Ridley Scott Comments on Epic Games' Parody of His '1984' Ad

[BuffaloTF]

I think most people are mixing things up here. The issue is not if Apple is a monopoly or not. The issue is if they are abusing or not of their dominant position. They are. A 30% cut on apps sold in the app store is high but acceptable. BTW, Epic charges 12% on their games store. What is completely unacceptable is the cut they take on in-app purchases and subscriptions. It's like if a truck manufacturer sells you a truck and then wants 30% on every fee you collect by transporting stuff. It's not related to apple's role in the purchase, it's an abuse that apple can do because they have a dominant position.
An additional problem, which is related, is that apple also competes with their own services. Apple music gets the full 10 dollars a month from every user, they don't have to pay the 30% fee. Apple imposes absurd rules for xCloud and Stadia (they would have to approve any single game) effectively keeping them out of the apple ecosystem because they want to protect their own gaming services. This is an abuse of dominant position as well and it's unfair competition

One similarity are bank and credit cards. What if Mastercard starts charging a 30% fee on everything that you buy?

"A manufacturer’s own products do not themselves comprise a relevant market."

"A company does not violate the Sherman Act by virtue of the natural monopoly it holds over its own products."

These are direct quotes from case law… the precedent has been set and upheld by:

-Parsons v Ford 1982.
-Spectrofuge v Beckman Instruments 1978.
-TV Communications Network v Turner Network 1992.
-Belfore v New York Times Co 1986.
-Carlock v Pillsbury Co. 1989.
-Elliott v United Center 1996.

Among others.

Elliott v United Center is a really good one here. About the United Center's policy on food sales within the United Center and a peanut vendor being angry he couldn't sell peanuts outside the UC and have patrons enter the facility with them...

The serious point here is that the United Center is certainly a popular facility in Chicago.   It serves, over the course of a year, millions of customers, and it is undoubtedly a prime spot for vendors of all kinds to ply their wares.   But this implies that the relevant market should be expanded to all other comparable places in the Chicago area.   Absent collusion, even if each stadium or arena had a policy similar to the United Center’s policy, there would be no violation of the antitrust laws.   In such an expanded market, furthermore, it is very doubtful that the United Center has any significant market power.   And we have explicitly rejected the proposition that a firm can be said to have monopoly power in its own product, absent proof that the product itself has no economic substitutes.   See Digital Equip. Corp. v. Uniq Digital Technologies, Inc., 73 F.3d 756, 761 (7th Cir.1996);  see also Bendix Corp. v. Balax, Inc., 471 F.2d 149, 160-61 (7th Cir.1972).

Can't have a monopoly within its own product... check.
Absent proof the product has no substitutes... well, they aren't even remotely close to the dominant product in this market.

 

[deeddawg]

But why is Netflix exempt then?

What leads you believe Netflix is exempt? Do their in-app purchases not go through Apple?

If you're talking about being able to purchase separately from the app, I don't think that's prohibited. Many apps let you subscribe / purchase content elsewhere to then use within the app on iOS. Hulu, YTTV, Netflix, etc. They just can't sit there and tell you to circumvent Apple and may choose not to pay Apple's 30% by not having IAP. Others (YYTV did this a while) had a higher price for IAP than direct.

I suspect if Epic stuck with that instead of trojan-horsing their own in-app-purchase capability in lieu of App store IAP, they'd have had no trouble.

 

[gnipgnop]

Apple imposes absurd rules for xCloud and Stadia (they would have to approve any single game) effectively keeping them out of the apple ecosystem because they want to protect their own gaming services.

Apple wants the App Store to provide native iOS/iPadOS applications, so one of the requirements to pass App Store review is that the app works natively. That means the gaming apps being provided through the xCloud/Stadia streaming apps aren't in compliance since they haven't been ported to iOS/iPadOS.

 

[deeddawg]

They sell a subscription. Users are directed to buy it directly on Netflix's site. Amazon did the same, and they also offer individual purchases of media. Spotify and Fortnite tried to do the same thing, both were disallowed.

I don't use spotify - are you saying that buying you subscription from Spotify doesn't give you service in the iOS app?

Spotify Premium (US) - Try 3 months for $0

Spotify Premium is a digital music service that gives you access to ad-free music listening of millions of songs. Try 3 months for $0.

www.spotify.com

I know SiriusXM streaming service, purchased from SiriusXM works just fine on the Sirius app. Same with Hulu and YTTV and even (when I had it) DirectTVNow. Amazon Music and Amazon Prime Video also work just fine with my Prime subscription purchased directly from Amazon.

Seems odd those all work fine and Spotify doesn't?

 

[LV426]

How much would it cost you to:
• Buy/rent and maintain a web server and all relate network equipment?
• Constantly develop and maintain an AppStore website that updates daily?
• Have enough server and network infrastructure to handle high amounts of traffic?
• Pay for enough bandwidth to support your operation?
• Have enough redundancy (location, computer equipment, power generators and internet service) to avoid gaps in service?
• Promote your own App Store among hundreds of available App Stores?
• Negotiate with phone vendors so your App Store could be easily accessible by the user just by tapping on an icon?
• Have enough personnel to handle all the work listed above + key employees to cover 3 shifts 24/7 in some specific departments?
• Pay for attorney fees, business licenses, insurance policies?
• Maintain Support personnel (Human Resources, cleaning, security, etc.)?
• Maintain the facilities where all this work will be handled?healthy

...and the list goes on...


So, when you think about, Apple is able to charge only 30% because of the amount of Developers that joined the AppStore. And yes, they are entitled to profit from all this hard work.

Well, Epic manage to host their own App Store and make a profit on 12% sales commission for third party apps. Which doesn't really surprise me, because it's not such a hard thing to do.

 

[archer75]

I don't use spotify - are you saying that buying you subscription from Spotify doesn't give you service in the iOS app?

Spotify Premium (US) - Try 3 months for $0

Spotify Premium is a digital music service that gives you access to ad-free music listening of millions of songs. Try 3 months for $0.

www.spotify.com

I know SiriusXM streaming service, purchased from SiriusXM works just fine on the Sirius app. Same with Hulu and YTTV and even (when I had it) DirectTVNow. Amazon Music and Amazon Prime Video also work just fine with my Prime subscription purchased directly from Amazon.

Seems odd those all work fine and Spotify doesn't?

spotify works fine.

 

[pasamio]

Well, Epic manage to host their own App Store and make a profit on 12% sales commission for third party apps. Which doesn't really surprise me, because it's not such a hard thing to do.

Do you have a source for Epic making a profit on their Epic Store business? Given they're giving games away, paying for exclusives to go to the store and also subsidising the cost of Unreal Engine games in the store it is entirely possible that they're currently losing money on the Epic Store in a bid to try to capture the market away from Steam. It'd be great to see some confirmation that Epic is still profitable after all of this outlay.

 

[jlocker]

Remember in the Mafia movies when one gang had a war with the other over someone doing the other one wrong. It is like Apple is now The Godfather and is saying, remember all those years that you did not make software for the Mac or take a year to port a game over to the Mac. Guess what the shoe is on the other foot now. But we have this wonderful graphics engine called Metal if you want do use a favor a put out some programs for us. And start writing more code for Apple AX processors

 

[mw360]

How much would it cost you to:
• Buy/rent and maintain a web server and all relate network equipment?
• Constantly develop and maintain an AppStore website that updates daily?
• Have enough server and network infrastructure to handle high amounts of traffic?
• Pay for enough bandwidth to support your operation?
• Have enough redundancy (location, computer equipment, power generators and internet service) to avoid gaps in service?
• Promote your own App Store among hundreds of available App Stores?
• Negotiate with phone vendors so your App Store could be easily accessible by the user just by tapping on an icon?
• Have enough personnel to handle all the work listed above + key employees to cover 3 shifts 24/7 in some specific departments?
• Pay for attorney fees, business licenses, insurance policies?
• Maintain Support personnel (Human Resources, cleaning, security, etc.)?
• Maintain the facilities where all this work will be handled?

...and the list goes on...


So, when you think about, Apple is able to charge only 30% because of the amount of Developers that joined the AppStore. And yes, they are entitled to profit from all this hard work.

Apple doesn't charge 30% to cover all that. They charge 30% because anyone who wants to sell games, movies, books, or music on an iPhone would get 0% if Apple hadn't built the iPhone, iOS, Xcode, and the base of 100 million trusting and spendy customers. The 30% pays for access to the platform and the customer base, not access to a web server.

 

[hot-gril]

I don't use spotify - are you saying that buying you subscription from Spotify doesn't give you service in the iOS app?

Spotify Premium (US) - Try 3 months for $0

Spotify Premium is a digital music service that gives you access to ad-free music listening of millions of songs. Try 3 months for $0.

www.spotify.com

I know SiriusXM streaming service, purchased from SiriusXM works just fine on the Sirius app. Same with Hulu and YTTV and even (when I had it) DirectTVNow. Amazon Music and Amazon Prime Video also work just fine with my Prime subscription purchased directly from Amazon.

Seems odd those all work fine and Spotify doesn't?

No, it does. I thought Spotify was forced to offer the IAP subscription, and I was wrong. I thought Amazon was allowed to direct users to the non-IAP subscription, also wrong.

 

[falainber]

I really don't understand this. No-one is stopping Epic Games from launching their own phone, OS, and App Store. If that were the case, fair play. But it's not. What an entitled company they must be. I hope Apple never gives in to their bullying. They need to pay up like everyone else, or just sell through other platforms instead.

So, you want every game (or even software in general) developer to release their own devices and OSes. We would have to buy all of them. Would not it be better for all of us to have one phone (per person) and alternative app stores?

 

[hot-gril]

They aren't directed to do anything. That's the difference. They're given an option only to "Sign In".

Spotify charged 12.99 as an IAP. They put in a message along the lines of "Get it cheaper by going directly to our website" complete with instructions on how to cancel the recurring payment first, then instructing them to wait until that month expired, then go to the webpage and sign up again. The update got blocked. They reacted by removing IAP entirely.

Fortnite put in something that circumvented the app review process and the App Store entirely, they got their app pulled.

Amazon offered Apple their own storefront on Amazon.com, updated their reseller agreement to only use certified resellers, and charges Apple rent. In return, they put on the Prime Video app. It's a 2 way contract.

Yeah, this is correct. I was remembering it wrongly and downloaded the apps to see it myself.

 

[falainber]

How much would it cost you to:
• Buy/rent and maintain a web server and all relate network equipment?
• Constantly develop and maintain an AppStore website that updates daily?
• Have enough server and network infrastructure to handle high amounts of traffic?
• Pay for enough bandwidth to support your operation?
• Have enough redundancy (location, computer equipment, power generators and internet service) to avoid gaps in service?
• Promote your own App Store among hundreds of available App Stores?
• Negotiate with phone vendors so your App Store could be easily accessible by the user just by tapping on an icon?
• Have enough personnel to handle all the work listed above + key employees to cover 3 shifts 24/7 in some specific departments?
• Pay for attorney fees, business licenses, insurance policies?
• Maintain Support personnel (Human Resources, cleaning, security, etc.)?
• Maintain the facilities where all this work will be handled?

...and the list goes on...


So, when you think about, Apple is able to charge only 30% because of the amount of Developers that joined the AppStore. And yes, they are entitled to profit from all this hard work.

I think 1% would cover all of it. I don't have any numbers but neither do you. All you are saying is that we all have to trust Apple. We don't. We need the market (alternative app stores) to establish fair pricing.

 

[BuffaloTF]

Well, Epic manage to host their own App Store and make a profit on 12% sales commission for third party apps. Which doesn't really surprise me, because it's not such a hard thing to do.

for 12% Epic doesn't cover the cost of the payment processing, nor provide the service of paying the taxes for the related purchase in the country it was bought in and then providing you with the supporting tax documents for that authority. For the payment processing, the consumer pays between 5-25% of the cost of the item. 60 dollars becomes 75. For the tax payments and even the 12%, Epic gives you all of the money, invoices you for the 12%, and leaves you to hire accountants to pay taxes in every country.

If you want Epic to cover the cost of the transactions... it's 25%. And you're still on your own for taxes.

It's... really a terrible deal for everyone.

 

[jhollington]

...paying the taxes for the related purchase in the country it was bought in...

That's another interesting point that many folks probably haven't thought of... How many countries and currencies is the Epic Store even available in right now? How likely is it to expand further? Granted, if they're simply invoicing for the commission and leaving all of the paperwork and taxes up to the developer, it's probably easier for them, but with the number of different currencies and laws around the world, there are still going to be challenges in some places.

I think the App Store is at around 175 countries right now. That's a pretty massive market that most third-party stores probably couldn't even hope to touch. In fact, one area in which Apple has consistently left the competition in the dust is in international availability of its services overall.

 

[jhollington]

Elliott v United Center is a really good one here. About the United Center's policy on food sales within the United Center and a peanut vendor being angry he couldn't sell peanuts outside the UC and have patrons enter the facility with them..

This is an excellent example.

 

[Unregistered 4U]

30 percent is WAY too much! Why do I say so... umm, well, I don’t have a good reason, but I do have a few completely unrelated analogies. It’s like....

 

[jlocker]

Here's the deal if you make Star Wars squadrons for the Mac and get it out in 3 months we will talk

 

[Unregistered 4U]

i think i got a good grasp, but why don't you tell me.

If you don’t know, it’s fine. I know I don’t, but you tossed it out like you knew. Sorry for asking! Google is my friend.

 

[jlocker]

Epic where is Tony Hawk Pro skater 1/2 for the Mac, oh you did not write game software for the Mac too bad. Maybe we can make a deal?

 

[zarmanto]

I do think 30% cut is a bit greedy from Apple. ...

I agree with the rest of your comment, but I would quibble with this point: It's only "greedy" if Apple is somehow taking advantage of their position to charge more than the alternatives. Contrary to Epic's claims, they're actually not. Google takes a 30% cut on Google Play. Sony takes a 30% cut on Playstation. Microsoft, Nintendo, Valve... all the same story. So really, Apple's 30% cut is the status quo, not the exception.

So you know who they're attempting to compare with Apple? Themselves. As you noted, Epic takes only a "paltry" 12% cut, on their own game store. Of course, even taking into account their many successes (like Fortnite) they still don't have anything close to the same kind of market sway that any of the afore mentioned hardware vendors have, so nobody would actually pay them a 30% cut for their "Epic Games Store" in the first place... so instead, Epic is attempting to turn a story about their own jealous greed and their own inability to become as big and powerful as one of the Big Guys, into this wild fabrication about them being the plucky underdog, with pious good intentions and love and peace for all.

News flash: They're not plucky. They're not even an underdog. And their intentions? Duh... profit, obviously. They are every bit as greedy as any other company noted in this comment -- if not more so.

This situation is frustrating for me and for my Fortnite playing kids... but I don't blame Apple in the least. I blame Epic, entirely. As such, they won't be getting any more money from me, or from my family members, going forward. (And ironically, I had even made a point of paying for our v-bucks via the web browser on my Mac, instead of from one of the iPads. Silly me!)

 

[2010mini]

I believe they're framing iOS devices as the market, not mobile devices as a whole.

But iOS doesn’t even have a monopoly on the market place. Android would be closer to monopoly than iOS.

 

[MVMNT]

Fortnite used the state of the world in 2020 as a vehicle against Apple. Not sure that was necessary.

 

[boss.king]

But iOS doesn’t even have a monopoly on the market place. Android would be closer to monopoly than iOS.

Reread the post you quoted.

 

[CthuluLemon]

Pot calling the kettle black. Scott's ad does exactly what he claims to be disappointed in.