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

[Michael Scrip]

The yearly fee pays for among other things the priviledge of 'renting' the space. Tagging on 15% & 30% to in-app purchases is just an exercise in how to money grab.

I don’t think that $99 a year pays for as much as you think it does. It’s like paying to enter Disneyland and then complaining that you still have to pay separately for food and souvenirs.

I think Apple needs to rename some things.

Instead of calling the $99 fee a "developer fee" and then people are confused what it is... it should be called an "Application Fee" to sell apps in the App Store.

And then the 15% or 30% fee should be called the "Developer Fee"

That would clear things up a bit.

Otherwise... developers will keep saying "I pay $99 a year... why do I have to give Apple more money?"

 

[laptech]

I don’t think that $99 a year pays for as much as you think it does. It’s like paying to enter Disneyland and then complaining that you still have to pay separately for food and souvenirs.

I think it is you who does not realise just how much a developer gets for the yearly fee. here is Apple's own page detailing what one gets for the yearly fee, and you can see from the list..it's alot

What’s Included - Apple Developer Program

The Apple Developer Program provides resources for developing and distributing software for Apple platforms.

developer.apple.com

 

[Abazigal]

I think it is you who does not realise just how much a developer gets for the yearly fee. here is Apple's own page detailing what one gets for the yearly fee, and you can see from the list..it's alot

What’s Included - Apple Developer Program

The Apple Developer Program provides resources for developing and distributing software for Apple platforms.

developer.apple.com

Thank you for proving my point for me - that the $99 fee comes nowhere close, and that additional 15/30% is what further helps defray the costs of operating and supporting the App Store.

 

[laptech]

Thank you for proving my point for me - that the $99 fee comes nowhere close, and that additional 15/30% is what further helps defray the costs of operating and supporting the App Store.

What point? you stated in your post, and i quote 'I don’t think that $99 a year pays for as much as you think it does'. I am proving that statement wrong.

I have always maintained that the yearly fee pays towards having apps hosted in the store and much more but every time someone comes along and says 'no it doesnt, the yearly fee does not offer much'.

 

[Abazigal]

What point? you stated in your post, and i quote 'I don’t think that $99 a year pays for as much as you think it does'. I am proving that statement wrong.

What I meant was that some people seem to expect the moon and the stars for $99 a year. I am saying (and perhaps it was poorly phrased) that $99 only pays for so much.

It seems that we are actually on the same page here.

 

[quarkysg]

What I meant was that some people seem to expect the moon and the stars for $99 a year. I am saying (and perhaps it was poorly phrased) that $99 only pays for so much.

It seems that we are actually on the same page here.

Actual developers will understand this.

Those who doesn't code or supported software development will likely think that $99 entitles them to everything in the Apple eco-systems.

 

[cmaier]

Lol I know... I meant on iOS which is what Epic was trying to say.

Yes... I know what the judge said. And I agree with her ruling. Sorry I misspoke!

And this will set a precedent, right? So no one else can come along and try to define a monopoly again. That's good too!

Future plaintiff’s can try different jurisdictions (states, countries), different legal theories, different market definitions, etc. May be tough for a gaming company, in the United States, though - a court in NY or Delaware isn’t bound by a court in California, but the judge would certainly take the california ruling into account.

 

[Maximara]

Future plaintiff’s can try different jurisdictions (states, countries), different legal theories, different market definitions, etc. May be tough for a gaming company, in the United States, though - a court in NY or Delaware isn’t bound by a court in California, but the judge would certainly take the california ruling into account.

Well there is the issue of just how far such rulings can go as outlined by the Commerce Clause (Article 1, Section 8, Clause 3 of the U.S. Constitution). Apple is an interstate company and the Federal courts are leery of having companies deal with 50 "special little snowflake" laws with how they do business.

 

[cmaier]

Well there is the issue of just how far such rulings can go as outlined by the Commerce Clause (Article 1, Section 8, Clause 3 of the U.S. Constitution). Apple is an interstate company and the Federal courts are leery of having companies deal with 50 "special little snowflake" laws with how they do business.

No, that’s not an issue. These are federal courts. But a federal court decision in NY is not generally precedential with respect to a case in another state, for example.

 

[Maximara]

On Apples website it states that Apple has paid out over $230 billion to developers selling digital goods and services. So just what exactly is Apple paying the develper for? because as i understand it, app developers pay Apple a yearly fee to put their apps on the store and apps that use in-app purchases are charged a surcharge of 15% or 30%. So if Apple says that they have paid out $230 billion to developers, what are the developers doing that gets apple to pay them???

Oh that is easy. It is called "selling their product".

 

[leman]

On Apples website it states that Apple has paid out over $230 billion to developers selling digital goods and services. So just what exactly is Apple paying the develper for? because as i understand it, app developers pay Apple a yearly fee to put their apps on the store and apps that use in-app purchases are charged a surcharge of 15% or 30%. So if Apple says that they have paid out $230 billion to developers, what are the developers doing that gets apple to pay them???

That’s how App Store business model works, payments go to Apple who then pays the devs. Same as Uber, Airbnb, Etsy and many other platforms. Basically, when you offer stuff at App Store, you are commissioning Apple to sell things for you, and you receive the money from Apple, not the end customer.

 

[I7guy]

The yearly fee pays for among other things the priviledge of 'renting' the space. Tagging on 15% & 30% to in-app purchases is just an exercise in how to money grab.

Isn’t apple allowed to make money? Alongside of the devs?

 

[laptech]

That’s how App Store business model works, payments go to Apple who then pays the devs. Same as Uber, Airbnb, Etsy and many other platforms. Basically, when you offer stuff at App Store, you are commissioning Apple to sell things for you, and you receive the money from Apple, not the end customer.

So basically your saying it's the same principle as paypal. People buy stuff through paypal and paypal then pass on the money to the seller of the items, whether it be an auction site or a brick and mortar business.

People do not like this 'middleman' approach because it allows the middle man to earn masses amount of interest for doing absolutely nothing whilst the middleman takes it time getting the money to the sellers. I have no doubt this is why Apple forces developers to use it's payment system so money can be sitting in one of it's bank accounts earning millions in interest for doing nothing and then a few days later transferring the money to the app devs. So not only are Apple getting a yearly fee from all the dev's to write and host their app in the app store, they also get commission from in-app purchases AND they earn interest on the money customers pay the dev's. Gezzus no wonder Apple is a trillion dollar company if that's the way they operate.

 

[leman]

So basically your saying it's the same principle as paypal. People buy stuff through paypal and paypal then pass on the money to the seller of the items, whether it be an auction site or a brick and mortar business.

Yes

People do not like this 'middleman' approach because it allows the middle man to earn masses amount of interest for doing absolutely nothing whilst the middleman takes it time getting the money to the sellers. I have no doubt this is why Apple forces developers to use it's payment system so money can be sitting in one of it's bank accounts earning millions in interest for doing nothing and then a few days later transferring the money to the app devs. So not only are Apple getting a yearly fee from all the dev's to write and host their app in the app store, they also get commission from in-app purchases AND they earn interest on the money customers pay the dev's. Gezzus no wonder Apple is a trillion dollar company if that's the way they operate.

Hm, have you ever tried to sell anything? Do you know how much work it is? I don’t know whether people like this model or not, but the fact that virtually every online store (be it apps, goods, or services) works this way makes it the most successful one out there. It’s obviously beneficial for the store operator (because they have direct control over the money), it’s beneficial for the user (because they have a single payment account and a trusted party whom to contact in case of refunds or other issues), and it’s also beneficial to the seller themselves, because they don’t have to deal with low-level accounting or user management. Besides, you might be shocked to learn this, but it’s exactly how any of the third-party payment processors work as well. It’s not Apple. It’s literally everybody. Because it’s a good model, and it has dramatically reduced the cost of the market access.

P.S. Your viewpoint strikes me as extremely naive. You are ignoring the amount of resources it takes to maintain a store, and you are also ignoring that the existence of the store is a service to the sellers. Charging a commission for store access is not a „money grab“. It’s how the store makes money. It’s why the store exists. And it’s how stores always made money - from physical bazaars and markets of the old times to the modern internet stores.

 

[Maximara]

Now, we still have Epic’s trial vs Google, but I think it’s pretty much a forgone conclusion at this point.

I don't know. Epic might have a better case against Google if the information in The Epic v. Google lawsuit finally makes sense is correct. Though the "Blizzard, Valve, Sony, Nintendo”—creators of some of the most popular and profitable entertainment—would be “able to go on their own”, bypassing Play by directly distributing their own apps." claim comes off as gonzo as all of those companies already have been "directly distributing their own apps" in the desktop space for ages.

 

[laptech]

Yes



Hm, have you ever tried to sell anything? Do you know how much work it is? I don’t know whether people like this model or not, but the fact that virtually every online store (be it apps, goods, or services) works this way makes it the most successful one out there. It’s obviously beneficial for the store operator (because they have direct control over the money), it’s beneficial for the user (because they have a single payment account and a trusted party whom to contact in case of refunds or other issues), and it’s also beneficial to the seller themselves, because they don’t have to deal with low-level accounting or user management. Besides, you might be shocked to learn this, but it’s exactly how any of the third-party payment processors work as well. It’s not Apple. It’s literally everybody. Because it’s a good model, and it has dramatically reduced the cost of the market access.

P.S. Your viewpoint strikes me as extremely naive. You are ignoring the amount of resources it takes to maintain a store, and you are also ignoring that the existence of the store is a service to the sellers. Charging a commission for store access is not a „money grab“. It’s how the store makes money. It’s why the store exists. And it’s how stores always made money - from physical bazaars and markets of the old times to the modern internet stores.

You think just because other businesses behave in that manner that it is ok for Apple to behave in the same way. No it doesn't, not by a long shot. Any business that keeps hold of money for days on end in their bank account to collect interest and THEN transfer the money to the rightful owners is NOT ethical and no business should be involved in the practice regardless of who they are. Just because other do it does not make it right and it's about time you learnt that instead of defending unethical business practices.

Oh and please stop using the line 'Charging a commission....' because it's BS and you know it. Apple only allow their payment system to be used in the app store, a payment system that they charge devs to use. Err excuse me, if a dev wants to use in-app purchases, what options do they have to chose from? a) apples pay system b) apples pay system, c) apples pay system or d) apples pay system oh an the system charges a commission if you use the system. Dev's have no choice but to use Apples pay system because they refuse to allow other pay systems to be used and then they have the audacity to say, 'the pay system you are forced to use comes at a price, 15% or 30% is taken off every in-app purchase'.

Oh and yes, please get it right, the yearly fee is what gives dev's access to the store, not Apples commission on using it's payment system.

 

[I7guy]

You think just because other businesses behave in that manner that it is ok for Apple to behave in the same way. No it doesn't, not by a long shot. Any business that keeps hold of money for days on end in their bank account to collect interest and THEN transfer the money to the rightful owners is NOT ethical and no business should be involved in the practice regardless of who they are. Just because other do it does not make it right and it's about time you learnt that instead of defending unethical business practices.

Oh and please stop using the line 'Charging a commission....' because it's BS and you know it. Apple only allow their payment system to be used in the app store, a payment system that they charge devs to use. Err excuse me, if a dev wants to use in-app purchases, what options do they have to chose from? a) apples pay system b) apples pay system, c) apples pay system or d) apples pay system oh an the system charges a commission if you use the system. Dev's have no choice but to use Apples pay system because they refuse to allow other pay systems to be used and then they have the audacity to say, 'the pay system you are forced to use comes at a price, 15% or 30% is taken off every in-app purchase'.

The one thing missing from above, is that to enroll in the Apple developer program is strictly opt-in. Apple is under no obligation to run it's programs based on requirements from MacRumors.

Oh and yes, please get it right, the yearly fee is what gives dev's access to the store, not Apples commission on using it's payment system.

This is true.

 

[cmaier]

You think just because other businesses behave in that manner that it is ok for Apple to behave in the same way. No it doesn't, not by a long shot. Any business that keeps hold of money for days on end in their bank account to collect interest and THEN transfer the money to the rightful owners is NOT ethical and no business should be involved in the practice regardless of who they are.

This is silly. It’s standard business terms to get paid at regular intervals by intermediaries who handle direct sales. And, as a developer, I agree to it when I enter into my contract with Apple. How can two parties entering into a sales agreement where they fully understand the terms, where each side benefits, and where the terms are completely legal, be unethical?

The transactional costs of immediately forwarding money would be completely unmanageable. Tax issues, fractional currencies, currency exchange rates, money transfer fees, etc., makes it essentially impossible.

 

[quarkysg]

Any business that keeps hold of money for days on end in their bank account to collect interest and THEN transfer the money to the rightful owners is NOT ethical and no business should be involved in the practice regardless of who they are. Just because other do it does not make it right and it's about time you learnt that instead of defending unethical business practices.

Do you shop with a credit card? If yes, you are also doing this, but in reverse. Or do you pay cash for all your purchases?

 

[ader42]

When I had a salaried employment position my employer kept my wages until the end of the following month, exactly the same. Not unethical at all, just an agreed contract. By laptech’s logic an employer should pay their employees on the hour every hour.

Developers do not have to develop for Apples customers, heck they don’t even have to be developers. We all have choices and make agreements.

 

[cmaier]

When I had a salaried employment position my employer kept my wages until the end of the following month, exactly the same. Not unethical at all, just an agreed contract. By laptech’s logic an employer should pay their employees on the hour every hour.

Developers do not have to develop for Apples customers, heck they don’t even have to be developers. We all have choices and make agreements.

We also must have to pay our mortgage or rent every second. (Paying by the hour isn’t ethical - why are you holding on to the landlord’s money for 3600 seconds. That’s interest she could earn.)

 

[Maximara]

So basically your saying it's the same principle as paypal. People buy stuff through paypal and paypal then pass on the money to the seller of the items, whether it be an auction site or a brick and mortar business.

People do not like this 'middleman' approach because it allows the middle man to earn masses amount of interest for doing absolutely nothing whilst the middleman takes it time getting the money to the sellers.

That is not how these things work. From the ruling:

"Given that Fortnite utilizes cross-platform technology to capture a larger audience and appears on several different platforms, Epic Games faces commission rates on its in-app purchases. Generally, plaintiff must pay 30% across most platforms. Indeed, for example, Epic Games has agreed to such a rate on all Fortnite transactions via the Microsoft (Xbox) Store, the PlayStation Store, the Nintendo eShop, and Google Play.

Epic Games has also agreed to extra payments for certain platform holders above and beyond the standard 30% commission rate. For example, for all Fortnite transactions via the PlayStation Store, Epic
Games agreed to make additional payments to Sony above this commission rate based on the amount of time that PlayStation users play Fortnite cross-platform."

Epic only won on one point and that was only because of the way California anti-trust laws are written. Also as pointed out by Hoeg Law the "5 years" is, as far as averages go, overly long

You may not like that but like a Trump supporter wining about the election results it will not change reality. And the reality is Epic only got one of its many claims regarding Apple.

 

[laptech]

That is not how these things work. From the ruling:

"Given that Fortnite utilizes cross-platform technology to capture a larger audience and appears on several different platforms, Epic Games faces commission rates on its in-app purchases. Generally, plaintiff must pay 30% across most platforms. Indeed, for example, Epic Games has agreed to such a rate on all Fortnite transactions via the Microsoft (Xbox) Store, the PlayStation Store, the Nintendo eShop, and Google Play.

Epic Games has also agreed to extra payments for certain platform holders above and beyond the standard 30% commission rate. For example, for all Fortnite transactions via the PlayStation Store, Epic
Games agreed to make additional payments to Sony above this commission rate based on the amount of time that PlayStation users play Fortnite cross-platform."

Epic only won on one point and that was only because of the way California anti-trust laws are written. Also as pointed out by Hoeg Law the "5 years" is, as far as averages go, overly long

You may not like that but like a Trump supporter wining about the election results it will not change reality. And the reality is Epic only got one of its many claims regarding Apple.

Unless the court has seen the contracts between Epic and the other gaming companies and knows the exact reasons why Epic pays 30% to those companies, it has no right to reference it in it's ruling because the conditions of the contract could be totally different to that of Apples but saying Epic already pays 30% to other companies is biased. Epic maybe allowed to use it's own payment system on the other platforms but pay the 30% for other things. Epic's complaint is very specific and therefore for the court to basically say 'well, Epic pay 30% to other gaming companies so what's the problem doing the same for Apple?' is wrong.

 

[Maximara]

Unless the court has seen the contracts between Epic and the other gaming companies and knows the exact reasons why Epic pays 30% to those companies, it has no right to reference it in it's ruling because the conditions of the contract could be totally different to that of Apples but saying Epic already pays 30% to other companies is biased. Epic maybe allowed to use it's own payment system on the other platforms but pay the 30% for other things. Epic's complaint is very specific and therefore for the court to basically say 'well, Epic pay 30% to other gaming companies so what's the problem doing the same for Apple?' is wrong.

The court has every right to reference the 30% as that was Epic's whole argument. Besides if you had actually read the actual court ruling you would have seen the referenced material used to support the courts statements:

87. DX-3582.004–.005; DX-3464.012, .027, .031; Trial Tr. (Sweeney) 142:19–143:1, 161:13–15; Trial Tr. (Weissinger) 1349:14–23.
88, Ex. Depo. (Kreiner) 52:13–19; DX-4519.003–.004; Trial Tr. (Sweeney) 198:10–21, 238:1–238:5, 308:14–2

"In light of Apple’s 30% commission, the Court is not persuaded that developers could not obtain these features more cheaply from other companies."

"Apple is entitled to license its intellectual property for a fee, and to further guard against the uncompensated use of its intellectual property"

Never mind Apple was subpoenaing other companies (A court is forcing Valve to tell Apple how much money 436 different PC games made for data to support it's position. Hoeg Law has An Antitrust Epic and Epic v Apple: Just the Trial playlist which go into he who thing from a lawyer's prospective. The lobbying Epic tried in North Dakota spectacularly blew up in their face.

 

[cmaier]

Unless the court has seen the contracts between Epic and the other gaming companies and knows the exact reasons why Epic pays 30% to those companies, it has no right to reference it in it's ruling because the conditions of the contract could be totally different to that of Apples but saying Epic already pays 30% to other companies is biased. Epic maybe allowed to use it's own payment system on the other platforms but pay the 30% for other things. Epic's complaint is very specific and therefore for the court to basically say 'well, Epic pay 30% to other gaming companies so what's the problem doing the same for Apple?' is wrong.

You are saying a federal district court ”has no right to reference” facts that were put in evidence not by the judge, but by the parties?

I hope you give your clients better advice than that, counselor.