U.S. Developers Can Now Offer Non-App Store Purchasing Option, But Apple Will Still Collect Commissions

[BaldiMac]

Where?

The courts decision and Apple's remedy.

Nah, if you go back far enough (to the origins of the App Store) a large portion of that sizable cut was argued to be for payment processing and software distribution infrastructure. Take out the payment processing (and at scale, the software distribution costs Apple halfpennies on the dollar) and what is left? The nebulous "intellectual property" argument has only come about in the last few years as people are rightly side-eyeing Apple for price-gouging the very developers that make their platform successful. And if the IP everyone loves to quote is referring to the developer tools and APIs that Apple provides - well, see my first post again.

Ahh. Some vague, unspecified argument going "back far enough". The findings of fact in this case directly refute your argument.

So don't give me that crap about Apple "deserving" all this.

I didn't. I'm just acknowledging that the have a legal right to charge for use of their property.

They're out to help themselves, not developers

Black and white nonsense. Of course, their primary goal is profit. Helping developers contributes to that goal.

(as evidenced by continued strained relationships with innumerable developers the world over).

Innumerable? Only in that you can't put a number on them. Because you have no evidence that they number more than a fraction of a percent of iOS developers.

 

[AppliedMicro]

"First, and most significant, as discussed in the findings of facts, IAP is the method by which Apple collects its licensing fee from developers for the use of Apple’s intellectual property. Even in the absence of IAP, Apple could still charge a commission on developers. It would simply be more difficult for Apple to collect that commission."

Judge or not, I don't agree.

There's little to no correlation between what, if and how much IP you're using and what you're paying. A 3d augmented reality furniture configurator apps pays no commission - while the most basic of eBook-shopping interfaces in an app would trigger 15% or 30% commission.

It's more akin to a tax - you pay it on your income, regardless of how that income was made.

 

[AppliedMicro]

But once a developer decides to use Apple's IP to start a business and make money... then Apple charges a commission fee. That seems perfectly reasonable.

They don't.

Apple doesn't charge commissions on booking.com, Uber, Amazon's shopping app or my favourite restaurant's ordering app. And they're making tons of money. From in-app sales.

They're only charging it on certain products or services - notably many of which they're competing with (games, music, video streaming, fitness).

But the idea that a developer can start a company and potentially make millions of dollars using Apple's IP for a mere $99/year is kinda ridiculous... in my opinion.

It's ridiculous to say it's not. Just ask Uber.

 

[BaldiMac]

Judge or not, I don't agree.

So? You don't get to make up your own facts and then argue that they are unreasonable.

There's little to no correlation between what, if and how much IP you're using and what you're paying. A 3d augmented reality furniture configurator apps pays no commission - while the most basic of eBook-shopping interfaces in an app would trigger 15% or 30% commission.

It's more akin to a tax - you pay it on your income, regardless of how that income was made.

So? I can give away yogurt and sell ice cream. What does that have to do with anything?

Personally, I've helped organize a market where food vendors paid a commission on sales and product vendors paid a flat fee for their location. Perfectly normal.

 

[farmboy]

Because it was never about payment processing. Back when the App Store first launched Steve Jobs said they intended to run it break-even. But once IAP launched and Apple realized how much money they could make taking 30% of every IAP (plus hardware sales growth slowing), running the App Store at break even was no longer the goal. If you have an app and make any money off it Apple believes it’s responsible for that and thus you owe them 30%. Even if they’re not steering any customers to you or promoting you in the App Store. When’s the last time you downloaded an app because Apple promoted it?

Steve Jobs is dead. Whatever he may have said once is irrelevant. Thirty percent for the first year, the same as almost everyone else. The fee is based on many different services Apple provides for the developers.

 

[Mrkevinfinnerty]

U.S. Developers Can Now Offer Non-App Store Purchasing Option, But Apple Will Still Collect Commissions

Nowhere near as big a market, nowhere near as essential services.

forums.macrumors.com

the market = smartphones

iphone not mentioned at all hth

 

[Analog Kid]

Yep we definitely need to enact legislation that ensures that more than just iOS and Android are available on mobile phones.

How do you imagine that to happen? There are essentially 2 desktop operating systems (Windows, Mac), and 2 server operating systems (Unix, Windows) and 2 mobile operating systems (Android, iOS). Windows failed on mobile despite being backed by one of the most valuable companies in the world. Nokia and Blackberry OSes died even though they were dominant in this space when iOS and Android were in their infancy-- now they can't even maintain a foothold.

What legislation, other than calling for a national institute of mobile OS development, can ensure happens what the market clearly does not want to happen?

There is a reason there is always 2. The market wants convergence because that simplifies everything. Developers want fewer platforms to target, users want fewer tools to learn and versions to buy and reliable integration among the tools they use.

If the market could, it would drive it all to one platform and ecosystem but I think what we see is that there is a fundamental tension between openness and polish. If a system is open, you can't expect it's pieces to work together as well, be carefully reviewed and vetted, follow common conventions etc. If you want a system that works smoothly within itself you limit your freedom of choice. I think that tradeoff is insurmountable-- people here will surely tell me tales of unicorns and leprechauns, but I see no way to maximize both openness and polish.

Windows was a strange beast because it was a closed OS and an open application landscape. It holds its legacy position in desktop software but the future looks like enterprise and mobile systems that are more fully open (Linux/Android) or more tightly closed (Mac/iOS).

I do not see a way to motivate a third player unless the existing solutions fail in their missions. If iOS becomes so unpolished that another closed system succeeds in surplanting it, or Android becomes so closed that another Linux variant gets ported and gains share.

 

[Michael Scrip]

Apple doesn't charge commissions on booking.com, Uber, Amazon's shopping app or my favourite restaurant's ordering app. And they're making tons of money. From in-app sales. Just ask Uber.

They're only charging it on certain products or services - notably many of which they're competing with (games, music, video streaming, fitness).

Ah I see. You think it's unfair that Apple charges a commission fee on some things... but not on other things.

I thought Apple explained that: App Store fees only apply to digital goods and services... not physical items. Payments for food, physical products, and tangible services bypass the 30% commission. That means Apple doesn’t get a cut of consumer’s money for Starbucks mobile orders, Etsy products, or Uber rides.

So if I want to develop a game that has IAP with commission fees... but I know Apple doesn't charge a commission fee for Dominos Pizza... should I be mad?

🤔

 

[dk001]

My teenage daughter and her friends claim that the will die without their smartphones. So does that count?

Good God!!!!
Ain’t that the truth .

 

[AppliedMicro]

So? You don't get to make up your own facts and then argue that they are unreasonable.

If a judge or court of law can make a finding of fact, so can I. And mine somewhat differs from the former.

Personally, I've helped organize a market where food vendors paid a commission on sales and product vendors paid a flat fee for their location. Perfectly normal.

So did you prohibit these vendors from making any outside sales or refer customer to their own web site?

 

[hans1972]

So Apple is admitting the 30% was always about them believing revenue a developer earns is because of Apple and therefore they deserve a cut. Even though many developers say Apple is not steering customers to them, doesn’t promote them on the App Store, etc. You could maybe make this argument for apps that are iOS only but apps that are cross-platform and available on the web…why does Apple deserve a cut of their business?

It's a business. No talk should be about deserving anything.

Apple get's paid because they provide access to customers which is something developers are willing to pay for.

 

[BaldiMac]

If a judge or court of law can make a finding of fact, so can I. And mine somewhat differs from the former.

Sure, but, like the court, you require a source for your claim in order to have a reasonable discussion. Otherwise it's just made up nonsense.

So did you prohibit these vendors from making any outside sales or refer customer to their own web site?

Of course! Why would we let vendors bypass our revenue share by redirecting them to their website for payment?

I get the feeling that so many people in this forum have never been exposed to business outside of their discussion of Apple. They have this complete exasperation that Apple could possibly do something that turns out to be a completely legal and normal business practice.

 

[farmboy]

And should an ISP or cellular provider get a cut because without the internet none of this would work?

You've gone out of your way to be obtuse. There is no universal method of one party compensating another for anything, so fabricating "what-aboutisms" doesn't help your case.

 

[I7guy]

the market = smartphones

iphone not mentioned at all hth

You weren’t clear. But the market is cell phones not smartphones.

 

[I7guy]

You are free to buy and move to your own private island and have your own laws.

And you are free to do whatever on the 2nd Tuesday….Or are you going to suggest that government is perfect and can do no wrong? And their priorities are in line with their constituents? Or that they can never be influenced by the likes of lobbyists?

 

[jamesnajera]

Understanding that Apple charges the commission to cover the cost of hosting the apps for sale in the App Store, and payment/accounting management, is the commission that Apple is charging for these Entitlement Link apps because the apps are still hosted and searchable from the App Store? Where as if the developer left the App Store and just sold their app via side load on a website they host they could avoid these commission charges?

Also, if the above is the case, who is going to create a new website to register these non App Store apps? Maybe call it the Jungle or the Wild Wild West?

 

[Mrkevinfinnerty]

about to get sued by their own government. 2024 coming in hard

Apple to Face US Antitrust Lawsuit as Soon as March

Apple Inc. is poised to face a US antitrust lawsuit as soon as March as the Justice Department prepares to take on one of the world’s most valuable companies, according to people familiar with the case.

www.bloomberg.com

 

[hans1972]

So Apple is admitting the 30% was always about them believing revenue a developer earns is because of Apple and therefore they deserve a cut. Even though many developers say Apple is not steering customers to them, doesn’t promote them on the App Store, etc. You could maybe make this argument for apps that are iOS only but apps that are cross-platform and available on the web…why does Apple deserve a cut of their business?

It's a business. No talk should be about deserving anything.

Apple get's paid because they provide access to customers which is something developers are willing to pay for.

Right and the majority of apps in the App Store are free to download and you don‘t pay a cent if you don’t buy anything in-app. Do those developers/apps not use all the things you mention above?

Yes, and Apple has been kind enough to not charge for it unless you make money on the app or its content.

If Apple wanted, they could.

 

[hans1972]

Just typical Apple greed. 30% is extortion and if they had done it 5% then nobody would have challenged it. Apple have billions sitting there so this isn’t about trying to make a company profitable, it’s just greed. I think I’m going to eventually go back to Linux and Android for my phone and computer as Apple are just taking the piss.

It's about making money when you provide value either to customers or others.

Developers voluntarily appoint Apple to be their agent and commissioner when it comes to selling and distributing their apps. Of course, Apple want's to get paid as much as possible for such a job.

 

[hans1972]

It's basically "We're not processing the transaction but we still want 29% because we're Apple and you should be lucky to be on our platform."

And that's true. Developers should consider themselves lucky.

If being available on the iPhone isn't valuable to them, they wouldn't need to have an app for the iPhone or deal with Apple at all.

 

[BaldiMac]

Understanding that Apple charges the commission to cover the cost of hosting the apps for sale in the App Store, and payment/accounting management, is the commission that Apple is charging for these Entitlement Link apps because the apps are still hosted and searchable from the App Store?

Apple established during the trial that the commission is primarily a license fee for use of its property (iOS and associated services). They were required to allow links to an outside website to allow for competing payment processors, but they were not required to give up their commission.

 

[dk001]

Understanding that Apple charges the commission to cover the cost of hosting the apps for sale in the App Store, and payment/accounting management, is the commission that Apple is charging for these Entitlement Link apps because the apps are still hosted and searchable from the App Store? Where as if the developer left the App Store and just sold their app via side load on a website they host they could avoid these commission charges?

Also, if the above is the case, who is going to create a new website to register these non App Store apps? Maybe call it the Jungle or the Wild Wild West?

I’ve run across a couple of sites that are waiting and hoping they can open an alternative App Store. I haven’t seen a “Jungle” or “Wild Wild West” yet.

Won’t surprise me in an attempt to entice the younger crowd.

”The Wild Wild West iOS App Store” sponsored by Tik-Tok! 😂🤣 😇

 

[hans1972]

I wonder how that is even legal (I don’t think it would be legal here) like if I am paying with my credit card or PayPal or whatever outside of the AppStore, how can Apple even know that, what I bought or that it’s actually been processed unless they gain access to the developers revenue streams for some reason.

I guess it’s basically like a Google Ads affiliate link under the disguise of privacy? Pay per Conversion so to say

Apple is already doing this in South Korea and in the EU. Taking a cut is not unusual and not illegal per se. I could give you several examples from here in Norway.

The developer has to report those numbers to Apple. The agreement between Apple and the developer will in all likelihood grant Apple the right to conduct an investigation if they suspect the developer not being honest.

 

[Mrkevinfinnerty]

Spotify Statement calling on the EU to act 🍿

“Once again, Apple has demonstrated that they will stop at nothing to protect the profits they exact on the backs of developers and consumers under their app store monopoly. Their latest move in the U.S. — imposing a 27% fee for transactions made outside of an app on a developer’s website — is outrageous and flies in the face of the court’s efforts to enable greater competition and user choice. This action follows similar moves by Apple to circumvent compliance in South Korea and The Netherlands. However, the EU’s Digital Markets Act (DMA) will finally put an end to this false posturing, which is essentially a recreation of Apple’s fees. We strongly urge the European Commission to act swiftly and decisively to prevent Apple from implementing similar fees, which are prohibited under the DMA.”

 

[dk001]

Apple established during the trial that the commission is primarily a license fee for use of its property (iOS and associated services). They were required to allow links to an outside website to allow for competing payment processors, but they were not required to give up their commission.

Maybe I am missing something here but how are they going to collect that commission?
Especially if it is a sale that could have been performed from a browser from any OS.