Epic Games Setting Up Webshops for iOS Developers to Offer Users Out-of-App Purchases

[bcortens]

Ok if as you say it’s about corporate IP
Then why is one company doing all they can to cling on to the 30% IAP and not allow Spotify for example to offer a promotion on iOS yet with this payment link they can now offer it to customers on the iOS app through the payment link?

I don’t personally think the IP argument works because of jailbreaking.

If I jailbreak my phone I can access all the APIs that shipped on that phone without paying Apple any money. That this is not considered illegal suggests that I do have some rights to the software on the devices I purchase.
Apple prevents developers from selling to me without getting a cut unless I jailbreak the phone.
Apple can of course charge for Xcode and tooling and make the use of Xcode dependent upon agreement to the developer terms but (given that APIs are already on device) I don’t know that they can actually double dip.

 

[bcortens]

Good point. I online bank from my windows desktop. Online banking has been a thing before the dawn of the smartphone.

So that’s not a reason to treat Apple differently.

You never answered my question previously, when did electricity move from a luxury good only the wealthy could afford to an essential that all homes were expected to have?
What criteria would mean that smartphones reach that point as well? Or do you think technology that was invented in your lifetime can never become essential because you can remember life without it?

 

[surferfb]

I don’t personally think the IP argument works because of jailbreaking.

If I jailbreak my phone I can access all the APIs that shipped on that phone without paying Apple any money. That this is not considered illegal suggests that I do have some rights to the software on the devices I purchase.
Apple prevents developers from selling to me without getting a cut unless I jailbreak the phone.
Apple can of course charge for Xcode and tooling and make the use of Xcode dependent upon agreement to the developer terms but (given that APIs are already on device) I don’t know that they can actually double dip.

Just because the APIs are accessible on a personal device doesn’t mean you have the legal right to use them for commercial purposes. Access is not the same as a license. You might be able to technically use those APIs by jailbreaking a phone, but that doesn’t grant you the legal right to distribute apps that use them, especially through unauthorized channels. The fact that something is possible doesn’t mean it’s permitted under the law or Apple’s terms of service.

Think of iOS like a rental car. You’re allowed to drive it because you’ve agreed to the rental company's terms. The rental company's terms prohibit you using it as an Uber. You might figure out there is no technical prohibition from using it as an Uber, but that doesn’t mean you’re legally allowed to start using the car as an Uber without permission from the rental company.

 

[Stuwil]

Just because the APIs are accessible on a personal device doesn’t mean you have the legal right to use them for commercial purposes. Access is not the same as a license. You might be able to technically use those APIs by jailbreaking a phone, but that doesn’t grant you the legal right to distribute apps that use them, especially through unauthorized channels. The fact that something is possible doesn’t mean it’s permitted under the law or Apple’s terms of service.

Think of iOS like a rental car. You’re allowed to drive it because you’ve agreed to the rental company's terms. The rental company's terms prohibit you using it as an Uber. You might figure out there is no technical prohibition from using it as an Uber, but that doesn’t mean you’re legally allowed to start using the car as an Uber without permission from the rental company.

But you actually buy the iPhone and don’t rent it?

 

[surferfb]

But you actually buy the iPhone and don’t rent it?

You buy the iPhone, you license the software that is on it.

I admit the rental car isn't a perfect analogy, a better one is buying a copy of a movie, but that one didn't seem to resonate with others on here.

Another, maybe more pertinent example. Let's say you buy a Tesla.

You own the car, and you can drive it, charge it, and customize things. But that doesn’t mean you have the right to access or repurpose Tesla’s software or internal systems, especially for business. You can’t legally reverse-engineer Tesla’s autopilot system and build your own product on top of it, even if the code is sitting there in the car that you own. Or, as another example, Apple can't buy a Tesla, then use the code to develop and release a version of the Tesla software that contains CarPlay.

 

[AppliedMicro]

I'd argue that's more of a result of being a mature offering than anticompetiveness, but just wanted to flag there haven't been zero changes.

It’s the high market concentration and barriers to switch - in other words lack of competition - that enable Apple to still charge the same (supracompetitive) rate. But 30% for intermediation in digital services with near-zero marginal costs? Over 15 years? That’s implausible and not happening in competitive markets.

Another, maybe more pertinent example. Let's say you buy a Tesla.

You own the car, and you can drive it, charge it, and customize things

…and make money with it.

Be it as a taxi, courier or food delivery service. Without having to report your revenue and pay commission to Tesla.
Even though you’re using Tesla’s IP.

Heck, their self-driving or route finding / navigation service may even enable you to be more productive than sitting in a car with a printed map. You may make more money because of Tesla.

As you say: a more pertinent example.
And exemplary of the business model we deserve, that‘s good for society, that government (if necessary) should enforce:

👉 „Sold and delivered means it‘s done!“

No junk commissions after the sale!
Possibly layers upon layers of them

• The electricity company charging a 30% commission on the phone/internet service provider‘s revenue.
• The ISP charging a 30% commission to Apple (or Ticketmaster, or Booking.com) on revenue from digital transactions.
• Apple charging developers yet another 30% on their in-app revenue.
• What‘s bloody next? Microsoft charging my business a 30% commission on revenue for the privilege of using Office?!

 

[Stuwil]

You buy the iPhone, you license the software that is on it.

I admit the rental car isn't a perfect analogy, a better one is buying a copy of a movie, but that one didn't seem to resonate with others on here.

Another, maybe more pertinent example. Let's say you buy a Tesla.

You own the car, and you can drive it, charge it, and customize things. But that doesn’t mean you have the right to access or repurpose Tesla’s software or internal systems, especially for business. You can’t legally reverse-engineer Tesla’s autopilot system and build your own product on top of it, even if the code is sitting there in the car that you own. Or, as another example, Apple can't buy a Tesla, then use the code to develop and release a version of the Tesla software that contains CarPlay.

Then that is why the smartphone is getting regulated differently from most other things out there

 

[surferfb]

Then that is why the smartphone is getting regulated differently from most other things out there

I disagree that the is the actual reason it’s getting regulated. (For example, the DMA doesn’t limit itself to smartphones, but rather focuses on big tech).

 

[Stuwil]

I disagree that the is the actual reason it’s getting regulated. (For example, the DMA doesn’t limit itself to smartphones, but rather focuses on big tech).

Just think about it
It’s getting regulated & will continue to get regulated compared with other companies

Think about it what company does the DMA actually affect the most?
Payment links in apps what company would that affect the most
The list is going to continue

 

[surferfb]

Just think about it
It’s getting regulated & will continue to get regulated compared with other companies

Think about it what company does the DMA actually affect the most?
Payment links in apps what company would that affect the most
The list is going to continue

The EU is, in my opinion, philosophically opposed to closed ecosystems, which is why the DMA arguably affects Apple more than other companies. But that’s beyond the scope of this thread, and I’m sure there will be another EU article soon to discuss that.

The payment links was a self own by Apple. They should have allowed them years ago, and they absolutely should have allowed them when the judge ordered them to and they lost all their appeals. Had they done so, this case would have been seen as a massive win for Apple, while being forced to accept a small concession around linking (that they could have still gotten commissions from).

Remember, the judge ruled that Apple wasn’t a monopoly, Epic failed to prove Apple had violated federal or state antitrust laws, Apple had an right to require IAPand that Apple was allowed to prohibit third party app stores.

 

[Stuwil]

The EU is, in my opinion, philosophically opposed to closed ecosystems, which is why the DMA arguably affects Apple more than other companies. But that’s beyond the scope of this thread, and I’m sure there will be another EU article soon to discuss that.

The payment links was a self own by Apple. They should have allowed them years ago, and they absolutely should have allowed them when the judge ordered them to and they lost all their appeals. Had they done so, this case would have been seen as a massive win for Apple, while being forced to accept a small concession around linking (that they could have still gotten commissions from).

Remember, the judge ruled that Apple wasn’t a monopoly, Epic failed to prove Apple had violated federal or state antitrust laws, Apple had an right to require IAPand that Apple was allowed to prohibit third party app stores.

What did Apple win because there might not be 3rd party app stores and the right for IAP
However if a company can put a payment link in their app to offer subscriptions or sell
V bucks without Apple receiving a single cent
Then EPIC has changed the iOS App Store model
On different levels

 

[surferfb]

What did Apple win because there might not be 3rd party app stores and the right for IAP
However if a company can put a payment link in their app to offer subscriptions or sell
V bucks without Apple receiving a single cent
Then EPIC has changed the iOS App Store model
On different levels

The original order said Apple could charge on link outs. That only was removed in the revised order after Apple behaved so poorly. (And again, there’s a strong argument that part of the revised order is unconstitutional).

 

[Stuwil]

The original order said Apple could charge on link outs. That only was removed in the revised order after Apple behaved so poorly. (And again, there’s a strong argument that part of the revised order is unconstitutional).

You don’t get it epic has won if payment links are allowed in App Store that bypass IAP because there is no way that the judge is going to accept any figure that Apple will want because she has already rejected that silly
27% figure because as she said that figure was just plucked out the air so to stop customers from using the payment link & keep people using IAP

the judge never said they couldn’t offer IAP so Apple in that regard can still collect their 30%

 

[surferfb]

You don’t get it epic has won if payment links are allowed in App Store that bypass IAP because there is no way that the judge is going to accept any figure that Apple will want because she has already rejected that silly
27% figure because as she said that figure was just plucked out the air so to stop customers from using the payment link & keep people using IAP

the judge never said they couldn’t offer IAP so Apple in that regard can still collect their 30%

I disagree “epic has won”. They lost everything except one point. They wanted third party stores and the ability for apps to offer non-Apple IAPs (not link out, because linking out conversion rates are significantly lower than IAP). They got none of that. The judge even declared Apple wasn’t a monopoly and that they hadn’t violated federal or state antitrust laws.

That’s not to say the link out isn’t a loss for Apple. It absolutely is, especially now that they can’t (at least temporarily, maybe permanently) charge commissions on the links.

But, I strongly suspect that had Apple put epic’s 12% commission in place for link outs we’d not be having this conversation.

And again, I think saying “isn’t allowed to charge” is unconstitutional. We’ll see if the appeals court agrees.

 

[Stuwil]

I disagree “epic has won”. They lost everything except one point. They wanted third party stores and the ability for apps to offer non-Apple IAPs (not link out, because linking out conversion rates are significantly lower than IAP). They got none of that. The judge even declared Apple wasn’t a monopoly and that they hadn’t violated federal or state antitrust laws.

That’s not to say the link out isn’t a loss for Apple. It absolutely is, especially now that they can’t (at least temporarily, maybe permanently) charge commissions on the links.

But, I strongly suspect that had Apple put epic’s 12% commission in place for link outs we’d not be having this conversation.

And again, I think saying “isn’t allowed to charge” is unconstitutional. We’ll see if the appeals court agrees.

Epic win because they have wanted rid of that 30% IAP fee right from the start and because Apple being too greedy and not saying we will take 12% instead they are being forced to do something that they don’t want to do

This payment link will eventually kill
IAP because if there is commission on payment links it will probably end up a low figure

 

[surferfb]

Epic win because they have wanted rid of that 30% IAP fee right from the start and because Apple being too greedy and not saying we will take 12% instead they are being forced to do something that they don’t want to do

This payment link will eventually kill
IAP because if there is commission on payment links it will probably end up a low figure

As far as I can tell Apple doesn’t even have to let Epic back in the App Store in the US. Some win.

 

[I7guy]

You never answered my question previously, when did electricity move from a luxury good only the wealthy could afford to an essential that all homes were expected to have?
What criteria would mean that smartphones reach that point as well? Or do you think technology that was invented in your lifetime can never become essential because you can remember life without it?

The question is a red herring. In 2007 prior to the iPhone society got along fine without a smartphone, however the internet and cellular communications were important. Without electricity society would come to a standstill. And that’s been shown for example in the great blackout of 1965.

Today smartphones are a convenience in a small package. That’s the “smart aspect”.

 

[I7guy]

Then that is why the smartphone is getting regulated differently from most other things out there

How are smartphones in the US being regulated differently, than say for example, brokerage firms or banks. Other than health and safety aspects, what specific regulations in the US are directed toward smartphones?

 

[Stuwil]

How are smartphones in the US being regulated differently, than say for example, brokerage firms or banks. Other than health and safety aspects, what specific regulations in the US are directed toward smartphones?

Because if we are talking about just the USA
Then as a private business
They are getting told we don’t care that it is your platform and store
You must allow individual developers offer a payment link within your company and your not getting a cent from it right now

Do they do that to any other type of business?

 

[AppliedMicro]

In 2007 prior to the iPhone society got along fine without a smartphone, however the internet and cellular communications were important.

Yes - and we don’t live 20 years ago anymore.

It’s not about consumers it’s about corporate IP.

Yes - and a link or a few words about a (non-Apple) company’s offerings is in no meaningful way a use of Apple’s “intellectual property”. When Spotify or Epic tell consumers about their offerings in their apps, it has got nothing to do with Apple. And it isn’t Apple’s business - it’s literally not their business!

…unless, of course, and to the extent that you believe that Apple “owns” their iPhone users.
And that own all (commercial) customer relationships with them.

Apple clearly do believe that and impose that on others.
And that is where government should restrict them.

It is one thing to “own” access to your customer base and monetise access to it in a competitive market.
It’s another if your customer base accounts for about half of the entire population (in a duopoly).

 

[Stuwil]

As far as I can tell Apple doesn’t even have to let Epic back in the App Store in the US. Some win.

Think about it from this perspective Apple has consistently defended the 30% IAP figure and have never really given that up even to YouTube premium
Along comes epic whose Fortnite game only had a 7% customer base on iOS App Store compared with other platforms
They have singlehanded forced Apple into doing something that they didn’t want to do by now getting made to offer payment links in there App Store so that means companies like Spotify can benefit from by offering promotions on iOS
To also smashing that 30% figure and then Apple came back & said ok 27%
The judge said get out & come back with a realistic figure

So one company has made Apple change the iOS App Store rules so that is how it’s a win for epic because if it didn’t have consequences for Apple then they wouldn’t keep fighting it
Because this will over time kill IAP on the App Store

Because for example if the IAP price is
15.99 and the payment link price is 12.99 then most people will pick the cheaper option so then that company now has your money and going forward Apple won’t see a cent of it.

Or Apple will eventually have to reduce the IAP charge to compete with the payment link price so that is how epic have won

 

[surferfb]

Think about it from this perspective Apple has consistently defended the 30% IAP figure and have never really given that up even to YouTube premium
Along comes epic whose Fortnite game only had a 7% customer base on iOS App Store compared with other platforms
They have singlehanded forced Apple into doing something that they didn’t want to do by now getting made to offer payment links in there App Store so that means companies like Spotify can benefit from by offering promotions on iOS
To also smashing that 30% figure and then Apple came back & said ok 27%
The judge said get out & come back with a realistic figure

So one company has made Apple change the iOS App Store rules so that is how it’s a win for epic because if it didn’t have consequences for Apple then they wouldn’t keep fighting it
Because this will over time kill IAP on the App Store

Because for example if the IAP price is
15.99 and the payment link price is 12.99 then most people will pick the cheaper option so then that company now has your money and going forward Apple won’t see a cent of it.

Or Apple will eventually have to reduce the IAP charge to compete with the payment link price so that is how epic have won

Not saying it isn’t a loss for Apple, just that it isn’t a win for Epic.

 

[bcortens]

The question is a red herring. In 2007 prior to the iPhone society got along fine without a smartphone, however the internet and cellular communications were important. Without electricity society would come to a standstill. And that’s been shown for example in the great blackout of 1965.

You continue to dodge the question, in 1925 half of American homes had no electricity, at some point between 1925 and today we decided that electricity was essential to society.

It is not 2007, in 2007 only half of people even had cell phones, never mind smartphones, the world has changed dramatically since 2007.

Cellular internet, in 2007 was a convenience and was no where near as important to society as it is today, I would even go so far as to say that in 2007 cellular internet wasn't yet essential. Sometime in the mid 2010s I would say cellular internet became essential as more and more services now rely upon it.

Today smartphones are a convenience in a small package. That’s the “smart aspect”.

At one point cell phones and cellular data was merely a convenience.

So I will try again at what level of dependence and market ubiquity did cellular data become essential?

 

[Stuwil]

Not saying it isn’t a loss for Apple, just that it isn’t a win for Epic.

Well
If it’s not a win for epic
Then how have they managed to add payment links that bypass IAP fees of 30% and at the moment it’s zero
Then going forward Apple will have to come back with a realistic figure so in turn
If the fee is set at about 12%
Then Tim Sweeney will win because that is what he wanted from Apple originally & they never negotiated & because of that

He then put an IAP on Fortnite and then a
NON IAP that was cheaper to then get Apple to kick them off the iOS app store
So that is how he has won

 

[I7guy]

You continue to dodge the question, in 1925 half of American homes had no electricity, at some point between 1925 and today we decided that electricity was essential to society.

The question is a red herring. There is some disconnect in the recognizance that there is no replacement for electricity, but there are replacements for smartphones. Tablets, laptops, desktops, even watches. All made possible by the cellular tech and the internet.

It is not 2007, in 2007 only half of people even had cell phones, never mind smartphones, the world has changed dramatically since 2007.

Cellular internet, in 2007 was a convenience and was no where near as important to society as it is today, I would even go so far as to say that in 2007 cellular internet wasn't yet essential. Sometime in the mid 2010s I would say cellular internet became essential as more and more services now rely upon it.

At one point cell phones and cellular data was merely a convenience.

So I will try again at what level of dependence and market ubiquity did cellular data become essential?

When do you think cellular become essential? There is no substitute for it. WiFi isn’t a substitute.