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Apple's EU Core Technology Fee Could Bankrupt Freemium App Developers

Abazigal said:
I am not aware of any replies of that sort (...) Linking me to any prior responses you have made would be much appreciate, because I am seriously drawing a blank here.
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Admittedly, I can't quickly find prior reference that includes both of us. We may not have crossed paths on this particular point (though we did, more generally, on the discussion of sideloading). 🙂
Abazigal said:
Well, Facebook wasn't taking control of one's iPhone remotely, logging in to their banking app and siphoning their life savings in the least. I guess we can be thankful for that.
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No other app can - it would have to know the login details. But that's the thing: You can distribute fake banking apps over such a channel. The attack vector is open. Though it is, admittedly, somewhat "unusual" to install third-party apps this way - though I'd also argue it is on Android.
It also seemed to have happened many years ago (you honestly can't expect me to remember an article from 2019), so I wonder if something like is still possible today?
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Of course - enterprise certificates and apps still exist today.
What they can do, and what access they have, may of course change by tightening the system. Example:

https://arstechnica.com/gadgets/202...ps-still-snoop-your-sensitive-clipboard-data/
https://www.macrumors.com/2022/10/17/ios-16-1-paste-from-other-apps-settings/

👉 Sandboxing apps and limiting their access to data are real security.
 
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heretiq said:
What’s not sustainable is charging a one-time price for a product or service that has recurring costs. Apple sets a recurring price for the App Store because it has a recurring cost structure.

If a developer chooses to offer a one-time price when they are in a recurring cost business the failure of their business is on them for making irrational decisions. They are not entitled to being subsidized by Apple or anyone else.
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If this also applied to apps sold exclusively through Apple’s App Store you might have a point. Since it doesn’t, you don’t.
 
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mrochester said:
Free apps have costs. just because they are given away for free doesn’t mean there isn’t A cost to making and distributing them.
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I maintain that if Apple isn't included in the developer-to-user pipeline then they aren't entitled to any money. (iOS itself doesn't count)
 
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Samplasion said:
Apple forcefully insert themselves into that pipeline to be able to justify a fee. That's what I'm against.
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Yes because Apple has a vested interest in keeping iOS as safe a platform as possible for end users. The EU recognises the value in this and specifically allows for measures on safety and privacy grounds.

Would you rather it just be a free-for-all?
 
mrochester said:
Absolutely, but Apple are involved, for every app that runs on an iOS device. That’s why they charge a fee.
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They don’t charge a fee for free apps exclusively distributed through their own store. Therefore any fee they charge to free apps distributed outside of their store is a combination of a steering measure, and rent seeking behaviour.
 
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bcortens said:
They don’t charge a fee for free apps exclusively distributed through their own store. Therefore any fee they charge to free apps distributed outside of their store is a combination of a steering measure, and rent seeking behaviour.
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So they charge the same fee to all free apps then 🤷

I presume from Apple’s perspective the free apps bring value to the Apple App Store, and thus Apple subsidises them using the fees collected from non-free apps. But free apps available in alternative app stores don’t bring any value to Apple just by being there, hence a fee. Of course the company running the alternative app store could also choose to subsidise those free apps by covering Apple’s fee using the proceeds from their paying customers.

So Epic Games App Store could have both paid and free apps, with Epic subsidising the free apps by paying the CTF from the money they make from paying app developers.
 
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mrochester said:
So they charge the same fee to all free apps then 🤷
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They should, to be consistent, charge this fee to all apps whether they distribute inside, outside, or exclusive in Apple’s store. Of course that would never actually fly with devs because it would kill Netflix, instagram, facebook and so many more popular apps. The fact that this would, if applied consistently, kill native app development should tell you all you need to know about apples intention here. It is to prevent popular apps from ever leaving the App Store. In direct violation of the spirit of the DMA (and hopefully the EU rejects the CTF as a violation).
 
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bcortens said:
They should, to be consistent, charge this fee to all apps whether they distribute inside, outside, or exclusive in Apple’s store. Of course that would never actually fly with devs because it would kill Netflix, instagram, facebook and so many more popular apps. The fact that this would, if applied consistently, kill native app development should tell you all you need to know about apples intention here. It is to prevent popular apps from ever leaving the App Store. In direct violation of the spirit of the DMA (and hopefully the EU rejects the CTF as a violation).
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Those apps make huge amounts of money, I’m sure they can afford the CTF so as to reach the iOS install base with their apps/services.

What it would kill are the small apps/businesses that offer their apps for free but subsidise with adverts or other income sources.
 
mrochester said:
And that’s justification for getting rid of the review process?
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I don't exactly care whether Apple wants a review process in their app store or not. But forcing me to pay because they want to exert control over something they shouldn't is what I'm against. It's not even about checking apps for malware, which other Apple platforms do automatically - and still, sandboxing is a thing. If anything, the review process slows down the spreading of important updates should a security hole be discovered.
 
mrochester said:
Those apps make huge amounts of money, I’m sure they can afford the CTF so as to reach the iOS install base with their apps/services.

What it would kill are the small apps/businesses that offer their apps for free but subsidise with adverts or other income sources.
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The CTF requires apps like instagram or threads to pay 0.5 per user per year, we don’t know how much ad revenue Facebook makes on these apps but it would have to be well in excess of $1 per year to justify continued development of the apps.

It would also have to start applying to apps like Netflix and YouTube that currently pay nothing.

If you think these companies wouldn’t start to question whether or not native apps are required I think you’re dreaming
 
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mrochester said:
That’s just a charge for Apple’s services for apps outside the App Store. Apps available in the Apple App Store are monetised in a different way.
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True.

Clear indication how Apple self-preferences their own Core Platform Service over others, thereby circumventing the legislation. Since it's not a fee for the intermediary services (e.g. running a marketplace/store and payments), but rather for "Core Technology", a remedy could be very simple:

👉 Force Apple to charge the Core Technology Fee in a non-discriminatory way. That is, charge it on all downloads in their own App Store, too. No exceptions for staying on existing terms.
 
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ksj1 said:
Great take on this from Steve Sinofsky who has experience dealing with EU regulations and regulators: https://hardcoresoftware.learningbyshipping.com/p/215-building-under-regulation
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Given the following:

1. Apple charging wildly different commission based on whether or not your app happens to include a link to your website or not - this leads to a worse app experience for users and doesn't actually seem to be working to help Apple make any money on these apps. Hence it is just petty.

2. Gambling apps in the app store

3. Games that allow you translate real money to in game currency to purchase items

4. Games that have pay to speed things up freemium mechanics

5. Ad based applications that can track and invade privacy (also incidentally paying no commission)

6. Limitations on installing perfectly legal, non-malware, based software

7. Limitations on developer tools

etc...

I would argue that Sinofsky is painting a rose coloured picture of the App Store which makes me just laugh. If Apple was actually the benevolent ruler of the App Store working to ensure the best possible customer experience he might have a point. Since they don’t he mostly comes off as someone bitter at the EU for daring to interfere.

I actually don't really want alternative App Stores. What I want is Apple to actually make the App Store better. The problem is what is better for users is worse for Apples bottom line. So much of App Store revenue is gaming and so much of gaming on iOS is terrible unethical monetization schemes which prey upon known flaws in human reasoning.

I want game companies to bring real versions of their games to the App Store not cut down versions filled with terrible monetization schemes. The App Store does not incentivize this. (Nor will alternative App Stores but that isn’t my point).

Edit: I generally agree with his take on default apps and competing with built in software.
 
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bcortens said:
I would argue that Sinofsky is painting a rose coloured picture of the App Store which makes me just laugh.
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His takes on Twitter have been pathetic tbh, full on drama queen mode complete with broken heart emoji


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