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Epic Games vs. Apple Judgment Allows App Store Developers to Link to Alternative Payment Methods
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I struggle to understand something basic here.
Say I’m a company who creates a virtual software store for developers (3rd party sellers) to list and sell their titles. Within my own store, all sales transactions are processed through my own store payment system (I see it as my virtual cash registry) and I charge the sellers 30% on their sales revenue generated in my store.
A judge then tells me to allow my 3rd party sellers to have customers pay them directly, if so they wish, by having software sales made within my own store processed outside of my store payment system, going directly to the sellers.
What business reason would I then have to allow these 3rd party sellers to come in and use my virtual store, generate sales revenue by getting paid directly by the customer, while I’m not getting a revenue share from their sales within my own store?
Say I’m a company who creates a virtual software store for developers (3rd party sellers) to list and sell their titles. Within my own store, all sales transactions are processed through my own store payment system (I see it as my virtual cash registry) and I charge the sellers 30% on their sales revenue generated in my store.
A judge then tells me to allow my 3rd party sellers to have customers pay them directly, if so they wish, by having software sales made within my own store processed outside of my store payment system, going directly to the sellers.
What business reason would I then have to allow these 3rd party sellers to come in and use my virtual store, generate sales revenue by getting paid directly by the customer, while I’m not getting a revenue share from their sales within my own store?
You wouldn’t. Which is why apple is still allowed to monetize these customers in other ways.
Since they renew annually Apple could simply change them at the next renewal.
Vat is not a developer cost, it’s fee added on the selling price. And both stripe, PayPal and Apple Pay can automatically determine the right VAT percentage.
I guess taxes in USA is extremely complex so not an EU problem. Unless you as a developer want to swallow that cost for some stupid reason I as a developer have no possibility to even try another payment option.
heck using apple pay exclusively would cap my fees at the normal credit card costs of 2-4%. Making my 1$ Transaction cost me 3~ cents instead of 30cent
Really? I could just as well said 10$ or a 100$What iOS apps charges $1000 for an in-app purchase? That's a really weird argument to make. Basically what you are saying is that the devs will have to avoid customer-friendly price points to make more money
10$=3$ fee vs 0.3$ fee
Or 30$ vs 3$ fee. No matter how you slice it apple are robbing them blind because they can.
Considering this is a major change. I wish them good luck as developers would likely revolt and cause a PR nightmare as well as legal ones. Contract laws are extremely harsh in EU
Plus the intellectual licensing fees you are now going to have to pay to apple.
No they aren’t. Contract laws in the EU are pretty similar to the rest of the world.
Correct. The court ruled Apple does not violate the law by restricting developers to use Apple’s In-App Purchasing system for in-app purchases. However, the court ruled that Apple violates the law by prohibiting developers from directing customers to purchasing systems for purchases outside apps.
One problem. Developers what’s stopped from having that transaction without apple or going through them. Apple is the one trying to force people from using their services even tho they don’t want to.
it would be like Walmart prohibit the manufacturers from selling without Walmart being the middle man. And you must have the same price in every store or be kicked out from Walmart…
The difference is that you cannot distribute iPhone apps without using Apple’s intellectual property. So for your analogy to be more accurate, what you want is for manufacturers to be allowed to sell directly to customers, but to do so in Walmart’s parking lot.
Apple is entitled to compensation for the use of its intellectual property, and nobody is entitle to free-ride on the R&D that apple expends to create the SDKs, developer tools, iCloud, etc. that these apps use.
No they aren’t. For example these EULA agreements are not legal in EU. Press x to agree is not legally binding, forbidding the use of legal remedies is illegal, contracts can’t remove legal rights and protections. Vague contracts terms are legally interpreted in the signers benefits or not legally binding etc etc
Of course you can distribute an app without using apples IPs for monetary transactions. Or even in other stores such as Cydia. What they want is the ability for the customers to go home and contact me for an upgrade. Not to stand on the parking lot.
It would be the equivalent of me putting a note inside the box telling you that if you go to website X you get 30% cheaper razor blades instead of buying them in the store
That’s simply not true. Clickwrap EULAs are enforceable in Europe. (See, e.g/. https://www.paulhastings.com/insigh...pean-court-of-justice-rules-on-click-wrapping) And if you are suggesting that you cannot have an arbitration clause in EU contracts, that’s also not true.
As for the rest of what you wrote, that’s true in most countries. In the U.S., for example, vague contract terms are interpreted to the detriment of the drafter (I assume that’s what you mean, because, in Europe, it is also not true that it is interpreted to the “signers benefit” - after all, both parties are signers). Also in most countries, there are rights and protections you cannot contract away.
Here I recommend you to read up on that
Belgium B2B contract law
and if apple does this I think the basic B2C laws will cover B2B as well.
But you where correct there is no universal EU directive but done nation by nation.
No I’m not talking about click wrap contracts with an electronic signature. Before a purchase, but an agreement you claim after a purchase already occurred.
for example apples EULA is not legally bindtsuring the setup process after I already purchased and opened it up.
buying a copy Photoshop and klicking an EULA after I already bought the product isn’t legally binding after the transaction already happened.
But I have to admit I have wrongfully mixed consumer protection laws with business law. making many of my points pointless untill it’s changed.
you can have an arbitration clause as long as it’s not in the detriment to the consumer( does not include businesses)
man’s yes drafter or consumer in this case as B2B don’t have the same protections
When you sell an app outside the AppStore you are responsible for collecting VAT and then paying it to each country. The same applies to US sales tax if you make enough sales and it is very complicated as it can go down to a single house on a street that pays more than their neighbours. Stripe can do this for you, they charge extra per transaction for both calculating the tax and subsequently paying that tax. In all this is way more expensive than the 15% or 30% cut of the main stores. Epic charge you 12.5% then you have the 15-30% extra on top of that for selling something. If you just look at the flat percentages it looks like Epic is a great deal, when you actually go into the business it very quickly becomes apparent that selling on Goggle Play, Steam, Microsoft Store, and The AppStore are much cheeper. And don't forget that building your own IAP mechanism isn't free, you have to hire a developer or develop and maintain that yourself.
Epic said they will appeal. Apple has not said one way or the other. I assume Apple is happy with the result, but they may appeal for tactical purposes if Epic is going to appeal anyway.
But the Court did say this explicitly (page 150):
"First, and most significant, as discussed in the findings of facts, IAP is the method by which Apple collects its licensing fee from developers for the use of Apple’s intellectual property. Even in the absence of IAP, Apple could still charge a commission on developers. It would simply be more difficult for Apple to collect that commission.”
In addition, the Court found that Epic had to pay 30% commission on its Epic Direct Payment transactions, which is outside Apple’s IAP system (page 179):
“(1) damages in an amount equal to (i) 30% of the $12,167,719 in revenue Epic Games collected from users in the Fortnite app on iOS through Epic Direct Payment between August and October 2020, plus (ii) 30% of any such revenue Epic Games collected from November 1, 2020 through the date of judgment;
How else do you explain this?
YGR said:
It is repeated over and over that Apple has a right to be paid for their IP. The injunction on anti-steering is only about information flow, not money flow.
But if a court rules that your employer's non-compete clause is unfair and says it must be removed, but in the same judgement awards damages against you for breaching it?
The court did NOT rule that apple doesn’t deserve to get paid, or that Epic can bill from within the app. The court just ruled that epic would be allowed to display text or a link or a button to take you to someplace to be billed. And apple is still allowed to get paid.
Epic got the benefit of being in the app store. The court making apple change one rule doesn’t mean Epic no longer has to pay.
Sales tax is not the same as VAT.
VAT is the same for for the entire nation so And VAT is included in the price.
VAT=tax added upon the selling price.
100$+25% VAT= 125$
sales tax= percentage of the sails price
100%+25% TAX= 75$ after tax
if you sell an app for 10$ and the VAT is 25%, you would just sell it for 12.5$
This means if you sell your app for 12.5$ epic would take 1.25$, the customer would pay you 2.5$ in VAT that you collect on the states behaf.
And iAP mechanism isn’t complicated to implement in your app, most of the time it’s quite literally a copy paste of code that is connected to your account. No development needed