Epic Lost Trial Due to Flawed Argument, Not Legal Error, Apple Says in Appeals Filing

[I7guy]

How can the play store be a competitor if its products (i.e. apps) don’t work on iPhone ? In order to use the play store you need to purchase a different device. So from the perspective of “Where to get iPhone apps” the App Store is a monopoly. Android has different app stores there’s the play store but there’s also the Amazon store for example.

Within the iPhone and iPad operating system ecosystem, the Apple App Store is a monopoly. I’m not saying Apple should not charge a fee and earn revenue for processing in app purchases and recouping its costs. But apple doesn’t charge a fee for physical goods like Uber and Lyft which use in app purchases. So why then are digital goods charged a fee? Why the discrimination between digital and physical goods?

Also, why not let developers use an alternative payment processor if they are savvy enough to do so? Some people say apple won’t recoup its App Store costs. No one knows what it costs apple to run the App Store but I think some people forget that apple already made money on the sale of the iPhone so why not let some developers trim some fat off the costs of their services by using their own payment processing system?

Secondly, macOS is wide open and users need not use the app store. M1 iPads, for example, use the same exact chip as in M1 macs. So why is the m1 in a mac allowed to run apps from outside the App Store, but the m1 in an iPad is restricted to only running apps from within the App Store? If the problem is security and privacy then why is macOS not locked down too?

There are internal inconsistencies in Apple’s position. But one thing that remains true is, so long as there are no competing app stores or in-app purchase processors, Apple continues to reap big profits from its 30% cut. Competition from alternative App Stores (assuming they charge lower fees) would put competitive pressure on apple to lower its fees.But this competition is restricted today. And this is why the EU government is looking into this because who is Apple or Google to restrict legal trade? It is not illegal for citizens who own an iPhone to run apps on their iPhone from outside of the App Store. Cydia taught us this, the makers of Cydia App Store have never been issued a judgement by a judge to cease operations due to violating a law. Of course jailbreaking has its risks but would users jailbreak if they could freely get their apps from outside of the App Store?

Also, it must be said, even if other app stores open up, similar to android, there’s no need to use any of them if the default store has everything you’re looking for.

Yes, the ios app store is a legal monopoly and android is a competitor as the same service can be found on a different platform. (that is in my view, of course with all of this ymmv)

 

[falkon-engine]

Yes, the ios app store is a legal monopoly and android is a competitor as the same service can be found on a different platform. (that is in my view, of course with all of this ymmv)

Well if it is a 'legal monopoly' as you claim, regulators are about to change the law. I am glad Apple has found success in iOS and iPhone. But I don't agree with its policy of locking down app distribution I believe users of computing equipment should be able to get their apps from anywhere similar to the Mac. Reasonable minds can disagree on this point and that is fine.

 

[jav6454]

Well if it is a 'legal monopoly' as you claim, regulators are about to change the law. I am glad Apple has found success in iOS and iPhone. But I don't agree with its policy of locking down app distribution I believe users of computing equipment should be able to get their apps from anywhere similar to the Mac. Reasonable minds can disagree on this point and that is fine.

For me it's not a monopoly since if you want "sideloading" you can go on Android as Tim said. You have options. Don't ruin the iPhone experience for everyone.

 

[Unregistered 4U]

For me it's not a monopoly since if you want "sideloading" you can go on Android as Tim said. You have options. Don't ruin the iPhone experience for everyone.

When you look into the definition of monopolies, it’s based on what’s defined as the “market” of the monopoly. As long as the definition of “market” doesn’t include any company’s trademarked names (oil, real estate, communications), then that’s a monopoly that’s worthy of looking into.

So, while defining a market as “Apple App Store” IS allowed, it’s widely understood as being one type of an absurd definition of a market. Primarily because every company has a monopoly over everything they make. And, those monopolies are widely protected. No one seriously looking into illegal monopolies are investigating Tiger Electronics because they have a monopoly on the “handheld electronic devices made by Tiger Electronics” market.

All of the gyrations we’ve seen in this area is because Apple’s “monopolies” as they’re trying to define them are the same as with every company that makes products. They’re trying to VERY hard define any new laws in such a way that they don’t upend literally every other company that makes a thing, provides a service, etc. While Apple is the public target, don’t doubt that every company that produces products aren’t in the ear of every lawmaker and regulator… thus the going has been and will be slow. I’m actually quite interested in what knots they try to tie… they may avoid “monopolies” altogether (likely) and use some new legal structure.

 

[Abazigal]

Also, why not let developers use an alternative payment processor if they are savvy enough to do so? Some people say apple won’t recoup its App Store costs. No one knows what it costs apple to run the App Store but I think some people forget that apple already made money on the sale of the iPhone so why not let some developers trim some fat off the costs of their services by using their own payment processing system?

I feel that it is not ideal to position the App Store as a loss-making entity, and it will simply incentivise Apple to cut costs and spend even less money on running it, which would simply be to the detriment of both developers and consumers.

Apple has also made it clear that even if developers are allowed to use other payment options, they will still want a cut (like the Netherlands case where Apple still takes 27%). So developers aren’t saving any money by doing so, and it’s more work for both parties as developers need to submit receipts and Apple has to audit them for accuracy.

 

[falkon-engine]

I feel that it is not ideal to position the App Store as a loss-making entity, and it will simply incentivise Apple to cut costs and spend even less money on running it, which would simply be to the detriment of both developers and consumers.

Apple has also made it clear that even if developers are allowed to use other payment options, they will still want a cut (like the Netherlands case where Apple still takes 27%). So developers aren’t saving any money by doing so, and it’s more work for both parties as developers need to submit receipts and Apple has to audit them for accuracy.

I don't see how you can claim allowing developers to process their in-app purchases would turn the App Store into a "loss-making" entity if you don't know what Apple's costs are. There are fixed costs and variable costs. Apple could recoup its fixed costs from the developer fee it charges.

When Epic Games' Fortnite was still on the app-store, Epic brought in over $1 billion in in-app purchases, of which Apple took a 30% cut. That is $300 million dollars. Do you really believe that it cost Apple that amount of money to process Epic Games' in-app purchases?

And another thing, Apple doesn’t charge a fee for in-app purchases for physical goods like Uber. They do charge a fee however for digital goods however. Why is this distinction okay?

 

[Abazigal]

I don't see how you can claim it's a "loss-making" entity if you don't know what Apple's costs are. There are fixed costs and variable costs. When Epic Games Fortnite was still on the app-store, Epic brought in over $1 billion in in-app purchases, of which Apple took a 30% cut. That is $300 million dollars. Do you really believe that it cost Apple that amount of money to process Epic Games' in-app purchases?

I believe that the App Store would be run at a loss were Apple not allowed to collect anything from app transactions (which is basically what everyone is rooting for here) and their sole source of income was the annual $99 developer fee.

Also, not every app brings in that much money. The majority of apps in the store are free or ad supported and provide no revenue to Apple, but they incur costs nonetheless. So it’s like taxation in a sense. A few larger developers (mainly gaming companies) provide the bulk of App Store revenue which goes towards maintaining it for everyone else.

Does that make it fair? Depends on who you ask, but I believe this current arrangement is what allows for the greatest amount of good for the greatest number of users.

From the consumer’s perspective, Apple is doing the right thing in ensuring the vitality and vibrancy of the App Store market.

 

[falkon-engine]

I believe that the App Store would be run at a loss were Apple not allowed to collect anything from app transactions (which is basically what everyone is rooting for here) and their sole source of income was the annual $99 developer fee.

Also, not every app brings in that much money. The majority of apps in the store are free or ad supported and provide no revenue to Apple, but they incur costs nonetheless. So it’s like taxation in a sense. A few larger developers (mainly gaming companies) provide the bulk of App Store revenue which goes towards maintaining it for everyone else.

Does that make it fair? Depends on who you ask, but I believe this current arrangement is what allows for the greatest amount of good for the greatest number of users.

From the consumer’s perspective, Apple is doing the right thing in ensuring the vitality and vibrancy of the App Store market.

Reasonable minds can disagree and on this point we can agree to disagree and move on! I never said Apple shouldn't be allowed to collect anything, I said give developers choice. Some would choose to continue using Apple's payment processing, others won't.