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

[robco74]

True, But Eu don't care if a company is sued in US by investors. As it's still in the USA and doesn't affect EU.

probably considering EU have very strict privacy laws and do not like any data to be available to USA considering the nonexistence of data protection laws. Facebook recently threatens to leave over it and EU figuratively said yes, please take your **** and go.

oh it's already targeted in a different legislation, but more in the principle that messaging services should be able to communicate with each other that aren't number dependent, such as WhatsApp, iMessage, signal etc. should allow users to send to each other. but we will see when the legislation is finalized


and apple takes a cut of sales that go through app store, they do not sell a service to give access to iPhone or iPad operating systems. apple dont own the device consumers use, they do.
The line comes at IAP as these do not use apples services to provide extra content to users.
apps that already exist on a user's iDevice is outside of Apples jurisdiction

Right, but Apple operates in the US and is also subject to US law. The EU can't legislate that away. It may not be a concern for you, or the EU, but it is a concern for Apple.

What I mean is that Apple will have a separate data center just for EU customers that only provide access to the services Apple is allowed to offer in the EU. I'm assuming that Apple will soon be forced to shut down Music in the EU as well in order to benefit Spotify, and perhaps other services like Fitness+, News+, and possibly even iCloud.

From what I gather, at some point Apple and Google will only be allowed to sell handsets with a minimal OS. When setting up the device, the consumer will be presented with a list of app stores, from which they can download all apps and any services they want to subscribe to, but Apple and Google will be barred from providing any ancillary services and will only be able to make money on the initial sale.

 

[Sophisticatednut]

If they truly believed in the spirit of the legislation, they should open up the Xbox to other app stores. I should be able to purchase Xbox games without giving MS a cut of the sale, right?

Well, you already can do this. You can purchase physical games, or games Keys online(game keys don't pay anything to Microsoft) and there is no legislation currently that will mandate an extra app store on the Xbox. or any ability for Microsoft to prevent it

And some important differences is that games and DLC is all sold on the store and not thou the game.

And at least they did it on the Windows store.
But i see no problem if i one day steam could sell Xbox games

 

[robco74]

Well, you already can do this. You can purchase physical games, or games Keys online(game keys don't pay anything to Microsoft) and there is no legislation currently that will mandate an extra app store on the Xbox. or any ability for Microsoft to prevent it

And some important differences is that games and DLC is all sold on the store and not thou the game.

And at least they did it on the Windows store.
But i see no problem if i one day steam could sell Xbox games

That is completely inaccurate. Microsoft charges a licensing fee for physical games as well, otherwise you can't put the logo on the box. Even if you purchase a digital key elsewhere, fulfillment still happens via MS and their store, and they get a cut. All games must come through and be approved by Microsoft before being allowed on the platform.

 

[Sophisticatednut]

Right, but Apple operates in the US and is also subject to US law. The EU can't legislate that away. It may not be a concern for you, or the EU, but it is a concern for Apple.

why would EU even try to legislate it away? apple's concern aren't of importance. the markets, competitors and consumers concern is.

What I mean is that Apple will have a separate data center just for EU customers that only provide access to the services Apple is allowed to offer in the EU. I'm assuming that Apple will soon be forced to shut down Music in the EU as well in order to benefit Spotify, and perhaps other services like Fitness+, News+, and possibly even iCloud.

There is no reason for any of those services to be banned or forced to be shut down. Just because apple isn't allowed to abuse its position doesn't mean things will be removed. And no separate datacenter is needed to provide services, that's just absurd. Only thing apple need to do is keep EU consumer info inaccessible by the US government

From what I gather, at some point Apple and Google will only be allowed to sell handsets with a minimal OS. When setting up the device, the consumer will be presented with a list of app stores, from which they can download all apps and any services they want to subscribe to, but Apple and Google will be barred from providing any ancillary services and will only be able to make money on the initial sale.

there is nothing pointing to ancillary services to ever be prohibited. Everything is targeting digital stores.

It could just as well be that Apple Inc would have to be broken up from Apple App Store Inc as a separate legal entity independent of Apple Inc in the worst case scenario. This would obliterate all problems' apple have.

But in all likelihood its just that apple will need to stop abusing the market and stop using anticompetitive practices

 

[Sophisticatednut]

That is completely inaccurate. Microsoft charges a licensing fee for physical games as well, otherwise you can't put the logo on the box. Even if you purchase a digital key elsewhere, fulfillment still happens via MS and their store, and they get a cut.

ot at all. The licensing fee is for using Microsoft copyrighted material such as their logo etc., but that's not a sales commission.
You are free to check G2A, they sell Xbox, PlayStation and Nintendo keys and don't pay them anything.
The key is just proof of ownership, nothing inside the key provides information of the price.

All games must come through and be approved by Microsoft before being allowed on the platform.

On the store, you can still Homebrew on it and install custom games and emulators. They just don't provide a way to install anything outside the store, and the developer tools are extremely expensive.

And I don't understand why you're arguing this, they aren't doing anything anticompetitive, so there is likely nothing regulators can do about it

 

[huge_apple_fangirl]

Exactly. What people outside the US may not understand is that under US law, Apple is legally obligated to its shareholders to do anything and everything they can to preserve App Store revenue. If they acquiesce, they can be sued in US court by their own shareholders.

The whole "fiduciary duty to maximize shareholder value" has been way overblown from Dodge v. Ford Motor Co.: https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.. They can't be sued. And long-term, destroying relationships with devs and regulators is not necessarily good for Apple shareholders.

 

[robco74]

why would EU even try to legislate it away? apple's concern aren't of importance. the markets, competitors and consumers concern is.

There is no reason for any of those services to be banned or forced to be shut down. Just because apple isn't allowed to abuse its position doesn't mean things will be removed. And no separate datacenter is needed to provide services, that's just absurd. Only thing apple need to do is keep EU consumer info inaccessible by the US government

there is nothing pointing to ancillary services to ever be prohibited. Everything is targeting digital stores.

It could just as well be that Apple Inc would have to be broken up from Apple App Store Inc as a separate legal entity independent of Apple Inc in the worst case scenario. This would obliterate all problems' apple have.

But in all likelihood its just that apple will need to stop abusing the market and stop using anticompetitive practices

Right, but Apple's concerns matter to them. If it comes down to choosing between operating in the US, where they have a much larger marketshare and much more revenue, opposed to the EU, the EU will lose. The point is that Apple has to exhaust any and all means available to them to fight this ruling, otherwise they risk getting sued in the US. They cannot simply roll over and take it, else they get into legal trouble in the US.

If Apple is forced to keep EU consumer data separate, as they are with China, then having a dedicated data center located within the EU is the simplest way to do that and would make it easier for the EU to audit and pull data on its citizens. Apple already complies with these sorts of restrictions for China, India, and other countries that have similar laws.

As for not being able to offer other services, that's coming from the US, not the EU Given all the headaches, spinning off IS&S into a separate company, or dissolving it and liquidating the IP might be the way to go. They'll take a hit for sure, but they'll still make plenty of money selling hardware. They just won't be able to offer, or it won't be worth it to offer, anything beyond that since any additional software and services will be subject to intense scrutiny.

As for the Xbox analogy. If Apple charged a 30% licensing fee for iOS apps, would that then be acceptable?

 

[AppliedMicro]

I'm assuming that Apple will soon be forced to shut down Music in the EU as well in order to benefit Spotify
(...)

Apple and Google will be barred from providing any ancillary services and will only be able to make money on the initial sale.

There is absolutely nothing to support that assumption. Not in the DMA proposal, not in policital discourse. What is quite likely though: That lawmakers and regulators demand and ensure a level playing filed for such ancillary services. By prohibiting steering users towards Apple Music or Apple Arcade by giving them preferential treatment on-device and pestering user with free trials on-device.

I've never shown any inclination towards subscribing to Apple Music. I've used my phone regularly to play locally saved on it. And my pre-installed Music today still looks like this:

 

[turbineseaplane]

Related to above ^^

What's so maddening about Apple of the last decade and the "services push" is that they've totally deviated from "great user experience" as a first principle.

It's objectively an awful experience - one we used to deride other companies for - to litter the operating system with ADs and constant nags (badges and the like) for all the Apple services.

It's just total s*** -- and all done in "service" of Apple Services Revenue

The services push is ruining their products and brand in many key ways.

 

[robco74]

There is absolutely nothing support that assumption.

What is quite likely though: That lawmakers and regulators demand a level playing filed for such ancillary services.
I.e., prohibiting steering users towards Apple Music or Apple Arcade by pestering them with free trials on-device.

I've never ever shown any inclination towards subscribing to Apple Music.
Yet when I want to play locally saved music on my phone, my pre-installed Music app looks like this:




View attachment 1956663

So should the free trials be banned? The messaging? Both?

 

[huge_apple_fangirl]

I see that Microsoft is, unlike Apple, trying to lead on this a bit and get ahead of regulatory issues.
Smart

https://twitter.com/x/status/1491461645901598726

This is just good PR from Microsoft, just like the redesigned Windows Store. Microsoft never had a successful app store, so it costs them nothing to open theirs up. (Notice they still charge a commission for Xbox.)

Still, it wouldn't kill Apple to learn from this. Microsoft has made concessions that are ultimately meaningless yet regulators now view them as the good guys. Apple just changing their messaging about the App Store and giving in in the most minor of ways could go a long way to stalling legislation.

 

[turbineseaplane]

This is just good PR from Microsoft

Whatever the reason - it's a smart tactical move for sure

Still, it wouldn't kill Apple to learn from this.

Exactly

 

[huge_apple_fangirl]

Related to above ^^

What's so maddening about Apple of the last decade and the "services push" is that they've totally deviated from "great user experience" as a first principle.

It's objectively an awful experience - one we used to deride other companies for - to litter the operating system with ADs and constant nags (badges and the like) for all the Apple services.

It's just total s*** -- and all done in "service" of Apple Services Revenue

The services push is ruining their products and brand in many key ways.

1000%, YES!

The services devision is a cancer. Seriously, I don't care if Apple is technically entitled to 30% or self-preferencing their services or whatever. This sort of behavior is an anathema to what gives Apple products their appeal in the first place. I want regulators to intervene before services grows so large that the rest of Apple is beyond saving.

Apple's growth from services revenue is like if Apple started licensing the Apple brand. Sure they would make a lot of easy money from it. But it's not what Apple is (or should be) about. So much of "services" is effectively this- Apple attaching their brand to various subscription offerings that would never survive in the free market but only get by because Apple actively degrades the user experience on their excellent products to push them on us. An Apple dedicated to their users would actively push back against the trend of every app/service going subscription because consumers hate it, rather than actively pushing towards this model.

 

[turbineseaplane]

So much of "services" is effectively this- Apple attaching their brand to various subscription offerings that would never survive in the free market but only get by because Apple actively degrades the user experience on their excellent products to push them on us.

The monopolist in action -- yep

It's awful

 

[AppliedMicro]

What's so maddening about Apple of the last decade and the "services push" is that they've totally deviated from "great user experience" as a first principle.

It's objectively an awful experience - one we used to deride other companies for - to litter the operating system with ADs and constant nags (badges and the like) for all the Apple services.

Exactly, I was just about to add that. It's objectively a degradation, a crappification of the user interface, where they should give the user playback controls. I'm not going to subscribe to Apple Music out of principle. What I did though, was buy an alternative music player app.

So should the free trials be banned?

No, why should it? Spotify probably has or had them as well, don't they?

It will likely just be required to become "unbundled" from the device and operating system. Prohibiting preferential treatment and advertising it in pre-installed apps (such as the music player).

 

[I7guy]

1000%, YES!

The services devision is a cancer. Seriously, I don't care if Apple is technically entitled to 30% or self-preferencing their services or whatever. This sort of behavior is an anathema to what gives Apple products their appeal in the first place. I want regulators to intervene before services grows so large that the rest of Apple is beyond saving.

Services are where it’s at, even if there is an uphill battle for the app store. We’ll have to see where this winds up in the US.

Apple's growth from services revenue is like if Apple started licensing the Apple brand. Sure they would make a lot of easy money from it. But it's not what Apple is (or should be) about.

Apple is about the ecosystem of which services play a part.

So much of "services" is effectively this- Apple attaching their brand to various subscription offerings that would never survive in the free market but only get by because Apple actively degrades the user experience on their excellent products to push them on us.

I disagree.

An Apple dedicated to their users would actively push back against the trend of every app/service going subscription because consumers hate it, rather than actively pushing towards this model.

Again I disagree, but I understand it’s your opinion.

 

[Sophisticatednut]

Right, but Apple's concerns matter to them. If it comes down to choosing between operating in the US, where they have a much larger marketshare and much more revenue, opposed to the EU, the EU will lose. The point is that Apple has to exhaust any and all means available to them to fight this ruling, otherwise they risk getting sued in the US. They cannot simply roll over and take it, else they get into legal trouble in the US.

if apple exits the market, it will have close to zero impact on EU. what is there for Eu to lose? The only thing apple does is provide goods for consumer to purchase and exploit tax loopholes, it could even be that EU would earn more tax revenue if Samsung, Sony or any random company took apple's place.

And i do not believe apple have any real danger to be sued. Apple might have a duty to maximize revenue, but this doesn't mean they must maximize short term gains to obliterate long term revenue. Otherwise, iOS would cost money, OS X, pages, numbers would cost money. They would monetize free apps and never lowered the commission from 30% to 15%. There are a lot of things apple have done that is counter to the "maximize revenue", and actually cost them a lot of money, but became they actually are the ones deciding things they ended up as the richest company

Apple and Google have explicitly dug their own grave and solely responsible for the existence of the DMA was drafted.
EU always tries to push for the market to self regulate and do better, but when they refuse they will be hit with the blunt force of government legislation

If Apple is forced to keep EU consumer data separate, as they are with China, then having a dedicated data center located within the EU is the simplest way to do that and would make it easier for the EU to audit and pull data on its citizens. Apple already complies with these sorts of restrictions for China, India, and other countries that have similar laws.

Eu have zero interest to audit user data. They have colossal problem that USA have an illegal surveillance program and can't guarantee that processed EU citizens data will not be accessed

EU Court Blocks Data Pact Amid Fears Over U.S. Surveillance (4)

The European Union’s top court struck down a key method used by Facebook Inc. and other companies to transfer data across the Atlantic amid fears over potential U.S. surveillance.

news.bloomberglaw.com

It is clear that the U.S. will have to seriously change their surveillance laws, if U.S. companies want to continue to play a major role on the EU market,” Schrems said after the ruling. “This judgment is not the cause of a limit to data transfers, but the consequence of U.S. surveillance laws.

As for not being able to offer other services, that's coming from the US, not the EU Given all the headaches, spinning off IS&S into a separate company, or dissolving it and liquidating the IP might be the way to go. They'll take a hit for sure, but they'll still make plenty of money selling hardware. They just won't be able to offer, or it won't be worth it to offer, anything beyond that since any additional software and services will be subject to intense scrutiny.

ah so you mean it's US legislation that might prevent apple to provide services? Because EU only requires level playing field to other paid competition that provided a service before apple implemented it.

As for the Xbox analogy. If Apple charged a 30% licensing fee for iOS apps, would that then be acceptable?

If In-app purchases needed to be listed in the store and downloaded from inside the store and not in the app like a DLC, then yes there would be no problem with a 30% cut as it's still their store running on apple servers, and not inside consumer's private property (iOS device)

 

[Michael Scrip]

If In-app purchases needed to be listed in the store and downloaded from inside the store and not in the app like a DLC, then yes there would be no problem with a 30% cut as it's still their store running on apple servers, and not inside consumer's private property (iOS device)

So if you had to leave Candy Crush and go to the App Store to buy gold... it would be OK for Apple to collect 30%?

But since you buy gold inside the game... that's not OK?

 

[huge_apple_fangirl]

Services are where it’s at, even if there is an uphill battle for the app store. We’ll have to see where this winds up in the US.

Services are where it's at, which is a real shame. We have more than enough companies that make semi-decent subscription services. There's only one company that is (was) fanatically devoted to making great consumer electronics.

Apple is about the ecosystem of which services play a part.

Apple's free services are great- they are made to serve the hardware. Apple TV+ is available on NVIDIA Shield TV- how exactly does it connect to the broader Apple ecosystem?

 

[Nuno Lopes]

Maybe that's an option.
Do it the hard way, where you have to submit accounting of your revenue and we can audit that, and we can freeze your account if we don't understand it or see something strange because you made a mistake.
Or do it the old way.

Oh, and because the new way is more work for us, it's always 30%.

Your choice.

How old are you? The old way you would not need to share your revenue to have access to the OS APIs. Have you ever heard iof Next OS … you know an OS also built by a Steve Jobs company? What about macOS … have you heard of it?

Do you know that actually the Web was invented on a Next Computer? The first Web browser and all? Look it up … Tim Burners-Lee.

Those were the old ways that you have probably missed … worst … have no memory of. The new ways … “if you wanna build for our OS … share 30% of the revenue generated by your business” Why? Because we have your customers surrounded by our devices we can remotely fully control … including the distribution of software … freeze your account if necessary … you owe us the world.

Imagine today such a thing for iOS … hey Tim share 30% … you know that we are fab and deserve it all. You know … without us you would have nothing … The old days … malware everywhere … terrible … no companies could grow … people were scammed all the time … terrible … terrible. We came to save y’all for those terrible times where no company was making money … we came to save you from Microsoft bad practices … App Store … see the light … all it you need to do is share 30% of your revenue … peanuts.

Welcome to the new way fish in a fishnet.

Apple itself benefited greatly from the old ways mentality. Apple systems were pricey …. But when it come to software that was this humble capacity to understand that it stood on shoulders of many. The company seams to becoming worst than MS ever was in that regard.

Fred should be ashamed of what he voiced in the latest Web Summit regarding the future of macOS … going the iOS way. Dishonoring the historical legacy of the technology at the elm of SJ that way.

Terrible. All we needed now is a Steve Balmer like monkey dance … I guess we get Fred”s hair. Seriously?

 

[theotherphil]

According to EU this is a distinction without meaning and not protected by copyright.

You keep saying this but the actual law doesn’t agree with you. The first law in Europe was passed in 1991 (Council Directive 91/250/EEC) that protects computer programs function and design as “literary works”. Council Directive 91/250/EEC was later replaced by Directive 2009/24/EC on 25 May 2009 which incorporates all the minor amendments.

The part people keep missing is the spirit of the law relates to programs/ apps…you know, the things that run on the OS. It relates to these in the sense that they are available for sale or acquisition in the after market.

The main problem is that iOS is the Operating System and not a “program or an App”. Apple does not sell iOS and has never sold iOS in an after market, it is not public domain or open source. As a user, you are using Apple’s intellectual property under their licensing terms. You are fundamentally not an owner of iOS.

Now, if you could “purchase” iOS or it was available to “rent” in an after market, then that would fundamentally change how copyright laws are applied because you become an owner. That’s why the “shrink wrap” licensing laws doesn’t apply…they are there for aftermarket purchases of programs or apps, not an OS that is licensed on a device, when said OS isn’t available in a stand alone format.

Here’s some more info on IP Licencing in Europe: https://europa.eu/youreurope/busine...ctual-property/licensing-selling/index_en.htm



Now I’m sure you’ll link to certain “precedents” but these ”precedents” are set under different conditions. Oracle vs Google for example was related to a ”program”, not an OS that was available to download freely from Oracle - available in an aftermarket which iOS is not.

 

[robco74]

if apple exits the market, it will have close to zero impact on EU. what is there for Eu to lose? The only thing apple does is provide goods for consumer to purchase and exploit tax loopholes, it could even be that EU would earn more tax revenue if Samsung, Sony or any random company took apple's place.

And i do not believe apple have any real danger to be sued. Apple might have a duty to maximize revenue, but this doesn't mean they must maximize short term gains to obliterate long term revenue. Otherwise, iOS would cost money, OS X, pages, numbers would cost money. They would monetize free apps and never lowered the commission from 30% to 15%. There are a lot of things apple have done that is counter to the "maximize revenue", and actually cost them a lot of money, but became they actually are the ones deciding things they ended up as the richest company

Apple and Google have explicitly dug their own grave and solely responsible for the existence of the DMA was drafted.
EU always tries to push for the market to self regulate and do better, but when they refuse they will be hit with the blunt force of government legislation

Eu have zero interest to audit user data. They have colossal problem that USA have an illegal surveillance program and can't guarantee that processed EU citizens data will not be accessed

EU Court Blocks Data Pact Amid Fears Over U.S. Surveillance (4)

The European Union’s top court struck down a key method used by Facebook Inc. and other companies to transfer data across the Atlantic amid fears over potential U.S. surveillance.

news.bloomberglaw.com

It is clear that the U.S. will have to seriously change their surveillance laws, if U.S. companies want to continue to play a major role on the EU market,” Schrems said after the ruling. “This judgment is not the cause of a limit to data transfers, but the consequence of U.S. surveillance laws.

ah so you mean it's US legislation that might prevent apple to provide services? Because EU only requires level playing field to other paid competition that provided a service before apple implemented it.

If In-app purchases needed to be listed in the store and downloaded from inside the store and not in the app like a DLC, then yes there would be no problem with a 30% cut as it's still their store running on apple servers, and not inside consumer's private property (iOS device)

Apple already offers IAP as separate listings in the store, so if they only offer those, but not allow them within the app itself, it's OK? It seems to be a dubious distinction.

Yes, there are rumblings in the US Congress that Apple and Google should not be allowed to operate app stores, or be in the music business, etc. There is some talk about breaking up Apple, Google, and Meta. Pretty much all of the MANGA companies are under the microscope right now. It's mostly political - right now it's the single issue that might actually get bipartisan support. Otherwise, the US government is mired in gridlock.

It seems the overarching consensus is that there is a point at which a company is too large. Either too many users, too much revenue, not enough competing companies. If that's the case, then there need to be clear rules of the road as to how large a company can be, how many business lines they can operate, etc.

Despite all this handwringing about how awful Apple is, I don't really see how prices for apps, music, books, etc. are going to get much lower for end users. Competition is cyclical, the airline industry is a great example. Margins and profitability go up, more players come onto the field. They compete, prices and margins go down, some players wind up bankrupt or being absorbed by others. Rinse and repeat.

 

[Sophisticatednut]

So if you had to leave Candy Crush and go to the App Store to buy gold... it would be OK for Apple to collect 30%?

But since you buy gold inside the game... that's not OK?

Yes. One action is inside Apple's store and servers, and the other happens on consumer property.
This is a very important legal distinction

 

[Michael Scrip]

Yes. One action is inside Apple's store and servers, and the other happens on consumer property.

This is a very important legal distinction.

Interesting.

And did no one think to examine this when in-app purchases were introduced in 2009? It's been a while.

Also... current in-app purchases are handled through Apple's store and commerce systems. When you buy gold or jewels or coins or whatever for your game... it's going through the App Store.

If, however, we were able to download and install apps from completely outside the store (sideloading) then I'd agree with your assessment that Apple shouldn't get anything.

But again... current IAP purchases are being handled by Apple at this moment... and that's why Apple takes a cut on IAP.

Could Apple's cut be smaller for certain IAP items or recurring subscriptions? I say yes. But that's a discussion for a different time.

 

[Abazigal]

Ironic how people decry the idea of Apple doing services, as though the idea of Spotify dominating music streaming is somehow a good thing.