Spotify, Epic Games, and Others Argue Apple's App Store Changes Do Not Comply With DMA

[AppliedMicro]

If someone wants to make a Fortnite skin and sell it without giving Epic a cut... Can they?

I don't know Fortnite in detail - I suppose the answer is no?

It's not very relevant, since Fortnite is only one game among thousands to choose from. It's very different from an operating system platform that thousands of developers are developing for and relying on for their business.

👉 Fortnite isn't iOS (an operating system) and Microsoft Windows isn't Call of Duty or Tetris.

Comparing the sale of Fortnite skins to mobile apps is like comparing Apple and Oranges.
Sure, they're both sweet fruits or software, respectively.
But the difference is obvious to any layperson.

It doesn’t take the proverbial rocket scientist to comprehend or explain why one is subject to particular EU legislation - and the other isn’t. Even though, admittedly, the economic concept of developing (software) “accessories” that only run on or with a core or base product controlled by a gatekeeper (that could disable access at any time) is very similar.

 

[djphat2000]

Then why are we paying the $99/year?

You don't have to. Just if you want the ability to distribute on the AppStore.
You can give the app away and make money via Ads. "OR", you can charge for the App and pay Apple 15/30% of the sale.

 

[djphat2000]

If someone delivers a cross platform product why should Apple or Google or whomever get a cut of that product’s revenues? Can Apple really argue Spotify’s subscribers are because of them when you can get Spotify on Android, Windows and the browser? If Apple deserves a cut then do ISP and cellular providers deserve one too? Without internet access Spotify wouldn’t work.

Spotify pays, I'm sure a lot every month for ISP access to the internet so we can get their streams of music.
So the "fee" is a monthly reoccurring cost (MRC) to the ISP.

 

[thejadedmonkey]

This 100%. I'm so sick of people who have literally no idea how app development works thinking Spotify and Epic are in the right here, they're not. They're just two greedy companies who want free access to work others have done. Running an App Store isn't cheap (Epic should know they have one that charges a fee too). Spotify wouldn't exist without the App Store and they already screw their artists constantly so I'm not sure why they think they have a right to talk.


People forget what it was like to develop before app stores existed. You had to build the product, you had to host it yourself (or give it to a publisher which took as high as 98% of the cut! No that's not a typo!), you had to pay for a payment processing system, security, etc and your neck was on the line if a hack happened. Oh and then you had to hope your product was a success.

When the App Store came out it was HUGE for Indies. Only a 30% cut for Apple handling the hosting and payment system? Sign me the hell up! (Now it's 15% if you make less than a million a year).

Epic and Spotify just don't want to pay for the platform they want to host on which is ludicrous. Tell Microsoft you won't pay them for Azure hosting, or tell Amazon you don't want to pay for AWS, or heck, tell Epic you don't want to pay their 15% fee to be in their store and you think it should be free. See how silly that sounds?

You're cherry picking the worst case scenario for a developer, but let me give you a better (and more typical) case:

Shareware existed before the app store. Hosting was and still is dirt cheap, but it might even have been un-necessary if the program was provided on a demo disk that came with a magazine, or maybe it was physically shared among friends via a floppy disk.

Payments varied from sending in cheques to using paypal. That's something like a 0% to 3% fee. You can make the argument that Apple provides services that are worth an additional 27%, but you can also make the argument that users should be allowed to install any apps that they want, without having to get Apple's permission first.

 

[djphat2000]

So you think the iPhone is a game console and not a general purpose computer?

It isn't a general purpose computer. It "can" process/compute. But, you're not going to walk away from it while it renders your 3D graphics work, or work through your LLM Ai program. Would you replace your desktop/laptop with your iPhone? Or your Apple Watch? They both compute.

 

[thejadedmonkey]

You don't have to. Just if you want the ability to distribute on the AppStore.
You can give the app away and make money via Ads. "OR", you can charge for the App and pay Apple 15/30% of the sale.

That's not true. If you don't pay Apple's $99/year random, macOS will give you a scare screen, and iOS just won't let you install the app.

 

[djphat2000]

You're cherry picking the worst case scenario for a developer, but let me give you a better (and more typical) case:

It's the ones the matter. You can't subscribe to Spotify or Netflix on iOS. But, you can still get the apps to get the content within. Unlike EPIC that went rogue and you can't get Fortnite anymore.

Shareware existed before the app store. Hosting was and still is dirt cheap, but it might even have been un-necessary if the program was provided on a demo disk that came with a magazine, or maybe it was physically shared among friends via a floppy disk.

Most people would not bother with this approach to getting apps. Back then you had to get a disk of some kind to get an app to try it out. Internet bandwidth was "poor" to say the least. Which isn't the case these days. And unless you know what you're looking for. Finding freeware, shareware isn't like it used to be. People tend to stick with name brand sources.

Payments varied from sending in cheques to using paypal. That's something like a 0% to 3% fee. You can make the argument that Apple provides services that are worth an additional 27%, but you can also make the argument that users should be allowed to install any apps that they want, without having to get Apple's permission first.

They don't need Apple's permission. There was never a bait and switch situation where Apple let the end user install whatever they wanted on the iPhone. Then took it away. You never could install whatever you wanted on the iPhone. If you needed the ability to do that. You either jail broke it, or you bought an Android. Which, still exists today.

No one has to buy and iPhone, or develop for iOS. No one is forced to do this. If you want to, you BEEN known the rules. If you don't like the rules, you don't have to program for iOS. This isn't a hard thing to understand. Develop for the desktop where you can sell your app for whatever you want direct to the consumer without any rules getting in the way. Or make your app available via a web page.

 

[visualseed]

You're cherry picking the worst case scenario for a developer, but let me give you a better (and more typical) case:

Shareware existed before the app store. Hosting was and still is dirt cheap, but it might even have been un-necessary if the program was provided on a demo disk that came with a magazine, or maybe it was physically shared among friends via a floppy disk.

Payments varied from sending in cheques to using paypal. That's something like a 0% to 3% fee. You can make the argument that Apple provides services that are worth an additional 27%, but you can also make the argument that users should be allowed to install any apps that they want, without having to get Apple's permission first.

I know of a lot of shareware that was distributed without paying the required licenses for many of the runtime libraries they used. It was different time and enforcement was lax, but that doesn't mean Apple is in the wrong here.

If Apple made a version of Xcode that complied apps for android, would you still insist that they have no right to charge a distribution fee for their compiled in IP or that they would have no right to enforce terms on how it is used?

 

[Jensend]

If Apple made a version of Xcode that complied apps for android, would you still insist that they have no right to charge a distribution fee for their compiled in IP or that they would have no right to enforce terms on how it is used?

Sounds reasonable that they would charge a fee for programs made using their tools that are distributed on another OS.
Epic charges 5% of revenue to use Unreal Engine for apps not distributed on their store, but gives a free license for games distributed on the Epic Store. Of course, the difference is that they don’t also control the OS and hardware. There are a bunch of alternative game engines and stores. There is only one realistic alternative to iOS. And that alternative OS is supplied by a company that gives Apple several billion dollars every year.
The issue is when Apple leverages their ubiquity in one area to unfairly compete in another area. It’s up to voters and their representatives in government to decide what is fair. When companies don’t have a monopoly/duopoly, the free market is often a better way to determine what is fair.

 

[d4cloo]

If Apple is going to ask for a ‘core tech fee’, it should not be tied to an alternative App Store’s amount of users, because the cost to Apple is not correlated to the third-party App Store’s amount of users, but by app.
Apple won’t be able to defend this fee.

 

[visualseed]

Sounds reasonable that they would charge a fee for programs made using their tools that are distributed on another OS.
Epic charges 5% of revenue to use Unreal Engine for apps not distributed on their store, but gives a free license for games distributed on the Epic Store. Of course, the difference is that they don’t also control the OS and hardware. There are a bunch of alternative game engines and stores. There is only one realistic alternative to iOS. And that alternative OS is supplied by a company that gives Apple several billion dollars every year.
The issue is when Apple leverages their ubiquity in one area to unfairly compete in another area. It’s up to voters and their representatives in government to decide what is fair. When companies don’t have a monopoly/duopoly, the free market is often a better way to determine what is fair.

I don't think even a true antitrust violation, which being considered a "gatekeeper" under the DMA does not rise to, would be a valid cause to suspend the right to collect license fees on IP. If I were Apple, I would see what the EU does next and if they challenge the 50-cent fee, I'd file a complaint with the WTO for violation of TRIPS where compulsory licensing has to be balanced with fees that respect the R&D investment in the IP.

 

[wbeasley]

What about "Apple contractually doesn’t allow it for app distribution to consumers" (in my post above) did you not understand? Apple doesn't allow it in their developer terms. That's all.

👉 From a technological point, you can easily sideload today. Totally. No jailbreak needed either. Which disproves your claim that sideloading would require "a significant change to the OS to allow this to happen".

Apple just doesn't allow it for distribution to end users/consumers as per their developer terms.
No need to change a bit in iOS to enable it. The only issue is the prohibition/restriction in their Terms and Conditions.


It's obviously not really about me doing wonderful things - but developers far more skilled and knowledgeable than I am (i.e. Spotify and Epic).

They'll supposedly revoke their certificate - just as they did with Google and Facebook.

But you have no interest in Terms and Conditions...

So if it is so easy to just drag and drop to sideload, why would you care about any Apple T&Cs?

Google and Facebook are still on iOS... so any difference of opinion was obviously worked through.
Spotify and Epic are hardly more skilled or knowledgeable. They just dont want to pay like other devs

I see you werent at all interested in Spotify being made to pay equal amounts as other streamers... you know fair competition...

 

[visualseed]

If Apple is going to ask for a ‘core tech fee’, it should not be tied to an alternative App Store’s amount of users, because the cost to Apple is not correlated to the third-party App Store’s amount of users, but by app.
Apple won’t be able to defend this fee.

How do you know Apple's cost structure is not correlated to number of users? Almost all of the IP licensing fees Apple pays, and therefore passes on to developers, are unit based. There were some like the patents for the original P2P FaceTime where the fees were so high they could no longer use themselves much less make them available to developers.

 

[wbeasley]

I don't know Fortnite in detail - I suppose the answer is no?

It's not very relevant, since Fortnite is only one game among thousands to choose from. It's very different from an operating system platform that thousands of developers are developing for and relying on for their business.

👉 Fortnite isn't iOS (an operating system) and Microsoft Windows isn't Call of Duty or Tetris.

Comparing the sale of Fortnite skins to mobile apps is like comparing Apple and Oranges.
Sure, they're both sweet fruits or software, respectively.
But the difference is obvious to any layperson.

It doesn’t take the proverbial rocket scientist to comprehend or explain why one is subject to particular EU legislation - and the other isn’t. Even though, admittedly, the economic concept of developing (software) “accessories” that only run on or with a core or base product controlled by a gatekeeper (that could disable access at any time) is very similar.

So if buying skins or Vbucks is OK in a physical store, why isnt it in an app?
The commissions are probably the same or close.

A skin just lets you personalise a game.
Using an alt app store is a personalisation choice you make as well so why shouldn't Apple get paid for that feature you are choosing to use? No one is making you use it.

Like is choice. And consequences of those choices.
And business exists to make money.
It's better to make 85% of something than 100% of nothing, isnt it?

 

[Jensend]

How do you know Apple's cost structure is not correlated to number of users? Almost all of the IP licensing fees Apple pays, and therefore passes on to developers, are unit based. There were some like the patents for the original P2P FaceTime where the fees were so high they could no longer use themselves much less make them available to developers.

Has Apple actually argued that they would have to pay some kind of per-unit fee for all (or even most) third-party apps distributed on alternative marketplaces, or is your argument just about hypotheticals?
You list a specific example, but is that common over a large portion of 3rd party apps they distribute? Could they not just disallow the use of certain APIs that require licensing fees? And why is it not a concern for desktop OSes?

 

[Abazigal]

So you think the iPhone is a game console and not a general purpose computer? How about a compromise where Apple only rent seeks on games. That’s where they make most of their IAP money anyway.

Well, there are tons of people here who would argue that the iPad is not a “real computer” because it can’t run terminal commands or virtual machines or some other niche, PC-only function, and it essentially runs the same OS as the iPhone.

So the smartphone / ipad is a computer when being classified as one would be disadvantageous to it, while also not being considered a computer when doing so would be to its benefit?

What’s this? Schrödinger’s computer?

 

[Seoras]

So, you will not list your app in any other app store that charges only 3%? Good to know. Can you please let us know which apps you develop?

No I won't because I don't think any other app store will come close to -the- app store.
3%? Who? No one. Time will tell...
Sure integrate PayPal and lose 6%, then get screwed by refunding scam artists. Apple deals will all that too for 15%.

Don't forget, and non-developers often forget this bit, that for every app store you publish on the more over head is created for you.
Not a problem if you are a big company with many minions but it's time consuming for the lone developer like me.
I was coaxed by Amazon into trying their store for a AWS voucher. Is wasn't worth my time in the end.
Not only the setup but integrating a new variant of my Android app to handle Amazon in-app payments.
Play Store is poor in revenue compared to App Store but the Amazon store was a magnitude worse than play.

Not giving away details of my little cash cows on here for others to see, compete with or negatively review if they don't like my comments on here.

 

[Rogifan]

No, it's because they moved their subscription payments to the internet. Subscriptions via App Store = 30% first year and 15% successive years. Subscriptions via internet = 0%.

Because Apple let them. Apple let them have an app that didn’t function if you didn’t have an account and didn’t log in.

 

[Rogifan]

It isn't a general purpose computer. It "can" process/compute. But, you're not going to walk away from it while it renders your 3D graphics work, or work through your LLM Ai program. Would you replace your desktop/laptop with your iPhone? Or your Apple Watch? They both compute.

So the iPad Pro isn’t a general purpose computer? Would Apple agree with that?

 

[mrochester]

So the iPad Pro isn’t a general purpose computer? Would Apple agree with that?

Apple bets 'your next computer is not a computer' in new ad touting iPad Air 5 - 9to5Mac

To celebrate the launch of the new M1 iPad Air today, Apple has published a fun new video on its...

9to5mac.com

The iPad is not a ‘general purpose computer’ (whatever that means) and Apple agrees. The iPhone is not a ‘general purpose computer’ either, it’s a smartphone (which are appliances).

The iPhone and iPad are a move away from ‘general purpose computers’ to appliances with extendable functionality.

 

[Rogifan]

Well, there are tons of people here who would argue that the iPad is not a “real computer” because it can’t run terminal commands or virtual machines or some other niche, PC-only function, and it essentially runs the same OS as the iPhone.

So the smartphone / ipad is a computer when being classified as one would be disadvantageous to it, while also not being considered a computer when doing so would be to its benefit?

What’s this? Schrödinger’s computer?

I’ve never argued that. As far as I’m concerned the iPhone and iPad are general purpose computers. Heck I’d throw Vision Pro in there too. People like John Gruber classify iOS devices as ‘consoles’ to justify Apple’s App Store model.

 

[mrochester]

I’ve never argued that. As far as I’m concerned the iPhone and iPad are general purpose computers. Heck I’d throw Vision Pro in there too. People like John Gruber classify iOS devices as ‘consoles’ to justify Apple’s App Store model.

You don't get to define what they are, Apple does as the product maker.

 

[Rogifan]

Apple bets 'your next computer is not a computer' in new ad touting iPad Air 5 - 9to5Mac

To celebrate the launch of the new M1 iPad Air today, Apple has published a fun new video on its...

9to5mac.com

The iPad is not a ‘general purpose computer’ (whatever that means) and Apple agrees. The iPhone is not a ‘general purpose computer’ either, it’s a smartphone (which are appliances).

The iPhone and iPad are a move away from ‘general purpose computers’ to appliances with extendable functionality.

“Your next computer is not a computer”. What the heck does that even mean? My guess is even Apple marketing doesn’t know.

 

[mrochester]

“Your next computer is not a computer”. What the heck does that even mean? My guess is even Apple marketing doesn’t know.

It means that most people don’t need a ‘general purpose computer’ and can get pretty much everything they want to do done on appliances like the iPad or iPhone. Many people don’t own legacy PCs anymore, it’s a model that is going away for consumers and being replaced with appliances. Case in point, my husband, who does everything he needs on an iPhone and iPad; he never uses the laptop or desktop PC in our house.

 

[Shirasaki]

Yeah sure let’s take pity on Apple and blame Spotify, Microsoft, Epic despite the current policy is clearly anti-competitive and a full display of malicious compliance. Apple isn’t even hiding its intent at all.

I guess Apple is the Satan and LITERALLY everyone else is evil and must be punished to death. Maybe, just maybe, Apple should purchase Spotify, Microsoft and Epic. While they are at it, purchase Google as well. Let Apple be the ONLY tech company of the world with market value exceeding the entire GDP of USA several fold.

Maybe this is what people want by supporting that outrageous CTF and the “new business term”, among other things came with EU’s new ruling. Not only they want Apple to grow, they want all competitions to go extinct. And guess what, even by then same people would still say Apple is not a monopoly. I think I understand why it’s EU, not USA, takes the initiative.