Tim Cook Says App Store Would Become a 'Flea Market' if Third-Party Payment Systems Were Allowed

[hans1972]

So does Microsoft for Windows. And Apple for OS X. And Linux, and web browsers. All of the aforementioned except OS X are more popular and widely used than iOS. And they charge $0 to use their APIs.

Yes, but they should be allowed to charge for the APIs if they want to. Or development tools or whatever else they control.

Apple chooses to get paid via a store since that is the best way for them. If it was more profitable for them to charge money for Xcode and API usage they should be allowed to do so too.

 

[ericwn]

I don't know where Android walked into the conversation. The OP quoted Tim Cook looking down on flea markets, which has a lot of minority and poor patrons.

Of mixed backgrounds which corresponds to the often low value and second hand nature of the items being offered.

 

[ericwn]

Maybe, but he has kept those thoughts private to himself. Here he did do a press release looking down upon an establishment popular with minority and poor people. Thoughts and actions do matter.

Minorities and poor people often but apple products too. The outrage over the term flea market is nothing but artificial.

 

[ericwn]

Apple themselves state that you cannot ignore views and actions in light of the people it might impact.

Speaking up on racism

Read the message from Tim

www.apple.com

There is no offecene in not wanting to participate in a flea market except for those who run it.

The race of fleas will survive.

 

[Somian]

The App Store already is a flea market. Lots of scam apps, apps that immediately crash, apps that don’t follow human interface guidelines, apps that don’t support keychain for their password fields, apps that still don’t support the iPad Pro resolution after more than 5 years, apps that don’t support landscape mode on iPad, which is ridiculous given that apple sells keyboard attachments that only work in landscape mode...

it’s terrible. They should charge more money for each submission to thoroughly test apps.

I’d rather have 2000 apps In the store that are tested and verified by humans than millions that reduce my trust in the App Store.

 

[Ray Donovan]

I usually don't post a lot here, however coming with massive and extensive experience related to payment service, card processing etc. I do have to defend Apple's stance here for several reasons.

Also I won't state my personal feelings stating whether I 'feel' or 'believe' that 30% cut that Apple takes is high, because facts don't care about my feelings or beliefs.

Those reasons are:

• By controlling the checkout system, Apple offers security from scams and card abuses. One example would be like this...let's say that developer makes semi-popular game and they have 3rd party checkout for in-app purchases that is integrated into the game itself. How would one know that your card information isn't collected in full? Your 16 digit card number fully revealed, expiry date and CVC code. At least with Apple Pay your real card information isn't revealed. That term of false checkouts is called 'hijacked checkout' and poses significant financial loss for end buyer/user.
• If your card is misused later on after month or two or so, then you notice sh*t going on then you have the issue above + that is also called hit&run account. Merchant/developer posing as completely legitimate, then sh*t hits the fan after few months, they decide to pull the plug, charge dozens of thousands of cards at the same time for $1 or $2 or $5USD, take the money and run, now you have 'card cashing' case where your stolen information is used to misuse your card.
• There is a huge risk of transaction laundering, money laundering, all sorts of financial scams
• There's a risk of information being leaked to dark web, where scammers buy in bulk stolen card information
• By having third party checkouts, their API integration also needs to be approved by Apple which isn't an easy task
• Will 3rd party checkouts work with FaceID? Who is stopping your kid to take your card information and abuse the card, whereas payments via FaceID would have to be approved by a parent
• What most of you don't know is that companies like Apple get scrutinised and fined for BRAM and GBPP violations by card companies like VISA and MasterCard, and those fines are someones annual salary in USA, +$40K USD
• When signing up for dev account, you have ToS there in front of you. You either accept or decline, simple as that
• Apple also has a merchant account with their respective payment processors, and they are bound by their ToS, especially when it comes to chargeback rates
• 30% cut by Apple is there, you either play by the rules and abide by them or you leave the platform, simple as that. You have signed the legal agreement and accepted it by signing it.
  We have a saying, after having sex, don't have any regrets.
• What EPIC Games has done is breach of legally abiding contract on several grounds driven by greed (wanting to cut out Apple) and wanting to make more money on top of pile of the money there were already earning.

We as a people see everything through the money or profit only, but as individuals we fail to see or to at least to think why or how things work in the background, especially when it comes to processing payments, and trust me things aren' t simple as that too.

I could write about this all day, but having third party checkouts if allowed will be a sh*t show, and will simply open a Pandora's box leaving us, the users vulnerable.

 

[Mousse]

Well, yea. That much is very known

Seems more of your opinion rather than known fact.

It's almost like Apple's tight control of their hardware and their app store instead *is* what makes it far more valuable to consumers and developers alike. And that prohibiting that control would instead be detrimental.

🤨🤨Epic disagrees. Hences the crazy court battle with a titan numerous times their size. Frankly, I don't think Epic has much chance of winning. Plenty of others have tried and failed to get Apple to allow apps to be install via anything but the Appstore.

No skin of my nose who wins or loses. I'm one of the loonies using an Android phone--an old, android phone I brought from Leroy out of the back of his car.😅 "Brand new, fell off the back of a truck."🤔😁🤐 No malware in years. I've always subsribed to the idea that the best security is between the ears.🧐

 

[sdf]

No, it would be so much worse. At a flea market at least you can see what you're purchasing, and you'll walk away with the thing you purchased.

 

[31 Flavas]

I didn't discover it. However it points out the dishonesty behind Tim's claim.

How can he (credibly) say that allowing non-apple payment systems would be terrible, and also allow non-apple payment systems for a whole class of the most popular apps?

I get the statement you're making or the question your asking. But, unless I'm mistaken, what you want Apple to do -- already exists for developers. In that, there are way Android phones in way more peoples hands and Google / Android doesn't place the restrictions that Apple does. So the total android market place (not just only the Google Play store) should be far more beneficial and profitable to developers since Google provides for 3rd party payments or even developer direct billing for apps not exclusively distributed though the Google Play store.

Yet, despite the much larger installed phone base, user base, and benefits like in-app market places, independent 3rd party app stores, allowance for 3rd party payments, direct payments, and side-loading -- developers still vastly prefer the smaller market of iOS and work with the restrictions that Apple has for payments on sales.

So if the open-ness you want from Apple isn't helping developers on Android - maybe Google should work on fixing whatever the heck is making the android market less desireable. Because, it rather seems that Apple's control is what is enticing both consumers and developers in their iOS market place.

 

[Michael Scrip]

At a flea market at least you can see what you're purchasing, and you'll walk away with the thing you purchased.

But each vendor at the flea market uses a different payment system. Who knows if their Square reader is actually a card skimmer...

Well at least you can pay with cash...

 

[Michael Scrip]

Yet, despite the much larger installed phone base, user base, and benefits like in-app market places, independent 3rd party app stores, allowance for 3rd party payments, direct payments, and side-loading -- developers still vastly prefer smaller market of iOS and work with the restrictions that Apple on sales.

So if the open-ness you want from Apple isn't helping developers on Android - maybe Google should work on fixing whatever the heck is making the android market less desireable. Because, it rather seems that Apple's control is what is enticing both consumers and developers in their iOS market place.

This comment should be repeated every time someone mentions Android's 85% market share...

 

[bluecoast]

Agreed. The App Store would be a terrible place if those well known hucksters & scammers Visa, MasterCard & PayPal were payment options too.

[end deadpan sarcasm mode].

 

[31 Flavas]

Seems more of your opinion rather than known fact.

🤨🤨Epic disagrees. Hences the crazy court battle with a titan numerous times their size. Frankly, I don't think Epic has much chance of winning. Plenty of others have tried and failed to get Apple to allow apps to be install via anything but the Appstore.

Well, sure. Epic is perfectly allowed to disagree. As you state though, there is a lot of precedence supporting Apple's control. Because for the past 30-35 years -- Nintendo, Sega, Sony, Microsoft, and other's have had 100% monopoly control of their hardware platforms and 100% control of online game sales for their respective hardware though their respective online store. Just like Apple's iOS App Store - you can not side-step the 30% cut you need to provide to them.

Epic wants to argue that Apple's iPhones are general purpose computers. But, then gives Nintendo, Sony, and Microsoft a pass even though their hardware systems are literal PCs under the hood. With web browsers that would otherwise allow for direct downloads from developers.

 

[pacalis]

On the surface, a gaming company switching out of and dumping a 30-90% margin product like games to a financial platform with 3-10% margins is absurd.

It has to be the case that EPIC is designing leverage it's own market power, perhaps in Fortnite and Unreal Engine to presumably build another transactional storefront which no one either needs or wants.

 

[pacalis]

Well, sure. Epic is perfectly allowed to disagree. As you state though, there is a lot of precedence supporting Apple's control. Because for the past 30-35 years -- Nintendo, Sega, Sony, Microsoft, and other's have had 100% monopoly control of their hardware platforms and 100% control of online game sales for their respective hardware though their respective online store. Just like Apple's iOS App Store - you can not side-step the 30% cut you need to provide to them.

In any business what EPIC is proposing makes no sense. If it did make sense a company could take any proposed good or service, claim monopoly around the whole, deconstruct it, and then demand that your element should have it's own payment system.

Pretend you're a plastic supplier to a car seat manufacturer. Well, by the same logic, the car seat company has a monopoly on selling that car seat, so now you want the right to charge separately for the plastic and build a payment system around it.

Or pretend you sell oil through an oil service station which has by the same logic a monopoly on their own oil services. We'll you want to capture the mark up your oil they sell, so you claim they are a monopoly so you can sell your own oil and build a payment system around it.

Walmart would then also have a so called monopoly on Walmart stores, so you want to be able to charge separately for your produce going through Walmart and build your own payment system around it. Etc...

The app store is simply a common supply arrangement to support Apple products and services. Not only can EPIC work with other companies, EPIC or any others could always create another path with Apple, such as shipping bundled with on Apple products (i.e. think Intel with Dell or Bose with the car industry ) instead of going through the app store or more dynamically through web services. Its all so absurd.

 

[IceStormNG]

Did macOS with its open app system become a flea market then, by Tim’s standards?

Yes... But Apple will probably fix this at some point. When they convert macOS to iPadOS...

 

[macintoshmac]

Curious why Android isn't the preferred or more profitable market for developers, seeing as Google Play allows for in-App market places, allows for separate 3rd party app markets themselves, along with unrestricted side loading - so that developers can just sell direct to android customers. Especially considering that 4 out of 5 of mobile phones are running some android OS variant.

You are probably sarcastic, but in case it was a genuine question, it boils down to quality of apps. Not the payment methods. Get a survey done, ask people if they would like to pay $0.75 for an In-App Purchase using some other payment processor or $0.99 using Apple's own. Which would they prefer?

The point of Epic's lawsuit, at least the way I see it, is not about allowing other App Stores as members here think. It is about paying for apps in ways other than through Apple to not pay the Apple cut for IAPs. They charge $99 a year for the App Store, do they not? Nobody is contesting that. They are only asking for giving people options to pay through the processor they want, so that if they want to pay more through Apple, they can, not because they must and have to, but because they want to. I'd t think this is classic American freedom..

 

[Apleeseed84]

Iddk flea markets around here are popular and require paid parking to get in, not to mention the notion that they do have a mini carnival so iddk what flea markets he goes to 🤣

 

[macintoshmac]

Does the Mac App Store allow alternate payment options?

It is about the operating system allowing for ways to install apps, and if not, allow for ways to pay through IAP in the App Store. macOS will still even today not survive on just Mac App Store. Everybody, maybe even including you, knows it. Which is why it is not clamped down still. Work is underway to attempt it, and we all see it and know it.

It is really funny how invisible the right-in-your-face things can be for some.

 

[appleii.c]

Oh please. Being able to load apps directly without the App Store wouldn’t hurt anyone but Apple’s bottom line.
I don’t understand why we can’t have both: the App Store for a “secure, simple solution,” and a the ability to install directly from websites so long as we agree to the potential risks doing so comes with.
Or basically EXACTLY how it currently works with MacOS, which last I checked seems to be doing just fine.
Something neither Tim nor Apple seems able to explain is why iOS is any different than MacOS in this regard, especially when they try so hard to convince us that the iPad is a computer.

It does hurt Apple. Their philosophy (or Business model) is to keep everything in-house. Once you start allowing apps from outside sources, you lose the quality control that you had. Once you start having people download malicious apps, apps that dont work well, junk apps, apps that steal your private info etc., and you start seeing more and more posts on other sites about how the iPhone/iPad is corrupt, bricked, hacked, or whatever... Apple loses much of their reputation of the "it just works" and their reputation about security that they work towards. It's one of the same reasons they don't allow MacOS on 3rd party devices.

 

[Dan Holmstock]

Today I can get every app publicly available for the iPhone by going to one store, the App Store.

With additional stores I would have to install additional stores app to get the same.
We _could_ end up installing the Epic store to get their games, a Microsoft store to get Microsoft apps etc.

If Epic wins completely, some of the power in the is removed from Apple and given to the larger developers.

I don't want to install several stores and have a customer relationship with developers just because I want their apps. Apple now has the power to "force" this companies to make their apps available on the App Store which benefits me.

Its still choice, and that power lays with you.

 

[hans1972]

The point of Epic's lawsuit, at least the way I see it, is not about allowing other App Stores as members here think. It is about paying for apps in ways other than through Apple to not pay the Apple cut for IAPs. They charge $99 a year for the App Store, do they not? Nobody is contesting that. They are only asking for giving people options to pay through the processor they want, so that if they want to pay more through Apple, they can, not because they must and have to, but because they want to. I'd t think this is classic American freedom..

They are paying $99 for membership in the Apple Developer Program, not the stores.

The problem is that Apple will make a lot less money if Epic wins. In fact, Apple will then only get $99 from them and at the sametime having to pay for the distribution, control of the app etc.

Therefore there is a possibility they will disallow any app in the App Store which has their own payment process and say that developers then have to go for other stores.

 

[hans1972]

Its still choice, and that power lays with you.

Yes, but I don't like choice when the two new options are worse than what I have today.

Today I have:

A) every app publicly available for the iPhone by going to one store, the App Store. One place to shop, one place to cancel, one place to complain, one place to search. Also Apple does an OK job with keeping the worst of developers and apps out.

In a new world I would have to choose between:

B) A subset of apps available on the App Store. I would have to potentially give up some apps I want If I want to keep one place to shop, one place to cancel, one place to complain, one place to search. Also Apple does an OK job with keeping the worst of developers and apps out.

or

C) Get all the apps but have more places to shop, more places, to cancel, more places to complain, more places to search and varying control and quality.

To me, A) is better than B) or C).

I don't want choice, I want what's best for me.

In most cases, what is best for me, is not best for developers. Which means I want developers to loose.

 

[Victor Mortimer]

Well... if this future ever comes, then I want Little Snitch for my iPhone and iPad.

I want Little Snitch for my iPhone NOW. Something like Little Snitch would be GREAT! Apps that don't need the internet could be blocked. Ad sites could be blocked.

Apps like Little Snitch is a huge part of why I want Epic to win, and Apple to be court ordered to allow installing apps on MY iPhone from any source I choose.

 

[31 Flavas]

You are probably sarcastic, but in case it was a genuine question, it boils down to quality of apps. Not the payment methods.

Well, then what makes iOS apps that much better in quality compared to Android apps? Or, why is the "quality" of apps on Android comparatively lacking?

Get a survey done, ask people if they would like to pay $0.75 for an In-App Purchase using some other payment processor or $0.99 using Apple's own. Which would they prefer?

Again, I get where you're going with that. But, I've still got to ask why Apple's iOS market place isn't marginalized by Android / Google's way more flexible app rules, possibility to use 3rd Party payments or direct sales, independent 3rd party app stores, and in general, just reduced restrictions on what can be developed in the first place. I'd think the Android market space (again, not just the Google Play store) should be thriving with the openness allowed and provided. Not limited.

Apple can set crappy development terms, expensive fees, for App Store distribution. But, the market size of Android is overwhelming and the befits of developing for Android seem very clearly superior.

The point of Epic's lawsuit, at least the way I see it, is not about allowing other App Stores as members here think. It is about paying for apps in ways other than through Apple to not pay the Apple cut for IAPs.

It's pretty straight forward if you read Epic's lawsuit. Epic wants their own independent App Store and they aren't going to pay Apple anything. Not side-loading. They tried that with Google / Android before (it didn't workout very well). They just want access to iOS's millions of customers for free. There are, of course, additional details - but that's the crux of it.

If you want a rundown of it from a business law lawyer you might want to check out this YouTube channel playlist: Hoge Law - Virtual Legality - So far he's got 32 individual video chats on it. They go over the initial complaint against Apple. The complaint against Google. The responses. The TRO. The Preliminary Injunction. And lots of news and events in between.

You sure as heck do not have to agree with him - but it'll get you up to speed on what Epic is actually asking for.

They charge $99 a year for the App Store, do they not? Nobody is contesting that. They are only asking for giving people options to pay through the processor they want, so that if they want to pay more through Apple, they can, not because they must and have to, but because they want to. I'd t think this is classic American freedom..

What I ask of critics that want me to understand their appeal for "classic American freedom" or common sense or decency or whatever - Is that what ever it is you want. It should be applicable across the board. As in, "If it's good enough for the goose, then it's good enough for the gander." Stop ignoring what Sony, Microsoft, and Nintendo have with their hardware. Which are singular market monopolizations of their own hardware. If you're going to give them a pass - Explain to me why their hardware monopolies are different from Apples. If they get a pass because "They sell their hardware below cost. So they need to make up the difference." - Well, what about Nintendo. They don't sell their systems for a loss. Do they have to open their hardware monopoly up now?