Judge Says Apple Has Until December 9 to Make App Store Change Letting Developers Link to Alternate Payment Methods

[I7guy]

I don't actually care what Epic does at this point. The court ruling, even if successfully appealed, is the beginning of the end of Apple's dominance and egregious commission pricing on the App Store. More governments, states, and other jurisdictions will end up passing laws & regulations that force Apple to allow developers to tell their users about other payment methods to buy from them. You don't realize it, but Apple already LOST this battle regardless of how this specific case turns out. The PR that Epic created from all of this has permanently damaged Apple and has brought to light these issues. The momentum is building against them and there's no stopping it. They'll have no choice but to make changes, it's just a matter of WHEN.

As for those issues you mention, someone will figure out solutions, they always do. As for the 'bait and switch' of URLs within code, someone can do that NOW with an iOS App. But that's also solved with whitelisting URLs, which Apple already does some of. So the big companies that will compete for 3rd party processing will end up being whitelisted in App code and that's what Apps will link to for this 3rd party payment stuff.

This bill has already been introduced in the US Senate (in August 2021) and has bipartisan support. It's only a matter of time before it gets passed and becomes law:

Bipartisan bill targets Apple and Google's ability to profit from app stores

App developers have complained to Congress of unfair treatment by Apple and Google.

www.cnbc.com

This is a key part from that article to note and expresses how many Senators feel about the issue, those feelings have been created from, or at the very least reinforced by, Epic's case against Apple:

Blumenthal said in an interview Wednesday on CNBC’s “Power Lunch” that Apple and Google’s arguments that tight control of their app stores protect users’ security is a “pretext to maintain their monopoly position.”

“It is not only disingenuous it’s ironic because they’re the ones who are actually invading privacy and stealing data from the developers and all the while they’re saying, ‘Oh, well, we’re the privacy protectors,’” Blumenthal said. “In fact, our legislation in Section 4 has a specific provision that protects privacy, even more than it is now. So this kind of argument is totally bogus and I think it is going to be absolutely transparent that, actually, privacy would be better protected with this legislation.”

I have my popcorn out. Waiting for apple to implode.

 

[Maximara]

I have my popcorn out. Waiting for apple to implode.

I think you will have stale popcorn.
People have been predicting the implosion/demise of Apple for a long time. In the 1990s it did look like Apple heading off the nearest cliff. IMHO Microsoft gave Apple money back only because they couldn't let Apple go under as there were rumblings that the government was already looking to break Microsoft apart like a piñata and they just didn't want to take that risk.

Even Apple has realized it is going to have to change but make no mistake much of this is like that line from Macbeth - "full of sound and fury. Signifying nothing". Apple has already made a partial concession to the California ruling and it looks like the rest may run afoul of the "Dormant" Commerce Clause (implied in Article 1, Section 8, Clause 3 of the U.S. Constitution). But Apple has to jump through the legal hoops to make that case and it is going to be close.

Even the Open App Markets Acts have a loophole (security) and leaves enforcement up to the FTC which has shown itself to be a joke given how well it has handled the internet (won't declare the internet a public utility, won't go after local cable monopolies for their excessive rates, says it both and does not have power regarding the internet, and other issues)

We have seen that if Apple feels that something really will change they take action (right to repair) they will take action to effectively deal with it before it becomes a national law.

 

[turbotech]

There are actually two bills: S. 2710 and H.R. 5017 (both called Open App Markets Act) both of which are at the Committee stage (08/11/2021 and 08/13/2021 respectively). "Most bills — about 90% — die in committee or subcommittee, where they are pigeonholed, or simply forgotten and never discussed." 6e. How a Bill Becomes a Law

Now if either of these beat the odds then on to the report stage and then there is the debate-vote stage. Now if this flowchart is correct this is where it could get weird.

Normally a bill is sent to the other House of congress where it goes through the introduction, committee, debate and then it goes to the Conference stage where any differences are sorted out and then the President gets it. This can take a long time. The CARE Act for example took over a year to work its way through this process.

As near as I can tell the bills are identical so I don't know if both survive the committee stage (1% Chance) they have to go through the other part of Congress or go straight to the Conference stage.

You don't need to explain to me how bills become law, that's taught in junior high school. I'm well aware of the committee process.

As for the two bills, the fact that one has already been introduced in the Senate and one also in the House, means there's an even more likely chance that it will become law. The bills will become COMBINED into one, that's a very common process when the two chambers introduce overlapping legislation. The fact that both chambers introduced bipartisan bills covering the same core issue makes eventual passage very high. It's not like it only has support from one party, it has support from BOTH. Most of those bills you refer to that die at the committee stage are because they're usually partisan, often "symbolic" bills that have no chance of passing. This isn't the case with the one concerning App Stores.

 

[turbotech]

I do often wonder if people are all too eager to proclaim the death knell for Apple. There was a time when everyone was saying that Apple would lose out to Android’s overwhelming market share, and the rest as we know it is history.

It seems that as Apple goes on to become ever more successful, people grow even more desperate to show that Apple is anything but winning the smartphone race (in fact, I would argue that Apple already has).

You will be disappointed.

Who said this is the death knell for Apple? Man, you guys love to "Apple-splain" what any critics of some of Apple's procedures are even saying, and you're so wrong.

Apple will continue to be one of the biggest and best companies in the world. I love Apple products. I was in a Mac User's Group when they came out in 1984. I run my entire company with Macs. I have iPhones, iPads, and an Apple Watch. My company develops software for Macs and iOS.

My viewpoint is in regards to their egregious 30% commission in the App Store and their anti-competitive restrictions on developers to be able to market and/or offer alternate payment methods and/or offer other digital products & subscriptions outside of their control and "Apple Tax." It's one thing to charge a commission on an App being sold in your marketplace with a retail price. It's an entirely different thing to try and control the sales produced INSIDE that piece of software once installed on a user's device as well as severely restricting the marketing & sales that can happen inside that independent software App that Apple DOES NOT OWN nor have any rights to a hardware device a consumer owns that Apple DOES NOT OWN.

I've already stated now MULTIPLE times that Apple should surely make billions from their running of the App Store. I don't think anyone is saying they shouldn't make money on the App Store. It's HOW they make money if certain things are done in an anti-competitive way that restricts free trade and goes against the nature of existing business law. For example, Apple couldn't tell developers they can't charge any less than $9.99 for paid apps. That would be "price fixing" and there are laws against it, regardless if Apple "owns the App Store."

 

[turbotech]

We have seen that if Apple feels that something really will change they take action (right to repair) they will take action to effectively deal with it before it becomes a national law.

Apple will also change things based on BAD PR that can affect the company's brand & image. Even if something isn't going to become law (or a guarantee that it will) they will still make changes to protect their public image. That's EXACTLY what they did with lowering the 30% commission rate to 15% commission rate for developers making less than $1M/year in revenue. I loved how Cook claimed it was to "help smaller developers due to Covid." LOL. Covid was already many months in motion before that change. They most likely made that change due to BAD PR from the Epic case.

 

[Maximara]

You don't need to explain to me how bills become law, that's taught in junior high school. I'm well aware of the committee process.

As for the two bills, the fact that one has already been introduced in the Senate and one also in the House, means there's an even more likely chance that it will become law.

Only in that 10% is more than 0%. Until either bill actually gets out of committee they don't mean that much. Raise the Wage Act (S.53; H.R. 603) case in point. Both went into committee (01/26/2021 and 01/28/2021 respectively) and I bet you didn't know/remembered they even existed. And how long has the public been crying for a raise in the minimum wage?

If bills that effects more people in the US than Apple have basically sat gathering dust then going into committee doesn't mean anything; only when they get out of committee do does a bill really matter. Also if there was really this public grounds swell for change Epic would not have hidden the fact it was behind that North Dakota bill which I might add died a pathetic in a 11-36 vote on the state Senate floor.

Arizona's House Bill 2005 just disappeared right before to a scheduled vote that could have sent it straight to the governor’s desk to be signed into law. (I suspect they didn't want a repeat of the North Dakota fiasco; "It seems committed members weren’t sure the bill could stand the trial of votes."). Minnesota House Bill HF 1184 went to its committee Feb 18, 2021 and hasn't been seen from since. New York Senate Bill S4822 went to committee February 12, 2021 and so far nothing. Illinois SB2311 different date same fate. (hey that rhymes )

North Dakota's bill went down in flames and Arizona's bill is the other only one that got through committee and yet it went walkabout because the state senate wasn't sure it could get the needed votes. After a while you have to ask who really wants this law - small developers or big multimillion dollar companies who want a free ride and are wrapping it in "helping the little guy"?

The one good thing it did do is it seems to have shook up the other 30%ers as far as mobile and computer apps go. Microsoft dropped its fee on PC software (console software remains at 30%), Steam now has a bizarrely regressive fee: 30% <$10 million; 25% between $10 and 50 million; and 20% for >$50 million; Google went with 15%/30 though more like the US tax system than Apple's set up.

Found this The 30% Fee Epic Is Fighting Apple Over Began With Nintendo which raises an interesting question - does the fact the fee goes back to the days of console Pac-man (1990s) change anything?

 

[turbotech]

The one good thing it did do is it seems to have shook up the other 30%ers as far as mobile and computer apps go. Microsoft dropped its fee on PC software (console software remains at 30%), Steam now has a bizarrely regressive fee: 30% <$10 million; 25% between $10 and 50 million; and 20% for >$50 million; Google went with 15%/30 though more like the US tax system than Apple's set up.

Found this The 30% Fee Epic Is Fighting Apple Over Began With Nintendo which raises an interesting question - does the fact the fee goes back to the days of console Pac-man (1990s) change anything?

You finally said something we agree on. . Yes, the "good thing" is that it forced ALL the game marketplaces to lower their commission rates. They all should be more like 12-15% across the board. More than enough to make a lot of profit with. Apple would still make billions.

In case I hadn't made it clear before, I'm strongly against ANY of these companies, not just Apple, charging 30%. 30% is just a bit ridiculous for an all digital product(s). And, yeah, that's really weird about Steam and the regressive fees that start at 30%. Should be more like 15% and maybe that can go lower based on massive volume, but nothing should be 30%.

30% OF PROFIT would be more fair, but this 30% of GROSS REVENUE (which is what it is now) is just too much. Depending on the developer, after team salaries & expenses, advertising & marketing costs, and other business expenses... there are MANY games where Apple ends up making more than the Developer on that developer's game that the Developer did most of the marketing for and risked the money to develop. That's a bit messed up in my opinion.

It would be another thing if APP DISCOVERY wasn't an issue and the App Store drove more free, organic downloads to more Apps. But, unfortunately, 95% of Apps get very little organic downloads from the App Store. Most of the download traffic goes to the top chart Apps and then ones Apple chooses to feature. So a Developer has to spend quite a lot on advertising & marketing to get any sort of traction with their App.

Never heard of that 30% Nintendo thing. That article, though, says 20% of it was a fee to manufacture the actual cartridges, so not exactly the same costs/business as a 100% digital App Store.

 

[Maximara]

30% OF PROFIT would be more fair, but this 30% of GROSS REVENUE (which is what it is now) is just too much. Depending on the developer, after team salaries & expenses, advertising & marketing costs, and other business expenses... there are MANY games where Apple ends up making more than the Developer on that developer's game that the Developer did most of the marketing for and risked the money to develop. That's a bit messed up in my opinion.

I guess you have never heard of Hollywood Accounting. As of 2009, Return of the Jedi which cost $32.5 million to make and earned $475 million at the box office "has never gone into profit" (LucasFilm Tells Darth Vader That Return Of The Jedi Hasn't Made A Profit!?). It's even a bad joke:
Q: What do you call anyone in Hollywood that gets paid from the profit on a movie they worked on?
A: An Idiot.

It is too easy to come up with a lot of BS/inflated expenses to where profit is zero. In fact, everything you just listed (team salaries & expenses, advertising & marketing costs, and other business expenses) are exactly was is used to make sure profit is zero or less in Hollywood Accounting.

Given the shady crap that some of the big software companies pull with their own employees I can totally understand Apple wanting it out of the gross.

It would be another thing if APP DISCOVERY wasn't an issue and the App Store drove more free, organic downloads to more Apps. But, unfortunately, 95% of Apps get very little organic downloads from the App Store. Most of the download traffic goes to the top chart Apps and then ones Apple chooses to feature. So a Developer has to spend quite a lot on advertising & marketing to get any sort of traction with their App.

If you know what you are doing internet advertising is insanely cheap. Its formal name is Earned Media and is considered the holy grail in advertising because it is effectively free (compared to Owned and Paid Media).

In fact, one of the most successive single player franchises by an indie developer was built on Earned Media in the form of Let's Plays and later theories. Perhaps you have heard of it: Five Nights at Freddy's.

Never heard of that 30% Nintendo thing. That article, though, says 20% of it was a fee to manufacture the actual cartridges, so not exactly the same costs/business as a 100% digital App Store.

I didn't know that was Nintendo where Apple got the 30% idea from either but: "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." Case 4:20-cv-05640-YGR Document 812 Filed 09/10/21 pg 14

So going digital didn't prevent Nintendo from keeping that 30% (Report: Steam's 30% Cut Is Actually the Industry Standard) which as you say make next to no sense from a cost POV in a digital world. But making sense was not the issue - it was Apple having unreasonable fees compared to the rest of the industry at that time. And like it or not 30% was the standard.

Given how many third party cartridges there were for the NES and how simple the cartridges really were I would say that 20% was very inflated. NES bootleg cartridges were so numerous that Nintendo put a lockout chip in the SNES which is why Super 3D Noah's Ark is the only US unlicensed SNES game.

In fact, AAA titles are creeping up in price and thanks to pre-orders (why in the name of sanity would you preorder a game?) quality is not that great. Never mind working conditions for some of those titles is horrid.

 

[turbotech]

It is too easy to come up with a lot of BS/inflated expenses to where profit is zero. In fact, everything you just listed (team salaries & expenses, advertising & marketing costs, and other business expenses) are exactly was is used to make sure profit is zero or less in Hollywood Accounting.

Given the shady crap that some of the big software companies pull with their own employees I can totally understand Apple wanting it out of the gross.

If you know what you are doing internet advertising is insanely cheap. Its formal name is Earned Media and is considered the holy grail in advertising because it is effectively free (compared to Owned and Paid Media).

LOL. Tell me you don't do any internet advertising without telling me you don't do any internet advertising.

Once again, you're treading into areas that you know very little about except for some articles you've read. You're not actually in the trenches running a game company, or clearly ANY company that relies on Digital Marketing.

Internet advertising is NOT cheap. Costs have skyrocketed in the last few years and competition has grown 100-Fold. Just for mobile apps it costs about $2-$4+ for ONE INSTALL of an iOS game (free games, not paid) from a US user (one of the best markets) and that often won't be profitable.

This "Earned Media" PR stuff or from organic marketing (that yields much) is very RARE. Everyone and their brother is hoping to get a bunch of free publicity and traffic for their game. Again, it's not that easy or everyone would be doing it. Therefore, PAID advertising (FB Ads, Google Ads) or sponsorships (such as with YouTube channels or Twitch broadcasters) are the only feasible option and it's far from cheap.

Facebook has over 10,000,000+ active paid advertisers on their platform that account for 98% of their billions in revenue. As someone that has spent a small fortune on FB Ads over a few years, I can tell you it's far from cheap. Yet it's the number one resource for advertising ANYTHING being sold online, including Apps or other software.

As for the Gross vs. Profit and the commission, I'm not saying it should be based on profit in a pure sense where companies would have to self-report their accounting etc. as that would be a nightmare. But the 'fair' amount of what % the commission should be based on should be with what estimated profit margins for developers are, not gross revenues. That's why the 30% is incredibly high and it could account for over 50% of Net (and does) for many developers. That's reason in and of itself why the commission should be lower, something more like 12-15% max. Taking 50%+ of someone's Net is a JOKE.

And dude... stop playing the "whataboutism" game in regards to Apple's 30% and what others are charging in an attempt to defend Apple. Apple established that monopolistic high price on their App Store that they fully controlled and others (Google, etc.) followed with the same 30% because Apple established they could get away with it. Nintendo wasn't running a comparable digital marketplace like the App Store or Google Play Store or how Steam works in the present day.

Just because a bunch of huge companies, that in many ways don't directly compete with each other, start charging 30%, doesn't make it right nor fair to developers. Especially when developers can't provide their players with alternative payment methods.

Apple and Steam may both charge 30% but they aren't really competing against each other. They have near monopolies on their marketplaces. Apple for iOS titles and Steam for PC titles. Epic investing $500M+ and still not making a major dent in Steam's business (yet) is the first company that has come along and tried to challenge Steam.

So some sort of price/commission comparison between actual direct competitors like McDonald's, Burger King, Wendy's, etc. is far different from companies like Apple, Microsoft (Xbox, not necessarily PC), Sony (PS), Google, and Steam that have grown so big they now have protected monopolies over their own marketplaces. A developer can't go and sell his iOS game on another marketplace, because there isn't one that works with an iPhone. Same with the Xbox or Playstation. There are some other marketplaces for PC games, but Steam has such a lock on the market and so many millions of users that use Steam to manage the games they own and play (and friend connections, etc.) that it's extremely hard to sell a PC game outside of Steam and have much success.

 

[Maximara]

Apple and Steam may both charge 30% but they aren't really competing against each other. They have near monopolies on their marketplaces.

Please tell me you are not going there.

Apple for iOS titles and Steam for PC titles.

Yep you went there. Oh for the love of... this nonsense is what Epic tried to pull in the court case and it spectacularly blew up in their face.

"In the foremarket, Epic Games identifies the product market as one for “Smartphone Operating Systems.” Epic Games contends in turn that there are two derivative and relevant aftermarkets that flow from this initial foremarket, including the “iOS App Distribution” market and “iOS In-App Payment Solutions.” Epic Games logic flows as follows: the iOS in-app payment solutions market is an aftermarket of the iOS app distribution market which is further an aftermarket of the smartphone operating systems foremarket.

Apple, on the other hand, contends that there is only one relevant product: digital game transactions. This includes any and all digital gaming transactions made on any gaming platform. The Court has discussed the factual profiles of each of the proffer, see supra Facts § II, and turns to the determination here."

"The Court reaffirms here the fundamental factual flaws with Epic Games’ market structure. See supra Facts §§ II.A–C. Without a product, there is no market for the non-product, and the requisite analysis cannot occur. Thus, where there is no product or market for smartphone operating systems, there are no derivative markets." - Case 4:20-cv-05640-YGR Document 812 Filed 09/10/21


Of course the court had some choice words about Apple's overly broad market. The Judge wasn't happy with either either Apple or Epic but more unhappy with Epic than with Apple.

Saying Apple has a near monopoly on iOS titles is akin to saying McDonald franchise owners have a near monopoly on McDonald hamburgers. In fact, McDonald franchise owners have it worse than Apple developers as McDonald franchise owners can't get anything outside of the McDonald production chain - not even repair for their ice cream machine. Other franchises can choose their ice cream machines, McDonald franchise owners cannot. Even worse if the machine breaks they have to call a repair person of that company. - The REAL Reason McDonalds Ice Cream Machines Are Always Broken

That is why you see shake machines sit "broken" for weeks or even months on end. It has finally (about bloody time) got the FTC involved.

Epic investing $500M+ and still not making a major dent in Steam's business (yet) is the first company that has come along and tried to challenge Steam.

Epic challenge Steam?! Snicker, giggle, BAHAHA. Reminds me all those developers who said they had the WoW killer and then their MMO didn't do anywhere near that (most imploded). You do know that $500M+ "investment" has been exclusive deals for games, right? Heck, it isn't even that low - Epic Games has spent at least $1 billion on exclusives.

"By charging 12% commission, the Epic Games Store will not be profitable for at least several years. Current estimates indicate negative overall earnings in the hundreds of millions of dollars through at least 2027. The anticipated loss is driven by hundreds of millions of minimum guarantees that Epic Games made to developers to entice them to distribute exclusively through Epic Games Store. - Case 4:20-cv-05640-YGR Document 812 Filed 09/10/21

Developers are not going to Epic because they have a lower percentage but because Epic is effectively bribing the developers...to have exclusives with Epic. As I have mentioned before Humble Bundle (25%) and itch.io (name your percentage) existed and they hadn't made a dent in Steam's marketshare.

I looked it up; itch.io launched 2013 which also the same year Humble Bundle did their own store; Epic's store came on line in 2018 - five years later. If it had only be about how much the developer had to pay for the store Humble Bundle and itch.io would have far more market share they they do.

 

[djphat2000]

There in bold is why your comparison doesn't hold up to scrutiny. A purveyor of goods has many stores they could do business with. Competition among the many stores prevents any one of them from extorting purveyors with one-sided, self-serving terms. Walmart has conditions that are too onerous? Target, Costco, Amazon, eBay, Etsy, others, or even running your own store (digital or physical, doesn't matter) are options. Of course since Walmart wants to stock goods that are in-demand, they won't set terms that are too far outside of what the market will bear anyway. Otherwise customers that would otherwise go Walmart to make that purchase will make that purchase at one of the many other stores. Conversely, a purveyor who doesn't like Apple's terms has just one other place where they can sell their goods, Android. There's no competition to keep the duopoly in check when it comes to settings terms for devs.

It's not Apples fault the rest of the market fell apart. It's not Apples fault the other big companies couldn't sell a device worth a damn to the vast majority of people out there. And what your suggesting is that Apple becomes more like Android. Hence removing choice. I have a choice today to pick many different Android (open) or Apple (closed) devices. Developers have many choices. And since I can't force them to develop on Apple or Android anymore than they should be able to dictate the cost of doing business on any platform.

If a business doesn't like to sell in Target, yes they can sell at BestBuy or whatever. Or build their own store if none of the stores terms makes them happy. They don't get to set the terms and the business they want to sell out of have to accept.

Your scenario also ignores that customers are also capable of shopping at multiple retailers. If a purveyor doesn't like Walmart's terms, they're still capable of reaching those typical Walmart customers through other stores. Even if all of Walmart's customers do 90% of their shopping there, if the purveyor has something desirable, the Walmart customers will still shop elsewhere 10% of the time to get that product that Walmart doesn't carry. That situation doesn't exist in the mobile OS world.

Yes it does. You don't have to purchase from Apple. You don't have to purchase anything from Apple. You can choose Android and either pay Google OR side load. The developer gets to advertise all over the place if they so choose to. I see Candy Crush ads more times than I care to. Play now on the App or Play stores!. But, if you want to sell within any physical store. You don't get to advertise how to buy from outside the store "in" that same physical store. There is no ad next to the product that states "Shop online and save 5% off MSRP". Or "This product is cheaper over at the store across the street". If your in Walmart and you can't find something you want there. Sure, your very free to shop elsewhere. But the manufacture of the item you are looking for can't just put and ad up in Walmart and tells you where to find that product Walmart doesn't carry.

If I don't like Apple's terms and so only develop for Android, I have no possible way of reaching those iPhone users anymore because there's only one route to those consumers.

This is typical of any physical store in America. I can't go to Target looking for a washing machine, any more than I can go to Best Buy looking for children's clothing. I'm sorry Developer you can't properly charge an amount you want to make while at the same time paying to stock your items in a store. If you don't like the terms, build a store and sell your own device.

A typical Walmart shopper may still buy goods from Target occasionally. An iPhone user cannot buy goods from the Google Play Store occasionally. Apple is making their consumers the product, a criticism frequently leveled at Google by Apple diehards.

Apple isn't doing anything. They are not forcing their products down anyones unwilling necks. If a developer wants to avoid the store, they can create a web app. We have been down this road before. I could say, well I like this BMW 7 series. But, why can't I put a HEMI in it? Why can't I just go to the dealer and say "hey, I'll drop the $70K+ on this car, but I need you to supply it with a HEMI and warranty it just like you would your own".

They can advertise other means of payment inside the product that was purchased.

I'm not against this. If I download fortnite and in the game was advertisements to purchase coin from the website. I'd be OK with that. And I'm perfectly capable of going to that website to purchase it directly if I so choose to do so. EPIC is also fully capable of developing a web app for their games just like Microsoft have done. So why can't I just do it that way and bypass the whole store?....... Why does Apple have to make the changes?

If I buy a video game at a retailer, the developer can include literature in their product that advertises in-game enhancements (skins, currency, etc.) and can even tell me where to get them.

Agreed and fine with as above.

If I do buy those enhancements, the retailer doesn't get a cut even though I bought the original product there.

You're correct, they don't. I fail to see why this matters. That isn't how their business is setup to operate. They are a retail store only. They don't sell their own gaming platform, or mobile devices and or operating systems.

 

[Fabercon]

It's not Apples fault the rest of the market fell apart. It's not Apples fault the other big companies couldn't sell a device worth a damn to the vast majority of people out there. And what your suggesting is that Apple becomes more like Android. Hence removing choice. I have a choice today to pick many different Android (open) or Apple (closed) devices. Developers have many choices. And since I can't force them to develop on Apple or Android anymore than they should be able to dictate the cost of doing business on any platform.

If a business doesn't like to sell in Target, yes they can sell at BestBuy or whatever. Or build their own store if none of the stores terms makes them happy. They don't get to set the terms and the business they want to sell out of have to accept.

Yes it does. You don't have to purchase from Apple. You don't have to purchase anything from Apple. You can choose Android and either pay Google OR side load. The developer gets to advertise all over the place if they so choose to. I see Candy Crush ads more times than I care to. Play now on the App or Play stores!. But, if you want to sell within any physical store. You don't get to advertise how to buy from outside the store "in" that same physical store. There is no ad next to the product that states "Shop online and save 5% off MSRP". Or "This product is cheaper over at the store across the street". If your in Walmart and you can't find something you want there. Sure, your very free to shop elsewhere. But the manufacture of the item you are looking for can't just put and ad up in Walmart and tells you where to find that product Walmart doesn't carry.

This is typical of any physical store in America. I can't go to Target looking for a washing machine, any more than I can go to Best Buy looking for children's clothing. I'm sorry Developer you can't properly charge an amount you want to make while at the same time paying to stock your items in a store. If you don't like the terms, build a store and sell your own device.

This is more of a reply to @vipergts2207, and to support what you wrote @djphat2000

Physical Retail Stores are actually one of the hardest markets to break into. Walmart and Target carry a lot of brands, but they rarely carry the same brands except proven and established major brands (or only manufacturer to carry that type).

Manufacturers were required to go through distributors and the distributors would pitch to retailers the "hot" new items they were now carrying. For an unknown manufacturer to get established in a retail chain bypassing the distributor, they had to known someone. Period.

Software developers shipping physical copies of their software often had the same restrictions as clothing or office supply manufacturers with a lot of competition. The most difficult fact to prove for new manufacturers was "why would the customer want to buy ____" BECAUSE retailers were up-fronting all of the risk by paying ~50% of the price they would sell to the consumers. The more risky the product, the lower the price the manufacturers had to accept in order to get their product in the store and on the shelf.

All of that changed with ecommerce and Amazon. Suddenly manufacturers had direct access to consumers. A lot of the prices on Amazon are cheaper because the manufacturer is selling it directly, and while Amazon takes a cut it is not nearly the fee that retailers were being charged. Also and perhaps more importantly, the RISK was no longer held by the marketplace (Amazon) but the mini-store owner which was often the manufacturer or a distributor working directly with the manufacturer.

It was that retail market which Apple was emulating and comparing retail vs Apple, that 30% was pretty darn good. The problem is that everyone is used to Amazon now; and we expect Apple to work the same way.

 

[Maximara]

It was that retail market which Apple was emulating and comparing retail vs Apple, that 30% was pretty darn good. The problem is that everyone is used to Amazon now; and we expect Apple to work the same way.

"Content providers receive 50% of net revenue." - Amazon Prime Video

Just who is expecting Apple to take 50% of their net revenue?!

 

[Fabercon]

"Content providers receive 50% of net revenue." - Amazon Prime Video

Just who is expecting Apple to take 50% of their net revenue?!

Amazon Prime Video content providers is very different than retail items sold through the Amazon store.

A subscription service fee is very different than a purchase fee, and while the entire subscription fee is a very big pie, there are a lot of content providers that each deserve a slice.

This would be more comparable to Apple Music or Apple Arcade.

Participants in any of the subscription programs are bound by the conditions of that program and there is probably metrics and payouts based on usage. This has nothing to do with 30% developer fees for apps.

 

[Maximara]

Yes it does. You don't have to purchase from Apple. You don't have to purchase anything from Apple. You can choose Android and either pay Google OR side load. The developer gets to advertise all over the place if they so choose to. I see Candy Crush ads more times than I care to. Play now on the App or Play stores!. But, if you want to sell within any physical store. You don't get to advertise how to buy from outside the store "in" that same physical store. There is no ad next to the product that states "Shop online and save 5% off MSRP". Or "This product is cheaper over at the store across the street". If your in Walmart and you can't find something you want there. Sure, your very free to shop elsewhere. But the manufacture of the item you are looking for can't just put and ad up in Walmart and tells you where to find that product Walmart doesn't carry.

This is typical of any physical store in America. I can't go to Target looking for a washing machine, any more than I can go to Best Buy looking for children's clothing. I'm sorry Developer you can't properly charge an amount you want to make while at the same time paying to stock your items in a store. If you don't like the terms, build a store and sell your own device.

This is the point everyone wants to dodge worse that given a strait answer in a political debate. In fact, stores have a tight control over how they stock - especially grocery stores (in the form of slotting fee). This is why the name brands (which are more expensive) are near eye level and the cheaper knock off brands are near the floor. If the company pays high enough a slotting fee or use direct distribution they not the grocery store stock their own items resulting in things like The Cookie War Between Oreo and Hydrox Is Getting Ugly

There are a handful of developers who want Apple's store to effectively advertise their software but don't want to paid for the advertising and visibility effectively provides for them.

It would be akin to going tp Best Buy's website and along side their listing for Call of Duty at ($39.99) they would have to have a link to the Call of Duty page where the exact same version (standard edition on Playstation) is $29.99. No those aren't numbers I pulled out my mind but the actual prices using the actual websites as of writing this. And before you go 'but it is in a box', many games "in a box" are little more than a download code - no disk. And even if it does have a disk there is such a huge update that you would have been better off just going for the download version anyhow.

I would like for someone to explain to me how that makes any freaking sense.

 

[Maximara]

Amazon Prime Video content providers is very different than retail items sold through the Amazon store.

A subscription service fee is very different than a purchase fee, and while the entire subscription fee is a very big pie, there are a lot of content providers that each deserve a slice.

So you don't count the $99 an Apple developer must pay so they down't have to have their user forced to do the left click try twice tap dance to bypass Gatekeeper on the Mac as an "subscription service". Got it.

 

[Abazigal]

So you don't count the $99 an Apple developer must pay so they down't have to have their user forced to do the left click try twice tap dance to bypass Gatekeeper on the Mac as an "subscription service". Got it.

Should we? I don’t think that $99 buys the developer anywhere best as much support as you think it should.

 

[turbotech]

Epic challenge Steam?! Snicker, giggle, BAHAHA. Reminds me all those developers who said they had the WoW killer and then their MMO didn't do anywhere near that (most imploded). You do know that $500M+ "investment" has been exclusive deals for games, right? Heck, it isn't even that low - Epic Games has spent at least $1 billion on exclusives.

WHAT???????????????

Am I living in some kind of alternate universe?????

DUDE... go back a couple of pages into our long discussion... *I'M* the one that told *YOU* that most of Epic's investment/costs in their Games Store was because of those licensing deals (both exclusive and non-exclusive) after you tried to imply that Epic couldn't become profitable only charging 12% commission (implying their Store had more costs just to run; nothing related to licensing deal costs) - which is what started all of this with you trying to claim Apple couldn't make any money if they lowered their commissions below 15% etc. yadda yadda.

You have to be the worst "debater" I've ever encountered in my entire life. You've literally just shifted your position and are now trying to quote case elements to now try and support whatever your latest argument is in support of things you already LOST ON, yet now playing the "other side" of that factor.

Apple and Steam are absolutely NOT direct competitors. "Digital games" is not the only element of this case and how it relates to anti-competitive behavior. There's more to business law than just the product category. You have to be DUMB and/or NAIVE not to realize this.

I also notice how you didn't say anything about the Internet Advertising thing after I, once again, proved you wrong about something you know nothing about but excerpts you've taken from articles (often out of total context).

It's funny how you keep getting proven wrong yet you never admit it or put any attention to it. You just move on to digging up your next Wikipedia entry, tech article, or excerpt from legal cases, often without taking into account the entire context of the situation they relate to.

 

[turbotech]

There are a handful of developers who want Apple's store to effectively advertise their software but don't want to paid for the advertising and visibility effectively provides for them.

It would be akin to going tp Best Buy's website and along side their listing for Call of Duty at ($39.99) they would have to have a link to the Call of Duty page where the exact same version (standard edition on Playstation) is $29.99.

I would like for someone to explain to me how that makes any freaking sense.

It doesn't make any freaking sense because your anecdotes, excerpts, made-up examples, etc. are NONSENSE and don't actually relate to the situation - including the one you just used above about Best Buy.

This is more of an example of what's happening...

Best Buy sells Call Of Duty standard edition on their web site at $39.99. A customer buys it and installs it on the Playstation hardware they purchased with their hard-earned money. Inside of that game, once they're running it on the Playstation hardware THEY PERSONALLY OWN, there's a Call Of Duty expansion pack or other products that company sells and markets to its customers.

Then Best Buy makes rules that BANS the Call Of Duty developer from being able to sell that expansion pack, or promote other games, INSIDE their own software product that's being played on THE CUSTOMER'S RIGHTFULLY OWNED HARDWARE *unless* the company agrees to pay Best Buy a huge gross revenue commission to run all the sales through them and with no other alternatives.

This ISN'T actually happening. Best Buy doesn't do this. But how ridiculous would it be if Best Buy DID do that?

Well, Apple IS DOING THIS VERY THING.

They're trying to control commerce or any marketing that goes on INSIDE DEVELOPER SOFTWARE *after* it becomes installed on CUSTOMER HARDWARE.

If you can't see why so many Developers and others think this is a real problem with what Apple (and others) are doing, then there's no hope for you. You are truly BLIND to the reality of what Apple is doing and started as a trend that, so far, some other big companies have been able to get away with too; which is going to all come to an end.

 

[Maximara]

It doesn't make any freaking sense because your anecdotes, excerpts, made-up examples, etc. are NONSENSE and don't actually relate to the situation - including the one you just used above about Best Buy. (...)Then Best Buy makes rules that BANS the Call Of Duty developer from being able to sell that expansion pack, or promote other games, INSIDE their own software product that's being played on THE CUSTOMER'S RIGHTFULLY OWNED HARDWARE *unless* the company agrees to pay Best Buy a huge gross revenue commission to run all the sales through them and with no other alternatives.
.

Made-up examples?! You are the one making up examples:

Here is proof you have no idea what you are talking about (this is the version from the App Store):

See that little thing that says "Support"? Well here is where it goes:

See all those little pictures? Well those are other programs the developer sales. And that isn't all of them.
And before you go into more of your nonsense here is a snapshot of the About box of an older version sold through the App Store:

What is that at the bottom? Why it is the developers website where he sales other software. Remember Fortnite was on both Mac and iPhone and got pulled from both.

In fact, here is what Epic themselves says: "Apple is preventing Epic from signing games and patches for distribution on Mac, which ends our ability to develop and offer Fortnite:" (What happens now that I can no longer play Fortnite on Mac?). Not iPhone or iPad but Mac. In fact in all that there is not one word about mobile devices or OSes (you have to click on the links to get that)

Face it, you are the one who doesn't know what they are talking about and I have provided proof.

 

[djphat2000]

This is more of an example of what's happening...

Best Buy sells Call Of Duty standard edition on their web site at $39.99. A customer buys it and installs it on the Playstation hardware they purchased with their hard-earned money.

How it's earned isn't important.

Inside of that game, once they're running it on the Playstation hardware THEY PERSONALLY OWN, there's a Call Of Duty expansion pack or other products that company sells and markets to its customers.

I've stated before I'm personally fine with that. If any game company wishes to advertise their products, they have every right to do so. My objection would be that they advertise while inside the "store" digital or otherwise that you can get items not sold in that store elsewhere. Or items sold in that same store for "less" elsewhere. That I have issue with.

Then Best Buy makes rules that BANS the Call Of Duty developer from being able to sell that expansion pack, or promote other games, INSIDE their own software product that's being played on THE CUSTOMER'S RIGHTFULLY OWNED HARDWARE *unless* the company agrees to pay Best Buy a huge gross revenue commission to run all the sales through them and with no other alternatives.

They have every right to "try" and do that. And if both parties can't agree on that. They don't have to sell the product within BestBuy. If Best Buy wants you (the customer) to purchase items from it's store. It has to sell stuff you want. You, the customer. Have absolutely no freaking idea what cut BestBuy takes of any item they sell. All you care about is the cost, and convenience of purchasing what you want at that store. You are free to shop elsewhere, online or physical for the items your looking for. BestBuy doesn't have to sell everything. Merchants don't have to sell everything they make at BestBuy either. I can't buy a car at BestBuy no matter how much money I'm willing to give them for it. You can't make anyone do anything they don't have to do. This works for all parties involved. But, when you agree to do X for Y. You should be held to it.

This ISN'T actually happening. Best Buy doesn't do this. But how ridiculous would it be if Best Buy DID do that?

It wouldn't be ridiculous if both parties agreed to do that. Nothing stopping EPIC from creating a game that includes a link to BestBuy's payment system for future updates/DLP/coin/etc to go through BestBuy for purchase. And their cut of the sale. They "could" do this. And they could also offer you the customer a deal. If you buy this version of the game from BestBuy we will give it to you for Free. It's say normally $60 for the game, plus any DLP you get. We will cut you a deal cause BestBuy really wants you to shop here for other things like, phones or movies or music. So while we are giving you this game. All sales go through BestBuy so it helps cover the cost of the game they are affectively paying you for. At the hopes you will shop for other items at the store. And since Epic thinks it will drive more customers to play the game since they will make some money from DLP/Coin/Updates etc to the game over time. It's worth them giving it up for "free" for "now" while recouping those costs later.

This applies to consoles. They cost MORE to make than they sell it for. Plus they still have to give up a cut to the store it is sold out of. If Microsoft wants to sell the Xbox for $500. They have to do so across all the stores. Less any cuts the store wants to make to have a sale. While also selling it at the same price on their store too. Again, less any cuts for sales bundles etc. Deals can be made in all kinds of different ways.

Well, Apple IS DOING THIS VERY THING.

Separate issue, but AppStore is setup this way. Why? Because many games are free to download and play with in-app-purchase supporting the cost of the game. Apple would get no cut for a truly free game. You can use ad support to make money around an in-app-purchase. But, it makes more money for the developer to go the IAP way than Ad's. So, if the developer gets to make money on a game's in-app-purchase. Why shouldn't Apple? They host the store, they provide all the stuff. They (Apple) has the customers with iOS devices. Should the developer get 100% of the in-app-purchase and pay Apple nothing?

They're trying to control commerce or any marketing that goes on INSIDE DEVELOPER SOFTWARE *after* it becomes installed on CUSTOMER HARDWARE.

They don't want the developer to advertise in the game that you can purchase elsewhere. As I stated before. I don't think in any store such a situation exists. If I go to a physical store, and pickup a game. When I take it home, if in that game they wish to advertise you can download x from here, y from there etc. I don't have an issue with it.
I don't have an issue with developers emailing/notifying outside of the App to customers that want to be notified of extras, other ways to pay etc. Just not "IN" the game. Again, if I am on my Xbox, I don't get advertisements to purchase the same game on Playstation for less. Or from Amazon on physical disk for less. Or from the developers site, for less. The game you pick up from a physical store doesn't advertise on the outside or near the box of any other way to get anything from anywhere else BUT from the store your in. Inside the box after you leave the store. They can do what they wish.

If you can't see why so many Developers and others think this is a real problem with what Apple (and others) are doing, then there's no hope for you.

They want 100% of the profit and to live rent free in the mobile space. Yes, I have an issue with that. They think Apple and Google has made enough money that they are trillion dollar behemoths that don't need to charge these poor devs anymore. I ask for someone to name another business that has to deal with this BS. They exist for others to thrive? Dev's can charge more money for their apps if they want to, to make up any difference they have to pay for AppStore-PlayStore access.

You are truly BLIND to the reality of what Apple is doing and started as a trend that, so far, some other big companies have been able to get away with too; which is going to all come to an end.

They didn't get away with anything. Perfectly legal, and to boot was at a cheaper price than any retail store those same dev's sell through today. Not to mention both Apple and Google has lowered their prices over time. Who does this? Prices usually goes up over time (inflation). Again, they want rent free space in the digital store with cake.

 

[Maximara]

Separate issue, but AppStore is setup this way. Why? Because many games are free to download and play with in-app-purchase supporting the cost of the game. Apple would get no cut for a truly free game. You can use ad support to make money around an in-app-purchase. But, it makes more money for the developer to go the IAP way than Ad's. So, if the developer gets to make money on a game's in-app-purchase. Why shouldn't Apple? They host the store, they provide all the stuff. They (Apple) has the customers with iOS devices. Should the developer get 100% of the in-app-purchase and pay Apple nothing?

Based on Epic's ramblings in the press I would say yes. Judge din't buy that and said Apple had the right to get something. As is demonstrated many times people don't know when they have a good thing and ruin it for everybody else. Here is an example from my University days:

For a monthly fee you got three meals a day at the University I went to. A bunch of Epic minded halfwits moaned about not having choice and the University caved and make the meals al a cart and your ID card worked like a debit card. Guess what? If you said we wound up spending more congratulations you win the grand prize a freaking 20% increase in your food expenses. Yes, even after 30 years I am still bitter about those morons ruining it for those of us who actually had a freaking brain in our heads and actually understood basic economics.

They don't want the developer to advertise in the game that you can purchase elsewhere. As I stated before. I don't think in any store such a situation exists.

The closest analog I can think of is the "we will match a competitors price" and even that has restrictions.

They want 100% of the profit and to live rent free in the mobile space. Yes, I have an issue with that. They think Apple and Google has made enough money that they are trillion dollar behemoths that don't need to charge these poor devs anymore. I ask for someone to name another business that has to deal with this BS. They exist for others to thrive? Dev's can charge more money for their apps if they want to, to make up any difference they have to pay for AppStore-PlayStore access.

Not just the mobile space. Epic had Fortnite on the MacOS as well so the desktop is also on the 'we want a free ride' developer train.

They didn't get away with anything. Perfectly legal, and to boot was at a cheaper price than any retail store those same dev's sell through today. Not to mention both Apple and Google has lowered their prices over time. Who does this? Prices usually goes up over time (inflation). Again, they want rent free space in the digital store with cake.

"Get away with x" has become a 'warning possible incoming straw man' signal. 'They got way with stealing the election from Trump' for example.

It would be more accurate to say 'it's immoral'. Companies getting mammoth amounts of money back from the government even though they made millions is perfectly legal. Take Activision's $243 million tax rebate despite making $447 million in profits; then they laid off 800 workers.

Did you pay US taxes? Yes? Well, congratulations you just supported Activision and their behavior towards women. Does that make you feel so good inside? No? Pity, it is legal. Doesn't make it moral.

 

[turbotech]

They want 100% of the profit and to live rent free in the mobile space. Yes, I have an issue with that. They think Apple and Google has made enough money that they are trillion dollar behemoths that don't need to charge these poor devs anymore. I ask for someone to name another business that has to deal with this BS. They exist for others to thrive? Dev's can charge more money for their apps if they want to, to make up any difference they have to pay for AppStore-PlayStore access.

C'mon... try and keep up with this entire situation. I haven't seen any companies stating they want 100% of the profit and not have to pay Apple anything. I haven't said it and I haven't seen any other companies state that. What they want are alternatives so it forces Apple to set more competitive commission rates and marketing controls which they currently have a monopoly over. And the "Devs can just charge more" is a TERRIBLE argument. Higher prices almost always reduce conversion (especially lower priced consumer products like game-related products) and the reduced conversions produces less revenue. That's like saying if Apple raised their commission to 90% then the Developer only has to raise their prices by 10X so the 10% they're left with becomes 100% to make up for it... so they'd raise their price of a $9.99 expansion IAP to $99.99. Yeah, that won't affect conversion at all and the same number of customers will buy.

 

[turbotech]

What is that at the bottom? Why it is the developers website where he sales other software. Remember Fortnite was on both Mac and iPhone and got pulled from both.

In fact, here is what Epic themselves says: "Apple is preventing Epic from signing games and patches for distribution on Mac, which ends our ability to develop and offer Fortnite:" (What happens now that I can no longer play Fortnite on Mac?). Not iPhone or iPad but Mac. In fact in all that there is not one word about mobile devices or OSes (you have to click on the links to get that)

Face it, you are the one who doesn't know what they are talking about and I have provided proof.

Dude, you're a total CLOWN. ?

You've been smashed a million times in this thread and have been proven wrong so many times now it's not even funny. You're CLUELESS about running a games or other software business because you're not in the industry.

You keep CHERRY-PICKING small elements to try and support an argument for larger context. It doesn't work that way, nor do you get any 'credit' in a debate when that approach is taken. Providing "proof" to support one of your own sub-points/claims, one that isn't even being debated within the core context of the argument, is in no way proving anything in regards to the discussion.

NONE of what we've been discussing was about the MAC App Store. NONE. ZERO. ZILCH. Everything I've written and been discussing back and forth with you is about the anti-competitive nature of the iOS App Store and that's what the majority of all this legal and other government regulatory stuff is about. So Epic mentioned MACS in it's broad legal action? WHO CARES! That doesn't prove anything and negate everything about the iOS App Store and all the laws that are being proposed against it, and the momentum in the industry against it. It's already been established that Epic threw the kitchen sink at Apple trying to make every possible claim they could (including anything about Macs) knowing much of it would be ignored; that's how lawsuits work. As I already stated, taking the broader claims approach allowed them to subpoena and obtain more of Apple's private documents in discovery; which they hoped would help their overall case concerning the iOS App Store.

People don't only use the Mac App Store to buy 3rd party software for their Mac. Millions of purchases are done directly through Mac developer web sites (or other places that sell software) and download from there. It's too late for Apple to try and control that market so they CAN'T - and YOU know that.

The iOS App Store is a completely different beast where Apple has exhibited anti-competitive behavior with their egregious commission rates and draconian anti-marketing, anti-steering rules to keep developers from having more access to their own customers, which in most cases the Developer invested the money to advertise to get those customers (installs) and Apple didn't just provide them the exposure in the App Store - 90% of Apps don't get any free organic installs because there are too many Apps and 'discovery' has always been a problem. Which is why Apple SELLS ADS to developers that want more exposure in the App Store.

This entire original discussion between us was about you claiming that you did your magic accounting analysis to estimate that Apple has to charge at least a 15% commission rate across the entire App Store just to break-even - in your attempt to JUSTIFY why Apple 'had' to set those fees so high. You were proven WRONG with multiple elements that myself and others clearly presented and explained. But after that happened, you abandoned that "position" and starting arguing about other things - a classic move of someone that lost a debate. But even in many of those other areas you were proven incorrect as well. Yet you keep digging and digging for sub-text, nuance, and trying to hold up other small elements to somehow prove a point in the broader context; which makes zero sense.

I'm done with this discussion and will no longer waste my time. You lost your original argument and continue to just ramble on and on and on about other things that don't always directly relate to what's being talked about. Your long-winded, vague, and fail to be able to sick to discussing SPECIFIC points that people begin a debate with you about. Therefore, it's a total waste of time to engage with you because you keep "moving the goal posts" as they say.

Good luck to anyone on this site that wants to continue to waste their time 'debating' with you.

 

[Maximara]

The reality is Apple's App Store serves both MacOS and iOS.

In fact, there have been times I see something described on the net and go to look at it on the App Store only to find out it is only for iPhone/iOS and I am using a (Intel) Mac. In fact with the new M1s developers have had to take steps to make sure their iPhone/iPad programs do not run on M1 Macs.

The boundary between what the law defines as computer and what is exempt under that definition is becoming blurry as all get out.

The National Archives states "Title 48 was last amended 11/08/2021" so that "dated-sounding language" was updated this year not even a month ago (Being 11/23/2021 as I type this) and it has this very interesting line:

"Tablet PCs, which may use touch-sensitive screens along with, or instead of, other input devices, are considered notebook computers." The iPadOS is "a rebranded variant of iOS" and therefore can run iPhone programs.

Does an iPad Pro with a magic keyboard qualify as a "table PC" (ie notebook computer) under the revised Title 48?