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

[acgmph]

I think it’s more likely Apple will front load the fees if the commission % goes down. I’m sure they’ve done all sorts of analysis to work out how they would need to tinker with the figures to make up for lost revenue.

Sadly, front loading the developer fees will make it harder for small time developers to ever get started. It would effectively be the de-democratisation of the App Store.

Hopefully they’ll keep the fees low (or even lower them) for devs with free apps. I don’t think they’ll front load unless they can estimate the revenue of an app. They’ll make it a monthly payment based on app revenue or some other indicator

 

[falkon-engine]

So it begins. The hammer has dropped as I have been predicting for years. Soon the other domino to fall will be alternative app stores. The question is, will this be limited to South Korea (and other nations that enact similar laws) or will the changes apply globally?

 

[acgmph]

So it begins. The hammer has dropped as I have been predicting for years. Soon the other domino to fall will be alternative app stores. The question is, will this be limited to South Korea (and other nations that enact similar laws) or will the changes apply globally?

They’ll have to prove Apple is a monopoly before some government will require that. It’s more of an uphill battle.

 

[jlc1978]

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.

My guess is Apple may simply add charges for downloads or posting apps on the Korean store; which will hurt smaller developers. The could offset the charges by any IAP amounts, but then developers will make less overall unless non-IAP revenue exceeds Apple's fees..

Apple will still make their money from offering the platform to developers. If they can’t get paid from a % of purchases, they’ll just bill a different way. As they should.

Apple could very well use this as an example to discourage others from doing the same thing. Ad fees to be on teh South Korean store to show what it means for developers.

Sanctions. The trade authority can bar the importation of the iPhone until it complies with local law.

True, and Apple can seek more non ROK suppliers for parts; I doubt either side wants to start a fight.

 

[mrochester]

So it begins. The hammer has dropped as I have been predicting for years. Soon the other domino to fall will be alternative app stores. The question is, will this be limited to South Korea (and other nations that enact similar laws) or will the changes apply globally?

If nothing else it’s going to be really interesting to see how it all comes out in the wash.

I’m certainly going to remain open-minded about withdrawing myself from the app market if conditions deteriorate for consumers on the back of this.

 

[Middling]

The thing is that these payment processing companies don’t have an App Store to manage. They don’t vet the apps, they don’t provide the SDKs, and they don’t pay for the infrastructure used to host them either.

They are literally riding on billions of App Store infrastructure for free. Apple pays for all this out of its own pocket, which is where that 30% goes. Offsetting the costs of running the App Store.

It’s easy to charge less, when you are also doing less and providing less for the money.

Apps give the iPhone/iPad value allowing Apple to charge premium prices for the devices. An iPhone/iPad with no third-party apps would be practically useless.

The cost of App Store infrastructure is just the cost of doing business.

 

[jlc1978]

Apple charge literally 10x what other payment processors do, so I don't think any of the incentives you listed are going to help.

They're going to have to compete on price and drastically drop their fees. At 5% everyone but the very largest of companies would stick with Apple's system for simplicities sake. Any higher than that and I think even small developers will start to look into alternative payment systems.

Find a payment processor that will host the apps, sign them, vet them, advertise them, for $99/year plus 5%. Good luck with taht.

I think it’s more likely Apple will front load the fees if the commission % goes down. I’m sure they’ve done all sorts of analysis to work out how they would need to tinker with the figures to make up for lost revenue.

Sadly, front loading the developer fees will make it harder for small time developers to ever get started. It would effectively be the de-democratisation of the App Store.

Exactly. It won't hurt big companies if Apple ups the fees, but will hurt the smaller ones.

 

[mrochester]

Apps give the iPhone/iPad value allowing Apple to charge premium prices for the devices. An iPhone/iPad with no third-party apps would be practically useless.

The cost of App Store infrastructure is just the cost of doing business.

I don’t think Apple will see it or treat it that way, and I think it’s really naive to think they are going to just give this revenue away without making up for it somewhere else. This is not how business operates.

Legally denying Apple the commission from IAP will simply shift the costs somewhere else.

 

[69Mustang]

But that’s a worse situation than already exists for consumers. Instead of the consumer being able to use the store they want and the app they want, the user now has to compromise.

We're all adults. We make choices in life. This would be one among many. What we're discussing here barely warrants the concern we're giving it. It's an app. It won't be many of them either, because for most devs the App Store is the best option for their app. If the app you like moves outside the app store, get it outside the app store. Or don't. By and large, these aren't major decisions.

 

[anadylan]

With iOS 15 beta, I’ve already deleted a lot of 3rd party apps and now use Apple apps. I’ll switch everything to Apple apps before I’ll download an app out of the App Store.

 

[mrochester]

We're all adults. We make choices in life. This would be one among many. What we're discussing here barely warrants the concern we're giving it. It's an app. It won't be many of them either, because for most devs the App Store is the best option for their app. If the app you like moves outside the app store, get it outside the app store. Or don't. By and large, these aren't major decisions.

No they aren’t major decisions, but it makes things worse for consumers by putting more power into the hands of developers.

I will gladly live without apps that make my experience worse. They can choose to take that risk with their business if they please.

 

[Appleman3546]

Apple’s position was one that they could only ever lose ground, not gain ground. Eventually, a Country was going to do this to them. The question became which country.

 

[Abazigal]

Apps give the iPhone/iPad value allowing Apple to charge premium prices for the devices. An iPhone/iPad with no third-party apps would be practically useless.

The cost of App Store infrastructure is just the cost of doing business.

No doubt Apple makes more than enough money to fully absorb the costs of running the App Store.

The question then is - should they? And why only the App Store, and not other digital storefronts like the xbox or sony play store?

But I guess it’s a moot point either way, now that this discussion is now out of their hands.

 

[Mitochris]

It's coming from people like me. I am an Apple user. I own an iPad. It's the best tablet out there. Do you know why I don't own an iPhone? It's because I cannot do anything close to what I can do on an Android phone. If there were decent Android tablets I'd probably buy one.

I understand that you might have some specific needs, but I cannot imagine the the group of people that require a phone for other than surfing the net, texting, listing to music, and watching some YouTube, is so great that it warrants is own law. Yes, there are numerous apps that I need daily, but my iPhone does them just fine. Like the damn authenticator, which is on my phone which I forgot at home today, and therefore cant get into certain apps at work. This push must come from somewhere else. I suspect it is the likes of Netflix or Spotify which do not want to pay for subscriptions. And I understand that and Apple should separate subscription, in the sense of access to music/films and app purchase, in my view.

 

[mrochester]

No doubt Apple makes more than enough money to fully absorb the costs of running the App Store.

The question then is - should they? And why only the App Store, and not other digital storefronts like the xbox or sony play store?

But I guess it’s a moot point either way, now that this discussion is now out of their hands.

Yeah it’s going to be interesting to see what this does to those other markets.

 

[hold121]

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.

Its just south korea being south korea (following china) in its nationalist agenda. While the general public views south korea as a progressive country but if you live here and look a little deeper the president is a puppet of the 8 large companies (samsung, hanjin, kumho, Hyundai, among others) are incharge of the policies. As samsung and kakao are launching a korean e-currency the govt is just asking what they wanted and that was to regular payment through the kakao platform using the samsung korea coin.

 

[Janschi]

I - for myself - had one of the best selling business apps in Germany and even Apple was delighted.
So - honestly - I just don't care about you my friend.

Australia, EU? Next please! Turn this company down, it has become to large, tog ready and to evil. But maybe it helps Apple to understand why CSAM is such a dangerous feature. It will just need a law and CSAM will scan for Chinese tanks rolling over students.

It's not hard being the best selling business app in a country where literally everybody uses android, because they're so stuck up and cheap. Additionally, since I checked your posts and having no reference of what your apps are, I assume they sucked, most of the technical/app/electronic stuff coming out of Germany sucks, the country and it's people are allergic to innovation.

I grew up and still (unfortunately) live in Germany too.

 

[Mitochris]

They already do. Google’s fee is $25 one-time and Apple’s is $99/year.

True, but do you think that $99.-/a will allow Apple to host the AppStore?

 

[malu05a]

I am quite sure this will be enforced in so many countries soon that apple will eventually have to make it a worldwide thing.

Apple will get some competition and most likely drop the 30% tier, and go for a flat 15% or 10% cut. (Maybe trying to get "around" it by altering the developer fee so that you pay more if you sell more.)
But Apple will still have the huge homefield advantage and most end-users will no doubt prefer paying with a "safe" payment method where they don't need to get their credit card out. And as a smaller app developer I would love to continue using Apple's payment methods just for the convenience.

It will be better for the users because they will finally be able to create a netflix, disney plus (or similar) account directly in app and not having to do silly workarounds with browsers and email, and all the other places where apple's payment platform and associated rules are just in the way for a smooth user experience.

Good for everyone, even Apple who will get happier developers and users.

 

[hcherry]

I’m always concerned when people applaud the use of the force of law to induce a specific business practice, especially when it’s a economic/business preference driving the action rather than having anything to do with the rights of individuals.

One party to an economic exchange shouldn’t be able to dictate what offer the other side gets to make. Each party gets to make an offer and either accept, decline or attempt to negotiate. But to use law to force a company to offer terms you like is an overreach and, in my opinion, a misuse of the power of government.

 

[jlc1978]

Yeah it’s going to be interesting to see what this does to those other markets.

No doubt. Any developer on the ROK store should be looking to switching from a set fee to an IAP for their. app to unlock it since they can avoid Apple's cut; why charge upfront when you can get Apple to host it and sell it for the same price as an IAP through a 3rd party that charges less?

Apple will see a sharp revenue drop that could simply result in a new fee structure, for example:

• A per download fee for any app that offers IAP. Any revenue collected through Apple's IAP offsets that fee.Apple could waive the fee if you agree to exclusively use Apple's payment system.
• Charge a flat fee to host any app that offers IAP and waive the fee if you agree to exclusively use Apple's payment system. The fee could be based on what is charged for premium features and be monthly for subscription services.

Apple can use the ROK store to experiment with various fee structures to see what is best for them and send a message to developers everywhere what such a change will mean for them.

It will also be interesting to see how other stores, such as those selling games for consoles, react. Will they have to let developers of expansions purchased in game have the same option?

 

[AndiG]

It's not hard being the best selling business app in a country where literally everybody uses android, because they're so stuck up and cheap. Additionally, since I checked your posts and having no reference of what your apps are, I assume they sucked, most of the technical/app/electronic stuff coming out of Germany sucks, the country and it's people are allergic to innovation.

I grew up and still (unfortunately) live in Germany too.

There s a huge change you owned it.

 

[Bonte]

What about the Windows store, game consoles, Steam, TV-apps etc..?

 

[yannxou]

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.

Well, we already have to pay the Apple Developer Program to post apps in Apple Store. But I also see some benefits by letting Apple take care of in-app purchases. It's very convenient and safe not having to enter payment info in other sites. Also regarding Subscriptions it's super handy to see them all in one place and being able to cancel them. This will be lost and certainly a step backwards.

 

[ilikewhey]

Too bad, so sad.

yeah, for anyone living in south korea, but i don't.