This case wasn’t initiated by Spotify. To quote from the original article: “The collective action has been brought by Dr Rachael Kent, an expert in the digital economy and a lecturer at King's College, London”.
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UK Class Action Accuses Apple of Breaking Competition Law by Overcharging for Apps
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Maybe or maybe not. When the judge renders the final decision who knows what will be deemed relevant or not.
Potentially yes, at least with digital only versions of them where a single online store is the sole option to buy games. From reading a bit more about this though, it seems CMA’s investigation is focussed more on the developer aspect to this and requirements ‘disconnected’ from the main purpose of the transaction or relationship. Also, on a more tongue in cheek point - I think the people who said they were ashamed to be from the UK when they heard about this, should think of this as the beauty of the common law taking shape, one of our best gifts to the world.
Speculation on my part — I think the noise Spotify is making has gotten the attention of Dr. Kent, and the mention of “overcharging” seems to be a reference to the Spotify complaint.
The App Store fee may have an indirect impact on the price of an App, but Apple doesn’t set this price — which is what I said.
Of course a developer has to count all costs. This is the way distribution in business works — there is a cost for the value they provide, and that cost needs to be factored in. This is nothing new.
Any developer has access to iOS users through the web. But if they want to reach them through a native experience, there is a cost. Whatever you decide, there will be a cost.
Apple gets $0 from those who decide their app should be free. Apple could certainly get rid of, or reduce it's fees and commissions and charge $10,000 for publishing an app. That would do wonders for innovation.
As said earlier, one has to price their app based on the expected margin (and taking into account what the market will bear), which includes taking computer costs, internet, dev fees into account. Of course your distribution costs, management costs, testing costs, marketing costs, etc are $0. In return Apple takes 15% or 30% if you decide to use iap.
So yeah, Apple indirectly affects the price of the app. First, it gives a dev the chance to avoid management and distribution costs, that's a net positive for the developer. Secondly, if one decides to use iap, apple takes a commission, which comes right off the bottom line.
Plenty of others have complained about overcharging. I think you are looking for reasons to blame Spotify.
Precisely. But is 30% of the price a marginal cost?
At current rates no way distributing and updating a bunch of files say 700MB, along with payment processing costs 30%.
That is why the App Store with such abnormal profits.
That is actually not true. The so called free apps actually promote iOS/App Store. It’s like free chocolate and candies for App Store iOS users payed by others. Can you imagine entering a shopping center where that is all over the place?
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Maybe we are talking about different things. That the only way I see this comment.
Any cost related to the delivery of the product is reflected into the price, unless parts are being subsidized. What you seam to be saying is that is not the case … never seen that happen in my 40 years.
Don’t forget - it’s only 30% from apps that cost money.
This means that if only 20% of developers sell paid apps in the App Store, Apple gets to collect money only from them. Free apps don’t generate Apple any revenue, even if they are companion apps for huge multi-billion dollar companies like facebook or youtube.
However, Apple has to vet, host and distribute every single app that passes through the App Store, including free apps that don’t earn it any money.
What this means is that the more successful apps help pay to maintain the overall App Store which in turn benefits everyone. This is what Apple means by the App Store being a powerful equalising force. Not that everyone is subject to the same rules, but that everyone gets to compete on a equal footing.
What this also means is that the App Store is not really as profitable as people make it out to be, and I doubt Apple really has that much room to reduce its App Store cut by if it wants to remain profitable. My own estimates put it at 20% at least to break even.
Charging every developer just 15%, or even 10%, is simply not sustainable.
So if I knew anything about it I would than understand that 30% of the revenue for my clients to be able to install and update my app is nonsense to talk about. Interesting way to condition the conversation.
Thank you Apple, love you, screw digital services and devs, those greedy people, right?
I understand Apple needs money to offer their services for free to some developers and not others.
Yet why should a medium size businesses be forced to fund Apple so that it can offer multi billion dollar business such as Facebook, TikTok, Microsoft, Spotify, Netflix, HBO and many others free distribution of their apps? Moreover, why should they be forced to invest in offering free versions of their apps and digital services, that is not Apple cost is it?
Take Procreate … amazing app. Yet those 30% is being used to fund free app distribution to their competition, Adobe, not to mention others listed above.
Forget your legion for moment, say you came up with Fortnite. Millions of players across platforms, millions of customers that your serve out of you geniality as a dev and formidable marketing. Why should than you be forced to give without contest your customers to an App Store for a reason as simple as your customers be able to install and update your app in their smartphone, that they have bought and licensed the software expecting to be able to do so?
If you have any understading of the costs to distribute and host an app, web app or otherwise, together with payment processing, the 30% markup is only justified by the iPhone and iPad market share and the fact that one you are not allowed to bill your clients directly in app. Otherwise would be a fraction of that.
Now if the model was purely based on resource consumption, hosting, payment processing, marketing, billing … cloud service plans style you would be able to choose whatever plan fits you business context.
I totally understand that say a startup, trying to make a difference in the market, you have so much problems to solve, heck you still don’t have a business, offsetting 30% of the price of you App to a distribution and universal payment platform such as the App Store can be left unoptimized, aka leaving money on the table. But once you reach a million or two of revenue out of you business efforts you are in conditions to add digital payment processing to you billing infrastructure, and that money might just give you the extra capital feed your teams with resources to face the competition better wits no need to go after an investor.
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LOL I remember the days before App store distribution. The cost to try and get a deal to distribute globally was enormous, and not just in direct cost but also in time. Time must 'better' spend on product development. And then once you had a deal, getting it in front of customers, an audiences that was willing, and the fees you paid for that. All way more than the flat fee easy distribution arrangement from the app store which provides access to the end users who are willing to pay.
Would I'd like to pay less, of course. But less doesn't always mean I end up with more. Paying for quality and the right audience and tools means a lot. 30% for the channel that also deals with all invoicing and tax, my gosh it is a really good deal...
Yes, The likes of Facebook, Microsoft, Adobe, Amazon …. really need to have their businesses subsidized.
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I remember the days before the Internet too. It was a waste land. Praise the lord App Store. Lol.
You are confusing the App Store with the iPhone, that is the problem.
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??? I doubt it but then again I have no idea where you are moving the goal posts to this time. 🤣
Nice. You seam to have understood what I thought of your argument. Before the App Store, used to download and pay for the Apps on the Internet so? The hurdle was mostly lack of bandwidth to download and update large apps. Yet had no difficulty finding digital services and their apps.
That is why DVDs were still necessary. Not today.
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Except that the App Store does a lot more than just process payments.
Apple is the one responsible for investing in, building, and maintaining the platform. They built the App Store, they design the APIs, and they aggregate the best customers in the world (via the iPhone) which in turn gives iOS app developers a lucrative pool of potential customers to tap into.
The walled nature of the iOS App Store largely solves the problem of software piracy. Apple also makes it easy for customers to pay for purchases by integrating biometrics into their payments (Touch ID, Face ID).
What I am trying to say is that Apple's value add is that they have helped grow the pie for developers, by enabling them to sell more apps to more users than they otherwise would have on their own merit. This is especially true for smaller developers who lack the brand recognition or the marketing budget of larger companies. I feel that 30% is not unreasonable given Apple's role in customer acquisition.
I am pretty sure that a payment processing company like Stripe doesn't do any of the above, hence they can afford to charge just 5%. Epic charges 12%, but their App Store is also a lot more barren when it comes to features and functionality (and it's still incurring heavy losses). It's easy to charge less when you are also doing a lot less for the money.
I will say it's everyone's duty.
It is in Apple’s, and consumers’ best interest for the App Store not to be positioned as a loss leader haemorrhaging cash (viability) or doing things like constantly pushing customers out of the store for various reasons (vitality). Take a look at Apple’s App Store decisions, and the common theme is a focus on supporting the App Store. That’s not exactly a surprise, but it does add context to management actions with regards to the App Store.
And yet Epic has no qualms about paying 30% to console makers like Sony.
Epic is a hypocrite through and through. They aren’t going against the App Store to empower users or developers. They want to burn the App Store model down to the ground, because Epic knows that this is the last stand when it comes to going toe to toe with Apple. If they don’t act now, then it’s pretty much over and the App Store will be the law of the land.
From a customer's POV, I denounce Epic's actions, and I am heartened to see that the developer and consumer pressure which Epic had hoped would make Apple cave in, just never materialise.
Continue to fight, and continue to win, Apple. As many times as you need to, as many times as it takes.
Yes. Is everyone duty to give money to the companies you have invested on.
It’s like paying social security.
I will say it's more like joining a union. There are annoying parts, but as a whole, it gives users a collective voice to force app makers to behave. If there are rival app stores then the user base can be divided, losing power to app developers.
At the same time, if everyone wants the benefits of being in a union, but doesn't want to pay their dues, then the union will simply not have the resources to function properly.
I like that apple forces app developers to update their apps for new features. I like that they force apps to support their privacy protecting authentication. I like that they are strick about background usage. I like that they audit UIs, and enforce quality standards. I like that I can rely on apple pay working in every app. It is why I paid for an iphone over a cheaper alternative. And it's why I will continue to support the App Store (and support there being just one App Store that Apple holds dominion over).
see, the problem is, judging from your ubuntu avatar, you understand computers, technology and how it's managed for decades
you're talking to people who live on their phone and have regurgitated rhetoric spewed to them on forums like this and truly don't KNOW what the computer industry and tech industry is as a whole.
This has been brewing for a while longer than the spotify issue, though they were an early one.
I actually think Netflix in particular was the first big salvo when they straight up removed purchasing from iOS devices and told everyone to go to the website first.
Once Netflix started bringing attention to this, a few other businesses had tried to do similar, but weren't big enough and Apple basically shut them down or blocked their apps.
which led to more court cases claiming anti-trust.
What I think we are seeing is a general dissastification overall by developers, especially the larger companies wondering why Apple will not even let them use their own payment processing. We can argue all we want about the 30% being unreasonable or not. But it would all be moot if Apple also allowed developers to choose to use their own payment processing.
Right now with Apple taking the stand that the only way you can get your App on iOS devices is to Pay Apple for your development fees, and then a portion of every transaction, while threatening to ban you for even dare point your users to your own site is where the line was stepped over. And people are tired of giving a company that continously toughts record profits, MORE profits, when many of these developers aren't able to break even because of losing 30% of every transaction
Never thought that by buying an iPhone would be joining a union where Apple is the judge. By the way, did anyone on this union complained to Apple for xCloud or Stadia not to be there like Apple Arcade is? How can they, it does not even exist right? Guess in this union customers complain about Apple to Apple ... that sorts it all out.
Humm, the tone of the conversation seams to have turned into a romantic comedy or business satire of sorts.
Roger out.