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

[laptech]

The point is iOS isn’t yours to do as you please. You license iOS from Apple. This is something you agree to the first time the device is turned on. You also have 7-14 days to return the device back to Apple for a full refund, no questions asked if you don’t agree with the license.

iOS has never been sold separately, is not open source or public domain and doesn’t belong to the user. It is licensed and by agreeing and continuing to use it, you are bound by it’s subsequent limitations, that you agreed to.

You absolutely can decide what you do with your device, that does belong to you. You are free to throw it in a lake, free to run over it with your car or free to give it away. If you have the expertise and want to install another OS, you are free to do that too. Apple is under no obligation to make it easy for you to do so however.

If a company builds an electronic device to be used on the consumer market and they do not want the consumers messing with the hardware, they put their own software on it but then say the software is licensed, which prevents the hardware from being messed with because to mess with the hardware has a tendancy to affect the software and because the software is only licensed it means it comes with a lot of restrictions.

The problem for Apple is that in some cases their licensing terms and conditions mean nothing, especially when it can be proven that a persons intention is just. The classic case in point being iphone jailbreaking which Apple fought heavily against using the iOS licensing T&C's as to why jailbreaking should be illegal but the courts went against Apple and said it was legal for an iphone owner to jailbreak their iphone.

Just because a company lists of a whole host of terms and conditions for it's hardware and it's software, it does not means these terms and conditions will hold up in a court of law and many times this has been the case.

So please, enough with this 'iOS is not yours to with as you please' nonsense.

 

[Sophisticatednut]

So-called “competition law” that is written to narrowly target a few very specific companies is anything but. DMA is the kind of anti-American nonsense I would expect out of the EU, but Competition and Innovation Act is an idiotic self-own by the US government. It doesn’t update existing antitrust statutes, it merely singles out a few big US companies for being ”bad” (eg Amazon can’t self preference but Target and Walmart can).

The Open App Markets Act is different, I think it has some flaws but it theoretically addresses some very problematic behavior by Apple. 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 AND do it in a way that doesn’t single Apple out from all other companies that profit from their IP and services.

You must read the reasoning. It’s not singling out companies it
seeks to address the negative consequences arising from platforms acting as digital “gatekeepers” to the internal market. These are platforms that have the power to act as private rule-makers and that can function as bottlenecks between businesses and consumers.

The Digital Markets Act builds on the horizontal Platform to Business Regulation, on the findings of the EU Observatory on the Online Platform Economy, and on the Commission’s extensive experience in dealing with online markets through competition law enforcement. In particular, the Digital Markets Act sets out harmonised rules defining and prohibiting unfair practices by gatekeepers and providing an enforcement mechanism based on market investigations. The same mechanism will ensure that the obligations set out in the regulation are kept up-to-date in the constantly evolving digital reality.

 

[AppliedMicro]

So, again, we agree then? There’s value in using Apple’s API’s?

Absolutely. That‘s why they‘re making tons of money from hardware sales and have so many paying developers.

It‘s just that the commission they‘re taking on in-app purchases is grossly disproportionate (too high) to their share of value delivered. I mean, if the 27% commission on non-Apple in-app sales they’re demanding here is a fair and reasonable figure, then they‘ve basically admitted they can do payment and tax processing for 3% or less of the transaction values (on an aggregated basis). It‘s also highly disproportionate to their charging only the yearly developer fee to carry free apps in their App Store.

In other words: if you agree with the notion that commissions are paying for use and „value“ of their IP, API, SDK and signing tools, then

1. they’re overcharging far too much on in-app purchases
2. and undercharging on free apps (probably below cost for many popular ones, even with the 99$ dev subscription)

Are companies free to set their pricing freely for different services and products, have loss leading products and services on one side and sky-high margins on others? I don‘t disagree.

But for Apple and Google and their market dominance and gatekeeping role, I am for legislation and regulation authorities to intervene for the benefit of the public, developer industry and innovation.

 

[Sophisticatednut]

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.

AppStore and play store are glorified traditional retail stores. Just digital

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.

No they se their acts as anti competitive and playing dirty.
Same reason you can’t throw sand in someone’s eyes in a boxing competition i or hit the guy in baseball who runs around the bases etc etc

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.

I 100% agree and everyone in EU agree that apple or any company is free to bankrupt themselves. EU have very little tolerance to save companies and will let the market fail, contralto USA who seems to love to save their too big to fail corporations from their mistakes.

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!!

That’s fine, something else will replace it it just as how apple replaced the old giants

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.

The EU commission is made of experts in their fields and aren’t elected politicians, but employed on their competence

 

[Maximara]

open shut case. In germany private property is yours to with as you wish and resell as modified as yo uwish

That was Psystar's argument but US court found out that this included "making multiple copies of OS X from its imaging station, and you just can't do that without permission". So Psystar (and if MacWorld was correct by extension the German company HyperMegaNet) was saying that First Sale doctrine allowed it to not only alter MacOS but to copy that version and let any old Johnny download it (remember that time MacOS was commercial):

According to a translation of an FAQ on its site, HyperMegaNet said it's on safe ground. "German legislation is in this case on the side of the final consumer," the company's site said, claiming that under German law, a license agreement is valid only if it was visible, and agreed to by the buyer, prior to purchase. "We are convinced of the fact that our product is legal in Germany."

I seriously doubt German law allows you to buy fewer copies of software than you go on to resale (ie make copies) but according you "In germany private property is yours to with as you wish" (sic) which by extension would include making more of that same item while making alterations (derivative works Systran v. European Commission, Case T‑19/07) and legally be able to tell the owner to pound sand regardless of what patents or copyright they have. So which is it?

"Creation of derivative works. This is part of copyright infringement, but we're going to break it out because it's a major key to the case. In order to boot OS X on a hackintosh, Psystar replaced the OS X bootloader, disabled and removed Apple kernel extensions, and added its own kernel extensions. That was enough variation from Apple's code to warrant a finding of copyright infringement all on its own -- Psystar was essentially selling a custom version of Apple's copyrighted code, and you're not allowed to do that without permission. What does that mean? It means that you can throw out all the arguments about EULAs and ownership and fair use, because Psystar's main business -- hacking OS X to run on non-Apple hardware -- is illegal."

Are you telling us what Psystar did is legal in Germany?!

 

[Maximara]

AppStore and play store are glorified traditional retail stores. Just digital

By that logic since Best buy and Walmart are "glorified traditional retail stores" and charge 30% Apple is totally entitled to their 30% Side note the article includes Gamestop and Amazon as "physical stores" - yes it is weird.

 

[Sophisticatednut]

The point is iOS isn’t yours to do as you please. You license iOS from Apple. This is something you agree to the first time the device is turned on. You also have 7-14 days to return the device back to Apple for a full refund, no questions asked if you don’t agree with the license.

There is not a single retailer in the whole of EU that will accept the return. They will laugh at your face and say too bad you opened it up and there is nothing wrong with it.

iOS has never been sold separately, is not open source or public domain and doesn’t belong to the user. It is licensed and by agreeing and continuing to use it, you are bound by it’s subsequent limitations, that you agreed to.

Untill apple proves it in court it’s just their opinion. And they have failed at it every time it’s challenged.

 

[Sophisticatednut]

That was Psystar's argument but US court found out that this included "making multiple copies of OS X from its imaging station, and you just can't do that without permission".

The thing is you don’t need permission to alter software. The only limitation is you can ONLY do it with your lawfully acquired copy. You can make multiple copies for private use. But you can ONLY sell your original and destroy the copies you have.

Essentially you just need to purchase a new license to circumvent it.

Example, I can buy an iPhone and jailbreak it an sell it as jailbroken.
If I could “purchase/download” iOS I could jailbreak it or modify the software and then sell the original copy

So Psystar (and if MacWorld was correct by extension the German company HyperMegaNet) was saying that First Sale doctrine allowed it to not only alter MacOS but to copy that version and let any old Johnny download it (remember that time MacOS was commercial):

Essentially the version altered is still yours. If you purchased a windows license and build a computer you could sell it even if you modified every windows version as long as you purchased every one of them before reselling it. In German only. Rest of EU B2B have other limitations

According to a translation of an FAQ on its site, HyperMegaNet said it's on safe ground. "German legislation is in this case on the side of the final consumer," the company's site said, claiming that under German law, a license agreement is valid only if it was visible, and agreed to by the buyer, prior to purchase. "We are convinced of the fact that our product is legal in Germany."

I seriously doubt German law allows you to buy fewer copies of software than you go on to resale (ie make copies) but according you "In germany private property is yours to with as you wish" (sic) which by extension would include making more of that same item while making alterations (derivative works) and telling the owner to pound sand regardless of what patents or copyright they have. So which is it?

No, as long as the derivative work is the original copy you bought you’re free to do what you want. You do need approval to make new copies and sell that copy

By that logic since Best buy and Walmart are "glorified traditional retail stores" and charge 30% Apple is totally entitled to their 30% Side note the article includes Gamestop and Amazon as "physical stores" - yes it is weird.

Well they are xD. Just not outside the store that’s the issue really.

Developers sett the price and apple takes 30% of the first provided copy.
If the price is 0, then they get 30% of that sold copy.

Or you could say apple purchases one copy from the developers and resell it to the consumer

 

[Sophisticatednut]

I seriously doubt German law allows you to buy fewer copies of software than you go on to resale (ie make copies) but according you "In germany private property is yours to with as you wish" (sic) which by extension would include making more of that same item while making alterations (derivative works Systran v. European Commission, Case T‑19/07) and legally be able to tell the owner to pound sand regardless of what patents or copyright they have. So which is it?

Absolutely you just need to purchase exactly the same amount that you sell. Then you can tell the and legally be able to tell the owner to pound sand regardless of what patents or copyright they have. In Germany

It means that you can throw out all the arguments about EULAs and ownership and fair use, because Psystar's main business -- hacking OS X to run on non-Apple hardware -- is illegal."

Are you telling us what Psystar did is legal in Germany?!

Yep, if Psystar was in Germany there wouldn’t be anything apple could do. Fair use doesn’t exist in EU. We have two extremely strong fundamental rights. Hence why almost every technological company in existence lobbied unsuccessfully against article 13

1: making a copy of someone else’s work and redistribute it always needs the copyright holder’s permission irrespective of how you modify it. Only media and art have some exceptions.

2: private property is absolute. When transfer of ownership is concluded there is nothing the original owner can impose as it’s not theirs anymore.

3: private property rights do not distinguish between goods. Car, potato, iPhone, furniture, tv, iOS, Firefox, software etc etc are all treated as private property.

Just as I can purchase anything, modify it and resell it. I just can’t recreate it, copy it and resell it. As that would be a breach of copyright of the original work and the rights to redistribute and creating more copies

 

[Maximara]

Developers sett the price and apple takes 30% of the first provided copy.
If the price is 0, then they get 30% of that sold copy.

Actually, at least in the US, it is now 15% up to US$1,300,000; 30% if you make more than that in a year. This is why I jokingly say Apple should just pull the 1960s US tax system - they are already part way there

 

[Maximara]

Absolutely you just need to purchase exactly the same amount that you sell. Then you can tell the and legally be able to tell the owner to pound sand regardless of what patents or copyright they have. In Germany

That wasn't the question. The question was was Psystar (which I remind you may have been run by a German company) selling more copies of the software than it purchased legal in Germany? HyperMegaNet who is said to have run Psystar claimed 'that under German law, a license agreement is valid only if it was visible, and agreed to by the buyer, prior to purchase. "We are convinced of the fact that our product is legal in Germany."'

Why word it that way if an EULA isn't work the change of electron state to post it? HyperMegaNet was basically saying if Apple's EULA had been accessible before purchase and agreed to by the buyer it would have been perfectly legal. Either the translation is wonked, German law was different back in 2009, or HyperMegaNet had no clue on what the law actually meant. If they were behind Psystar I would hazard it was the last option.

 

[Nuno Lopes]

So, again, we agree then? There’s value in using Apple’s API’s?

We always agreed with that. I suppose you also agree that there is value in the third party software programs. But it’s irrelevant.

The core of the controversy is if Apple is or not abusing its position of being the sole distributor of native software programs to inflate its value and deflate digital services value.

Take for instance Oranges. Now Oranges are relatively cheap, many distributors. Than someone comes and controls the delivery of Oranges because many people bought them smart homes … and starts demanding a revenue share of 30% in this context. Oranges can of course only be delivered to those homes using APIs provided by the distributor. Funny enough the people that buy the smart homes are the same people that usually buy Oranges … no customers are being created by the distributor … its an illusion … only the producer / creator (the digital services themselves) can create demand for their Oranges.

Then after the fact … we agree that there is value on those APIs because it couldn’t otherwise be delivered as well given the control to those smart homes.

So where is the actual value justifying the fee? In controlling the delivery to those smart homes. The value of the API is superseded by such control, reduced to irrelevancy in the discussion.

The question is … without such absolute control what would be the API value? Looking at other similar systems … comparatively to what it is being charged today by Apple not as much … really!!

So what it need to be relaxed to get the the APIs closer to its actual value and the digital services not have their value deflated? The controls over distribution.

This or a massive shortage Oranges in being delivered to those homes. Which will never happen, because this would be akin to Orange producer harming their customers. Not to mention, that if it was a concerted action between multiple Orange produces it could be illegal.

Hope it helps.

Cheers.

 

[Maximara]

We always agreed with that. I suppose you also agree that there is value in the third party software programs. But it’s irrelevant.

The core of the controversy is if Apple is or not abusing its position of being the sole distributor of native software programs to inflate its value and deflate digital services value.

Take for instance Oranges. Now Oranges are relatively cheap, many distributors. Than someone comes and controls the delivery of Oranges because many people bought them smart homes … and starts demanding a revenue share of 30% in this context. Oranges can of course only be delivered to those homes using APIs provided by the distributor. Funny enough the people that buy the smart homes are the same people that usually buy Oranges … no customers are being created by the distributor … its an illusion … only the producer can create demand for their Oranges.

The flaw here is that the market for Oranges is wildly diverse - much of it is via physical stores which charge a premium (50% to 70% of the retail price which goes to middlemen).

Along comes Premium Orange which charges a 30% rate and a year later comes OpenOrange which allows you use their service for free. Anybody that produces Oranges who doesn't live under a rock knows Premium Orange charges 30% while OpenOrange is effectively free but they go to Premium Orange because of superior services, quality control, and they provide the boxes and handle the money. Customers follow suit - those who want items with the reputation for superior service and quality control get Premium Orange while those who want most selection go with OpenOrange.

The physical stores follow Premium Orange's lead but only for Oranges, bananas and other items are still at 50% to 70%.

Then somebody has a hissy fit because they tried to deceive Premium Orange and stir up the movement that Premium Orange must be just like OpenOrange even if the buying customers want Premium Orange to retain its relatively closed market.

 

[Sophisticatednut]

That wasn't the question. The question was was Psystar (which I remind you may have been run by a German company) selling more copies of the software than it purchased legal in Germany? HyperMegaNet who is said to have run Psystar claimed 'that under German law, a license agreement is valid only if it was visible, and agreed to by the buyer, prior to purchase. "We are convinced of the fact that our product is legal in Germany."'

If they actually sold more OS X copies than they had purchased then yes that would be copyright violation

Why word it that way if an EULA isn't work the change of electron state to post it? HyperMegaNet was basically saying if Apple's EULA had been accessible before purchase and agreed to by the buyer it would have been perfectly legal. Either the translation is wonked, German law was different back in 2009, or HyperMegaNet has no clue on what the law actually meant. If they were behind Psystar I would hazard it was the last option.

Because apple said they are breaking the EULA AND LICENSE agreement. And in 2009 we didn’t have legal cases that showed that law of property covered software or had the Supreme Court provide interpretation of EULA not being relevant

 

[Sophisticatednut]

So, again, we agree then? There’s value in using Apple’s API’s?

Yep. Unfortunately APIs aren’t copyrighted inn EU. So their value is irrelevant

 

[Sophisticatednut]

The flaw here is that the market for Oranges is wildly diverse - much of it is via physical stores which charge a premium (50% to 70% of the retail price which goes to middlemen).

Along comes Premium Orange which charges a 30% rate and a year later comes OpenOrange which allows you use their service for free. Anybody that produces Oranges who doesn't live under a rock knows Premium Orange charges 30% while OpenOrange is effectively free but they go to Premium Orange because of superior services, quality control, and they provide the boxes and handle the money. Customers follow suit - those who want items with the reputation for superior service and quality control get Premium Orange while those who want most selection go with OpenOrange.

The physical stores follow Premium Orange's lead but only for Oranges, bananas and other items are still at 50% to 70%.

Then somebody has a hissy fit because they tried to deceive Premium Orange and stir up the movement that Premium Orange must be just like OpenOrange even if the buying customers want Premium Orange to retain its relatively closed market.

Why is it that you always conflate store purchases with in app purchases?
IAP do not have anything to do with apples App Store. Apple just decided that anything on iPhones belong to them

 

[I7guy]

Why is it that you always conflate store purchases with in app purchases?
IAP do not have anything to do with apples App Store. Apple just decided that anything on iPhones belong to them

False statement. Apple decided that by using their ip they were going to charge a fee.

 

[Sophisticatednut]

False statement. Apple decided that by using their ip they were going to charge a fee.

Apple can’t decide this. On something the law doesn’t recognize as their property.
Their API is not covered by copyright in EU

 

[Maximara]

Why is it that you always conflate store purchases with in app purchases?

Why is it that you always ignore the purchases of the apps themselves which is part of this and what the example I was replying to was clearly thinking about - as outside an SCP article you don't purchase things through an Orange?

 

[Nuno Lopes]

The flaw here is that the market for Oranges is wildly diverse

That is not the flaw, it’s actually the reason why the App Store so extremely powerful when compared with Game Stores (leave abusive to courts and regulators).

If the Digital Services / Oranges where specific in kind, such as Game and Game Services probably would not be much of a problem … change your diet just don’t play games. But no, it surrounds any kind of business on the planet … from games to … … child care?

It’s a extremely large fishnet where digital services are the fish … and soon little will know other reality but but the FishNet. Born and bread in the fishnet. In fact certain fish around here already adopted the fishnet mentality without noticing it.

What’s the size of this fishnet? 50% of American mobile phone users … common people … for now … that make up the fishnet and are the fish. That is just Apple. Add Play Store … The reason why Google still has not closed that door … well it does control Android enough.

PS: The Open Oranges you talk about aren’t the Oranges but other fishnets … to
competed with the App Store fish net would need to “replicate” a product tangent it … yet the thing that gives reason to its existence … they would need a iPhone like product … that is marketed as a pocketable Video camera that makes you look pretty at points … the effective God product.

 

[I7guy]

Apple can’t decide this. On something the law doesn’t recognize as their property.
Their API is not covered by copyright in EU

Their apis are their intellectual property. There are agreements in place covering this. EU can’t snap it’s fingers and say, “nope it’s not yours”.

 

[Sophisticatednut]

Why is it that you always ignore the purchases of the apps themselves which is part of this and what the example I was replying to was clearly thinking about - as outside an SCP article you don't purchase things through an Orange?

I’m not. The purchase of the app fulfills the first sale doctrine
The app use 0 of apples IP( APIs isn’t copyrighted in EU)

Things being purchased through their own apps doesn’t change anything. It would the same thing if every bag of oranges had phone number inside to purchase more from the farmer.

 

[Sophisticatednut]

Their apis are their intellectual property. There are agreements in place covering this. EU can’t snap it’s fingers and say, “nope it’s not yours”.

EU haven’t snapped their fingers. This has been law for decades. And courts have agreed with it.

if manufacturers of airplanes and their complicated programming and hardware have lost this argument, do you really think apple can win it with their phone?

Accessing hardware and software interfaces. Doesn’t matter how you do it you can’t copyright it. Only thing you can say is Samsung can’t take iOS code and put it in their phone. But that’s it

 

[Sophisticatednut]

Their apis are their intellectual property. There are agreements in place covering this. EU can’t snap it’s fingers and say, “nope it’s not yours”.

And apparently USA Supreme Court agrees

Google LLC v. Oracle America, Inc.​

The ruling in 2021 concluded use of the APIs is covered under fair use and not a breach of copyright. So the court did not find it relevant if APIs can be copyrighted
So control is not possible over fair use

Only difference to EU, is the fact fair use do not exist. You must always require the consent of the owner, but that APIs can’t be copyrighted and therefore no consent or control is possible.

So no agreements are violated and no complaints have been filed by USA in decades over it.

 

[I7guy]

And apparently USA Supreme Court agrees

Google LLC v. Oracle America, Inc.​

The ruling in 2021 concluded use of the APIs is covered under fair use and not a breach of copyright. So the court did not find it relevant if APIs can be copyrighted
So control is not possible over fair use

Only difference to EU, is the fact fair use do not exist. You must always require the consent of the owner, but that APIs can’t be copyrighted and therefore no consent or control is possible.

So no agreements are violated and no complaints have been filed by USA in decades over it.

Again, show me where apple is not collecting fees on IAP. So this ruling isn’t applicable.