Right. Essentially using apple intellectual property for free.
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Epic Games vs. Apple Judgment Allows App Store Developers to Link to Alternative Payment Methods
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I’m not really sure that this was true. (Not about your opinion, but I believe there were thoughts apple would be “crushed “.
My guess is that Apple would have large developers sign revised contracts that stipulate they owe Apple 30% of in-app purchases that take place outside of Apple payment.
To monitor this, Apple could utilize a process that involves these developers self-reporting the amount of App Store billings that occur on other payment platforms. Audits would exist as a way of ensuring developers report accurate figures. Apple would then assess a commission based on those ex-Apple payment billings (could be 30% or the difference between 30% and whatever the other payment service charges). It is certainly possible that developers end up paying more when a customer uses an alternative payment for in-app purchases versus using Apple payment. The unsaid implication is that such a system would force developers to stick with Apple payment and not offer alternative payments in the first place.
This is the type of unintended consequence and development that is possible when such a rule is passed.
Apple would not stipulate the same terms to small developers. To be clear, I feel that this is still far from an ideal solution versus the current structure. There are also questions regarding the legality (and the optics) of such a move. However, it would at least solve some of the bad optics that would be found with Apple going after small developers.
People would be less sympathetic of Apple going after a larger developer like Epic vs a smaller one like Hey.
Nowhere is there ever a rational reason do build their own payments system when they can literally use dousins available competitions with low fees. And apple likely have closer to 90-9% gross margins on AppStore purchases
We will just get an PayPal button, Apple Pay, button, credit card field and apples expensive iAP option. You must be insane to believe a payment system will be built. Why make a new tire from scratch when stores already sell them finished for you…
Better developers keep the apple tax than apple having their tax
Sorry to break it to you, but that is already the case for the last 10 years.
Won’t happen. Ready made solutions are already available with barely 5% of the cost compared to apples forced option
it’s an absolute robbery because they can’t choose anything else. Stripe/PayPal have 2.9%fee+0.3$ for every purchase
And on 1-5$ purchases its 0.1-0.45$
iAP is kind of a good option for 1$ or less purchases.
1000$= 300$ iAP fee
1000$= 30~$ stripe/PayPal fee
Yea… great deal my ass
Apple App Store is notoriously bad for advertising, top 100 lists often have bootleg games etc. this is not developers problem. If apple punished the smaller developers to make up for the big players they might just go to android instead. So apple have to chose what they value, happy customers or higher profits from services
If that is the case then Epic would have won not that much, except it could force players to make an account and collect personal data that way. That would benefit a new service but that's about it.
My take on it isn't that the ruling necessary explicitly says so but it doesn't ban Apple from doing it.
"[Apple] prohibiting developers from (i) including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and (ii) communicating with customers through points of contact obtained voluntarily from customers through account registration within the app."
Apple can do and change everything, if they want, as long as they don't break the law and don't violate the above.
So what's stopping Apple from changing its rules for the App Store and calculate commission based on revenue from the app independent of the payment system?
This is already in the existing developer agreement, since it makes no distinction as to where the transaction takes place. It just stipulates that Apple is owed a commission for sales.
This is why Epic still had to pay Apple commission for v-buck sales made outside the App Store.
That was not my stance. As I’ve said, I posted this possible outcome as a good one for now. Basically the ball is now on Apple court … and was ruled to change how it plays ball … it’s not judge procedure.
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The market developed very differently. When PC's came out digital distribution was not realistic, even with 2400 baud dialup. Hence it took the same distribution model as physical goods.
That remains to be seen; Apple may or may not be allowed to charge a commission on purchase outside of it's IAP process.
Current law is what counts. That's why they are used in court instead of "what we want the law to be..."
Exactly. If Apple changes its pricing structure to add more upfront fees small developers will be hurt. Apple could charge for hosting / review /etc. based on downloads or use patterns on an iPhone and makeup for any lost revenue from out side of IAP purchases.
The real question for me is will companies actually reduce prices or simply enjoy a windfall?
There is no evidence prices will drop; and some that they won't.
Two lawyers, three opinions.
Well, it resolves the issue of anti-competitive behavior relative to IAP policies.
To me, the questions till remains as to how Apple could change the contractual agreements between them and developers. A licensing scheme requiring a cut of revenue is not an unusual contractual requirement, Epic, IIRC, does that for its Unreal Engine. Sony, if I read it right, gets a cut based on how much time is spent by gamers in app on its platform.
Apple could very well find ways to continue to get revenue even if the actual purchase is made outside of the app.
If they can't, it would setup the scenario where every paid app goes freemium and developers simply setup a purchasing link to unlock the full features and pay Apple zero; that clearly is unsustainable for Apple. Apple could do away with freemium all together; allow developers to sell codes on their site and charge a fee to redeem the app from the app store; plus charge a fee to host the app.
Another alternative might be to allow links but do away with immediate unlocking / download and require a code to accomplish that for off app purchase and take their cut, reduced by some small percentage since they don't do CC processing when activating.
Apple could even go full on consumer friendly and give a 10% (or some percentage) bonus on iTunes gift cards to encourage their use; which require an IAP to redeem and drive sales to IAP that way.
Would those methods stand up in court? Who knows.
I am a user and I don't want choice. I want exactly just one choice: One store for everything.
One place to register (already done as part of using Apple devices), one place to enter payment information, one place to complain, one place to ask for refund, one place to cancel subscription, only one user interface to know.
Choice is the enemy of convenience and laziness two things I value highly.
Are you sure? Remember his war with Eric Schmidt? That's the reason why Apple have their own Maps app.
I didn't say it would be a good idea - I'm just wondering what he would have done.
On which legal grounds? Why would any developer sign a contract that is less advantageous to them than their current one?
Majority of in-app purchases are between $1 and $5, which means that using Stripe for them will cost you between 30% and 10% (don't forget that the fee increases for international customers). And you have to do VAT reporting on top of that. And of course, you still end up paying when the customer demands a refund. Or maybe you want to use another processor who does taxes and reporting for you, such as Paddle. Well, that will be somewhere between 50% and 15% of your revenue for those price points.
What iOS apps charges $1000 for an in-app purchase? That's a really weird argument to make. Basically what you are saying is that the devs will have to avoid customer-friendly price points to make more money
Three things. First, it's not practically enforceable. Two, they have existing contracts and they would need to force the devs to accept new contracts that disadvantage them. And three, that would be absolutely terrible PR blunder for Apple. Imagine the outrage. No, if they want to compensate the loss of the revenue, they would charge for App Store listing and API use.
This actually is a good question.
The current contract does not allow developers to direct customers to alternative purchase mechanisms, i.e. purchases outside the app. This is the so called "anti-steering provision". The injunction effectively nullifies that provision.
Suppose Apple changes the contract and now demands 30% commission for every purchase, even those made outside apps. If Apple prohibiting developers from even mentioning external purchasing options has been ruled unfair and anti-competitive behaviour, as has been ruled in current ruling, Apple demanding a cut from said purchases would most definitely constitute anti-competitive behaviour.
I agree, I don’t think Epic won anything. That’s why they’re so unhappy and Apple is so happy. Epic even had to pay for the commissions on v-buck sales outside the App Store,
I’m so confused about one detail that seems contrary to the rulings that are about to be put in place:
If the judge rules that links to external payment providers is permissible, then that means the laws should always have been that way to begin with.
So why, then, does Epic need to pay Apple a 30% commission on the transactions it made from the external payment provider?
That seems like punishing Epic for making the courts acknowledge that it should have been that way all along…
Why does Epic need to pay a cent? They literally gave Fortnight customers the choice to use Apple Pay or their own provider, which is what the judges ruling is forcing Apple to permit.
This seems like a bizarre contradiction.
If the judge rules that links to external payment providers is permissible, then that means the laws should always have been that way to begin with.
So why, then, does Epic need to pay Apple a 30% commission on the transactions it made from the external payment provider?
That seems like punishing Epic for making the courts acknowledge that it should have been that way all along…
Why does Epic need to pay a cent? They literally gave Fortnight customers the choice to use Apple Pay or their own provider, which is what the judges ruling is forcing Apple to permit.
This seems like a bizarre contradiction.
Multi platform can do two things. Either price match between in and out App Store payment … or not.
If companies don’t change out of the App Store payment methods to something more competitive don’t see how these methods can compete as an alternative to their customers.
If Apple tries to create barriers of entry to new payment methods and adopts any anti competitive model on royalties, basically not charging royalties when the user opts for App Store payments a 30% fee on an App Store sale is applied, while demanding outside payments say 30% in royalties … Huston we have a problem. Because this value, royalty, should be stacked on both ends in a normal market configuration … If you have 30% royalty means that any App Store would go bankrupt with a 30% fee … but hey it’s not the case is it? So the royalty cannot be 30% ever.
Let’s not forget that Apple practice was ruled anti competitive. Even in scenario we’re it was not considered a monopoly. Apple response to the resolution will dictate or not further measures / law suits.
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Because the judge never stopped Apple from collecting commission on sales outside its App Store - that is already in the existing Developer Agreement, and there was no injunction against that.
This is already in the Developer Agreement.
What isn’t in the agreement is a way to monitor outside sales; that’s a pain to administer at the scale of Apple but a perfectly legal and normal way of doing business.
Basically without the ability to collect from revenue derived from the ios ecosystem, devs can use Apples' IP for free, which doesn't make sense.
The devil is in the details. Epic is liable for breach of contract not because Epic breached the anti-steering provision in the contract with Apple, which prohibits developers from even mentioning alternative purchasing options, but other provisions (ruling, p. 173):
Most notably, Epic did not pay Apple commission for in-app purchases, thereby breaching the provision in the contract that requires them to do so (ruling, p. 168):
Thus, the court's ruling that:
(i) Epic is liable for breach of contract and
(ii) Apple violates anti competition law
are perfectly reconcilable. The breach of contract relates in-app purchases, the violation of anti competition law relates to purchases outside apps.
Wrong. The law wasn't changed. The facts have been applied to the existing law, on the basis of which the court came to a conclusion. The reason Epic is liable for breach of contract and needs to pay 30% commission over sales to Apple is explained in my post above. Please refrain from making legal statements if you have no idea what you are talking about.
No. Apple charges a $99 developer fee. They could change that rate, or come up with alternative sources of revenue. The court observed (ruling, p. 114):
Apple will have to, since many large developers, who bring in most of Apple's App Store profits, will probably switch to purchasing outside apps to avoid the 30% commission.