Epic Games Accuses Apple of Charging 'Unjustified Fees' for Required Non-App Store Purchase Link

[cocky jeremy]

Easy to say when you're not the one under the thumb of an out of control MegaCorp

No one is forcing them to develop anything for iOS. They agreed to the terms. Either deal with it, or **** off.

 

[jlc1978]

Sometimes customers get charged the fee (many businesses pass it along for American Express here).

Depending on their agreement with AMEX they may be violating it; AMEX required (or at least used to) that you charge no more for use of their card. If customers complained AMEX could pull the store's agreement.

b) The "people" are forced to use Apple's services. Why is that so complicated to understand?

No, they make choices based on what they value. No one is forced to buy an iPhone, they can forgo whatever apps it has.

Epic would be paying this store at least 30% commission to do this.

It's a vouchure. In a physical store.

ANd teh store no doubt paid less for it than the selling prices. Stores don't stock products for free.

Because the commission is mostly about rent seeking not payment processing costs.

Commissions or markups are the cost of access to a customer base; it's not unique to Apple.

This isn’t about hosting or infrastructure or developer support this is about companies being successful and Apple thinking they’re responsible and thus deserve a portion of said company’s success.

They built the user base that is lucrative for developers and deserve renumeration for it; and made it a lot less expensive and risky to develop and sell software. Developers can focus on their software and not worry about distribution, payment processing, handling returns of unsold stock, rampant piracy, dealing with various tax laws worldwide, etc.; and small developers can do that for 15%, not 30%. I suspect many developers would love to grow sales to the point Apple ups their cut; and even then if it is a subscription app the fee drops to 15% after year 1.

Do you think any car manufacturer would be allowed to ask fuel stations to pay a cut from their revenue by adding a special equipment which would only open the tank if you had agreed to pay 30% of your revenue? This would be ridiculous!

And Apple lets you use 3rd party chargers without a cut as well. A more apt analogy would be the like of sideloading, but even then cars don't allow you to easily tap into their systems to add features such as new stereos, engine control hardware, etc. You can replace any parts with OEM 3rd party offerings, some of whom may actual license tech from a manufacturer, but you can do that on an iPhone as well.

Would you like to be forced to pay additional 30% for a tire just because the car manufacturer forced your preferred tire producer to give them a 30% cut from their revenue?

And to use your analogy, Apple doesn't get a cut from 3rd party accessories not bought from them; but if you buy it from them they get a cut just as if you bought the product from a car manufacturer's network.

 

[gregmancuso]

Apple sets that fee
If they think it's too low, they should raise it!

Because their annual dev fee is so low ≠ justification for Apple to incorrectly insert themselves in all revenue streams

Apple has every right to monetize their platform, wouldn't you agree? They chose to set teh annual developer fee at the lower $100 for several reasons. Not the least of which was to open the platform development opportunities to a much broader audience. Historically, developer fees for platforms are prohibitive and only large players could afford to play.

They also chose this price point understanding there would be a "per-sale" fee on all paid applications. The introduction of IAP was probably the biggest mistake on the platform. But IAP / micro transactions did not start with the iPhone and ultimately had to be supported. But that also inevitably led to the "race to the bottom" pricing of applications to the point where most games and applications are free to download (no fees) and subscription or IAP micro transactions (fees for transactions and in-app subscriptions).

To say that Apple has no right to a cut of any digital transaction equates to saying Apple has no right to monetize their platform.

You may get your wish - $100 annual developer fee plus the existing fee structure for apps in the App Store. But if you roll your own store or distribute through a third-party start your annual developer fee will be $1,000,000. But hey, you don't have to pay 15-30% on the sales of your box of coins.

 

[Student of Life]

Do you want another analogy: what if you bought a Tesla as a cap driver, but tesla told you, you could use it as a cap only if you paid 30% of your revenue to Tesla because it is the Tesla that attracts the passengers.
Let me know if you don't like this one either and I can come up with 100 more. A car manufgacturer simply does not act as a "Pi.p" in between. It would be illegal.

Your analogy makes no sense. It would be more akin to buying a Tesla car and they trying to add your app to the Tesla console display. Guess what, if you want your product to enter that market, you need to pay Tesla. Tesla made the car, has the valuable client that you want access to, it doesn't come free. You can get gas/electricity where ever you want, but no way do you get access to the console display and all its users unless you meet and abide by Tesla regulations/rules and pay up for the privilege.

 

[gnipgnop]

The idea that a link inside the application is the only way to communicate web-based payments is ridiculous. There are all kinds of ways to communicate with customers outside of the apps themselves and outside of the App Store.

 

[gnipgnop]

But this is a US case. Apple's commission has been deemed legal by US courts. It's no use to discuss that in story about a legal case which isn't about commissions at all.

The EU is fine with commissions as well.

 

[gregmancuso]

I don’t think so, he is an idealist.

Well, he is something. I'd opt for a different description also starting with "id".

 

[ric22]

If you say so...
And if you were correct, what's the damage? I thought business is all about making money.
Unless it's government, which is all about spending money.

There's no damage. I didn't suggest that. Just clarifying after you seemed to suggest Apple weren't turning one hell of a profit... inadvertently, I assume.

 

[hovscorpion12]

Apple needs to wipe the floor with Epic. They are the worst company in gaming. The Unreal Engine is Sub Par compared to other platforms.

Apple has the money and resources to drag this out for decades without loosing any sleep with Epic hemorrhaging money.

Plus, the true king of gaming already put Epic in their place. Apple needs to be the second.

Essentially, Apple has done nothing wrong. Epic/Tim Sweeney are.

https://www.pcgamer.com/gaming-indu...-which-valves-coo-simply-replied-you-mad-bro/

 

[ArtOfWarfare]

Freeloaders gotta freeload.

Not sure if you're accurately referring to Apple here, or unironically trying to accuse Epic of freeloading.

Apple is charging something for nothing here. A developer writing code that handles payment themselves costs Apple nothing.

When Apple complies with the injunction and permits third parties to process transactions, do you know what'll happen? Apple will slash their fees. Because Apple's fees are currently non-competitive because Apple operates (several) monopolies. Probably the fee will settle in the 5-10% range - it's more than competitors will charge, but the appeal of "it just works" can actually justify pricing it that high. It doesn't justify the 15-30% range.

Developers will win. They can pass on savings to customers, who will also win. And we'll see higher quality apps for iOS that lead to Apple winning, too. That's the most infuriating part here - Apple is so blinded by greed that they really want to strangle their golden goose.

 

[redheeler]

Startups got off the ground much faster at a much lower cost. They could also easily focus on a high quality customers base, simply by releasing a quality app on the Apple App Store. The entire modern startup ecosystem is based on this.

Trust me, if PWAs were a viable option, startups with limited resources would much rather build a single PWA that works on everything than hire two specialized native app teams, one for iOS and one for Android…

 

[vkd]

I agree with Epic. Apple are unrestrained money-grabbing greed personifled.

 

[Sophisticatednut]

illegal contract? it was the same contract for over a decade. Epic just didnt like the wording and went outside and broke the rules. the were removed for breaking them not punished.

Yea did you not follow the U.S. case?

Judge Rogers ruled that Apple did violate the California Unfair Competition Law through the anti-competitive behavior of disallowing any mention of other payment systems within apps.
January 16, 2024, the Supreme Court declined to hear the appeals from Apple and Epic in the case ended with all charges dismissed exception for the anti-steering charge.

I just find it strange that Apple can punish Epic for breaking a clause in their contract that was judged to be illegal.

 

[MortgageMecca]

Is it possible for apple to call it "Advertising" fee? If I was to set up a link on someone's website, I'm most certain that a fee would be charged. I'm not sure the last time McDonald's gave away free Cokes or if McDonald's pays Coke the full retail price it receives. Most likely, McDonald's pays a whole sale price and Coke might only make 50% or less.

 

[Sophisticatednut]

The price you pay for Epic’s games (or any games or apps) is the price set by the market.

If Epic wins this fight they will not pass the savings on to you.

So rant all you want about Apple’s greed, but just know that you’re fighting for Epic’s greed.

And is that bad somehow? If The developer gets a better profit margin they can use to develop a better product is good for the market.

If I earn 1 million and apple takes 300.000$ from me, that’s bad for business, I could do a lot of development with extra 300k

 

[m4mario]

Trust me, if PWAs were a viable option, startups with limited resources would much rather build a single PWA that works on everything than hire two specialized native app teams, one for iOS and one for Android…

Off course. I trust you. But the very idea of PWA is to give a native app experience. And that will always be ahead of Web Technology. Simply because as WT improves, so does Native Technology.
I remember in 1999-2000, they said Java Applets were the future. Because as processing speeds and internet speeds improve, web apps will become as responsive as Native apps. What they did not consider, is that Native apps will improve as well.

 

[m4mario]

Trust me, if PWAs were a viable option, startups with limited resources would much rather build a single PWA that works on everything than hire two specialized native app teams, one for iOS and one for Android…

Also they will still want to release it in the App Store. So they want to have an iOS native(resembling) app in the Apple App Store, for the lowest cost possible. And Apple gave it to them.

 

[gregmancuso]

They're spending it on providing affordable commissions for sales through their store - to the benefit of developers and consumers alike.

12% - that's less than half of Apple's 30%.

And they have stated that they are running it at a loss. You don't believe it will stay at 12%, do you?

 

[Amazing Iceman]

There's no damage. I didn't suggest that. Just clarifying after you seemed to suggest Apple weren't turning one hell of a profit... inadvertently, I assume.

You are confusing profit with revenue. Step back, think again and reply when you understand it.

 

[nexx27]

Can't believe we have that much patience dealing with apple's abusive practices...

Apple:
- Every app for their phone, let's charge them 30%.
- If dev complain, we them delete their app store account
- OK, Epic won... let's search for flaws in the law's text to make it harder for them to implement
- Let's ditch upgradability, so we can force them to buy replacement devices sooner
- Let's ditch reparability, so we can force them to buy replacements sooner
- Let's limit device's ports, so again, we can force them to replace sooner
- If they can survive with all these limitations, let's "obsolete" the device through software

- Hey, let's stop shipping chargers for phones, so we can upsell
- Hey, let's patent "features", so no competitors!
- Let's force them to use our cables, so we can get more income!
- If they want more RAM or DISK, this might compromise our replacement policy. This is unacceptable, let's charge them >500% of market price!
- Let's ditch subpixel rendering from macos so we can ruin 4K monitors experience, and force them to buy our 5k an 6k monitors!

They must be laughing real hard.. It must be cool being Apple.

They're just humans... Their public culture go real slow... we can go on profiting and abuse for years to come! Look, we even have a legion of fans!! They defend us and justify our practices!

Hello politics, are you there? Wouldn't it be time for a "anti smart ass policy"

 

[dead.cell]

And is that bad somehow? If The developer gets a better profit margin they can use to develop a better product is good for the market.

If I earn 1 million and apple takes 300.000$ from me, that’s bad for business, I could do a lot of development with extra 300k

Well, sure. This is why you agree to the terms before you sign a contract.

Let's also not forget that Epic tried at first to negotiate with Apple, and only began their shenanigans when Apple told them to kick dirt, as they did most other developers. Epic was never in it for "the little guy" like they try to make people believe.

And they have stated that they are running it at a loss. You don't believe it will stay at 12%, do you?

I feel like Sweeney did a short study of Walmart's strategy of opening up shop, pricing people out, then cranking prices back up after... in belief that it would work on the PC market. Problem is, we have no proof that companies are paying their employees better (trickle-down economics), the prices aren't any different (in fact, went up to $70 too), and the platform itself stinks.

It's no wonder they're unsuccessful. Meanwhile, indie developers continue to deliver on Steam because that's where the largest community of gamers who will actually PAY for games exists. Most people with an Epic Games account just sign in to collect the free game, by their own admission.

 

[Sophisticatednut]

The issue for Apple is that freemium applications get to use apples eco system for free and make millions of dollars.
Instead of making a genuine sale at the front door of the shop people come into the shop and take it for free then pay you for it later outside the shop. However the shop has hosted your product and giving it floor space, wrapped it up annd gave it to the customer but the dev ended up paying nothing for that. That’s actually not that fair either.

Apple feel that without them building the shop they would never have been able to do that. Since apple spent billions creating the eco system they want at least some compensation for the opportunity they have created.

yes but you do realise the spirit of the $99 dev kit was to equal up the game for independent devs vs big development companies with billions in the bank right?

Oh so now the spirit of the law is relevant? What happened with” that’s not what they say or imply.

That’s what Apple explicitly spells out in a black and white manner. 99$ and you get everything. The commission is a separate thing and their rules are vague.

When you develop for a console you have to pay thousands for a dev kit to get access to api’s and support. On top of that you pay a license to console maker who then distributes your games.

Apples app store literally made the indie dev viable. People left their full time jobs and because devs on their own because apple did this. Before the App Store it was very hard to compete and get an indie game distributed on other platforms. And that’s not even mentioning piracy issues.

When people have eaten their dinner they often forget who made it for them…

I think you should look at the work steam did and thousands of other entities that actually made indi development possible. Apple didn’t do anything special as they just did what everyone else was already working towards.

If Apple was removed from history this part wouldn’t change.

Steam had already existed. And even a small developer made the first AppStore to the iPhone before Apple did it

 

[flexwithmarius]

Good. The more pressure on Apple the better, simple as. Better for consumers.

Lolllll

These fees are a business expense and therefore tax deductible. Meaning, they can take the deduction and still pass on part (or all) of the fee to the customer.

It ain’t about the consumer, not even a little bit.

 

[Sophisticatednut]

Well, sure. This is why you agree to the terms before you sign a contract.

Let's also not forget that Epic tried at first to negotiate with Apple, and only began their shenanigans when Apple told them to kick dirt, as they did most other developers. Epic was never in it for "the little guy" like they try to make people believe.

And nether is apple, what their motives are is completely irrelevant as long as their legal arguments are valid and they have a case. And as the court said, the anti steering provision was illegal.

I feel like Sweeney did a short study of Walmart's strategy of opening up shop, pricing people out, then cranking prices back up after... in belief that it would work on the PC market. Problem is, we have no proof that companies are paying their employees better (trickle-down economics), the prices aren't any different (in fact, went up to $70 too), and the platform itself stinks.

And why do you or anyone care if the company pays more for their employees or have a lower price on their game?

That’s something I never understand why anyone would care for those metrics. Is it not a good thing if companies have a bigger margin that they can invest to make a better product.

The iPhone have only increased in price but the services and functionality provided is greater etc.

Epic store develops the Unreal engine 5 and it’s considered one of the best gaming engines currently especially with the tools to make dynamic environments

It's no wonder they're unsuccessful. Meanwhile, indie developers continue to deliver on Steam because that's where the largest community of gamers who will actually PAY for games exists. Most people with an Epic Games account just sign in to collect the free game, by their own admission.

True that because steam is simply just better

 

[gregmancuso]

Let's outlaw deliberately deceptive design and then we'll really be getting somewhere.

Imagine if most commercial buildings opened into a maze that took you directly to the most expensive parts and you have to find your way to what you actually want.

You mean Ikea? Try getting to dining room tables without going through every other room in the house.