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

[djphat2000]

Taxis either don’t have monopolist (or duopolist) power. Or it’s legally tolerated by concessions.

What is the option to a Taxi? You can drive your own car. You can take public transportation. You can walk.
It's not the same issue we are treating Apple and Google with. Instead of someone else creating a new device/OS/App store. Or other option, or do without. We want the equivalent of taking a taxi and pay for it with Uber.

Don’t be ridiculous. Division of labour has been around in human economies since the Stone Age. It’s been a cornerstone of human economic history and the evolution of modern civilization.

What does this have to do with anything?

Competition law isn’t about being at fault. Neither is laws such as the EU DMA (and the US‘ similar proposal).

They are treating it as such. We fault Apple for the success they have had in dominating the mobile market. And don't like it. Cause we don't like it. Not because it's wrong. Again, feelings and opinions. What Apple is doing is not illegal. At least not until someone makes it so, and a court backs that up.

You want competition, well freaking compete! Stop complaining and go to Sony, Ericsson, Nokia/Microsoft, BlackBerry and tell them to compete. Not this I want another way to pay for my apps, and I don't care about how difficult that is to do properly or care how you do it so long as you do it!

You should float that idea with Timmy.

I'm sure he's floating it. Cause, at the end of the day. Lets be real. iPhone didn't come out with the hope of anyone else apps making it successful (My business doesn't depend on your business). They simply wanted better than what existed at the time. They have all the tools now to make all the apps one would need on a phone. Again, it's a PHONE!!. If Apple pulls out in such a fashion, then your all left with Android. Good luck with that.

Forgoing not only all app sales but also compromising the iOS user experience when you want to sell iPhones for billions of dollars?

YUP! Forgo it. Can't make me offer anything if your also going to control how I charge for it, and make it work the way it was intended to work. Your not a programer and you don't work for my company. So, if you want these rules to apply and I don't agree with them. My choice is to not allow development anymore. I don't have to continue to do so. YES, I can lose money in the process. YES I can fail as a company. I'm allowed to do that. Can't force me to exist. So bugger off, and choose Android as your ONLY DEVICE!!

Such retaliatory phantasy is the equivalent of shooting yourself in both your own feet - with only one shot.

It certainly could. But I'm an American. I get to do that. I believe firmly that a business should be able to do as it wishes so long as it isn't breaking any laws or acting in some immoral way. When Apple is wrong I expect them to pay for that. When the are right I expect them to profit from it. I'm personally not treating Apple as a monopoly. I can pick another device if I thought that way, or did not agree with having just one AppStore or more than one way to pay. The gov't of the world seem to think differently. While not knowing **** about anything when it comes to how this tech works. Just have more competition. What does that mean? Not one gov't has set a price as to charge no more than this amount. Or can come up with any idea on how to make 3rd party payments work and still have Apple get commission on purchases. Or how to properly secure a 3rd party AppStore. When doing so on first party stores are hard enough.

We literally live in a world that is under constant bombardments to hacks and cyber threats 24/7/365.25 and yet they want to "open it up some more please". So No. I don't agree with this BS thought of having more choice forced in this manner. Sorry not sorry.

 

[I7guy]

Thank you for correcting @I7guy. Sit. You left out that everything that digital services created is their IP, including their Apps. I wonder why.

Don’t understand where is the doubt considering that this IP ownership questions come over and over again as a counter argument for regulation.

PS: Apple indeed bring their contributions to the market place. But it’s not the only one. If there weren’t for third party digital services contributions, iPhones and Android devices wouldn’t have the importance it has to today in peoples daily life’s. Take for instance Windows Phones … it’s a case study where the lack of third party contributions largely lead to its demise.

The idea that some people here might have that this is a “one man show” and everyone else is a bitch … it does not look like it will end well … will see how that goes.

Synergies.

The apps call Apple's ip.

 

[djphat2000]

IOS isn't a public utility and shouldn't be regulated as such. And, imo, consumer facing electronic device manufacturers shouldn't be regulated on popularity, especially when their businesses are run legally.

Absolutely.

 

[hans1972]

APIs aren’t covered under copyright.
Developers aren’t using any IP that apple owns. Essentially undermining apple’s claim to revenue split, royalties(you can’t have a royalty on nothing)

The implementation code of an API is covered by copyright unless the code is extremely simple.

Computer programs — legal protection | EUR-Lex

eur-lex.europa.eu

 

[hans1972]

Psystar lost on First Sale doctrine because it violated the DMCA in altering those copies something that is required to make a hackintosh work. This is why I say DMCA and EUCD must be substantially different.

You have the same thing in EUCD with regards to changing computer programs.

"Exclusive rights of the rights-holder

The holder of the rights to a computer program may do, or may authorise others to do, the following:

• the permanent or temporary reproduction of the program, or a part thereof;
• the translation, adaptation, arrangement and any other alteration of the program;
• the distribution of the programme:"
  

and

"Special measures of protection
[...]

• putting into circulation or owning, for commercial purposes, any means whose sole purpose is to allow the unauthorised removal or bypassing of any technical protection device.

Computer programs — legal protection | EUR-Lex

eur-lex.europa.eu

 

[hans1972]

Thank you for correcting @I7guy. Sit. You left out that everything that digital services created is their IP, including their Apps. I wonder why.

Don’t understand where is the doubt considering that this IP ownership questions come over and over again as a counter argument for regulation.

PS: Apple indeed bring their contributions to the market place. But it’s not the only one. If there weren’t for third party digital services contributions, iPhones and Android devices wouldn’t have the importance it has to today in peoples daily life’s. Take for instance Windows Phones … it’s a case study where the lack of third party contributions largely lead to its demise.

The idea that some people here might have that this is a “one man show” and everyone else is a bitch … it does not look like it will end well … will see how that goes.

Synergies.

It's just that a developer has no way to get any of their apps into the App Store or onto an iOS device without using Apple's IP. That's why Apple are in a position to demand money.

 

[Abazigal]

It's just that a developer has no way to get any of their apps into the App Store or onto an iOS device without using Apple's IP. That's why Apple are in a position to demand money.

Because Apple makes the hardware and OS. They are under no obligation to make their platform available to any Tom, Dick and Harry for free.

 

[CthuluLemon]

I thought the justification on the fee was to pay for the maintenance and further development of the IAP system. What’s Apples argument that these revenue streams are different from apps that get revenue from third party ads? Genuinely curious here , isn’t their an argument by doing this that Apple is targeting one type of revenue and not another? What makes Apple entitled to this and not the other?

 

[huge_apple_fangirl]

I thought the justification on the fee was to pay for the maintenance and further development of the IAP system. What’s Apples argument that these revenue streams are different from apps that get revenue from third party ads? Genuinely curious here , isn’t their an argument by doing this that Apple is targeting one type of revenue and not another? What makes Apple entitled to this and not the other?

The 30% cut pays for IAP as well as Apple's various costs in running a successful mobile platform, as well as a fee to Apple to access the extremely valuable userbase it has built up. The costs of each of those parts is unknown, but Apple has now shown that it values IAP at 3% of that fee.

In regard to free/ad-supported apps, Apple could demand a cut of those as well but it chooses not to. This is because the App Store's design allows for a flourishing app platform where anyone can easily publish a free app for just $99/year and have Apple worry about the rest. The very small minority of game devs that make billions on micro-transactions effectively subsidize the rest of the store. It's not that Apple believes it isn't entitled to the profits of ad-supported apps, it's that Apple has chosen a deliberate model that benefits small devs and Apple at the expense of large, profitable devs.

 

[djphat2000]

Fairest outcome I see is Apple gets a commission but at lower, FRAND negotiated rate- basically they deserve compensation just like everyone else, but iOS is just “too important” to let them dictate the terms unilaterally.

they need to figure out what that rate is. And then it will be challenged in court.

 

[huge_apple_fangirl]

they need to figure out what that rate is. And then it will be challenged in court.

Yes, it will be very, very complicated, especially since Apple will be as uncooperative as possible. But ultimately, Apple wants the full 30%, developers want 0%, and no one is going to be happy. I think the fairest outcome is devs can use their own payment processors or app stores, as they have demanded, but Apple still gets a commission no matter where the transaction takes place, albeit at a lower rate negotiated between Apple, developers, and regulators. That will at least give each party some of what it wants.

 

[Nuno Lopes]

It's just that a developer has no way to get any of their apps into the App Store or onto an iOS device without using Apple's IP. That's why Apple are in a position to demand money.

Neither does Apple have a way to their products and services into users hands without using others IPs. That point is basically mute.

The only difference between Apple practices over others and others over Apple is that others do not have control over distribution of their products or worst require Apple to embed a device into their products to fully control billing as Apple does. Effectively creating a wall around mobile properties owned by 50% over American users. I mean, properties, things actually by people owned, not just licensed for use.

This has ripple effects all over the place. If eventually say others believe that Apple is in breach of contract, they need to take the firm to court to stop the sale of their products. Apple does not need to do that at all, they can simply do whatever with a flip of a switch. This is a huge difference in how businesses traditionally work, in the relationship of power between digital services using Apple’s components and the firm using others. There is indeed a transference of power with this practice that is way different to anything seen before, its no way complementary as you suggested to another poster. While being a interested party are also the Judge and the Executionair in the business relationship … welcome to the far west.

Some courts might find that an abusive use of technology. Hopefully will, as I’m afraid that if this catches on and starts spreading to future tech, smart cars, smart homes, bionics so on and so forth it will be very very bad for people but this huge corporations.

I’ve been suggesting solutions where exclusive software distribution practices like the ones of Apple are regulated. this is truly the main power the App Store has. But it seams that some people feel that whatever IP they have is superior and overrides whatever others have. Maybe the only solution for the moment to restore some power balance in the digital service space and device manufacturers is indeed Sideloading … who knows. Software programs are fundamental components in the digital economy and highly dependent on devices owned by customers.

 

[AppliedMicro]

Designing an “antitrust“ law that only targets a few American companies is by definition discriminatory. And the EU has a strong history of trying to go after US tech giants specifically.

The big tech giants just happen to come from the U.S. nowadays.
I don‘t see that it‘s got anything to do with the country per se.

The problem is, as I said earlier, that forcing Apple to allow sideloading will not stop it from collecting a commission. If they want this bill to actually work as intended they need to account for that

What makes you think they didn‘t?

„those gatekeepers should not be allowed to impose general conditions, including pricing conditions, that would be unfair or lead to unjustified differentiation. Pricing or other general access conditions should be considered unfair if they lead to an imbalance of rights and obligations imposed on business users or confer an advantage on the gatekeeper which is disproportionate to the service provided by the gatekeeper to business users or lead to a disadvantage for business users in providing the same or similar services as the gatekeeper“

And that‘s only part of it.
Escaping that will be very hard for Apple.

Apple does not force nor could it force any developer to make an App. So why should it work the other way?

Having an app for the two or three most popular mobile OS platforms is - for many - dictated by the realities of their market and competition. You‘re just not going to operate an online bank or internet dating service by forgoing one of the 2 most popular smartphone platforms and app stores and expect to compete well in the market.

And, imo, consumer facing electronic device manufacturers shouldn't be regulated on popularity, especially when their businesses are run legally.

Yeah, well… rather sooner than later running them as they do today may not be legal anymore - it may become illegal.

 

[AppliedMicro]

I think the fairest outcome is devs can use their own payment processors or app stores, as they have demanded, but Apple still gets a commission no matter where the transaction takes place

Fairest outcome I see is Apple gets a commission but at lower, FRAND negotiated rate- basically they deserve compensation just like everyone else

Why and how much?
I mean, the premise „just like everyone else“ is simply not true, is it?

Do they get a commission on every app made for and running on macOS?
Does Microsoft get a commission on every app made for and running on Windows?
Does Google get a commission on every app made for and running on Android?

 

[I7guy]

[…].

Yeah, well… rather sooner than later running them as they do today may not be legal anymore - it may become illegal.

Maybe or maybe not.

 

[AppliedMicro]

What is the option to a Taxi? You can drive your own car. You can take public transportation. You can walk.

Yes. And all of them are regulated. All except walking are also regulated on pricing and access.

What does this have to do with anything?

You were the one claiming a business should „stand on its own“, or it would be a bad one.
Reality is: many important businesses are depending on someone else.

iPhone didn't come out with the hope of anyone else apps making it successful (My business doesn't depend on your business)

I‘d argue it did. They just didn’t have the developer tools ready at launch. And yes, maybe Steve wasn‘t 100% convinced. Everything else was just largely their PR spin on it.

If Apple pulls out in such a fashion, then your all left with Android. Good luck with that.

Yeah, so? Apple won‘t. But even assuming they did, we‘d use Android.
It‘d mostly hurt Apple more than anything else.

YUP! Forgo it. Can't make me offer anything if your also going to control how I charge for it, and make it work the way it was intended to work. Your not a programer and you don't work for my company. So, if you want these rules to apply and I don't agree with them. My choice is to not allow development anymore

While that could be yours, the reality is that Apple is a profit-oriented listed company that will put profits over „sticking it to them“ as a matter of principle.

They company’s not run by armchair jocks such as me and you

 

[huge_apple_fangirl]

Why and how much?
I mean, the premise „just like everyone else“ is simply not true, is it?

I don’t know the exact rate. Ideally Apple would negotiate with regulators and developers over this rate. In reality Apple will fight to the death for the full 30%.

“Everyone else”- anyone who lets others use their software IP on a commission basis, such as Epic with Unreal Engine. If this is a legitimate model, Apple should not be barred from demanding the same from those who use its APIs and tools, as well as giving it some amount of compensation for investments into iOS and notarization for sideloaded apps.
Given the essential role iOS plays in digital commerce, Apple may not be allowed to charge any rate it wants but it's well within is rights to charge something. And as I’ve said before, no regulator has ever went on the record and said Apple is not entitled to a commission.

Do they get a commission on every app made for and running on macOS?
Does Microsoft get a commission on every app made for and running on Windows?
Does Google get a commission on every app made for and running on Android?

The fact that Apple chooses not to charge a commission on macOS doesn’t negate their right to do so on iOS. Just like Microsoft has a commission on Xbox but not Windows.
(Although, Apple charging a commission for commerce outside the Store could allow for the possibility of them doing it on macOS, although I doubt they would. The market wouldn’t bear it.)

 

[Sophisticatednut]

That's not uncommon at all and not illegal.

Take the insurance business. A lot of large insurance companies contracts with smaller companies (agents) to sell insurances on their behalf. Here in Norway it's not uncommon for that agent to receive a provision for all new insurances that customer gets for the first year or two even if they, the agent, is not involved in all the sales.

So if the agent does acquire a new customer on the behalf of the insurance company they might get 50% of the insurances they were able to sell and maybe 10% of all other insurances (even if they were not involved) for the first year.

This was determined by contract which both parties agreed to. Businesses in EU have wide latitude in deciding how their contracts are constituted.

Important distinction is sale of services aren't regulated like goods. iOS's apps are classified as sale of goods.

And this you describe is not impacted by first sale exhaustion(this cover IP and Copyright).

 

[bb9]

Did people really expected free rent, that Apple will let you use their ecosystem, their HD SW for free? If you want to sell your underwear at Mary’s, you have to give Macy’s a cut and they decides what that is going to be.

 

[theotherphil]

I believe that apps - and in-app content and services - created by a developers fundamentally belong to them: the developer that made and created the. They're not Apples "own product". And neither is an in-game item or subscription. Not even if Apple found clever contractual and technological means to muscle themselves in between me and the app developer (by way of their T&C and threatening to withdraw apps from the store) that I want to buy them from.

Developers literally sign an agreement, which on the first couple of pages state that they authorise Apple to become the sole agent for the marketing and distribution of their app and any content provided in the app by way of IAP. IAP doesn’t just handle payment processing….it is the mechanism that must be used for unlocking additional content (read the developer agreement, it’s all in there).

Page 1-2…..they can’t even claim that they didn’t read it all.

What sort of person or company enters into a legally binding contract that they don’t agree with? Page 1 is where you say “you know what, I don’t agree with this….I’ll develop for another platform”.

As a developer, I am happy to take 70%. Apple do way more than payment processing….the convenience alone is worth it to me. The only people complaining are a handful of devs who want everything for free and a heap of Android users with no idea how businesses work/ want to see Apple fail at all costs.

 

[theotherphil]

Whatever the definition that Epic wanted to use, the court said, Apple could possibly be a monopolist or act as one.

It's just not been proven that they do/are.

That claim can be made of any business. The burden of proof is on the accuser…and as yet, nobody has provided evidence of Apple being a monopoly.

 

[Maximara]

You have the same thing in EUCD with regards to changing computer programs.

"Exclusive rights of the rights-holder

The holder of the rights to a computer program may do, or may authorise others to do, the following:

• the permanent or temporary reproduction of the program, or a part thereof;
• the translation, adaptation, arrangement and any other alteration of the program;
• the distribution of the programme:"

and

"Special measures of protection
[...]

• putting into circulation or owning, for commercial purposes, any means whose sole purpose is to allow the unauthorised removal or bypassing of any technical protection device.

Computer programs — legal protection | EUR-Lex

eur-lex.europa.eu

Per the Directive 2009/24/EC you cite and the fact 'Installing the MacOS on anything but a genuine Macintosh can't be done without hacking macOS, so it's a violation of copyright.' it should be illegal to sale Hackintosh computers (ie PCs with the MacOS preinstalled) in Germany. For me, looking for Germany, Hackintosh produced HyperMegaNet UG (PearC) from 2009.

At the time (and even now) information was fragmentary and contradictory. One article said PearC used a completely unmodified copy with software allowing to to be installed (which as you have stated Apple couldn't do anything about) while another stated they preinstalled the MacOS (which would have been illegal). Yet another article claimed "Psystar, run by HyperMegaNet, based in Wolfsburg, Germany, currently ships to 23 destinations including the UK via delivery firm DHL." which if true raises some questions about what was going on and throws the whole legal claim in the dumpster under both the DMCA and EUCD making Apple's EULA irrelevant.

 

[theotherphil]

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.

So why do they even need to be in the App Store then? The reason being is developers see value in what the App Store offers and feel compelled to be in there.…they just don‘t want to pay. If you don’t need or want to use any of Apple’s libraries or API’s, you can create a web app, free of charge and even use Apple Pay/ third party payments within the Web App and NOT PAY APPLE A DIME.

But no, devs want to be in the App Store, because it adds value.

 

[theotherphil]

Are you saying the Netflix or Facebook apps, just as examples … are Apple IP? How far goes the definition of Apple IP?

Here’s a genuine question….why does FaceBook/ dating apps need a native app? They work perfectly well on Safari, including microphone/ camera etc. FaceBook/ dating apps choose to be on the App Store because it adds value. It is more than payment processing. They choose to be on the App Store because Apple’s API’s add value to their product that they don’t want to pay for.

 

[AppliedMicro]

What sort of person or company enters into a legally binding contract that they don’t agree with?

The ones that feel compelled to.

I could ask back: what sort of company presents a contract that stipulates that they’re entitled to 30% commission of every „aftermarket“ business (such as on gaming apps)?

But no, devs want to be in the App Store, because it adds value.

So much in fact, that they (feel they) don‘t have a choice.
It‘s not like there’s even five other relevant platforms stores they could compete through, is there?
So not being on the App Store or Play Store would impede their ability to compete.

But talking about the „value“: What‘s the „value“ that Apple adds on in-app purchases or subscriptions? They payment processing and tax processing, yes. But not much, otherwise software-wise. It‘s merely a switch that gets flipped.

With their 27% commission on outside sales they’re now demanding, they couldn’t have made it clearer:
You‘re mainly paying the privilege of Apple contractually allowing it. And access to customer base.

Here’s a genuine question….why does FaceBook/ dating apps need a native app?

We both know that, why and how native apps are superior to web apps, don‘t we?

(as a side note: for Facebook, I‘d actually wish they offered their messenger as a web app and didn‘t force people to use an app)