Epic Games vs. Apple Judgment Allows App Store Developers to Link to Alternative Payment Methods

[Admiralbison]

Apple only allows THEIR App Store on their iOS devices. It IS a monopoly.

- End users have NO other choice to purchase and install software from elsewhere
Apple touting “privacy” and security for end users is irrelevant.
- installing software outside of Apple’s App Store or ultimately from Apple’s App Store is purposely difficult and restricts end user’s choices and control on what they want to install on their devices.
- Devs are ultimately under Apple’s roof with no other competitive alternatives

NOTHING good comes out of monopolies, doesn’t matter how hard Apple corporate shareholders defend and excuse it.

In the end, the power is with the consumers as long as they are aware of alternatives that doesn’t compromise their autonomy and control.

Several solutions.

1. Allow other App stores and give end users the freedom to install whatever the hell THEY want, Apple can do whatever and charge whatever they want on their App Store.

2. Install full MacOS on iPad Pros - not ideal for everyone, but MacOS certainly allows more freedom and giving users more control.

3. consumers/customers (such as myself) look to other better alternatives - I am looking at Windows 11 tablets as I no longer have any interests in iPad’s limited iOS wall gardened environment, and am hoping Windows 11 phones will be a thing with a Surface Duo 2.

 

[Michael Scrip]

Apple only allows THEIR App Store on their iOS devices. It IS a monopoly.

- End users have NO other choice to purchase and install software from elsewhere

Apple touting “privacy” and security for end users is irrelevant.
- installing software outside of Apple’s App Store or ultimately from Apple’s App Store is purposely difficult and restricts end user’s choices and control on what they want to install on their devices.
- Devs are ultimately under Apple’s roof with no other competitive alternatives

NOTHING good comes out of monopolies, doesn’t matter how hard Apple corporate shareholders defend and excuse it.

In the end, the power is with the consumers as long as they are aware of alternatives that doesn’t compromise their autonomy and control.

Several solutions.

1. Allow other App stores and give end users the freedom to install whatever the hell THEY want, Apple can do whatever and charge whatever they want on their App Store.

2. Install full MacOS on iPad Pros - not ideal for everyone, but MacOS certainly allows more freedom and giving users more control.

3. consumers/customers (such as myself) look to other better alternatives - I am looking at Windows 11 tablets as I no longer have any interests in iPad’s limited iOS wall gardened environment, and am hoping Windows 11 phones will be a thing with a Surface Duo 2.

If there was ever a case to prove Apple is a monopoly and force other stores onto iOS... wasn't this the case to do it?

So what went wrong? Is it that Epic's lawyers suck at their jobs? This case took an entire year.

Or is it just not that big of a deal in the eyes of the law?

 

[Analog Kid]

Yep, and every one of those moves is either caused by fundamentals, or technicals, or both. This move wasn't huge (well not yet anyway. I'll be curious what this week brings), but it was significant, and especially significant in that it jumped down, not up, on the court ruling. You have maths understand, but not stock market understanding.

You've defined technicals essentially as human whim, so yeah, every move is either because the underlying value changed or someone made a tactical decision. Saying a downward move is more significant than an upward move is a good example of how "technicals" are subject to fallacious decision making-- in this case confirmation bias.

It's worth remembering that the stock market is a market for stocks, not for companies. Over long periods of time, those stocks will generally track the value of the company they represent ownership in, but over short periods of time it's about trading in the margins and has little do to with facts and much more to do with trying to guess what other people think. Short term trading is computer algorithms steering by their wake, and twitchy humans trying to get ahead of the crowd by essentially guessing emotionally.

If news headlines were written as "Apple commissions ruled legal, wins all counts but one", I'd imagine the market would have reacted differently.

It'll be interesting to see what happens this week, but also hard to separate the impact of this news from the usual churn around new product launches.

I agree the move wasn't huge and if you can't find it in the last years data knowing the number you're looking for and with the axes labeled, then it clearly wasn't significant.

Anyway, here's the answer key:

 

[Analog Kid]

Apple only allows THEIR App Store on their iOS devices.

Change your emphasis and it’ll be more clear to you:
Apple only allows THEIR App Store on THEIR iOS devices.

The relevant market is discussed at length, and it’s worth reading to understand how these things are thought about, but here’s the gist:

In terms of substance, the Court agrees with Dr. Schmalensee that plaintiff’s identification of a “foremarket” for Apple’s own operating system is “artificial.” The proposed foremarket is entirely litigation driven, misconceived, and bears little relationship to the reality of the marketplace. Quite simply, it is illogical to argue that there is a market for something that is not licensed or sold to anyone. Competition exists for smartphones which are more than just the operating system. Features such as battery life, durability, ease of use, cameras, and performance factor into the market. Consumers should be able to choose between the type of ecosystems and antitrust law should not artificially eliminate them. In essence, Epic Games ignores these marketplace realities because, as it presumably knows, Apple does not have market power in the smartphone market. Rather Apple only has 15 percent of global market share in 2020.

 

[AppliedMicro]

That is EXACTLY the point….they CANNOT enable any extra functionality in the APP without using Apples IAP API. Go back and re-read my post. You are confusing what the IAP API does.

They absolutely can - though they may not be allowed to under the developer agreement.

I have literally quoted every relevant part of the developer agreement, and the judgement, and yet you still try to argue the point. Quoting MSM for ANYTHING is probably not a good idea as they are looking for clicks only.

I'm not sure what you mean by "MSM" and I did watch the video posted earlier.

So here's the thing:
People have argued that Apple could take their 30% share even on outside purchases.

I don't see how (under the current developer terms).
This is a particular point I am arguing. Not unlike the court ruling itself, which considers them individually. Throwing developers out of the app store for a violation of rules - or provoking that, as Epic did - is just a „nuclear“ option. It‘s not Apple veing able to charge 30% on any outside purchase.
Could they just their agreements to ask for 30% on outside purchases? They can try - but asking the same rate for purchases they aren’t involved with would be even more indicative of being anticompetitive.

The current injunction has thrown just one brick out of the wall (the anti-steering rules). But others will follow. It's only a matter of time until they do. And in-app purchases are at the top priorities of regulators and legislators. The UK CMA is looking into it. And so are the EU and South Korean legislators, specificity for in-app purchases.

 

[laptech]

If there was ever a case to prove Apple is a monopoly and force other stores onto iOS... wasn't this the case to do it?

So what went wrong? Is it that Epic's lawyers suck at their jobs? This case took an entire year.

Or is it just not that big of a deal in the eyes of the law?

People do not realise that what the Judge has done in this case has allowed every company in the US to challenge the FTC when they deny a merger on 'monopoly' grounds because all the company has to do is show the comparision between itself and Apple and say 'look, the situations are identical between us and Apple but yet Apple was cleared of monopolystic practices but yet we are being denied. The FTC are going to have a hard time over this.

 

[Z1000ST]

3. consumers/customers (such as myself) look to other better alternatives - I am looking at Windows 11 tablets as I no longer have any interests in iPad’s limited iOS wall gardened environment, and am hoping Windows 11 phones will be a thing with a Surface Duo 2.

This quite clearly solves the monopoly problem. With monopolies there are no alternatives.

The fact the consumers can go to alternatives suggests the market is bigger than your just iOS defined monopoly. The fact that at this stage consumers aren’t really doing that means your sentiment is at least for now, a small %. If that grows over time then Apple would be forced to make changes - free market way of working in which you vote with your wallet.

 

[Z1000ST]

People do not realise that what the Judge has done in this case has allowed every company in the US to challenge the FTC when they deny a merger on 'monopoly' grounds because all the company has to do is show the comparision between itself and Apple and say 'look, the situations are identical between us and Apple but yet Apple was cleared of monopolystic practices but yet we are being denied. The FTC are going to have a hard time over this.

Computers (Apple not a monopoly)
Phones (Apple not a monopoly)
App marketplaces (Apple not a monopoly)
Mobile Gaming platforms (Apple not a monopoly * Judge ruled here)
iOS (Apples own product, can’t be a monopoly on your own product - see Ford‘s monopoly on the Ford Focus or McD‘s monopoly of the Big Mac for an overused comparison) The key point being there are other products in the same product category if don’t like Ford’s or McD’s offerings. Same with Apple’s products.

What Apple can be is anti-competitive especially as they do have large control of their product.

 

[jlc1978]

I wonder if Apple will offer an upgrade option in the future — this would probably limit the number of apps moving to the subscription format.

I’m not even sure how it would work, because it could easily become messy, but I’m sure some developers would welcome the opportunity to have that option.

They already do - sort of. Developers can release an upgrade as a separate app and charge for it. If they want to they can over a discounted price for a set period. Not quite like being able to simply charge an upgrade fee as an IAP. but doable.

Yeah, and if it continues that way, soon everything will be subsidized multiple times till nothing is left to the dev or content creator. E.g. under this ruling TV and Display manufacturers could simply start building a system to request 30% of everything that wants to show up on their Panel, because it’s their IP.

If a TV manufacturer created their own OS and ap store, sure but then it would just be one more OS and cut. Developers real problem isn't the 30% cut, but that app store pricing has made it hard to charge more than a few dollars or Euros for apps, which means unless you sell a lot it's hard to make a meaningful return on the investment of time.

Apple only allows THEIR App Store on their iOS devices. It IS a monopoly.

You have choices beyond Apple.

NOTHING good comes out of monopolies, doesn’t matter how hard Apple corporate shareholders defend and excuse it.

Well, some would argue government monopolies over healthcare are a good thing.

3. consumers/customers (such as myself) look to other better alternatives - I am looking at Windows 11 tablets as I no longer have any interests in iPad’s limited iOS wall gardened environment, and am hoping Windows 11 phones will be a thing with a Surface Duo 2.

Thus you have choice and Apple is not a monopoly.

I agree the move wasn't huge and if you can't find it in the last years data knowing the number you're looking for and with the axes labeled, then it clearly wasn't significant.

My favorite story about technical analysis from a finance class was where a technical analyst was given a chart of stock moves and asked for his advice. After explaining what the moves meant and offering the opinion it was a bad got quite pissed when told it simply was a chart of random coin flip results.

So here's the thing:
People have argued that Apple could take their 30% share even on outside purchases.

I don't see how (under the current developer terms).

They just need to change the terms and charge a license fee for using their IP like many companies do. What rate they decide to charge is a separate issue.

 

[laptech]

Computers (Apple not a monopoly)
Phones (Apple not a monopoly)
App marketplaces (Apple not a monopoly)
Mobile Gaming platforms (Apple not a monopoly * Judge ruled here)
iOS (Apples own product, can’t be a monopoly on your own product - see Ford‘s monopoly on the Ford Focus or McD‘s monopoly of the Big Mac for an overused comparison) The key point being there are other products in the same product category if don’t like Ford’s or McD’s offerings. Same with Apple’s products.

What Apple can be is anti-competitive especially as they do have large control of their product.

From memory, the FTC has prevented phone companies from merging, satalite companies from merging, music/video media companies from merging because they said it would create 'monopolies' within the market place and thus be anti-competitive.

One rule for Apple and one rule for everyone else it would seem.

 

[vladi]

Microsoft sales hardware (Xbox and surface) and they charge 30% through their store so your argument fall flat on its face.

Microsoft takes a loss at every single Xbox they sell so their Xbox business is based on selling software and not hardware. And Windows on your PC has nothing to do with it.

 

[ader42]

From memory, the FTC has prevented phone companies from merging, satalite companies from merging, music/video media companies from merging because they said it would create 'monopolies' within the market place and thus be anti-competitive.

One rule for Apple and one rule for everyone else it would seem.

Nope. FTC would likely prevent Apple and Samsung Mobile merging.
Who has Apple merged with to create a monopoly in a relevant marketplace?

 

[vladi]

Nintendo sells hardware at well above break-even, so perhaps put that Epic talking-point canard (which is also completely irrelevant under the law) to rest.

Nope. Nintendo is in business of making and selling games. That's obvious. In what business is Apple?

 

[Z1000ST]

From memory, the FTC has prevented phone companies from merging, satalite companies from merging, music/video media companies from merging because they said it would create 'monopolies' within the market place and thus be anti-competitive.

One rule for Apple and one rule for everyone else it would seem.

Well I guess yeah, if a company merging is subject to FTC interventions due to a possible monopoly situation occurring, then yeah a comparison to Apple or any other company that not a monopoly would assist if they operated the same way.

 

[laptech]

Nope. FTC would likely prevent Apple and Samsung Mobile merging.
Who has Apple merged with to create a monopoly in a relevant marketplace?

You've not read my post's properly. It has nothing to do about Apple merging with others, it's about the principles of monoplies. Many businesses are denied merging because it is feared they will create a 'monopoly' in the marketplace, which would restrict competition and therefore be anti-competitive.

Apple control 100% of the App store and everything associated with the app store. they control it's payment methods, preventing developers from using their own payment methods. they prevent developers from linking to outside payment systems (looks to be changing), they prevent developers from allowing users to know there are cheaper payment opitions and yet this is not considered 'monoplistic' behaviour by the Judge.

So my argument is that when two companies want to merge and the FTC say 'nope, not going to happen' because of factors that are very similarly used in the app store, the two companies can go 'hold on, your denying the merger based on factors that are very similar to the app store but the app store has been classed as not being 'monopolystic', so why is Apple allowed to have 100% control of a service but we (the two companies) are not?'

 

[Z1000ST]

You've not read my post's properly. It has nothing to do about Apple merging with others, it's about the principles of monoplies. Many businesses are denied merging because it is feared they will create a 'monopoly' in the marketplace, which would restrict competition and therefore be anti-competitive.

Apple control 100% of the App store and everything associated with the app store. they control it's payment methods, preventing developers from using their own payment methods. they prevent developers from linking to outside payment systems (looks to be changing), they prevent developers from allowing users to know there are cheaper payment opitions and yet this is not considered 'monoplistic' behaviour by the Judge.

So my argument is that when two companies want to merge and the FTC say 'nope, not going to happen' because of factors that are very similarly used in the app store, the two companies can go 'hold on, your denying the merger based on factors that are very similar to the app store but the app store has been classed as not being 'monopolystic', so why is Apple allowed to have 100% control of a service but we (the two companies) are not?'

The judge defined the market as “digital mobile gaming transactions” for the purposes of the lawsuit, and Apple most certainly is a not a monopoly in this market, Epic is currently participating in many other markets in this space.

 

[jlc1978]

Apple control 100% of the App store and everything associated with the app store. they control it's payment methods, preventing developers from using their own payment methods. they prevent developers from linking to outside payment systems (looks to be changing), they prevent developers from allowing users to know there are cheaper payment opitions and yet this is not considered 'monoplistic' behaviour by the Judge.

Because Apple is not a monopoly. The consumer has other options for mobile devices; being successful does not a monopoly make. Even the judge in the EPIC case, with a narrow definition of the market, did not rule Apple was a monopoly. Granted, Apple's size means it needs to be careful in how it acts but as long as they do that they aren't acting like a monopoly.

 

[I7guy]

From memory, the FTC has prevented phone companies from merging, satalite companies from merging, music/video media companies from merging because they said it would create 'monopolies' within the market place and thus be anti-competitive.

One rule for Apple and one rule for everyone else it would seem.

Because Apple doesn't control the smartphone market with dozens of competitors?

 

[laptech]

So, for those who quote my post(s) and are debating the merits of what I have written, let me put it this way:-

If I want to purchase an Apple iphone, there are many places I can go (legitimately) to find the best deal.
If I want to purchase a Ford car, there are many places I can go (legitimately) to find the best deal.
If I want to purchase a music album, there are many places I can go (legitimately) to find the best deal.
If I want to puchase an app for an Android phone, there are many places I can go (legitimately) to find the best deal.

But!!

If I want to puchase an app for my iphone there is nowhere else (legitimately) to purchase the app, therefore getting the best deal is taken away from me or to the point I am refused the best deal because there is only one place I can purchase iphone apps.

So people are saying being succesful does not a monopoly make then why was the car manufacturers told they must allow 3rd party companies to sell their cars and spare parts and for independants to repair their cars? People also keep using the argument, if you not happy with app store rules, there is always Android. Well wasn't that the same case with the car manufacturers, if you didn't like the terms and conditions of Ford, there was always another car maker to chose from.

Take for example spare parts, it used to be that if you wanted a spare part for your car, you had to go to the car makers dealer and had to buy at their prices because you couldn't get the part anywhere else. The car maker controled the spare parts for their cars, who could make them, who could sell them and at what price. Is this not what Apple does with the app store?

So why was the car industry forced to change?. They were successful just like Apple, they had 100% control of a part of their business (spare parts) just like Apple does, the app store is part of Apple's business which they have 100% control over but yet the car industry was forced to change and Apple is being told, 'not a problem Apple, your app store is not monopolystic'.

 

[I7guy]

The court could never rule a rate. It is not within the realm of its competences. So ruled nothing in that regard.

Jezz … so much misdirection … anyway in does not matter. It just makes it harder to sympathize with the stance. Even though all of it a side, I may find some merits. Very few things in the matters of the Men are entirely right or entirely wrong.

PS: By the way, I never also said that I believe that Apple has a Monopoly. But being a Monopoly is not a pre-requisite to consider a practice anti-competitive, even illegal. This ruling is the proof of that.

The ruling is proof of something that Apple needs to change that has gone unchallenged for 13 years.

 

[I7guy]

So, for those who quote my post(s) and are debating the merits of what I have written, let me put it this way:-

If I want to purchase an Apple iphone, there are many places I can go (legitimately) to find the best deal.
If I want to purchase a Ford car, there are many places I can go (legitimately) to find the best deal.
If I want to purchase a music album, there are many places I can go (legitimately) to find the best deal.
If I want to puchase an app for an Android phone, there are many places I can go (legitimately) to find the best deal.

But!!

If I want to puchase an app for my iphone there is nowhere else (legitimately) to purchase the app, therefore getting the best deal is taken away from me or to the point I am refused the best deal because there is only one place I can purchase iphone apps.

So people are saying being succesful does not a monopoly make then why was the car manufacturers told they must allow 3rd party companies to sell their cars and spare parts and for independants to repair their cars? People also keep using the argument, if you not happy with app store rules, there is always Android. Well wasn't that the same case with the car manufacturers, if you didn't like the terms and conditions of Ford, there was always another car maker to chose from.

Take for example spare parts, it used to be that if you wanted a spare part for your car, you had to go to the car makers dealer and had to buy at their prices because you couldn't get the part anywhere else. The car maker controled the spare parts for their cars, who could make them, who could sell them and at what price. Is this not what Apple does with the app store?

So why was the car industry forced to change?. They were successful just like Apple, they had 100% control of a part of their business (spare parts) just like Apple does, the app store is part of Apple's business which they have 100% control over but yet the car industry was forced to change and Apple is being told, 'not a problem Apple, your app store is not monopolystic'.

If you want to read the WSJ there are legitimately different ways of doing it. If you want to purchase a new Ford vehicle you must go to a Ford dealership. Inside the dealership you will only find Ford products.

 

[I7guy]

Apple made the decision to go the freemium model. If they wanted to they could say every app has to cost something and then take a cut of that. Once an app is downloaded to your phone can you really say it’s still part of Apple’s store?

The IP that drives the app is still Apple's though.

 

[Maximara]

From memory, the FTC has prevented phone companies from merging, satalite companies from merging, music/video media companies from merging because they said it would create 'monopolies' within the market place and thus be anti-competitive.

One rule for Apple and one rule for everyone else it would seem.

This is nonsense as pointed out before. All your examples are companies within a broad market being prevented from merging.

Computers market? Nope
Phone market? Even with what Apple has bought they are only 15% of the world marketshare.
App marketplaces? Nope
Mobile Gaming platforms? Nope
iOS? Not a product category.

 

[I7guy]

[...]

Why is Epic appealing? App Store keeps on being the entry point to install and update apps, Internet end-points if you will, on users devices. Apple still fully controls which apps and what content will or not ever and how be in users devices flowing from the Internet. Case in case a Net Neutral platform transformed into a non neutral one through the device and its OS. This was not addressed by the court in any shape or form. In other words, Apple and Google devices and OS can keep being non Net Neutral on top of Net Neutral Internet while having 48% of earths population using their mobile platform to access the Internet. I suppose in California, Apple alone may be even way higher. But the company, Epic have been failing to articulate this stance and instead talked about Apple‘s huge profit margins and market share as anti-competitive to the point the Judge needed to say … Success is not Illegal.

The app store is not an internet end-point, not is it a gatekeeper end-point. Websites are proof of this. Apple should control the apps that make it into the app store. Why should they allow smoking, vaping, drug and porn apps. There is no first amendment right that says Apple has to allow every app into the app store. In your parlance, Apple is under no obligation to be net neutral.

Please provide a citation for 48% of the earth's population using their platform. I think you have overstated that point significantly.

 

[cmaier]

The app store is not an internet end-point, not is it a gatekeeper end-point. Websites are proof of this. Apple should control the apps that make it into the app store. Why should they allow smoking, vaping, drug and porn apps. There is no first amendment right that says Apple has to allow every app into the app store. In your parlance, Apple is under no obligation to be net neutral.

Please provide a citation for 48% of the earth's population using their platform. I think you have overstated that point significantly.

They have 15% mobile market share, according to documents in the case. And not all internet access is mobile.