Epic Games Not Satisfied With Ruling in Case Against Apple, Files Appeal

[dvanwinkle]

I said it before, and will say it again: I still think all these App developers that are complaining are getting it wrong. If I have a product to sell, and I want to sell it in a certain store, then they are entitled to make a profit on my products. The mechanism is slightly different, be it that I might sell it to the store, the store slaps on a 30% profit margin and sells it to the consumer. In the App store case, I hand my product to the store, they sell it for the full consumer price, retain 30% and give the rest to me. Same difference. No where in the world can I demand that the store uses a different payment system or that customer inside that store pay me direct, it just doesn't happen and it's total nonsense. if Epic wants to sell their product elsewhere, then they can go ahead and do so, but if they want to sell it through Apple's store, then comply with their rules. Simple.

Just to play devils advocate:
Let’s say that you live in NYC in the late 1970’s and all the stores around are controlled by different mafias, all of the stores take 30% off of the top to sell your product. You have a product to sell and mark up the price to cover the costs by 30% to cover the fee that you have to pay to the mafia. There are two different stores in two parts of town controlled by different mafias.

You products grow in popularity because of the placement in those stores. However, you want to offer your products at a cheaper price. You can’t afford to if you’re still paying a 30% fee to the mafia, so you decide to open your own store in both towns. One mafia allows you to open your own store in that part of town and sell your product. They are still happy to sell your product in their store for the 30% cut, but they don’t mind you having your own store. Some customers shop in your store because they enjoy the benefit of a lower price. Others however still shop in the other store because they have accounts there and don’t have to open a new account in your store. Everyone in that part of town is happy.

In the other part of town, you try to keep opening your own store and the mafia burns it down every time. They also don’t allow you to place anything in your product to allow your customers to know that they could get a cheaper price elsewhere. If you want to sell to the customers in that part of town, you HAVE to keep selling in the stores controlled by that mafia. Some customers have an undying loyalty to that mafia and would never buy anywhere else, even if there’s a discount or any other benefits. Others would, but they aren’t even allowed to shop in any other stores, no matter how trustworthy. That mafia keeps saying that it’s to keep their neighborhood safe, but crime rates are still extremely high.

 

[michaeljk]

People don’t spend money on android, apps aren’t up to scratch, nowhere near the same level of polish as iOS.

And this argues in favor of Apple's whole point. They tend to their App garden, unlike Google. If anything, Epic's arguments make more sense with Google, which basically charges the same amount as Apple, solely because they can, with their OS. One of the (many) reasons I don't use Android is that I can assume that Apple is "watching the Store" to make sure I don't get fleeced by whatever App I buy on their store (and the very strenuously curtail privacy and bad mojo violations getting onto my phone). I am will to pay a lot more for my iPhone than almost all Android phones cost, and more for my apps, because I trust Apple to do it's job--maintain a easy to use, safe and reliable place to find good apps for my smart phone (and iPad).

 

[cmaier]

Just to play devils advocate:
Let’s say that you live in NYC in the late 1970’s and all the stores around are controlled by different mafias, all of the stores take 30% off of the top to sell your product. You have a product to sell and mark up the price to cover the costs by 30% to cover the fee that you have to pay to the mafia. There are two different stores in two parts of town controlled by different mafias.

You products grow in popularity because of the placement in those stores. However, you want to offer your products at a cheaper price. You can’t afford to if you’re still paying a 30% fee to the mafia, so you decide to open your own store in both towns. One mafia allows you to open your own store in that part of town and sell your product. They are still happy to sell your product in their store for the 30% cut, but they don’t mind you having your own store. Some customers shop in your store because they enjoy the benefit of a lower price. Others however still shop in the other store because they have accounts there and don’t have to open a new account in your store. Everyone in that part of town is happy.

In the other part of town, you try to keep opening your own store and the mafia burns it down every time. They also don’t allow you to place anything in your product to allow your customers to know that they could get a cheaper price elsewhere. If you want to sell to the customers in that part of town, you HAVE to keep selling in the stores controlled by that mafia. Some customers have an undying loyalty to that mafia and would never buy anywhere else, even if there’s a discount or any other benefits. Others would, but they aren’t even allowed to shop in any other stores, no matter how trustworthy. That mafia keeps saying that it’s to keep their neighborhood safe, but crime rates are still extremely high.

Except apple isn’t a mafia, the mafia doesn;t own the stores you are trying to sell in (whereas apple does), and this analogy is broken in countless other ways.

 

[dvanwinkle]

Hopefully, never. Sideloading (bypassing the App Store) will compromise the security of iOS. OTOH, if Apple should allow sideloading they need to make clear that security on the device is broken and users are on their own for support and that it will break the warranty.

It’ll compromise the security of iOS the same way it compromises security on macOS. Apple could easily put safeguards in place that forces customers to manually allow an untrusted developer.

 

[jlc1978]

Well then you can also enforce that sideloaded app has to be signed with apple provided certificate, which come free with apple account

If Apple has to allow that they will recoup the costs through raising fees for signing apps.

So an enormous software company, with so much talent, with thousands and thousands of hours of work by these talented people putting their life into their work, Apple deserves 30% of all of that for merely curating and hosting content?

No, they deserve it for developing the tools to write the software, issuing certificates, and providing access to a very lucrative user base.

It’ll compromise the security of iOS the same way it compromises security on macOS. Apple could easily put safeguards in place that forces customers to manually allow an untrusted developer.

Better yet, simply bar sideloaded apps from accessing customer data and critical parts of the OS to maintain security.

I don't think they even deserve 10%.

Fair enough. Why should developers deserve more than $5 for any app. All they do is write an app and then let Apple take care of the rest and send them a check.

Not really. The difference between a store buying merchandise from a manufacturer and reselling it vs. selling it on a consignment basis is who bears the risk. Any Finance 101 class will explain why the level of risk must be coupled with the level of return.

The consignment store also has risks associated with maintaining the property and curating the items to ensure they also make a profit after expenses. In some ways they bear they greater risk.

 

[dvanwinkle]

Exactly.

Apple would need to make some super-sandbox before they allow sideloading.

But add me to the list of people who don’t want sideloading.

Even if I don’t have to use it… I’m worried about what kind of scams would be possible if people could install unchecked and unverified apps.

Use Android if you want that.

I don’t get the “use Android” argument. How about “don’t use 3rd party stores if you don’t want that”? Apple would be just as safe if people didn’t load another store or sideload anything. The walled garden wouldn’t be compromised.

 

[FreedomPenguin]

I still support my statements 100% barring all side loading, leave the store as it is, its been fine since its come out. if people want to make more money, make more apps that will gain more subscribers with their work appeal. not because lowering prices to cut into apple which is the people making it all possible in first place.

I really don't understand why so many people on macrumors want to break down apple so much to turn it into android. I get it, they like their iPhone but many of these people want it to become "like android" in ways, nah. get outta here.

id even pay more to do so ensuring no side loading was possible thats how much I oppose it.

 

[laptech]

I said it before, and will say it again: I still think all these App developers that are complaining are getting it wrong. If I have a product to sell, and I want to sell it in a certain store, then they are entitled to make a profit on my products. The mechanism is slightly different, be it that I might sell it to the store, the store slaps on a 30% profit margin and sells it to the consumer. In the App store case, I hand my product to the store, they sell it for the full consumer price, retain 30% and give the rest to me. Same difference. No where in the world can I demand that the store uses a different payment system or that customer inside that store pay me direct, it just doesn't happen and it's total nonsense. if Epic wants to sell their product elsewhere, then they can go ahead and do so, but if they want to sell it through Apple's store, then comply with their rules. Simple.

Actually, you would be royally ^&&%£ if the store said only it's own store payment card can be used and the T&C of using the card means every purchase made incurs a charge of 30% to cover the costs of using the stores own payment system, meaning everytime a consumer purchase your product, the store gets 30% and you 70%, whilst you are in full knowledge that you could get more if the store allowed cash payments or credit card payments.

So knowing that other payment systems are available which give you a bigger share of the purchase price and the fact the store already charges you x amount a year for putting your product in it's store, your happy to live with the store taking 30% because they are forcing everyone to use the store's own payment card which incurs a 30% charge every time it's used? You happy with that?? no somehow i do not think so.

 

[hcherry]

I don’t get the “use Android” argument. How about “don’t use 3rd party stores if you don’t want that”? Apple would be just as safe if people didn’t load another store or sideload anything. The walled garden wouldn’t be compromised.

Because the second option means forcing a company to change/build something that they don't consider beneficial to their business. I don't get to force Costco to accept MasterCard. And Apple shouldn't be forced to alter their ecosystem because others would prefer something different.

 

[elptdbi3lYI]

I still support my statements 100% barring all side loading, leave the store as it is, its been fine since its come out. if people want to make more money, make more apps that will gain more subscribers with their work appeal. not because lowering prices to cut into apple which is the people making it all possible in first place.

I really don't understand why so many people on macrumors want to break down apple so much to turn it into android. I get it, they like their iPhone but many of these people want it to become "like android" in ways, nah. get outta here.

id even pay more to do so ensuring no side loading was possible thats how much I oppose it.

I want sideloading because types of apps that are allowed on app store is very limited, you can't just make more apps if they are simply not allowed there. Now people have to workaround this issue with altstore or testflights or jailbreaking instead of just having sideloading outright being available.

 

[gregmancuso]

This is what’s going on. A whole lot of people complaining about things that they don’t quite realize aren’t problems.

But it is more fun to complain that to use rational thought.

 

[dvanwinkle]

Because the second option means forcing a company to change/build something that they don't consider beneficial to their business. I don't get to force Costco to accept MasterCard. And Apple shouldn't be forced to alter their ecosystem because others would prefer something different.

This is exactly why anti-monopoly laws exist though. Apple and Google have grown to be a duopoly in the mobile phone software distribution business. Yes, you can force businesses to do something when customers are the ones at risk. See HIPPA laws to force companies to protect medical records. There are also states adding PCI compliance laws to store credit card data (mostly punitive after breach and not auditable).

HIPPA laws in particular put a lot of pressure on every medical provider to protect medical information of patients at their own expense.

 

[gregmancuso]

Because the second option means forcing a company to change/build something that they don't consider beneficial to their business. I don't get to force Costco to accept MasterCard. And Apple shouldn't be forced to alter their ecosystem because others would prefer something different.

This is exactly the point! There is an alternative to Costco that accepts other cards - Sam's. Just like there is a mobile ecosystem that offers side loading.

And should Apple decide to open up the OS to side loading there will be significant development, testing, and support costs. That means higher costs for all developers (in terms of fees), app consumers (in terms of app prices as the developers need to recoup their added expense), and device consumers (in terms on additional OS development costs and Genius Bar / AppleCare personnel costs to handle the ultimate issues which will need to be recouped).

 

[hcherry]

This is exactly why anti-monopoly laws exist though. Apple and Google have grown to be a duopoly in the mobile phone software distribution business. Yes, you can force businesses to do something when customers are the ones at risk. See HIPPA laws to force companies to protect medical records. There are also states adding PCI compliance laws to store credit card data (mostly punitive after breach and not auditable).

HIPPA laws in particular put a lot of pressure on every medical provider to protect medical information of patients at their own expense.

True enough — that's certainly what folks in favor of those laws often cite. But where are customers "at risk" in the App Store situation?

But to be fair, I also tend to think most of the laws/precedents around monopolies are BS. And I totally get that I might be in the minority on this. Most actual monopolies are those that exist with permission/mandate by state and local governments (e.g., utility companies). In those situations, I literally have no other choice but to go w/ the company that's authorized to "sell" electricity in my geographic area. I might even be prevented by law from disconnecting from the utility grid and using my own generative source.

To call Apple (or Microsoft back in the day, for that matter) a monopoly seems overkill to me.

Hear me out: if a business truly becomes a monopoly and starts raising prices, consumers still have a choice to buy or not buy. And when a monopolist artificially raises prices beyond the price set in the open market, it makes it more compelling for competitors to enter to market with an alternative. Customers still have a choice, and, IMO, as long as no one is being forced to buy the product, the company should be allowed to make its own business decisions.

 

[cmaier]

I want sideloading because types of apps that are allowed on app store is very limited, you can't just make more apps if they are simply not allowed there. Now people have to workaround this issue with altstore or testflights or jailbreaking instead of just having sideloading outright being available.

If you want those kinds of apps, use android. That’s the difference between the two ecosystems. Why do you want to take away consumers’ ability to choose between a comparatively secure but closed ecosystem and a dangerous but open ecosystem?

 

[I7guy]

Epic could easily stick it to Apple in a very BIG way.

He/they tried and failed.

Tim Sweeney is just NOT smart-enough to figure it out !

Where there's a will there's a way I suppose.

NOT Rocket Science, iPhones & iPads are now mature products, that consumers don't see the value in upgrading more than every 3-4 years now.

But, many still have some extra Coin in the pocket, & would welcome something new & exciting to spend it on between iPhone & iPad "buy years".

Apple is also in a difficult situation, as the state of iPhones & iPads now is similar to PCs of the late-1990s.

That's when consumer upgrade cycles really stalled-out.

Consumers just didn't see the value in upgrading often.

Here in the States, iPhone upgrades are being driven by the carriers (via attractive upgrade deals), NOT by Apple.

Why do I bring ALL this up ?

There is opportunity, for Epic, OR even somebody else, to bring something new & exciting to the market, that Steals the Limelight (from Apple) !

I suspect GOOG & FB, once they figure this out, will drive the new opportunities.

Yes, this! I've been waiting for 14 years for GOOG & FB & MSFT to show Apple what's what. My grandkids will have grandkids before this happens though.

 

[sdwaltz]

Something tells me Epic won't be satisfied until Apple has to shutter their doors.

 

[cmaier]

Something tells me Epic won't be satisfied until Apple has to shutter their doors.

They’ll be holding their breath a long time.

 

[ValueArb]

In 90 days the boom gets dropped on Epic and Spotify.

Anyone who stops using the App Store purchasing system and stops paying Apple it's 15-30% is going to start to get charged hosting and network transfer fees for their apps in proportion to their data volume based on app size, downloads and updates. My estimate is that both Epic and Spotify will be charged over $10M a month if they want to stay on the store.

 

[ValueArb]

Epic could easily stick it to Apple in a very BIG way.

Tim Sweeney is just NOT smart-enough to figure it out !

NOT Rocket Science, iPhones & iPads are now mature products, that consumers don't see the value in upgrading more than every 3-4 years now.

But, many still have some extra Coin in the pocket, & would welcome something new & exciting to spend it on between iPhone & iPad "buy years".

Apple is also in a difficult situation, as the state of iPhones & iPads now is similar to PCs of the late-1990s.

That's when consumer upgrade cycles really stalled-out.

Consumers just didn't see the value in upgrading often.

Here in the States, iPhone upgrades are being driven by the carriers (via attractive upgrade deals), NOT by Apple.

Why do I bring ALL this up ?

There is opportunity, for Epic, OR even somebody else, to bring something new & exciting to the market, that Steals the Limelight (from Apple) !

I suspect GOOG & FB, once they figure this out, will drive the new opportunities.

Yes those cycles have lengthened so much for those "mature products" that Apple has had record revenues that last few years.

 

[ValueArb]

This is exactly why anti-monopoly laws exist though. Apple and Google have grown to be a duopoly in the mobile phone software distribution business. Yes, you can force businesses to do something when customers are the ones at risk. See HIPPA laws to force companies to protect medical records. There are also states adding PCI compliance laws to store credit card data (mostly punitive after breach and not auditable).

HIPPA laws in particular put a lot of pressure on every medical provider to protect medical information of patients at their own expense.

Apple isn't a monopoly.

HIPPA has made healthcare more expensive and service worse.

 

[StralyanPithecus]

So now they are singing:

 

[QuiteSure]

So an enormous software company, with so much talent, with thousands and thousands of hours of work by these talented people putting their life into their work, Apple deserves 30% of all of that for merely curating and hosting content? I don't think they even deserve 10%.

But Apple also builds, refines and updates both the software and the hardware platforms upon which these apps are sold, they don't "merely" curate and host.

 

[mrothroc]

All Apple needs to do is change the Xcode and library license to be a % of gross, regardless of where the revenue comes from. App builders are licensing the technology, and including Apple technology in the apps they distribute via the libraries.

Just like Epic does with Unreal Engine. https://www.unrealengine.com/en-US/faq

 

[ValueArb]

Actually, you would be royally ^&&%£ if the store said only it's own store payment card can be used and the T&C of using the card means every purchase made incurs a charge of 30% to cover the costs of using the stores own payment system, meaning everytime a consumer purchase your product, the store gets 30% and you 70%, whilst you are in full knowledge that you could get more if the store allowed cash payments or credit card payments.

So knowing that other payment systems are available which give you a bigger share of the purchase price and the fact the store already charges you x amount a year for putting your product in it's store, your happy to live with the store taking 30% because they are forcing everyone to use the store's own payment card which incurs a 30% charge every time it's used? You happy with that?? no somehow i do not think so.

Apple doesn't charge 30% for payment processing. It charges 15-30% for hosting, network bandwidth, store-fronts in hundreds of countries and dozens of languages, developer tools, developer support, developer services, app review and access to the best app store in the world where each customer spends ten times as much because they are so comfortable and safe.

If you have a free App, you only pay Apple $99 a year and you get XCode, support, distribution, etc even if Apple has to distribute hundreds of terabytes of your software a month.

If you had a paid app and your own payment system, you will be paying a minimum of 12% in payment processing fees for 99 cent purchases.

There is no free lunch and somehow all those services need to be paid for. If Apple isn't allowed to charge paid apps a reasonable profit share, then they will start charging distributions fees to free apps and apps that don't use their payment system.