or sue for infringement of IP rights.

Supreme Court of EU(CJEU) ruled that software supplied electronically can be considered “goods” and that, if the copy of the downloaded software is accompanied by a perpetual license for use, this must be considered “sale of goods”.

A perpetual software license is a type of software license that authorizes an individual to use a program indefinitely. Generally, outside of termination, a perpetual software license allows the holder to use a specific version of a given software program continually with payment of a single fee.

The ECJ ruled that the EU Software Directive 2009/24/EC, Article 4(2) applied:

The first sale of a copy of a program by the rights holder or with their consent in the EU exhausts the distribution right of that copy within the EU

This means multiple things

1. Software sold on the AppStore is provided with a perpetual software license
2. The moment apple sells this product to a consumer they have relinquished their rights and ownership of the software
3. The moment apple/reseller sells you an iPhone, both parties with the sale relinquished any ownership and control of any software included we in the sale such as iOS

This makes it hard to claim any rights when legally speaking it’s not theirs anymore.

So again, apple already threatened to leave the U.K. once. Telling Apple, guess what you are no longer entitled to your commission could provoke a severe response from apple. Who knows?