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

[robco74]

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

Spotify isn't financially successful. They're also in the EU.

 

[huge_apple_fangirl]

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

Why can’t it be that we want Spotify to have competitors, but we don’t want Apple to be one of them?

Plus, the idea that having multiple players in streaming is a good thing has been roundly disproved in video- first everything was on Netflix, now you need like five subscriptions to see everything. We already see the beginnings of this taking place in music with exclusive podcasts. (Not to mention that refuting the idea that more options = good has been a crucial defense of the App Store )

 

[robco74]

Well, depending on how the whole Joe Rogan kerfuffle pans out, Spotify may need a few million euro...

 

[CthuluLemon]

27% of in-app sales sounds about right ?

Yeah, amazing Apple can make 80% profit on services when they only apparently make 3% on App Store fees. Who would have thought iCloud+ and Apple Fitness were so popular! I guess every subscriber of every service from Music to iCloud is subscribing to the top tier. /s

 

[Sophisticatednut]

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 known, 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.

we already have case laws denying this interpretation.

EU highest court says software licence terms can be ignored ​

The CJEU said a sale was "an agreement by which a person, in return for payment, transfers to another person his rights of ownership in an item of
tangible or intangible property belonging to him
It means software licence agreements and all their terms and conditions (not just the one prohibiting transfer) can be ignored by European courts if the licence period is indefinite

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:62019CJ0410&from=en

the purchase of the iPhone already transfer the ownership of the iOS "license" and i become the owner

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.

it dosent matter if the law implicates the purchase of a device providing a perpetual license is equal to sale of goods and transfer of ownership.

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

DIRECTIVE 2001/29/EC
and here is the legal text supporting this text

Copyright protection under this Directive includes the
exclusive right to control distribution of the work incor-
porated in a tangible article. The first sale in the
Community of the original of a work or copies thereof
by the rightholder or with his consent exhausts the right
to control resale of that object in the Community

article 4
The distribution right shall not be exhausted within the
Community in respect of the original or copies of the work,
except where the first sale or other transfer of ownership in the
Community of that object is made by the rightholder or with
his consent.

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.

(91 /250/EEC)
Article 4
any form of distribution to the public, including the
rental, of the original computer program or of copies
thereof. The first sale in the Community of a copy of
a program by the rightholder or with his consent shall
exhaust the distribution right within the Community
of that copy, with the exception of the right to control
further rental of the program or a copy thereo

and here you have some EU consumer law aswell.
DIRECTIVE 2011/83/EU
article 2
‘sales contract’ means any contract under which the trader
transfers or undertakes to transfer the ownership of goods
to the consumer and the consumer pays or undertakes to
pay the price thereof, including any contract having as its
object both goods and services;

 

[Sophisticatednut]

Interesting.

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

If nobody brings forth a complaint, there isn't anything to investigate. Governments don't have the manpower to investigate everything and relies on lawsuits and request for investigation.

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.

So what do you say then to apple taking a 27% of competing In-app payment system NOT being handled by apple?
As the court said apple must allow third party solution next to their own solution as forcing their solution exclusively is anticompetitive.

 

[Sophisticatednut]

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.

Well, I can't see any problem as then everything is on the store and delivered by apple. only thing that might be forced is allowing subscription in apps and allow links to go outside the store.

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.

interesting, the EU essentially see this as absolutely last resort if everything else fails. the DMA is targeting large companies, but contains provisions to be used if companies continues to skirt rules with clear distinction to prevent any argumentation

The Digital Markets Act: ensuring fair and open digital markets

Discover how the Digital Markets Act ensures large online platforms in the EU behave fairly, and allows new players to enter the market, thus developing a fast evolving digital sector.

ec.europa.eu

In case of systematic infringements of the DMA obligations by gatekeepers, additional remedies may be imposed on the gatekeepers after a market investigation. Such remedies will need to be proportionate to the offence committed. If necessary and as a last resort option, non-financial remedies can be imposed. These can include behavioural and structural remedies, e.g. the divestiture of (parts of) a business.

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.

actually their is a lot of evidence that apple artificially increase prices for subscription services as they almost always offer more expensive prices inside the iOS app compared to their website to cover the 30% cut. and if nothing else it will improve the competition if developers can keep more of the revenue. would you say spotify would more easely compete with apple music if tehy could offer in app purchase at the same price like apple without being punished by the apple tax?

Fanhouse adopts iOS in-app purchases with 50% higher prices - 9to5Mac

After criticizing App Store fees, Fanhouse is now raising subscription prices by 50% for iOS users as a way to cover Apple's commission.

9to5mac.com

 

[Maximara]

That being said, while this may kill the current model, Apple can switch to alternate methods like the wholesale model, or move to a subscription service like Arcade. One upside to alternative stores is that Apple won't need to host everything in their store and they can actually curate it and offer a more focused selection. They could also charge a subscription fee for Xcode, though they may not want to make the barrier too high.

I doubt that Apple will charge a subscription fee for Xcode given all the open source ways people can program for the Mac/iOS as all it would do would drive people to those options. Per the example I provided they just has to make it inconvenient enough that the average person will go through the App Store.

 

[Sophisticatednut]

..Apple made iOS, providing access to it is a service.

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.

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

well the sad thing in my mind is Steve jobs would absolutely fire 90% of apple's leadership, because everything you people argue for is as corporate and soulless. and apple will go the same path as before.

 

[robco74]

I doubt that Apple will charge a subscription fee for Xcode given all the open source ways people can program for the Mac/iOS as all it would do would drive people to those options. Per the example I provided they just has to make it inconvenient enough that the average person will go through the App Store.

Sure, there's also AppCode from JetBrains as well. I think there is a sufficient number devs who find enough value in Xcode to pay for it, as long as the fee isn't too steep. They already pay for IDEs like VS, and the JetBrains tools.

 

[I7guy]

well the sad thing in my mind is Steve jobs would absolutely fire 90% of apple's leadership, because everything you people argue for is as corporate and soulless. and apple will go the same path as before.

The people will then speak with their $$$. Right?

 

[huge_apple_fangirl]

well the sad thing in my mind is Steve jobs would absolutely fire 90% of apple's leadership, because everything you people argue for is as corporate and soulless. and apple will go the same path as before.

Vast majority of Apple’s leadership team were there with Steve. The ones that aren’t are the CFO and the AI guy from Google, John Geandrea. I think all the rest have been at Apple for years.

 

[robco74]

Well, I can't see any problem as then everything is on the store and delivered by apple. only thing that might be forced is allowing subscription in apps and allow links to go outside the store.

interesting, the EU essentially see this as absolutely last resort if everything else fails. the DMA is targeting large companies, but contains provisions to be used if companies continues to skirt rules with clear distinction to prevent any argumentation

The Digital Markets Act: ensuring fair and open digital markets

Discover how the Digital Markets Act ensures large online platforms in the EU behave fairly, and allows new players to enter the market, thus developing a fast evolving digital sector.

ec.europa.eu

In case of systematic infringements of the DMA obligations by gatekeepers, additional remedies may be imposed on the gatekeepers after a market investigation. Such remedies will need to be proportionate to the offence committed. If necessary and as a last resort option, non-financial remedies can be imposed. These can include behavioural and structural remedies, e.g. the divestiture of (parts of) a business.

actually their is a lot of evidence that apple artificially increase prices for subscription services as they almost always offer more expensive prices inside the iOS app compared to their website to cover the 30% cut. and if nothing else it will improve the competition if developers can keep more of the revenue. would you say spotify would more easely compete with apple music if tehy could offer in app purchase at the same price like apple without being punished by the apple tax?

Fanhouse adopts iOS in-app purchases with 50% higher prices - 9to5Mac

After criticizing App Store fees, Fanhouse is now raising subscription prices by 50% for iOS users as a way to cover Apple's commission.

9to5mac.com

If users are allowed to go outside to subscribe, then it doesn't make a lot of sense for Apple to offer the service. There is a law under consideration in CA that will force sites that allow users to sign up online without speaking to customer support to be able to cancel online as well. That would alleviate one of the benefits of subscribing through Apple.

Spotify doesn't currently allow users to subscribe from within the app, you have to go to their website. As a consequence, Apple gets almost nothing. They just get revenue from those who subscribed in the past, and they're likely at the reduced 15% commission that kicks in after one year.

Also, calling it a tax is a bit misleading. The commission covers quite a bit. In reality, most developers are quite happy with the arrangement. Apple takes care of a lot of red tape and paperwork, especially around international sales. Any future competing stores will need to offer equivalent or better services, while taking a lower commission. But as we've seen with the Epic Game Store, those lower commissions likely won't translate into lower prices for consumers. It will help developers, but not consumers. When Epic pulled the stunt that got them kicked out the App Store and Play Store, they were only offering a partial discount of the "Apple tax".

 

[Sophisticatednut]

The people will then speak with their $$$. Right?

Money isn't everything, good products should always come before profits. Not the other way around

Vast majority of Apple’s leadership team were there with Steve. The ones that aren’t are the CFO and the AI guy from Google, John Geandrea. I think all the rest have been at Apple for years.

the fact they are still there doesn't mean he would fire them. As Steve said, it was the corruption of their values in leadership position. And as he said at 01:00 they started to care about profits and lived off the products that great people started, instead of making a greater product it became the maximizing of profit margins.

If users are allowed to go outside to subscribe, then it doesn't make a lot of sense for Apple to offer the service. There is a law under consideration in CA that will force sites that allow users to sign up online without speaking to customer support to be able to cancel online as well. That would alleviate one of the benefits of subscribing through Apple.

It would make a lot of sense as it improves customer interaction. It doesn't make sense to allow apple to take a cut in subscription services such as movie and music streaming, as these apps are just glorified web wrappers.

Spotify doesn't currently allow users to subscribe from within the app, you have to go to their website. As a consequence, Apple gets almost nothing. They just get revenue from those who subscribed in the past, and they're likely at the reduced 15% commission that kicks in after one year.

Spotify doesn't allow it explicitly to not have to pay 30% as many users would otherwise just subscribe in the app for convenience as with netflix. they are already well established , so consumer will most of the time just be forced to use a clunky interaction to login on their devices

Also, calling it a tax is a bit misleading. The commission covers quite a bit. In reality, most developers are quite happy with the arrangement. Apple takes care of a lot of red tape and paperwork, especially around international sales. Any future competing stores will need to offer equivalent or better services, while taking a lower commission. But as we've seen with the Epic Game Store, those lower commissions likely won't translate into lower prices for consumers. It will help developers, but not consumers. When Epic pulled the stunt that got them kicked out the App Store and Play Store, they were only offering a partial discount of the "Apple tax".

in EU, there is barely any benefit or paperwork they do for you. VAT is available in many payment solutions that automatically applies to the right region.
And VAT is not handled by apple but by the developer.

And Epic actually allow developers to use their own IAP solution and pay nothing to epic or to use their option and pay 12% and i think its appreciate to call it a tax considering you can't escape it.

 

[Abazigal]

well the sad thing in my mind is Steve jobs would absolutely fire 90% of apple's leadership, because everything you people argue for is as corporate and soulless. and apple will go the same path as before.

And I will reply with the same response I have said numerous times.

That different people are needed at different points in a company history. Jobs was right for his era, and he would have been a disaster for the Cook era. Cook is amazing, and has been responsible for most of the achievements of Apple, though not the initial innovation and concept that Jobs provided.

Rather, what Cook has done is refine the culture and expanded it, and has done as fine a job as any CEO in American history, if not world business history.

He's Eisenhower, not Churchill, and Apple and its users are better off for it.

 

[robco74]

If Apple isn't going to get a cut of subscription revenue, they may as well just let the developer implement their own solution. Ditto with payment processing. It doesn't make a lot of sense for Apple to continue to provide store services that go unused. It seems the intent of these regulations is to make sure more third-parties get a cut of the action on Apple's platforms. If alternate app stores are allowed, it really doesn't make much sense for Apple to continue operating the current store as is. There will definitely need to be some major changes made. Apple has plenty of options and other ways to bring in revenue.

As others have pointed out, the platform is lucrative enough that others will want to remain, even if Apple no longer provides all the services they have until now. It will definitely mean a more complicated and less convenient user experience.

 

[theotherphil]

we already have case laws denying this interpretation.

EU highest court says software licence terms can be ignored​

The CJEU said a sale was "an agreement by which a person, in return for payment, transfers to another person his rights of ownership in an item of
tangible or intangible property belonging to him
It means software licence agreements and all their terms and conditions (not just the one prohibiting transfer) can be ignored by European courts if the licence period is indefinite

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:62019CJ0410&from=en

the purchase of the iPhone already transfer the ownership of the iOS "license" and i become the owner

it dosent matter if the law implicates the purchase of a device providing a perpetual license is equal to sale of goods and transfer of ownership.

DIRECTIVE 2001/29/EC
and here is the legal text supporting this text

Copyright protection under this Directive includes the
exclusive right to control distribution of the work incor-
porated in a tangible article. The first sale in the
Community of the original of a work or copies thereof
by the rightholder or with his consent exhausts the right
to control resale of that object in the Community

article 4
The distribution right shall not be exhausted within the
Community in respect of the original or copies of the work,
except where the first sale or other transfer of ownership in the
Community of that object is made by the rightholder or with
his consent.

(91 /250/EEC)
Article 4
any form of distribution to the public, including the
rental, of the original computer program or of copies
thereof. The first sale in the Community of a copy of
a program by the rightholder or with his consent shall
exhaust the distribution right within the Community
of that copy, with the exception of the right to control
further rental of the program or a copy thereo

and here you have some EU consumer law aswell.
DIRECTIVE 2011/83/EU
article 2
‘sales contract’ means any contract under which the trader
transfers or undertakes to transfer the ownership of goods
to the consumer and the consumer pays or undertakes to
pay the price thereof, including any contract having as its
object both goods and services;

Again, you are missing the point that iOS is not a program and ownership never transfers to the user. Oracle vs Google doesn’t apply here.

The laws you are quoting relate to programs, the things users purchase/ download for free via public domain/ open source in the after market to run an an OS. The fact that they are available in the aftermarket is what allows ownership to transfer.

iOS isn’t available in the aftermarket - you cannot buy/ download iOS as a standalone product and ownership never transfers to a third party because of this. Therefore Apple can licence their IP to developers for a fee, and end users with restrictions.

 

[theotherphil]

What you say is wrong in my opinion because the yearly fee developers pay is meant to be for EVERYTHING, the API's, hosting the app, to run the store.

Nope, this is what is included: https://developer.apple.com/programs/whats-included/

 

[AppliedMicro]

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

Having a single company dominate a market is often not beneficial to consumers and suppliers. But I‘d rather have Spotify dominate Music streaming than Apple dominating everything.

It doesn't make a lot of sense for Apple to continue to provide store services that go unused

Why should they go unused? I think it has been established that Apple, with their App Store and In-app purchasing, provide a very convenient service. To both developers and customers.

I hope they continue doing just that. I see little reason why consumers shouldn’t be able to choose the conveniency of their service. And I see little reason why Apple wouldn’t want to provide these services?

That said, I think it‘s good for consumers and suppliers alike if Apple provided their services at competitive rates - prices that have been determined by competition.

Yes, I absolutely anticipate Apple being able to command a premium over many other competitors for their level of convenience.

But no, I don‘t believe that prices and rates for aftermarket services are (or should be) competitively determined at the time customers purchase their hardware device (the old „you can choose Android instead“ argument).

 

[theotherphil]

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.

Given that retailers must accept Apple’s terms in order to sell their products, I’d say page 1 of the licence agreement applies:

”IF YOU HAVE RECENTLY PURCHASED A DEVICE AND YOU DO NOT AGREE TO THE TERMS OF THE LICENSE, YOU MAY RETURN THE DEVICE WITHIN THE RETURN PERIOD TO THE APPLE STORE OR AUTHORIZED DISTRIBUTOR WHERE YOU OBTAINED IT FOR A REFUND, SUBJECT TO APPLE’S RETURN POLICY FOUND AT https://www.apple.com/legal/sales-support/.”

 

[Abazigal]

Having a single company dominate a market is often not beneficial to consumers and suppliers. But I‘d rather have Spotify dominate Music streaming than Apple dominating everything.

Spotify isn’t profitable, and they are currently grappling with their own share of controversy. I am personally betting on music streaming being a loss leader that needs to be propped up by platform owners like Apple or Amazon, and I personally prefer Apple Music over the other alternatives.

 

[Sophisticatednut]

And I will reply with the same response I have said numerous times.

That different people are needed at different points in a company history. Jobs was right for his era, and he would have been a disaster for the Cook era. Cook is amazing, and has been responsible for most of the achievements of Apple, though not the initial innovation and concept that Jobs provided.

Rather, what Cook has done is refine the culture and expanded it, and has done as fine a job as any CEO in American history, if not world business history.

He's Eisenhower, not Churchill, and Apple and its users are better off for it.

Considering the explosion of controversy. The lowering of quality of their products, the money grubbing they have participated more and more in.

Steve Jobs was obsessed with perfection. Remember when the white iPhone wasn’t shipping because the right nuance of white in the home button wasn’t archived.
This something dead today.

Tim Cook isn’t a good ceo, he’s a bean counter, not a product person.

 

[Abazigal]

Considering the explosion of controversy. The lowering of quality of their products, the money grubbing they have participated more and more in.

Steve Jobs was obsessed with perfection. Remember when the white iPhone wasn’t shipping because the right nuance of white in the home button wasn’t archived.
This something dead today.

Tim Cook isn’t a good ceo, he’s a bean counter, not a product person.

Which is not at odds with what I have said. The CEO of a company doesn’t have to be a product person. I view Tim Cook’s role as ensuring that the trains leave the stations on time, which is just as important, because the best-designed product in the world is useless if you can’t make any to sell.

If anything, it was Steve Jobs who was a poor CEO because he delegated most of his managerial duties to Tim Cook (freeing him up to focus on product design). After his death, this role went to Jony Ive.

Different skill sets, each uniquely suited to tackle the challenges of their respective generations.

 

[laptech]

Nope, this is what is included: https://developer.apple.com/programs/whats-included/

whats missing then?

 

[theotherphil]

whats missing then?

Under “Distribution” and “App Store”:

• Keep 70% of your sales proceeds (85% if you’re enrolled in the App Store Small Business Program or News Partner Program) and 85% for qualifying subscriptions.