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

[AppliedMicro]

But Apple NEVER jsutified the 15-30% fee as being to cover payment processing.
We all know banks and card companies charge fees.
Depends upon the size of the business what rate they charge. 1-5%.
Sometimes customers get charged the fee (many businesses pass it along for American Express here).

So Epic go what they wanted: the fee for payment removed.

The remaining commission is for all the infrastructure, tools, marketing that Apple provide to bring app users along.

...the same infrastructure and tools that they're giving away for free to the Amazons, Booking.coms, Ubers...
Are Apple free to do that? Sure why not, unless they're acting anticompetitive or subject to legislation mandating otherwise.

But let's not pretend the commission is primarily for the tools. And Apple certainly needn't do marketing for the Netflixes and Spotifys (or Fortnites for that matter).

At this point, the commission goes straight to Apple's Profit, then Apple's profit, Apple's profit, Apple's competitive advantage against competing services etc. And a small fraction to all that infrastructure and tools.

If they stop doing that, they‘ll probably jack up prices a few hundred percent (they essentially lightweight do this via their Core Tech Fee).

App Store revenue got jacked up by a few hundred percent - yet we haven't seen any decreases in commission until 2021. And none for the biggest developers that make up the bulk of App Store revenue.

So no reason to increase prices either.

Apple just needs to kick Epic the **** off the App Store already.

They did!?

I honestly don't understand anyone complaining about the 30% or 15% cut.
I work in the music publishing industry and there companies take 50 to 75% cut, that you like it or not!

You aren't working for a company that provides a platform in a duopoly market with entry barriers like Apple.
You're working in a competitive market.

I can put my music on my website and self-distribute - and it will "run" on consumer devices.

 

[wbeasley]

this epic saga keeps on going.. i don't see any issue, am i that naive?

as far as i know, the app store rules over the year have become easier, started with 30% fees always, know recurring is reduces after a year and for small developers it's reduced as well. epic knew the price apple was charging when they signed up and started developing for iOS i don't get why suddenly it became such a problem?

from spotify i can understand the case, they have high royalty costs etc.. however epic just sells there own developed digital goods (which is a one time developing costs, but same costs if the sell just 1 or 1 million).

i'm not saying, apple's app store practises are perfect, but if apple has to create a level play field, i guess all the social media apps should start paying per download as well? and what about all other free apps?

as a developer you have the option not to develop for iOS, if you want a piece of the pie apple is happy to let you in, but why not charge you for getting a piece of the pie?

i'm a believer in open marketplaces, competitors make for better products. let's see and find out in the eu how many people will end up installing a 3rd party app store (wild guess? < 5%) it's a perfect place for apple to test this hypothesis.

even at 5% fee Spotify and Epic would complain. they want it free.

15-30% is so much better than physical stores. one app dev said they used to effectively pay 90% when it was physical boxed product. and lots of admin hassles.

if Spotify are paying so much for rights (and they pay less than Apple does) perhaps they need to look closer at their business model? they run free accounts with ads. increase the number of ads or charges for them? look at all the free games with ads. they nag and nag until you either stop playing or upgrade to remove them. Spotify would be better offering competitive high res music (promised for two years) to other services and working to convert their free accounts to paid ones.

 

[theinsaneworld]

Anyone that pushes back against big corpos is a good thing.

Epic is a multi-billion dollar company.

 

[pumpkinwhite]

I don’t have any real stake in this (I.e. I’m not a developer), but reading the multiple posts here defending Apple is just unreal. Many posts reek of blatant fanboyism. I felt like replying to some of those posts but realized I won’t convince them so thought better of it.

Anyway, here’s my take. I get both sides of the argument. However, the situation today is very different from what it was when iOS and Android platforms had started. Phones and Tablets are now ubiquitous, just like computers. The line between a tablet OS and laptop/desktop OS will become thinner and thinner. Somebody told a developer earlier in this thread that they have the option to not develop their software for iPads. That’s just being naive. It’s not really an option. They have to reach customers where the customers are. In terms of development effort, it’s takes broadly the same effort to build software for windows, Mac OS, Linux, iOS, iPad OS or Android. However a developer can simply publish their apps on first three avenues without having to pay a cut in sale fee. Windows and Mac app stores exist but developers (and users) have the choice to any store front. But on the phone and tablet OS’s neither developers nor users have any choice. Now arguments about Apple developing core technologies are valid, but so are for desktop OSs. When phone/tablet OSs were in infancy arguments about a walled system were valid. Apple and Google earned a lot of money. But they cannot be allowed to earn that in perpetuity. It’s not good for consumers in the end. Once a platform becomes too big, governments should step in to protect consumers interests. Thematically it is no different from FTC reviewing every large merger.

Nobody is saying Apple Store will go away. It will stay remain dominant. But there should be options for both developers and users. Having an option cannot be bad for either of them. The current system benefits only Apple and Google. And nobody else.

 

[TimFL1]

...the same infrastructure and tools that they're giving away for free to the Amazons, Booking.coms, Ubers...
Are Apple free to do that? Sure why not, unless they're acting anticompetitive or subject to legislation mandating otherwise.

But let's not pretend the commission is for all that.

At this point it goes to Apple's Profit, then Apple's profit, Apple's profit, Apple's competitive advantage against competing services etc. first and foremost.

App Store revenue got jacked up by a few hundred percent - yet we haven't seen any decreases in commission until 2021. And none for the biggest developers that make up the bulk of App Store revenue.

So no reason to increase prices either.

They did!?

You aren't working for a company that provides a platform in a duopoly market with entry barriers like Apple.
You're working in a competitive market.

I can put my music on my website and self-distribute - and it will "run" on consumer devices.

Why would they willingly decrease their commission rate? Other platforms don‘t do it either and they offer FAR FAR less than what Apple provided for their commission (Steam has 30%, for example).

Don‘t get me wrong, I think Apple is stupid for their crap stunts (Spotify competition, the whole external payment guideline debacle in the US and EU up to a few days ago etc.), but they‘re allowed to monetize their stuff however they want. Epic and co. are leeches, they take the 99€ fee and run wanting more and more for free until Apple snaps and jacks up developer program fees for the people who want „0% commission to Apple“ (e.g. their proposed 12/27% split and CTF is the first sign of this).

 

[wbeasley]

...the same infrastructure and tools that they're giving away for free to the Amazons, Booking.coms, Ubers...
Are Apple free to do that? Sure why not, unless they're acting anticompetitive or subject to legislation mandating otherwise.

But let's not pretend the commission is primarily for the tools. And Apple certainly needn't do marketing for the Netflixes and Spotifys (or Fortnites for that matter).

At this point, the commission goes straight to Apple's Profit, then Apple's profit, Apple's profit, Apple's competitive advantage against competing services etc. And a small fraction to all that infrastructure and tools.

App Store revenue got jacked up by a few hundred percent - yet we haven't seen any decreases in commission until 2021. And none for the biggest developers that make up the bulk of App Store revenue.

So no reason to increase prices either.

They did!?

You aren't working for a company that provides a platform in a duopoly market with entry barriers like Apple.
You're working in a competitive market.

I can put my music on my website and self-distribute - and it will "run" on consumer devices.

Apple are under no compulsion to give away their tools.

they already give away from OS updates on phones and laptops/Macs.
They did this when Microsoft were still charging for upgrades.
They gave away included Office software: Pages, Number etc.

You get a lot of free things when you buy Apple.

If Apple isnt doing marketing for Netflix etc, then the users of those system already know they pay outside the app.

I can put Spotify and Netflix on my TV and can't pay for either that way.
They link out and let me create an account. Or sign in.

People are smarter than SPotify and Epic are pretending.

Apple doesnt set app store prices. App devs do.

Feel free to put your music on your website.
You might make 100% of the purchases. Good on you.
But you wont be making much because noone sees you. Exposure in an app store is a huge benefit. For free.

 

[macabrumorsab]

still not Apple's issue. it's customer expectations.

Customers can demand all they want to. You dont have to comply. If a good business opportuinity to extend you product reach exists and makes you money then that's a good thing.
...

"it's customer expectations" because Apple is selling iPads as computers. And customers do not want different computers for different software.
EU does exactly protect customers, but also software suppliers who have heavily invested in their software for years and now need to deal with Apple rules just because they have to offer a new client software.
I can guarantee you that the rest of the world will follow soon as more and more people are understanding that it is not about accessories, but actual computers.

 

[wbeasley]

I don’t have any real stake in this (I.e. I’m not a developer), but reading the multiple posts here defending Apple is just unreal. Many posts reek of blatant fanboyism. I felt like replying to some of those posts but realized I won’t convince them so thought better of it.

Anyway, here’s my take. I get both sides of the argument. However, the situation today is very different from what it was when iOS and Android platforms had started. Phones and Tablets are now ubiquitous, just like computers. The line between a tablet OS and laptop/desktop OS will become thinner and thinner. Somebody told a developer earlier in this thread that they have the option to not develop their software for iPads. That’s just being naive. It’s not really an option. They have to reach customers where the customers are. In terms of development effort, it’s takes broadly the same effort to build software for windows, Mac OS, Linux, iOS, iPad OS or Android. However a developer can simply publish their apps on first three avenues without having to pay a cut in sale fee. Windows and Mac app stores exist but developers (and users) have the choice to any store front. But on the phone and tablet OS’s neither developers nor users have any choice. Now arguments about Apple developing core technologies are valid, but so are for desktop OSs. When phone/tablet OSs were in infancy arguments about a walled system were valid. Apple and Google earned a lot of money. But they cannot be allowed to earn that in perpetuity. It’s not good for consumers in the end. Once a platform becomes too big, governments should step in to protect consumers interests. Thematically it is no different from FTC reviewing every large merger.

Nobody is saying Apple Store will go away. It will stay remain dominant. But there should be options for both developers and users. Having an option cannot be bad for either of them. The current system benefits only Apple and Google. And nobody else.

That's a naive response.

And fanboyism comments tend to get you warned or banned for a while... just saying

Many people bought Apple devices because of the walled garden and store. by choice.
They could have bought Android ones where things are more open.

Phones and tablets do borrow features and crossover. no argument.
But they remain different hardware.
You dont carry a laptop everywhere with you but a phone does not have the screen real estate or keyboard or unlimited storage potential a laptop has. If one device could do it all that would be all we buy. iPods sales disappeared as iPhones became cheaper with more features. Hardware vendors like product differentiation. But all the Apple devices make it easy to AirDrop files and share WiFi passwords between siblings and continue file edits on another device in a vertical market. Apple have thrived by getting someone to buy in and keep expanding their product purchases.

 

[ksj1]

What I am reading here is that some people are not going to be happy until an iPhone is as crappy as an Android phone.

 

[maxoakland]

c) At no point is anyone forcing Epic to develop for iOS and at no point did anyone force them to sign the agreement between themselves and Apple.

They are forced to develop for iOS since that's such a huge part of the market. Maybe Apple didn't force them, but it's illogical to act like there's no pressure on Epic.

And that pressure is power, and Apple is taking advantage of that power too much. There's a reason we have a lot of the regulations we have against monopolistic behavior. And we need more. This is a good thing for consumers because Apple doesn't have our interests in mind, they have their profits in mind

 

[mcnallym]

Your second sentence (in bold) is all conjecture and hypothesizing

You're also completely ignoring how much 3rd party Apps DRIVE iPhone sales
No 3rd party Apps? .... I got news for ya ... iPhone becomes a nothing burger

that means that to drive growth then the absence of that App would mean people would not buy an iPhone but would buy an alternative.

i suggested that developers stop developing on iOS but keep developing on Android. if these apps that developers are providing are driving iPhone growth then Apple will soon be contacting them to provide better terms to get them to release the products on iPhone again when iPhone sales tank.

surely that is win win for the developers.

either they get better terms from Apple or they find that the consumer buys an Android and buys the App on that platform where they already have what the DMA forces Apple to do so surely they must be getting better terms then on iOS.

the response I got to the suggestion was that the AppStore was unfair as Netflix got better terms then small developers which completly ignored what proposing.

Surley that shows that is not the availability of these smaller developers apps that are driving iPhone growth. removal or threat of removal would get you better terms. if it isn’t then your app is not a factor in driving iPhone growth,

if these developers not targeting android then surely undermines the argument as android has all of these features already so surely if that is the problem then why is it not working on Android for these developers.

if want to argue that is because iPhone users buy apps and android users don’t ( figures show that app spend on iPhone dwarfs app spend on Android) then surely that is Apple is driving the growth. If the same apps available on both platforms and people buy them on iPhone then it is iOS the difference between an iPhone and Android mobiles that is driving iPhone growth not the availability of the app.

the real big test will be when the Alt app stores launch, if the apps are not cheaper (with presumably the alt App Store and payment providers taking a smaller cut) then will show that is just about people wanting a bigger slice of the pie rather then that apple hampering them with their charges.

it will need to be so that the alt App Store and alt payment providers cut vs apples is known and if the FULL amount not passed on then people will argue that is proof that is not Apple artificially keeping the price up to the consumers but this simply driven by devs wanting to not pay Apple.

if people not prepared to publish the potential spaving’s vs actual savings then does not fill me with confidence. After all showing that will show why I am wrong and this is not and not devs wanting to keep more of the pie themselves.

of course that still won’t show why my choice for a closed mobile ecosystem is being removed to support businessee who want to target iPhone users, as opposed to simply pointing out that all of this is available on Android so why are you not targeting those consumers instead and leave me and other people like me with there choice.

if the apps we need are not available on iOS then will stop buying iPhones or Apple will give devs better terms to keep them onboard if iPhone sales tank due to lack of apps.

if devs cannot back up there claims of we drive the iPhone sales by removing there apps then not very confident that the claim is accurate are they.

 

[wbeasley]

Maybe the following helps in understanding the difference: Imagine you bought a car and every gas station in the world would have to pass 30% of the revenue to your car manufacturer each time you fueled your car. Or each time you bought new tires, 30% of the revenue needed to be passed to your car manufacturer. This would never happen and would be considered as illegal anywhere in the world.

your analogy fails...

how about franchise businesses?
part of buying into a franchise puts a whole bunch of "only buying our products from us" clauses.

remember when printers had chips to only work with supplies from the parent company?

Game consoles limit what you can buy and install.

a car can use any fuel or tyres. they are parts.

Different business models have different rules.
Just like Macs and iPhones do.

If people didnt like iPhone rules they wouldnt be buying them or developing apps for them.
A million apps and billions paid in app fees to devs would say it works as it is.

except for greedy Spotify and Epic.

 

[ksj1]

Lots of obvious non-developers commenting here that is for certain.

 

[mcnallym]

a) It is not about SDK. If it was about SDK, anyone would have to pay independent of going through App Stor or not! Don't mix things up.

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

c) Smartphones or tablets are like computers in the meantime. Do you remember the Apple's commercial ad? Many people don't buy any computers anymore, and stick to their tablets and smartphone (=computers) for years. It is ok to sell your system as a "computer", but it is not ok to get a cut from the software suppliers who had enough additional costs to port their software also to your platform (edit: it is not all about Epic, also I have a software company and had to port our software to iOS because customers use iPads instead of Windows notbooks). You can't just steal from other people's efforts.

Are you not admitting here that as a developer you have to develop on iOS as your customer has already chosen an iOS device and need the software to run on the device.

surely that is tacit admission that Apple is driving iOS device growth as if you as a developer was driving the growth of a platform then apps would have determined your customers choice of platform.

what apple services am I forced to use. I could buy an android device instead and not pay apple anything or use any Apple Service.

 

[GrayFlannel]

Lots of obvious non-developers commenting here that is for certain.

Irrelevant. The judge along with Apple and Epics lawyers are likely not developers either. And developers are not the only ones with an opinion.

 

[ksj1]

Irrelevant. The judge along with Apple and Epics lawyers are likely not developers either. And developers are not the only ones with an opinion.

Yes, however developers are likely to have an informed opinion. That is in short supply on this thread.

How many of you are getting paid for all the attacks? I'm willing to bet its quite a few. Certainly something Sweeney would probably do, among others.

 

[macabrumorsab]

your analogy fails...

how about franchise businesses?
part of buying into a franchise puts a whole bunch of "only buying our products from us" clauses.

remember when printers had chips to only work with supplies from the parent company?

Game consoles limit what you can buy and install.

a car can use any fuel or tyres. they are parts.

Different business models have different rules.
Just like Macs and iPhones do.

If people didnt like iPhone rules they wouldnt be buying them or developing apps for them.
A million apps and billions paid in app fees to devs would say it works as it is.

except for greedy Spotify and Epic.

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.

 

[GrayFlannel]

Yes, however developers are likely to have an informed opinion.

Preposterous. Is the definition of a developer anything like a journalist now days? Anyone can claim to be one. The vast majority of genuinely professional developers don’t even code for iOS and even fewer have ever commercially published anything.

 

[TigerNike23]

How many days until Apple changes this or is forced to by the EU? Either way it’s excellent news, finally things are moving and I bet soon enough these changes will expand to countries outside the European Union.

Only if Apple is forced to by the local government. There’s a less-than-zero chance this stuff comes to the US.

 

[ghanwani]

maybe check your tagline: iPhone SE 2022 ... i'm doubting any new whizz bang iPhone is coming your way in 2024.

more seriously, with all the employees at Apple I think we can say the hardware and software people aren't doing the lawyering on this process...

I need a phone with no PWM and no temporal dithering. If there was a killer feature in a phone it would be a display built for sensitive eyes. There are so many threads now on this, not just here but other places as well like reddit and ledstrain.

 

[CarAnalogy]

Specifically, Apple does not allow External Links that resemble a "button" in any way.

Can we please talk about how companies know Dark Patterns / Deceptive Design exists and they use them all the time. They call each other out on them but abuse them for themselves just as much.

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.

...My god this is already what happens. What have we become.

 

[WilliApple]

Ok I actually support Epic on this one. Kinda dumb that people can’t redirect users.

I do not want to play Fortnite on my switch anymore, want to go back to playing on Mac…

 

[lazyrighteye]

This was, is, and never will be about “the consumer,” as Sweeney is so proud to proclaim - as if he's Robin Fcuking Hood. This is actually pretty simple: Apple spent time, energy and resources building, maintaining and evolving their ecosystem and Sweeney (and others) wants a piece of the action. For free, of course. Typical hack CEOing. Imagine if they spent as much time, energy and resources innovating as they did litigating.

 

[AppliedMicro]

Why would they willingly decrease their commission rate?

Competition. To fend off competition.
Since Apple don't face any competition regulators and lawmakers should limit Apple's ability to restrict competition.

Epic and co. are leeches

Apple is the true leech, when they think they can charge 30% perpetually on subscriptions for others' content.

Apple are under no compulsion to give away their tools.

No - but they've chosen to give them away at a certain price (the subscription and otherwise free).
And every revenue share arrangement has (should have!) its limits how far the revenue share extends.
If that can't be determined by market competition, governments, lawmakers and antitrust law should step in.

If Apple isnt doing marketing for Netflix etc, then the users of those system already know they pay outside the app.

Probably - but Apple makes it inconvenient by restricting it in apps. And since they're competing with Netflix, they're acting anticompetitively (by leveraging their platform in an otherwise unrelated market).

Feel free to put your music on your website.
You might make 100% of the purchases. Good on you.
But you wont be making much because noone sees you

For now, let's focus on forcing Apple letting stuff "run" that gets downloaded from my website.
Third-party developers determine and choose themselves how to increase their visibility - with or without Apple.

 

[AppliedMicro]

Apple spend time, energy and resources building, maintaining and evolving their ecosystem

...and they're being fairly (well) compensated for it by device and accessory sales.

What we don't need: Apple disadvantaging and/or taxing their direct competitors (for gaming apps, music and video streaming), while giving away their time, energy, resources and maintenance away for free to others, to prop up their ecosystem.

Given Apple'a market power, they should be prevented from
a) giving away IP for free where it suits them (the network effect and locking in of developers and consumers through "free" apps), while at the same time
b) "charging 30% commission on competitors" and restricting their ability to communicate and conduct transactions with consumers where they can.