Google Play Will Let Developers Use Alternative Billing Systems in South Korea, While Apple Has Yet to Make Changes

[dwaite]

Not really? Allowing third party payment systems is a matter of policy, not technology. Nothing but Apple policy (and enforcement via App Review) prevents developers from launching a web view or browser to take payment and returning to the app when it's done.

If Apple's policy is to allow third party payment for apps in South Korea, no technology change is needed.

Adding UI and system frameworks to do this might make the process more elegant, but unless the South Korean law specifies the OS must implement a native UI that native UI wouldn't be necessary to comply.

Right, the limitation was on the stores forcing payments to be funneled through the Apple/Google in-app payment systems only. there was no change to other limitations such as

• Stores demanding some proceeds of third-party payments as part of the store agreements
• Stores restricting alternative payments to be presented in-app

Google's implementation is channelling users through a system API for payments because they plan to take a cut. There may be restrictions here, such as both the payment app needing to be installed and the app which seeks payment needing to opt into using that form of payment.

Apple's implementation likely is just widening up what developers can do outside the store with policy, such as being able to provide a link for direct payment or indicate payment options in emails. They are likely considering google's approach as well.

 

[FloatingBones]

"Like any business, we need to have a sustainable model to continue to improve our products while maintaining important user protections,"

What value does the company that charges 11% provide to users to sustain/improve the platform? AFACT, they provide absolutely nothing for that 11%. Do the Korean authorities not understand this?

 

[mrochester]

What value does the company that charges 11% provide to users to sustain/improve the platform? AFACT, they provide absolutely nothing for that 11%. Do the Korean authorities not understand this?

Well, it’s also profit for the platform vendor. They are entitled to profit!

 

[dwaite]

What value does the company that charges 11% provide to users to sustain/improve the platform? AFACT, they provide absolutely nothing for that 11%. Do the Korean authorities not understand this?

I'm sure you realize that Android, the Play store and Play services are not "absolutely nothing".

Hopefully you realize that saying "you can't restrict payment options" and "you can't make a profit" would be different regulations with different criteria?

 

[H2SO4]

If Google charges a fee of their choosing, I don't see how this accomplishes anything. Apple should do the same thing but charge the same 15% they always do. Technically, they will have multiple payment systems that follows the law. The only difference is that you pay more to use something else. lol. I think these laws are nonsense. These are Googles and Apples store and OS, they have the right to charge what they want and people have the right to buy their devices or not. Governments should stay out of the market place.

With Google' solution, their 11% plus the other payment provider mark up will generally be the same cost as just using Google's payment method. Anyone that would take the risk of using the other payment methods without saving any money is crazy.

By the same token what you seem to have overlooked is that;
These are market places that belong to other countries, they have the right to impose what laws and regulations they see fit.
Google and Apple should stay out of law making?

 

[dba415]

Developers don’t just have to develop for android. iOS and other platforms are options 4,5, 6 and beyond.

They do though. Apple and Google have created a situation where they are a duopoly. You want to be a duopoly and enjoy all the benefits of that, then you gotta play by the rules of a duopoly.

 

[mrochester]

They do though. Apple and Google have created a situation where they are a duopoly. You want to be a duopoly and enjoy all the benefits of that, then you gotta play by the rules of a duopoly.

Apple and google haven’t created that. Developers could have developed for windows phone, Symbian, QNX, Meego amongst other platforms but chose not too.

There’s nothing in the apple or google developer agreements that say developers can’t make apps for other platforms.

 

[Michael Scrip]

Apple and Google have created a situation where they are a duopoly.

Apple and Google didn't create a situation. In fact... they were LATE to the smartphone game.

There were PLENTY of platforms before them. Big ones, too. Symbian, Palm, Blackberry, Windows Mobile, etc.

But those other guys couldn't survive.

You could say it was those other guys' FAILURES that created a duopoly.

 

[now i see it]

Here’s your damn alternate billing link - and it’ll cost you a fee / Ha!

 

[nutmac]

In theory, competitions can lead to good things.

If Apple is forced to offer alternate billing globally (fees average around 3%), it would be pressured to lower the fee. For instance, match Google's recent reduction to 15% for all, 10% for music streaming services.

In turn, some developers would probably lower their subscription price or in-app purchase price. Many probably won't and will pocket the difference.

Apple should just move on from this distraction by (1) lowering the commission and (2) allow alternate billing.

Apple needs to focus on offering more innovative pricing models instead. I think this push toward subscription is harming the App Store ecosystem. Many developers are moving toward the subscription model, alienating many consumers in the process. I used to purchase several dozen apps per year. I can't remember the last time I purchased an app. I have few subscriptions, but only those that I find essential or use very frequently.

Some developers (e.g., Agenda, Due) have developed their own pricing model where an annual subscription entitles you to a perpetual license to all the past and new features to be released in the next 12 months. Apple can embrace these innovations, perhaps improve upon them, provide the framework and indicate these pricing models with more distinction.

 

[bousozoku]

Apple should have finished this by now.

They certainly moved their commission from 30% to 15% when it was news.

They're a business, not a philanthropy, but they can and should make an effort to work with countries that have certain requirements. If for some reason, a final court says that they don't have to do it, they can return to their previous behavior.

 

[Cosmosent]

At 11% vs 15%, most won't bother !

Some country somewhere on this planet needs to get bold, & declare that both App Stores MUST become "Utilities," where their "cut" is controlled / set by the Gov't !

And, I think that's coming, sooner rather than later !

And, I hope the cut is set @ 7.5% for ALL transactions across the Board !

I believe that is a fair number, to App Stores, App Developers, & App Store consumers.

Apple will fight it to the End, but I believe it's inevitable !

It doesn't solve the "App Discovery" problem, which is just as BIG, if NOT BIGGER, of a problem, but it would solve one problem !

And for those of you who don't know, Apple paid NO attention to the App Store until iPhone unit sales had stalled-out !

Nov 1st, 2018, is the date Apple made it official ! ... that's when Tim announce Apple would NO longer report iPhone Unit Sales @ quarterly & annual earnings announcements.

In early 2019, Apple kicked off an attractive Trade In Program, which worked ! ... it "juiced" iPhone unit sales, but ONLY for/by upgraders !

Apple's iOS customer base has NOT really increased since the days of the 2015 iPhone 6s & 6s Plus.

Make NO mistake, Apple is in a very difficult situation, & now compounded by their ATT privacy changes !

Apple ONLY has so many iOS consumers who will pay for Apps & IAPs.

Some Gov't around the world, NOT Google OR Apple, will make a Bold Move, & will get credit for it !

Apple will fight it to the end, but it is, IMO, inevitable !

The pendulum had swung too far in Apple's direction for far too long !

Anyway, I welcome a Break Up of the App Store, in one manner OR the other ...

we live in exciting times.

 

[ForkHandles]

In theory, competitions can lead to good things.

If Apple is forced to offer alternate billing globally (fees average around 3%), it would be pressured to lower the fee. For instance, match Google's recent reduction to 15% for all, 10% for music streaming services.

In turn, some developers would probably lower their subscription price or in-app purchase price. Many probably won't and will pocket the difference.

Apple should just move on from this distraction by (1) lowering the commission and (2) allow alternate billing.

Apple needs to focus on offering more innovative pricing models instead. I think this push toward subscription is harming the App Store ecosystem. Many developers are moving toward the subscription model, alienating many consumers in the process. I used to purchase several dozen apps per year. I can't remember the last time I purchased an app. I have few subscriptions, but only those that I find essential or use very frequently.

Some developers (e.g., Agenda, Due) have developed their own pricing model where an annual subscription entitles you to a perpetual license to all the past and new features to be released in the next 12 months. Apple can embrace these innovations, perhaps improve upon them, provide the framework and indicate these pricing models with more distinction.

As soon as they allow alternate billing they will end up with an App Store where every download is free!
The cost would pass to in App purchasing for the full application.

No company would be daft enough to host an App Store, development tools and ecosystem for free.

 

[mrochester]

At 11% vs 15%, most won't bother !

Some country somewhere on this planet needs to get bold, & declare that both App Stores MUST become "Utilities," where their "cut" is controlled / set by the Gov't !

And, I think that's coming, sooner rather than later !

And, I hope the cut is set @ 7.5% for ALL transactions across the Board !

I believe that is a fair number, to App Stores, App Developers, & App Store consumers.

Apple will fight it to the End, but I believe it's inevitable !

It doesn't solve the "App Discovery" problem, which is just as BIG, if NOT BIGGER, of a problem, but it would solve one problem !

And for those of you who don't know, Apple paid NO attention to the App Store until iPhone unit sales had stalled-out !

Nov 1st, 2018, is the date Apple made it official ! ... that's when Tim announce Apple would NO longer report iPhone Unit Sales @ quarterly & annual earnings announcements.

In early 2019, Apple kicked off an attractive Trade In Program, which worked ! ... it "juiced" iPhone unit sales, but ONLY for/by upgraders !

Apple's iOS customer base has NOT really increased since the days of the 2015 iPhone 6s & 6s Plus.

Make NO mistake, Apple is in a very difficult situation, & now compounded by their ATT privacy changes !

Apple ONLY has so many iOS consumers who will pay for Apps & IAPs.

Some Gov't around the world, NOT Google OR Apple, will make a Bold Move, & will get credit for it !

Apple will fight it to the end, but it is, IMO, inevitable !

The pendulum had swung too far in Apple's direction for far too long !

Anyway, I welcome a Break Up of the App Store, in one manner OR the other ...

we live in exciting times.

what’s the legal justification for this? You can’t just unilaterally declare something a utility.

 

[CarlJ]

What value does the company that charges 11% provide to users to sustain/improve the platform? AFACT, they provide absolutely nothing for that 11%. Do the Korean authorities not understand this?

Are you suggesting that iOS and Android just magically appeared out of thin air, fully formed, and cost nothing to develop, maintain, and improve? That developing and maintaining the App Store software, and the hardware it runs on, costs nothing?

"they provide absolutely nothing for that 11%" seems like an absurd statement, on the face of it, but perhaps these platforms and the hardware they run on were conjured out of thin air by unicorns? I was under the impression that Apple and Google have poured billions of dollars into developing (and continuing to develop) the hardware and software that make iPhones and Android phones exist and work, as well as the App Stores that support them.

 

[WiseAJ]

At 11% vs 15%, most won't bother !

Some country somewhere on this planet needs to get bold, & declare that both App Stores MUST become "Utilities," where their "cut" is controlled / set by the Gov't !

And, I think that's coming, sooner rather than later !

And, I hope the cut is set @ 7.5% for ALL transactions across the Board !

I believe that is a fair number, to App Stores, App Developers, & App Store consumers.

Apple will fight it to the End, but I believe it's inevitable !

It doesn't solve the "App Discovery" problem, which is just as BIG, if NOT BIGGER, of a problem, but it would solve one problem !

And for those of you who don't know, Apple paid NO attention to the App Store until iPhone unit sales had stalled-out !

Nov 1st, 2018, is the date Apple made it official ! ... that's when Tim announce Apple would NO longer report iPhone Unit Sales @ quarterly & annual earnings announcements.

In early 2019, Apple kicked off an attractive Trade In Program, which worked ! ... it "juiced" iPhone unit sales, but ONLY for/by upgraders !

Apple's iOS customer base has NOT really increased since the days of the 2015 iPhone 6s & 6s Plus.

Make NO mistake, Apple is in a very difficult situation, & now compounded by their ATT privacy changes !

Apple ONLY has so many iOS consumers who will pay for Apps & IAPs.

Some Gov't around the world, NOT Google OR Apple, will make a Bold Move, & will get credit for it !

Apple will fight it to the end, but it is, IMO, inevitable !

The pendulum had swung too far in Apple's direction for far too long !

Anyway, I welcome a Break Up of the App Store, in one manner OR the other ...

we live in exciting times.

And who are you, or the government, to determine what % is fair? I could say that I randomly think that the cut should be 9.99% that would be fair, or maybe even as low as 3.14% why not?

The market has already decided that 30%/15% is fair as that is what has been supported. If it wasn't fair then no one would be selling apps on Google Play or the App Store.

 

[CarlJ]

They do though. Apple and Google have created a situation where they are a duopoly. You want to be a duopoly and enjoy all the benefits of that, then you gotta play by the rules of a duopoly.

What specific actions did they take to force their competitors out of business or keep other companies from entering the business?

 

[Ebarella]

Then maybe you can explain how they are not in compliance?

They don't allow any third party billing (for digital purchases), that is pretty clear. Many have tried (outside of Korea) and failed, they are explicitly banned

 

[AgentAnonymous]

Arrogant for the South Korean government to think they can regulate the decisions of private American businesses.

Imagine if we cut them off from Google and Apple products, and better yet stopped protecting them from North Korea and China.

 

[jonblatho]

What specific actions did they take to force their competitors out of business or keep other companies from entering the business?

That’s an overly simplistic view of abuse of market power and why legislators care about this in the first place. We can start with Apple and Google both offering their platforms for software distribution and competing on those platforms while refusing to either offer payment processing services at or near cost to direct competitors or allow them to use their own payment processing systems.

For example, Spotify can’t afford to pay Apple’s 15–30% cut, and they can’t realistically raise their $9.99 monthly price to make up for Apple’s cut because they’re directly competing with Apple Music’s $9.99 price. Apple, of course, isn’t donating to charity the proceeds from the 15% or 30% fee that would be charged to a third-party developer — it is keeping them. Spotify, conversely, never sees that 15% or 30% cut due to their requirement to use IAP.

So, Spotify’s IAP options here are to either operate at breakeven (if not lose money outright) or price themselves out of existence, because given the dominant market power of iOS and Android, simply not developing for either isn’t actually a feasible/sustainable option. They could try to cut costs to blunt the force of the 15–30% cut, but that comes at the risk of offering an uncompetitive service due to eventual loss of quality, talent drain from low salaries, etc.

That’s where the “reader app” solution comes in, where apps directly competing with Apple have historically have been allowed to disable user signups in their app and forbidden from informing users how to sign up — significantly increasing signup friction — and merely allow existing users to access their existing subscriptions. That rule is in the process of changing, but this concept has allowed Google and Apple to operate their own services (which often carbon-copy ideas from third-party developers against whom they’re “competing”) at lower or nonexistent profit margins in order to snuff out smaller competition that just doesn’t have that flexibility. Smaller companies can’t make up that difference elsewhere nearly as easily as behemoths like Google and Apple can and do.

It’s all a cluster**** because Apple and Google refuse to be either a player or the referee — instead, they insist on trying to be both. That appears at this point to be untenable.

 

[CarlJ]

At 11% vs 15%, most won't bother !

Some country somewhere on this planet needs to get bold, & declare that both App Stores MUST become "Utilities," where their "cut" is controlled / set by the Gov't !

And, I think that's coming, sooner rather than later !

And, I hope the cut is set @ 7.5% for ALL transactions across the Board !

I believe that is a fair number, to App Stores, App Developers, & App Store consumers.

So, you're advocating nationalizing the smartphone industry? You don't maybe want to nationalize the wireless carriers, the broadband providers, and the cable TV companies, first? Some of them have effective monopolies in their various areas. While we're at it, why can't get get nationalized healthcare, like the entire rest of the developed countries in the world?

What studies can you present that show 7.5% to be a fair number and what method was used to come by that number? Or did you just pick it out of a hat, because it sounded nice to you, some guy on the internet? Why not 10%? Why not 1%? What is inherently unfair about either 10% or 1% (or 30% for that matter)?

Advocating for new government-controlled price fixing of existing/thriving markets is dangerous. You're effectively telling companies, "that new idea you're thinking of building? don't bother trying, there's no money in it - or if there is, the government will step in and take it away - sorry, people love your new product/service too much, you'll have to forgo profiting off it now." Which also leads to the question: how would you have the government compensate Apple and Google for the very valuable thing you want the government to take away from them? One time payment of $1 trillion to each company, perhaps?

Do you want any company to spend money trying to develop something new and exciting ever again? Because your plan would drive companies away from that - if you spend billions developing some new thing that people love, now because they love it, the government will step in and say you can't make very much money from it.

 

[CarlJ]

That’s an overly simplistic view of abuse of market power and why legislators care about this in the first place. We can start with Apple and Google both offering their platforms for software distribution and competing on those platforms while refusing to either offer payment processing services at or near cost to direct competitors or allow them to use their own payment processing systems.

For example, Spotify can’t afford to pay Apple’s 15–30% cut, and they can’t realistically raise their $9.99 monthly price to make up for Apple’s cut because they’re directly competing with Apple Music’s $9.99 price. Apple, of course, isn’t donating to charity the proceeds from the 15% or 30% fee that would be charged to a third-party developer — it is keeping them. Spotify, conversely, never sees that 15% or 30% cut due to their requirement to use IAP.

Do you think the 15-30% is only a "payment processing fee"? That seems an overly simplistic view. Apple is not asserting that it costs them 30% to run the transaction through a payment processor.

They're effectively charging for the entirety of the App Store and the development and maintenance of iOS and all the APIs that make it possible for developers to write apps in the first place. They built an ecosystem, and it costs money to develop and maintain, plus they're entitled to some profit. They could, instead, say, charge every develop $1 million a year, up front, to use the libraries, APIs and ecosystem, but that would be so burdensome to small developers as to chase most of them out, while it might not be enough for a few really large developers. Better to find some way to charge for everything Apple is offering/providing to developers in some more equitable manner. So, first pass, "develop your apps and put them in the store at whatever price you want and we'll take a 30% cut". This, frankly, roughly matches what a whole lot of other businesses do. And apps that sell a lot, pay more, and apps that don't sell much (or are "sold" for free) pay very little or even nothing. This seems pretty fair. Then... then developers and users wanted IAPs. And some started charging less for the initial download, making it up on the IAPs (and "free to play" games were born, sigh). Now, if Apple didn't charge for IAPs equally with initial purchases, then developers would have made pretty much every single app in the store "free to 'purchase' with IAPs to unlock", and Apple's funding model for all of this would have collapsed. So, everything gets charged the same - initial purchases, IAPs, everything.

Now, people are saying, "hey, wait, I can get a credit card transaction processed for way less than 30%, so let me do it myself (and then don't charge me anything, right?)". Except they're making that mistake of thinking the 30% is a credit card transaction fee. It's not. Take the banking fees (3-4% has been bandied about) out of the equation and you're still left with the rest.

I don't know what to do about, say, Apple Music vs. Spotify. Perhaps the answer would be to spin Apple Music out as a "separate-ish" entity that has to pay the same fees as everybody else, in order to level the playing field. I'm not sure that would fix the situation.

(Personally, I wish all-you-can-eat subscription music streaming had never become a thing - it pays vanishingly little to the artists. Or, if they were going to exist, they should be much more costly. As it is, the companies are essentially saying, "well, this person streamed these thousand songs this month, and they paid us $10, so after taking out our cut and the record label's cut, we'll give the artist half a cent for that song". Rather than a smaller number of people deciding to actually buy the song. It's not a good deal for most artists. Rather than starting from what would be reasonable to pay the artists and working out what to charge for the service, they started from what they wanted to charge for the service and worked backwards from that to figure out how much to pay the artists. From this article - a random Google hit, it looks like Apple Music pays about 0.78 of a cent per stream, while Spotify pays about 0.44 of a cent per stream - to be clear, the larger of those is about 3/4 of a penny.)

 

[Runequester]

A bunch of angry legislators fishing for cheap wins by targeting something consumers broadly don't give a **** about, instead of going after things that are actually holding up innovation and competition in the tech sphere nationally and globally.

 

[hans1972]

A service fee..... for providing no value....... here, purchase our CONTENT that is hosted OUTSIDE of the app. Enjoy our passed-through 11% fee.

Google is providing value: Listing in the Google Play Stores and all the APIs in Google Play Services. It's probably impossible to create an Android app without using Google intellectual property.

 

[Jetscreamer]

Is only a matter of time, if the feds in South Korea can force Google to comply, Apple will have no choice.