South Korea Passes Bill Banning Apple From Requiring Developers to Use App Store In-App Purchase System

[q64ceo]

How is it preposterous. If an app developer can choose any way to implement payment… can he not do away with IAP all together? This is the part I don’t understand. People have been saying on here how great this is, that it gives the consumer more choices. How so? It gives the app developer more choices. If Apple has to host their apps on their servers, push through updates, etc.. but the developer can require the consumer to re-route to their website to pay… where they don’t have to pay any commission at all to Apple… how would that not be a free ride? I already have to do this with a few services. I forget which at the moment. Maybe YoutubeTV was one. I don’t think you can even pull up your account plan info and payments at all… it tells you you have to access all that from a web browser. That’s not more choice for me. It’s just a different choice, and not mine. You are assuming they can add these alternate payment options, but will continue to allow IAP to those that want it. How do you know that will continue to be the case?

Because people are lazy and they take the path of least resistance. If they are required to do a boatload of extra steps for something, they'll just not do it. Apple's IAP has such a significant advantage in this. If I want to buy stuff from an app all it requires from me is a finger print. That's why it's preposterous. You're acting like the sky is falling without actually taking into consideration human behavior.

Edit: as for the edit to your comment, YouTube is probably losing subscriptions over their decision to no longer use Apple's IAP. As I said, people are lazy. YouTube may decide in the future to change this. But it's their decision to lose that money.

 

[gregmancuso]

Because people are lazy and they take the path of least resistance. If they are required to do a boatload of extra steps for something, they'll just not do it. Apple's IAP has such a significant advantage in this. If I want to buy stuff from an app all it requires from me is a finger print.
That's why it's preposterous. You're acting like the sky is falling without actually taking into consideration human behavior.

You are also assuming that every app that currently has IAP will continue to work the same way. The fact that you as a user only have to place your finger down to approve the purchase does not mean that the developers will provide that option to you when they move to one alternate payment process. There is also no guarantee that Apple will allow the third-party payment processors to use the same IAP framework.

This bill (assuming it actually gets enacted and stand up in the inevitable court challenges) only says that Apple has to allow third-party payments. Nothing says that Apple has to enable it in any specific way. And it should go without saying that a law mandating a specific implementation design direction would be more than a little legislative overreach.

 

[q64ceo]

You are also assuming that every app that currently has IAP will continue to work the same way. The fact that you as a user only have to place your finger down to approve the purchase does not mean that the developers will provide that option to you when they move to one alternate payment process. There is also no guarantee that Apple will allow the third-party payment processors to use the same IAP framework.

This bill (assuming it actually gets enacted and stand up in the inevitable court challenges) only says that Apple has to allow third-party payments. Nothing says that Apple has to enable it in any specific way. And it should go without saying that a law mandating a specific implementation design direction would be more than a little legislative overreach.

Legislative overreach? Governments have the authority to regulate business transactions and contracts. Yes, they can in fact specify how Apple must use third party payment methods.

 

[gregmancuso]

Legislative overreach? Governments have the authority to regulate business transactions and contracts. Yes, they can in fact specify how Apple must use third party payment methods.

There is not a court that would let stand a law that specific that not only must Apple allow third-party payment options but this option must also use some specific core API and OS mechanisms. Governments can regulate, yes. But first there generally has to be display of harm and the need for regulation. We can argue all day long about whether that threshold has been reached, and I am not saying I agree or disagree if that point has been reached - that is irrelevant to the topic at hand.

Assuming this bill and the findings behind it have met that threshold and this bill passes, the only thing it is doing, and arguably can do, is mandate a business function - the allowance of third-party payment for in-app purchases in this case. Apple allowing the process that EPIC snuck in last year satisfies that requirement. And that did not use the core IAP framework and API.

 

[playtech1]

If teh goal is consumer benefit then the size of the consumer base for popular products such as consoles should not be a determinate if they should be subject to the same regulations.

I think what happens to Apple and Google stores will apply to Sony, MS Xbox, Valve, etc., but it would basically be collateral damage as games consoles are otherwise too small fry to bother specifically legislating for.

I'm not convinced Dev tools will suddenly get super expensive if the App Store model is changed - they aren't particularly expensive for more open platforms like MacOS or Windows.

And I can see Apple spending less on the App Store if it makes less from it, although if there's competing App Stores, it will probably spend enough. A less profitable App Store would still be a cash cow.

 

[DoubleJ2119]

Deleted.

 

[turbotech]

You can check it out and let me know what you think of my earlier response.

Note that a lot of it is guesswork, but the TL;DR is that Apple needs to charge 20% for the App Store to break even, because so many developers do not charge for their apps.

With all the due respect, your math is WAYYYYY off if you think it costs Apple $10-$11 Billion to run the App Store. It's nowhere near that amount.

 

[turbotech]

AND SO IT CONTINUES...

EXCLUSIVE Apple hit with antitrust case in India over in-app payments issues

Apple Inc is facing an antitrust challenge in India for allegedly abusing its dominant position in the apps market by forcing developers to use its proprietary in-app purchase system, according to a source and documents seen by Reuters.

www.reuters.com

Apple is screwed over this issue. There's a reason why all these countries are finally fighting back against this joke of Apple's 30% cut and Apple's lack of open competition towards users of the iPhone and what content they purchase with it (and how).

 

[Michael Scrip]

AND SO IT CONTINUES...

EXCLUSIVE Apple hit with antitrust case in India over in-app payments issues

Apple Inc is facing an antitrust challenge in India for allegedly abusing its dominant position in the apps market by forcing developers to use its proprietary in-app purchase system, according to a source and documents seen by Reuters.

www.reuters.com

Apple is screwed over this issue. There's a reason why all these countries are finally fighting back against this joke of Apple's 30% cut and Apple's lack of open competition towards users of the iPhone and what content they purchase with it (and how).

Yes... we know the problem is Apple's 30% cut.

So what is the solution?

Can Apple simply lower the cut?

Or do we need to jump straight to sideloading and multiple app stores?

Or are things like the linking from the app good enough? I remember this was a big complaint for a long time.

Again... we know what the problems are. They are WELL documented.

But I want solutions!

 

[CarlJ]

Yes... we know the problem is Apple's 30% cut.

So what is the solution?

Can Apple simply lower the cut?

Or do we need to jump straight to sideloading and multiple app stores?

Or are things like the linking from the app good enough? I remember this was a big complaint for a long time.

Again... we know what the problems are. They are WELL documented.

But I want solutions!

John Gruber has an interesting related article up today:

• Apple to Relax Anti-Steering Rules to Allow 'Reader' Apps to Link to Their Websites for Account Creation and Management

 

[Michael Scrip]

John Gruber has an interesting related article up today:

• Apple to Relax Anti-Steering Rules to Allow 'Reader' Apps to Link to Their Websites for Account Creation and Management

Thanks!

I can't wait to hear his thoughts on The Talk Show. Hopefully he has a developer guest next week!

 

[jlc1978]

Yes, just checked and YouTube TV is one of them. See screenshot. It does not allow me to view or change my plan at all in the apps. I have to go to my account on a browser. What’s worse.. it wvwn required me to have a gmail account to use their service. So to repeat: I HAVE NO IAP OPTION. This is not more choice for me. It’s a pita.

Google needs all of your subscription money and personal information; can't have Apple close the money pipe.

As a side note, much of this debate reminds me of the cable vs. cord cutting debate where people clamored for cord cutting because "it'd be cheaper than cable and I won't have to pay for crap I don't want." How'd that work out?

Now every major content provider is starting their own paid service, shows are getting removed from competing streaming service, and you need fast internet service with a high or no cap in some cases. As a result, the cost can be as high as before or higher depending on you viewing habits. Be careful what you wish or, you may just get it.

 

[CarlJ]

As a side note, much of this debate reminds me of the cable vs. cord cutting debate where people clamored for cord cutting because "it'd be cheaper than cable and I won't have to pay for crap I don't want." How'd that work out?

FWIW, I’m still paying quite a bit less than I was for cable, and I’m happy with the result. It did involve thought into choosing what I actually wanted. I mean, sure, it’d be nicer if it was even cheaper, but hey. But the “we’ll get channels ala carte for $1 each and only get the 5 we like” was never going to work out.

 

[Abazigal]

AND SO IT CONTINUES...

EXCLUSIVE Apple hit with antitrust case in India over in-app payments issues

Apple Inc is facing an antitrust challenge in India for allegedly abusing its dominant position in the apps market by forcing developers to use its proprietary in-app purchase system, according to a source and documents seen by Reuters.

www.reuters.com

Apple is screwed over this issue. There's a reason why all these countries are finally fighting back against this joke of Apple's 30% cut and Apple's lack of open competition towards users of the iPhone and what content they purchase with it (and how).

These are problems for developers, not end users.

Clicking on a link to go to an external website to sign up for a Netflix account is still more cumbersome than simply signing up within the app itself. And so we have this current standoff where developers don’t want to pay Apple anything and Apple feels entitled to a cut of the profits for its role in helping said developer acquire more customers (let’s be honest - a company like Spotify would never have been as successful as they were if early users had to navigate to an external websites rather than subbing within the app).

I am just happy I subscribed to Netflix early enough that I am still still billed for it via iTunes, and I am able to track it via the subscriptions page in the App Store app.

It’s easy to say “just lower the cut” but something tells me these companies are not going to be satisfied with anything higher than 0%. If they want further concessions, they are going to have to fight for it and earn it the hard way.

 

[Aoligei]

There is inequality in any system. Public or private. There is a mountain of separation between a good public school and a bad public school and it’s not usually due to a lack of funding. Almost always the worse public school receives more funding than the better one in a given metro area.

The most important thing we could do to increase income mobility is to ensure every child in this country receives a high quality education and far too many of our public school monopolies are failing kids and this country’s future.

But when you have big capital creating private school that able to attract good teachers with above average pay, what do you think gonna happen? Good teacher will teaching at private school and not so good teacher teaching at public school.

This in turn will create even more inequality.

 

[jlc1978]

But when you have big capital creating private school that able to attract good teachers with above average pay, what do you think gonna happen? Good teacher will teaching at private school and not so good teacher teaching at public school.

This in turn will create even more inequality.

It’s possible many private schools do not offer the benefits, retirement, or job protections a public school offers. Where I live teachers sometimes retire and then teach in a private school.

 

[960design]

so what is the alternative? Apple and Google charging the developer for posting an app in their stores? I understand that the current system is not great, but I do want to have a store system, where there is some sort of oversight of the apps available.

Absolutely. If I was Apple I would charge $0.99 / month to host an app available within the Korean country. I would also charge Korean developers a monthly charge for storage, PCI, hosting, advertising for all their current apps ( especially the free ones ).

I'd hate to a Korean based developer right now. But hey, host your own app in your own store, using your own PCI liability, and pay for your own advertising to drive business your app store's way... exactly as you wished.

 

[sunny5]

Apple will lose the lawsuit with Epic games since South Korea passed that bill and both EU and USA will be interested to participate their moves.

 

[MacBH928]

I do not understand this law, how does it benefit the others?
How would you pay for apps now? when you click install you will get a list of 3rd party options?

This has Samsung written all over it imo

 

[jlc1978]

FWIW, I’m still paying quite a bit less than I was for cable, and I’m happy with the result. It did involve thought into choosing what I actually wanted. I mean, sure, it’d be nicer if it was even cheaper, but hey.

I am as well, and could be paying less if I didn't want the highest speed access, part of the reason it is less is I get several premium services included in my phone and internet service.

But the “we’ll get channels ala carte for $1 each and only get the 5 we like” was never going to work out.

Yea, people didn't understand cable's economics.

It’s easy to say “just lower the cut” but something tells me these companies are not going to be satisfied with anything higher than 0%. If they want further concessions, they are going to have to fight for it and earn it the hard way.

Yea, they want free access to Apple's user base with Apple handling all the distribution and hosting. Apple's response to the lost revenue could wind up costing them more, if for example Apple moved to a monthly hosting fee plus per download charge. Apple could charge based on the user base, giving smaller developers a break by only charging above a certain threshold of installed base.

Apple will lose the lawsuit with Epic games since South Korea passed that bill and both EU and USA will be interested to participate their moves.

I doubt it will have any impact on EPIC's suit, especially since it is civil suit between them.

Of course, let's suppose online app stores are forced to allow 3rd party payments and side loading. I would love to see EPIC be forced to allow sale and use of 3rd party skins separate from their monopoly store; and allow teh sale or gifting of accounts. I have a feeling they would not be very happy with that result of their suit.

 

[DoubleJ2119]

Deleted.

 

[turbotech]

Here's my napkin math on the this topic.

Minnesota and Arizona Bills Aim to Let Developers Skirt Apple's In-App Purchase Rules

Here's my thinking. App Store profits is derived from two areas. The cost of running the App Store (which doesn't change, because the number of developers is assumed to be fairly constant), and the revenue from games and IAPs (which is variable in nature). We also know that about 85% of...

forums.macrumors.com

Summary:

1) Estimated margins of 40%, requiring 20% cut to break even. This works out to total costs of 11-12 billion.
2) Assume 10 million registered developers, for annual income of 1 billion.

But I guess we will never know for certain until Apple publishes their own numbers.

The margins were estimated to be 85%+ during the Epic Trial. No way in hell it costs 11-12 Billion to run the App Store. That's larger than the operational costs of most Fortune 500 companies that have physical locations. There's just no way it costs anywhere near that to run the App Store.

 

[alien3dx]

As Tim said all this means is Apple will have to collect their commission another way…….However the consumer highly likely to pay through Apple for convenience and security.

this overule not solve much problem . 30% okay is market is volume style but if everybody open their apps store like google how much volume market we can get profit ?

 

[turbotech]

Yes... we know the problem is Apple's 30% cut.

So what is the solution?

Can Apple simply lower the cut?

Or do we need to jump straight to sideloading and multiple app stores?

Or are things like the linking from the app good enough? I remember this was a big complaint for a long time.

Again... we know what the problems are. They are WELL documented.

But I want solutions!

The solution is for Apple to lower their commission to 10-12%, allow Apps to offer alternative payment options. I don't think other app stores or side loading is necessary if Apple eased up on their 'control' over what Apps can and can't do.

 

[Michael Scrip]

The solution is for Apple to lower their commission to 10-12%, allow Apps to offer alternative payment options. I don't think other app stores or side loading is necessary if Apple eased up on their 'control' over what Apps can and can't do.

I like that. 👍

And as Gruber said in his recent podcast... it's better for Apple to make that change themselves... rather than having governments forcing them to do it.

Hell... even Phil Schiller was questioning the 30% a decade ago. Basically he asked "Why are we still doing this?"