Epic Games and Spotify Say Apple's Latest DMA Changes Are 'Illegal' and 'Deliberately Confusing'

[Jago]

The yearly developer fee pays for access to Apple’s development resources, including code development support, downloads, beta programs, and education. It does not constitute a license to make money from the use of their libraries nor customer acquisition fees. This is clear because Apple has always charged additional amounts for for-profit apps. Pretending the $99/year fee covers all the benefits of being licensed to operate for profit in the Apple ecosystem is naïve to the point of being maliciousness.

The fact that Apple charges ANYTHING for the developer program is offensive on its own. It's not "normal". Microsoft doesn't charge you anything to develop for Windows, No Linux vendor charges you for developing and packaging software for their distribution.

Generally you entice others and yes, sometimes even PAY others to come develop for your platform because it makes your platform more enticing.

Apple is the odd one out, wanting to both have their cake AND eat it too, not the other way around.

 

[jakey rolling]

Read the license you sign to find out.

I think you fail to understand what is going on here. There is a reason why the EU is intervening, and it is precisely because of the license. Luckily, laws override contracts.

Learn something about business. Customer acquisition is an industry in itself.

Oh, I'm quite aware of that, thanks very much. It just seems like you have gotten a bit lost here. See, this whole conversation is about software developers who are fine with acquiring customers on their own and don't really want nor need Apple's help.

 

[vantelimus]

What would iOS look like if it didn't have Netflix, Spotify, YouTube? I'm not convinced Apple would sell as many phones as they do.

It would look fine to me. I don’t use those apps on iOS. You forget that when the iPhone came out it immediately captured 15% of the smartphone market with just a browser, mail app, and contact manager, with no ability for 3rd party native apps. Apple didn’t support making apps for the system for a few years. If you wanted to make an app, you made a web-based app to run in your browser.

 

[jakey rolling]

The fact that Apple charges ANYTHING for the developer program is offensive on its own. It's not "normal". Microsoft doesn't charge you anything to develop for Windows, No Linux vendor charges you for developing and packaging software for their distribution.

To be fair, Microsoft does charge for professional and enterprise versions of Visual Studio and they used to require an MSDN subscription for access to SDKs and the like. In many cases, large corporate development houses pay a very pretty penny to Microsoft for their development tools.

Having said that, there are many, many tools that can be used to develop for Windows that are absolutely free, and many of those tools are created by Microsoft and provided free of charge.

There is no problem with charging for developer tools, SDKs, educational materials, or for access to online assistance. The problem is in tying those things to ancillary distribution services and then charging a heavy commission on those ancillary services.

 

[wbeasley]

It's often repeated on here that consoles are loss leaders:

"Nintendo declared from the outset that it would not sell the Nintendo Switch at a loss, and as Bloomberg reports, as of August 2021 Sony confirmed that the baseline $499 PS5 is profitable in its own right. That said, the $399 digital edition PS5 still loses money upfront and relies on the kind of recouped investment that Spencer mentioned. The eye-wateringly expensive PS5 DualSense Edge and Xbox Elite Series 2 controllers, for instance, have been positioned as profit-recovering peripherals."

One reason for them not being profitable is they sell them through retail channels. They need easy access to gamers and sell the physical device.

As we move more to online stores and product fulfillment by manufacturers, cutting out the middle men, the profit line should improve.

 

[vantelimus]

Oh, I'm quite aware of that, thanks very much. It just seems like you have gotten a bit lost here. See, this whole conversation is about software developers who are fine with acquiring customers on their own and don't really want nor need Apple's help.

Fine. Let them acquire customers on Android without Apple’s help. Developers want to make apps for the iPhone because the customer base that Apple has aggregated is affluent and will buy apps. You seem to think Apple should cede that value they have built to freeloaders.

 

[wbeasley]

Didn’t they also do an increase on subscriptions in that time frame? I am sure some people actually paid attention to that and picked a lower priced service but even more didn’t even pay attention and just shelled up more money each month. If you have a billion subscribers and they don’t react to a price increase of a dollar, then you just made yourself an extra billion each month.

Not only did they increase fees they still were using the regular Apple AppStore without any change to the rules about steering. So any new customers were coming the same way as ever: install the app, sign up on the website. And still they whinge...

 

[ProbablyDylan]

It would look fine to me. I don’t use those apps on iOS. You forget that when the iPhone came out it immediately captured 15% of the smartphone market with just a browser, mail app, and contact manager, with no ability for 3rd party native apps. Apple didn’t support making apps for the system for a few years. If you wanted to make an app, you made a web-based app to run in your browser.

Ah, excuse me, I wasn't aware that MacRumors Forum posters represented average consumers. I'm right there with you, I don't use them either, but we all have that one cousin or friend of a friend that's obsessed.

I honestly think Steve was right about web apps though. Oh what could have been.

 

[Jago]

I think you fail to understand what is going on here. There is a reason why the EU is intervening, and it is precisely because of the license. Luckily, laws override contracts.

You are at the very core of the difference in the worldview of (generalising) US and EU folks on this issue.

In the US, it seems generally accepted that if something is in a licence/contract, then that's how that goes and that's the end of discussion. The bar to have the courts deem a contract/license outright illegal over there is VERY high.

Meanwhile people in the EU generally think that anyone having unlimited power to craft licences and contracts that favour one side very very heavily is a very stupid idea and that thinking that "2 parties read the terms and agreed to them so that makes it okay" is not anywhere good enough in a world where we have things such as skewed power balance in a lot of different situations (workers and employers, consumers and mega corps, etc).

US folks will argue "but these companies worked very hard to achieve this position of power to be able to dictate these terms, so they should be able to enjoy the power they earned!" and the EU folks will reply "The fact that they did work very hard towards this goal does not in any way, shape or form, mean that this being possible is a good thing for society as a whole".

 

[vantelimus]

The fact that Apple charges ANYTHING for the developer program is offensive on its own. It's not "normal". Microsoft doesn't charge you anything to develop for Windows, No Linux vendor charges you for developing and packaging software for their distribution.

Generally you entice others and yes, sometimes even PAY others to come develop for your platform because it makes your platform more enticing.

Apple is the odd one out, wanting to both have their cake AND eat it too, not the other way around.

You are clearly a youngster. Be offended all you want. There’s a reason those other tools are free and yet developers still pay Apple’s fee. If you don’t want a built-in affluent customer base, stick with Windows and Android. Don’t hate on Apple just because you are cheap.

 

[webkit]

You forget that when the iPhone came out it immediately captured 15% of the smartphone market with just a browser, mail app, and contact manager, with no ability for 3rd party native apps.

Source? I haven't seen data that shows iPhone reached 15% smartphone market share until at least three years after it launched and two years after the App Store launched.

 

[AppliedMicro]

Do you think Apple has a right to be compensated for Spotify and Epic using iOS to create a product that functions on iOS devices? If no, why not. If yes, how much is too much?

Up until the Spotify or Epic app has been bought delivered to the customers.
Not for 12 months afterwards.

If I want to write a story set in the Star Wars universe, should I be allowed to write it and sell it without compensating Disney for use of their intellectual property?

Depends on what Disney charge you. And they should be free to charge you anything they want.
It’s not as if Disney/Star Wars and Paramount/Star Trek had a monopoly on Science Fiction intellectual property. And it’s not as if you have to spend billions of dollars to overcome entry barriers to the science fiction story market to publish.

If Disney and Paramount hypothetically controlled 95% or so of all science fiction book and movie stores and sales, and if you had to spend billions to set up a competing store chain, I‘d advocate for government regulation to ensure your right to publish, fair compensation for you and consumer choice.

I just don’t agree that means Apple shouldn’t be allowed to charge developers for use of their IP. If the terms are too onerous, developers will stop developing for iOS and its associated platforms

They can charge - but developers don‘t have many competing operating systems to develop dor or stores to sell through. It’s a monopoly or duopoly and you know it.

As we’ve established in multiple threads, I don’t think developers have a right to develop for iOS without following Apple’s rules just because they want to, and Apple’s market share in the EU certainly doesn’t warrant government intervention.

More than 50% of the entire market‘s revenue is.
As long as you keep quietly ignoring their revenue share time and again, I‘ll vow to respond 🥸

 

[Jago]

You are clearly a youngster. Be offended all you want. There’s a reason those other tools are free and yet developers still pay Apple’s fee. If you don’t want a built-in affluent customer base, stick with Windows and Android. Don’t hate on Apple just because you are cheap.

This would be a funny comment if it wasn't so sad. I am 40 years old, meaning I actually remember the time when trying to monetise anything and everything was considered shameful. We've fallen quite far.

You, on the other hand, seem to be so young as to actually not having lived through that time period.

 

[I7guy]

Does Costco have the ability to force their customers to only shop at Costco?

Does any business have the ability to force their customers to use their services or buy their products?

 

[vantelimus]

This would be a funny comment if it wasn't so sad. I am 40 years old, meaning I actually remember the time when trying to monetise anything and everything was considered shameful. We've fallen quite far.

You, on the other hand, seem to be so young as to actually not having lived through that time period.

I’ve been working in the industry since the 1970s. 40 years old means your experience is after the internet bubble popped. You have a perverse view of business that is influenced by the follow-on land-grab mentality that took hold when the internet opened up. Land grab has largely been unsuccessful outside the internet. I’ve got a closet full of swag apparel with the logos of companies that came and went quickly under the delusion that free was the way to build your customer base because you could always find ways to get them to pay later. Hint: free means zero customer loyalty.

 

[surferfb]

As long as you keep quietly ignoring it time and again, I‘ll vow to remind you 🥸

I’m not ignoring it because “you got me”, I’m ignoring it because I think it’s a bad measure.

For example, Rolex is estimated to make over 30% of the revenue in the $30 billion a year luxury watch market (Rolex is around $11.2 billion a year in revenue). Even if they bought their closest competitor (in revenue) Cartier ($3.5 billion) - giving them almost 50% of the the market, it’d be laughable to say there is no competition in luxury watches.

So no, the fact that Apple has successfully captured the top end of the market despite having much lower market share does not, in my opinion, mean they should be regulated differently. Just means they have a better business model.

 

[macfacts]

What kind of platform would Apple have if software developers didn't make iOS software?

People use computers (including phones!) for the software that runs on them. We saw this in practice when Windows Phone died due to the lack of software being made for it.

What would iOS look like if it didn't have Netflix, Spotify, YouTube? I'm not convinced Apple would sell as many phones as they do.

Take a look at vision pro, that's what you get with no indie and no big developers.

 

[vantelimus]

Source? I haven't seen data that shows iPhone reached 15% smartphone market share until at least three years after it launched and two years after the App Store launched.

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You are correct. It took until 2009 (second full year of sales) for them to reach 14% market share. In the first full year (2008), they shipped 13 million units. I seem to have either correctly remembered an unreliable source or misremembered a unit number stat as a percentage stat. The App Store launched mid year 2008. The 3G phone came out around the same time. So, any point I was trying to make about app availability vs. sales can't be made using that data. The timing between different events that drove the initial success of the iPhone is too close to reasonably support the point I was trying to make.

 

[delsoul]

Linux has, and at least for the foreseeable future, been open sourced. Of course they don’t charge you anything for it because it’s owned by no one person in particular. It was designed this way from the start. Mac OS/ios, etc? They’ve been a for profit, closed source operating system since the dawn of time. Of course they’d charge people money to have anything to do with it. As they should.

 

[Abazigal]

Take a look at vision pro, that's what you get with no indie and no big developers.

It does also speak to the importance of maintaining your own ecosystem, if for no other reason than to serve as a hedge against developers who decide not play ball. No spotify? Good thing Apple has its own music streaming service then, and one less reason to ever go with a competing alternative in the future.

 

[jakey rolling]

Does any business have the ability to force their customers to use their services or buy their products?

Yes. Apple does. That's kind of the whole point of this conversation.

 

[jakey rolling]

In the US, it seems generally accepted that if something is in a licence/contract, then that's how that goes and that's the end of discussion. The bar to have the courts deem a contract/license outright illegal over there is VERY high.

I agree for the most part. Even in the US, if a contract provision clearly conflicts with the law, the law is what applies. Where the EU and US differ has more to do with the interpretation and application of laws more than the tenet that laws override contracts. As others have described, EU laws are interpreted based on their meaning, not just based strictly on their text. As a result, many US courts strictly adhere to the text of laws and will only deem a contractual term legally invalid if it clearly conflicts with a law. An EU court, on the other hand, would be more likely to override a contractual term if there is a grey area between the law and the contract and there is sufficient evidence that the contractual term violates the spirit of the law.

Meanwhile people in the EU generally think that anyone having unlimited power to craft licences and contracts that favour one side very very heavily is a very stupid idea and that thinking that "2 parties read the terms and agreed to them so that makes it okay" is not anywhere good enough in a world where we have things such as skewed power balance in a lot of different situations (workers and employers, consumers and mega corps, etc).

In other words, the EU legal system is built to deal with the real world, not the ideal world.

US folks will argue "but these companies worked very hard to achieve this position of power to be able to dictate these terms, so they should be able to enjoy the power they earned!" and the EU folks will reply "The fact that they did work very hard towards this goal does not in any way, shape or form, mean that this being possible is a good thing for society as a whole".

I think many people on both sides of the pond would argue that "these companies worked very hard..." is a very naive statement in itself. Many, many large corporations got to where they are because of luck, mixed with back-room dealings and a little sprinkling of fraud and market manipulation. There are a whole host of reasons why given companies become successful, and "worked very hard" is not something that is at all unique to the large successful ones.

 

[I7guy]

Yes. Apple does. That's kind of the whole point of this conversation.

No Apple does not. When you enter into an agreement with apple you agree to their t&c.

 

[breenmask]

i'ts my device, i do with it as i please.

you bought the device knowing the limitations.

 

[breenmask]

Not at all! There are rules that must be followed by everybody,. big tech companies too...

we're discussing the argument against DMA so the rules that Apple setup were compliant with the rules before DMA.