Think Apple has already seen the writing on the wall - both S. Korea & the US are now probably going to push back against the IAP restrictions, and they can / should do a couple of things, which might actually increase revenue.
1. Cut down the IAP commission to 15% for everyone.
2. Cut down the commission to 5% for those who pay for a Business Account, say at $5,000 a year.
The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. Every iOS and macOS user will prefer to use the Apple system. All Apple has to do is to make the rates competitive enough, that after considering building their own purchases system, factoring in sales tax and VAT, most developers will happily just opt for Apple's system if the rates make sense. Many people are putting up with 30% already — bringing the rates down to something reasonable with an upgrade path to put them on par with payment processors like Stripe (with VAT and Billing and Radar) or Paddle will just increase revenues for them.
The moment they drop rates and ease restrictions apps that are not being built because of these rules will get built, and these apps will gladly pay the market rate of 5% to 10% for a full service payments system.
> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. Every iOS and macOS user will prefer to use the Apple system.
The first sentence is true but incomplete, making the second wrong. For example, the Amazon app is highly likely to have people using their existing Amazon payment method. Companies like Stripe are going to offer their own SDKs just like they do for web payments. Apple’s offerings are quite polished so I don’t think they’ll fall out of favor but it’s going to reduce their profit margin and I’m sure the number of people who will use alternatives is much greater than zero.
Companies will want it, but I'm not sure users will. Apple does a really good job of warning me, I feel, and centralizing subscription cancellation etc., and that's huge. Like, if I have to go to your app--or worse, your website--to cancel a subscription? I'm gonna just not use your stuff, because I'm going to forget about it until you whack me for another year or whatever.
You'll get no argument from me that Apple's system is pretty good from a consumer standpoint — that's the primary reason why I predicted that it'd remain popular. It's really nice knowing that you can nuke a subscription without getting some dark patterns trying to talk you out of it.
On the other hand, it's really easy to imagine that you'd see something like “$9.99 IAP; $7.99 direct from Epic/Amazon/Google/Netflix/et al.”, especially when it's a company they already deal with and don't have a negative impression of.
The big question I'd have is whether that's possible or the other terms require price parity — and whether they'd be able to do something like offer bonus content, rewards clubs, etc. to nudge people toward their own store. I'd be somewhat surprised if, for example, Epic couldn't entice a fair number of people with some kind of in-game skin or other loot which they could argue has a resale value of $0.
I had a WSJ subscription which I couldn’t cancel online. You have to call them, wait in line and then let them talk you into another free month and stuff. A bad experience.
It was so annoying I just gave up until my CC was locked.
This experience was definitely more expensive than using Apple’s services.
Seems like the right strategy. A chargeback request automatically implies a $25 fee for the merchant if I remember correctly (read this on Braintree long ago). I'd expect any merchant will want to avoid disputes/chargeback requests like the plague.
Take this with a grain of salt, it seems excessive, I should probably have looked it up again :) But there definitely is some kind of strong incentive for merchants to avoid these, not just because it wastes time for them.
It's not just the direct chargeback fee - too many chargebacks and the credit card companies will start actively penalizing you with higher fees overall and more declines and more 3DS verification requests.
As someone in the fintech field, a $25 fee doesn't sound unlikely. The credit card companies love their fees, and every time I see them I'm amazed at just how high those fees get.
Ah, it seems we are back to dark magic times, where you have to find the right magic words, to actually have an effect and not default to bots. To achieve complicated things, like cancel a subscription.
I literally cannot speak to a human at my ISP unless I tell the robocall system that I want to cancel. As in, I'll call and say I need to return some equipment, be on hold for an hour, leave a callback number, and not get called back in the same week. Versus calling and saying I need to cancel, then getting connected to a service rep in 15 seconds and asking them about returning equipment.
I recently had the same issues you did with my ISP. I started mentioning firing middle management for tolerating such poor customer service. I received a call from a person within a couple minutes.
If only there was meaningful ISP competition in my area.
I don't understand how this works in favour of Apple. Imagine you had paid with any other third-party payment provider, e.g. Paypal. Wouldn't you have been able to cancel the recurring payment just as easily? Even with a CC payment, wouldn't you be able to cancel the recurring payment by going through the account options on your bank website?
> Even with a CC payment, wouldn't you be able to cancel the recurring payment by going through the account options on your bank website?
No? I don't know where you're located, but I'm not aware of any North American banks that offer anything of the sort. Typically the only thing you could do through your bank is dispute a charge after the fact and request a chargeback. The end of that process may or may not see the company in question left unable to charge you again, but it's not a "cancellation of recurring payment" process in any normal sense, and it's going to require some phone calls and form-filling.
Companies will famously decline to offer subscription cancellation options on their website, leaving consumers with the only option of calling them on the phone and facing a hard sell when attempting to cancel. Apple's subscription cancellation options are night-and-day better than the status quo.
Here in UK if a company wants to charge you regularly for anything they have to start something called a "direct debit" on your bank account - then they can withdraw money from your account whenever they see fit. The thing about direct debits though is that you can cancel them for any reason within few clicks on your account website, and all charges are reversible without having to provide a reason - I just call my bank and say I want to reverse a direct debit charge X, done.
I know the American system is bad, but it's not like the only system in the world. There are other ways of doing this, without going through Apple's closed ecosystem.
I may not understand properly what you are saying but here in the UK you can have regular payment on your credit/debit card. Except for Utilities, basically all my recurring payments just happen like that. Netflix does not require a Direct Debit, neither does a variety of service, including Apple iCloud.
Although you can chargeback those payment, that's not really a cancellation. It's a last recourse type of stuff. I'm still subscribed and liable for whatever charge I have incurred. If I want to cancel Netflix or iCloud, I need to go there. So sure, if the payment fails your account will eventually be suspended but not necessarily cancelled.
Even Direct Debit are like that. I cancelled my Electricity DD by accident, but I still received the bill in the mail (at the time) and the electricity wasn't just cut.
Also in the UK, Paypal will allow to setting up subscription. Similarly you can cancel the subscription, but it is not a cancellation of the service. You need to go to whatever setup the subscription and unsubscribe there.
Apple system is a centralised cancellation of the service first, the fact that the payment are stopped is a consequence of cancelling the service. Not the other way around as with all the systems I listed.
> Here in UK if a company wants to charge you regularly for anything they have to start something called a "direct debit" on your bank account - then they can withdraw money from your account whenever they see fit
Here in Czechia most periodic payments are paid through either direct debit or standing order. Direct debit payments require apriori permission (enabled for each recipient max sum per period), which could be revoked at any time.
The infuriating thing is that some american users think that since they have to endure crappy banking then everybody else on the planet must also be enduring the same thing, and that's not the case.
I must explicitly approve any direct debit subscription before it can withdraw money from my balance and I can kill a subscription from my home banking (I'm an Unicredit customer btw).
That's actually how I made sure my gym subscription was terminated for good.
There are also 720 euro/month gym subscriptions in Europe, and probably everything in between.
Just a 30 euro/month subscription would quickly add up to amounts worth collecting, although I've even had a debt collector call me over a debt of 2 something euros.
Precisely this. And I realize it's not the same around the world, but recurring payments get really bad in large parts of the world.
If you, the customer, want to cancel a recurring payment and you're using ApplePay, it's one button and done.
If you're using 3rd party billing from $randomcompany, it usually works by you, the customer, trying to find who to call and spending a substantial portion of your time being badgered by customer retention people. They're set up to make it as difficult as possible because they know that they can make people give in if the effort is too high.
This is a huge part of the reason why companies want the second option - they want to own the customer, and for you to have to get permission from them to stop belonging to them.
I've had to deal with this type of thing in the past. Not often. What has worked for me was saying something like the following right off the bat when they try to keep me (but I guess it only works if not all of us do it :):
I get it. You are doing your job. You have a script. You have to try and keep me. It's not gonna work on me. Skip to the part of the script where you begrudgingly give in and cancel the service for me and you can take your next call quickly.
Usually the easiest way to solve this is to send a written letter, registered mail for like $1.50 or whatever it is now.
Then you dispute the charge each time. It's a pain, but it's a bigger pain for them and costs them more than it does you. Especially once you've documented with that receipt of a registered letter.
From the same page, micropayments on PayPal have an alternative fee structure of 4.99% + $0.09. PayPal is less expensive than Apple's 30% fee in every scenario.
This is why I use privacy.com. Each company or subscription gets their own personal dedicated credit card number, and if I don’t like their service, I can pause or cancel the card.
And if someone else tries to charge that card, then I know who leaked it.
Which is strange considering that both Mastercard and Visa require banks to offer this feature, and provide services to make it easy to implement.
I suspect if you called up your bank and asked to block recurring payments from a specific merchant, they could do it. It’s just not advertised very well, and the implementation aren’t always granular enough (block a merchant using Stripe for example, can result in all Stripe payments being blocked).
I guess that's because they cancel the payment, not the subscription.
If you cancel Netflix that way, Netflix isn't told. They will just realise the payment failed and block your account until you upgrade your payment details.
Apple system cancel the subscription, just like if you go on Netflix account and cancel. The blocking of the payment just happen as a consequence of the subscription to the service being cancelled.
Of course maybe time changed. Like shop returns 20 years ago, it was badly seen to pick load of stuff and bring most of the stuff back. Nowadays shops expect it and during Sales period they will ask you to do it that way rather than jam the few fitting rooms.
At least with my European CC I need to fill out a PDF, put a signature on it and upload. Not the level
of convenience I am used to. Maybe it’s different elsewhere.
I believe it just covers automatic renewals, which are illegial.
The WSJ needs to clean up their act. Offer better info to subscribers? The rest of us arn't going to pay. And I know it's difficult business. Figure out something newsboys besides trickery?
We just got an email notice that $locl_newspaper was doubling its monthly subscription rate effective immediately. When we called to cancel they permanently us in at the old subscription rate.
Pretty clearly a cash grab against those subscribers who aren't watching the notices + auto-billing closely...
If a smooth cancelation is so important to users that it justifies a 30% upcharge, other payment processors will compete. They can even advertise the easy cancelation during checkout next to the payment method (“install the stripe subscriptions app or go to stripe.com for one-click, prorated cancellations!”). I think once one of them does it, they all will. If the injunction goes into effect in 90 days, it will be a gold rush for everyone who gets to finally compete with Apple Pay. This will induce a bunch of rapid innovation in the iOS payment space.
The thing that I think you're perhaps missing is that Stripe etc. will be competing with Apple for developers. Letting developers make it harder for consumers to cancel something is a feature, not a bug.
Stripe etc. do not care about competing for consumer favor. Apple does. As far as any large company is on the consumer's side, Apple is, because they need me to buy another iPhone more than they need me to buy a subscription to somebody else's app, even at a 30% vig.
This is a deeply threaded discussion, but if you look up there, you’ll find that people are arguing that users will choose Apple Pay over other payment processors or refuse to use apps that don’t offer Apple Pay. That’s the context in which my comment is written. If it’s true, then app developers and payment processors will need to respond to that market demand. If users don’t care, then of course developers and payment processors don’t need to care either (absent regulation).
It’s very wholesome (or, naive) of you to think that developers will give users the choice for a less predatory payment gateway out of the goodness of their hearts, but that’s not going to happen.
Making it harder for users to cancel their recurring payment is a feature, it’s customer retention, the only choice you’ll have is whether a given site or payment processor is so egregious that you will forego use of the service entirely rather than take the risk.
If not being robbed is so important that it justifies buying locks we might actually decide that robbing should be illegal and punishable by jailtime....
My mother can trump that. Her VOLUNTARY subscription donation to the guardian was messed up and again could only be cancelled by phone despite signing up online. Dialing through the phone tree eventually connected cancellations to the NHS blood delivery service, really, I kid you not. They were very polite but equally bemused. Eventually sorted but way to drive away a donor.
How does this work for deaf or hearing impaired users? Surely even in the US there must be a way to cancel a subscription without having to speak to someone on the phone?
Generally in the US, if a company is large enough they will provide a TTS number, otherwise you can call via a TTS “gateway”, many of which are provided free of charge by various government entities or by the phone company.
When you call via a TTS gateway, a certified transcriptionist for the deaf or (now) a computer program that does speech recognition will transcribe what is said by the other party to text so you can read it and speak out loud what you type exactly. There’s quite a few regulations around this service, although I’m sure it’s developed since I last looked into it.
There are also special phones or phone apps many deaf people have that do live captioning. CaptionCall is one common brand.
The other part is, what do the Apple subscription cover in terms of platforms?
e.g.: If I can pay for say Guardian subscription either:
1. via their website/app and use it on iPhone, android, PC, etc; or
2. Pay for same subscription via Apple subscription and ONLY have it on my iPhone
- that's a HUGE diff, and one that I have been extremely peeved off to discover in the past :-/. It only took one such experience to permanently sour me on Apply subscriptions.
That's not a shortcoming of Apple's system - every subscription I have using IAP has a way to tie to to an existing or new account for use on other devices. If the Guardian decided not to do that, that's kinda crappy and 100% on them.
I would consider going through HBO directly. I used to subscribe through Apple but once HBO offered a promo that I didn't qualify for because I was billed through Apple.
The Guardian allows you to sign in from a browser with your AppleID - does that not give you access to your subscription? https://profile.theguardian.com/signin
I ended up canceling a magazine subscription I’d done with Apple, because there was no way to use my Apple credentials on the web site. It was app-only, and the app was crap compared to the web version. I might resubscribe but… friction…
> It's really nice knowing that you can nuke a subscription without getting some dark patterns trying to talk you out of it.
Tim Cook said at the trial they could integrate a separate payment API into Apple's subscriptions. Alternatively, Apple could check the cancel method during app review - so that's not a reason to allow Apple's payment monopoly.
I suppose that would only happen if Apple were very uncompetitive in price. In the example above, the options would be equivalent to the company if Apple only dropped their cut to 25% and the competition was free.
Assume Apple dropped to 15% and the competition was 10% - then it would be 9.99 IAP, 9.63 on Amaozon/Stripe/Netflix, which probably wouldn't be worth the consumer confusion.
A micropayment is 5% + $0.09. For a $0.99 purchase, this is about 15%.
I would expect other payment processors to be similar.
This also leads to the question of "how do you maintain the in app purchases?" Is it an account on a website that has 100% uptime? Does it work for solo games when there's no network connectivity?
This works for Epic (big company, lots of payment processing already). It doesn't work for SmallGamerInc that would find that they'd need to do a bunch of other stuff to get it working that incurs more costs than what Apple offers.
I’m very curious if that clause would be challenged by this judge or another one — because that’s the linchpin.
That decision changes register my Netflix account, that I don‘t remember doing, nor do I remember what interface I used to do it ––it was three computers and two phones ago–– but if another decision says I could save 20% every month, I’d munster the energy to get off the couch.
The question I’d have is whether they can hedge around that with freebies. It’d be an interesting lawsuit if, say, Epic started including some in-game rewards rather than direct monetary discounts and Apple sued claiming that those should count as a violation of the contract.
A fair amount of companies makes their subscription cancellation actively hostile in an effort to not get people to do it. To give an example, though you can subscribe online, the NYT requires you to call during only certain hours to a customer service line where you get badgered and questioned like you’re trying to cancel a cable subscription.
If the US mandated that you need to provide equivalent means of subscription and unsubscription with equal ease of use that would be one thing, but we do not live in that world.
This is exactly the example that's been on my mind. Had I known how horrible NYT's unsubscription process is, I would have never subscribed in the first place. I'm sure they extracted an extra month or two out of me because of the friction they introduce, so in management's eyes that's probably a win. I will never use NYT again in the future, but I think a big label letting users know an app isn't using iCloud payments could go a long way to cautioning users about a user-hostile experience.
Even if a developer makes subscriptions easy to manage today, without tie-in to Apple's infrastructure, they could change that process on a whim.
Similar opinion for XM... Would never sign up again without a generated card number that is only good for a single charge. I only wanted to cancel one radio of 3 I had at the time. By the third 40+m wait after mysteriously "disconnected" after they couldn't talk me out of it, I cancelled the whole thing.
Don't get me started on XM. Starting the second year after I bought a car they were calling me several times a week. It took a few years of "No" and blocking any number in my area code that isn't in my contacts (my phone number is not local) for it to stop.
Then I brought my car to the dealership to have some recall handled, and the calls have started again....
That sounds like it would primarily impact the low-paid worker on the other end of the line rather than alter company policy.
Instead I suggest playing back a pre-recorded sales pitch for a relevant trade union: The workers won’t suffer from bleeding ears and the bosses might actually care.
Just tried this. I had to talk to a support staff on the website, and they made one attempt to offer me a lower rate for a year (which I declined).
In my opinion, it should be as easy to unsubscribe as it is to subscribe. I interpret anything else as consumer-hostile. It's very strange coming from NY Times ... I know they find it hard to finance journalism nowadays, but dark patterns are never the answer.
This used to be the case with NYTimes, several years ago. But, I think it has improved. Same horrible experience, a few years ago. Then, I resubbed after a couple years. A few months ago, NYTimes ran an article on "dark patterns." So, I attempted to unsub -- it was much easier.
But, that is only the NYTimes. My guess is that the original hypothesis holds true for others; I doubt JFax has improved.
This makes the practice even more egregious as you know the website has the ability to allow cancellations they just choose not to enable it for people living in other states.
Huh, I was just able to cancel my digital introductory subscription ($4/month) w/o talking to anyone. This must be a recent change. I've canceled several times in the past and had to talk with someone, either voice or via online chat.
It's a law in california at least. If you log onto NYT in california you can cancel online I believe. Outside of california if you have no issue burning a bridge, you can issue a chargeback and most services will ban your account.
It seems theoretically possible for Apple to reject an app with a hostile cancellation policy without requiring that they use Apple as a payment processor.
This 100%. As an Android user if I have the option to pay for a subscription with Google Pay (even for extra) I will do it to avoid the dreaded "You can only call to cancel" interaction where someone will spend the next 10 minutes trying to talk me out of it.
Third-party payment providers who I don't select, not being answerable to me as a platform holder, are incentivized to make it hard for me to cancel. Apple doesn't do that. I have better things to worry about than to track this stuff down and I desperately want to think about fewer stupid things in my life. Subscription management is solved and stupid.
Perhaps look at it this way: I'm pretty OK with paying 30% to not pay 200% and, kinda more importantly, not to feel upset and angry later for forgetting a dark-patterned subscription dinging me again. If that's an edge case, y'all are wrong.
Maybe Apple can straitjacket them properly. "You must use XYZ API in iOS/MacOS and you must support one-click cancellation via a standard process." But I think the dark-pattern farmers who are angry about this would be angry about that, too.
I don't want to pay an extra 30%, and have that 30% taken away from the devs who actually deserve the money, because _some_ might make it hard to cancel.
Most would likely just have a Paypal button same as 90% of websites if that makes you feel better.
Apple can still enforce in their rules the ability to cancel from one place
If that's all they'd done from the beginning this ruling would not have happened.
Apple wants to control the access to a very significant portion of the user base?
Fine, but then they'll act like a lawmaker-light and in many (western) societies that means you get some burdens and responsibilities piled upon you by the original lawmakers.
> Maybe Apple can straitjacket them properly. "You must use XYZ API in iOS/MacOS and you must support one-click cancellation via a standard process." But I think the dark-pattern farmers who are angry about this would be angry about that, too.
Im not sure Apple want's to do that. By not restricting the 3rd party payments there is more of a case for using Apple's payment processor so you can cancel easier.
This is my hope as well. This ruling explicitly pushed back against the attacks on App Store review and other Store policies - and as such they can still leverage that into a requirement to implement some API that allows one click control of recurring subscriptions.
Another edge case here. For now I trust apple with my credit cards (a lot) more than a bunch of smarmy payment processors (somehow I magically get subscribed to a bunch of things when I use the latter)
Two separate things at play here. Parent is saying they trust Apple to manage their payment options, and since third parties have to go through Apple they don't have to trust a bunch of individual companies to do things right.
Apple Pay is one of those payment options, but if you have to trust a bunch of third parties to properly manage your information the specific form of payment doesn't matter much.
I mean everyone's assuming that non-IAP subscriptions are going to be 30% cheaper but I don't really buy it. If the market has proven that someone will pay $10 for a thing, suddenly offering it for $7 seems like a bad business move.
Most likely Apple subs will increase in price. This was the case for Netflix/Spotify for a while until Apple banned the practice (7.99 direct, 9.99 via IAP.)
> If the market has proven that someone will pay $10 for a thing, suddenly offering it for $7 seems like a bad business move.
The mobile app payment market hasn't been competitive for a decade, so Apple has never had to compete with companies that are more efficient than they are, and can offer the same or better service for less than a 30% cut.
No the problem here is that a business wants X money, to sell thru Apple (and similar) they have to add 30% to what they want, whereas other payment platforms offer a much lower cut.
However Apple does vet apps and focus on security somewhat (altho Google's project 0 seems to do a better job at finding bugs for Apple), however 30% is far too much even for what Apple are offering their customers.
In an ideal world, Apple customers need to be told: "you will be charged extra buying through Apple to help pay for the protections/quality that our platform offers you".
However, Apple explicitly disallows both telling users that they're being charged more and why, and that they could get it cheaper elsewhere.
Regardless of whether Apple are still allowed to charge x%, the first step it to get Apple to allow developers to tell the customer about other payment options and for Apple to explain to their customers why it costs more, then customers can make the decision for themselves.
Do you really think that the digital purchase cost would be 30% lower if you bought it directly through the vendor? The edge case would be that buying directly though the vendor would actually be 30% less.
What makes you so sure it would be 30%? Somewhere a middleman gets their cut.
Why wouldn't bigCorp just make you use their payment system at the same price without allowing purchases via Apple at all?
You think that you’ll get a 30% discount by subscribing via an external website? More likely they’ll give you a small discount to entice you and pocket the difference.
Wouldn't it be better if that money went to the actual creator instead of a greedy middleman though? Apple will be fine. They have more money than they know what to do with. Literally. Steve Jobs even asked Warren Buffett WTF to do with their hoard, and that was over 10 years ago now.
Truthfully, aren’t the only developers who are really affected by this decision mega-corporations anyways? Epic had $5B in revenues in 2020. Should I feel indignant which greedy mega corp gets more money? Apple already lowered the commission to 15% for small developers (under $1M annually) where the additional income really matters.
Apple's refusal to allow alternative payment methods is (and has been) the issue. They can take 99% for all I care, but their smug refusal to allow alternative payment methods all but confirms that it's a ripoff.
You think the people who move to their own payment systems are going to drop their prices by 30%, when instead they could keep them the same and make 30% more revenue?
I assume by that you mean the developer tools to create apps in the first place.
Apple is free to not make developer tools anymore, that's their choice. Nobody is forcing them to. They do it b/c apps make the iPhone better. In fact an iPhone without apps is pretty useless.
You're assuming that the Epics of the world will actually lower their rates the 30%. Epic could just as easily keep the same prices, but now make that extra. That's the issue I have with Epic's arguments. They might lower the rates by a percent to entice people over to their system, but over time pull the cable company routine and just up the rates each time it renews or new version.
It’s almost impossible to analyze Epic’s rates “objectively”. Fortnite is free, but you can pay for in-game currency (V-Bucks) with which you buy cosmetics. You can buy V-Bucks directly (discounted in large amounts), get them through a monthly subscription slightly cheaper, or get a limited amount by playing (more if you buy a season pass which also includes cosmetics).
BTW: Cosmetics are EXTREMELY overpriced, because you pay for “exclusivity” (think like USD 20+ for a fully accessorized skin with no effects beyond cosmetic).
Even though Epic can claim it lowered the cost of V-Bucks in its store, you can only used them to pay for a small daily selection of arbitrarily overpriced cosmetics that Epic puts in its in-game store… so how much is a V-Buck worth? Nobody knows, and Epic can tweak it by making skins more or less detailed, or by giving away more or less V-Bucks to players and subscribers.
One drawback of the current situation is that for example you can’t purchase ebooks through the iOS Kindle app (because Amazon can’t/won’t let Apple take their 30% cut there), and the app can’t even link to the corresponding product page on Amazon. If the new ruling enables such purchases and linking, then as a consumer I’m very much in favor of it.
I used to love buying comic books in Comixology—it was so quick and easy to try new titles. And then Amazon bought Comixology, and almost immediately removed in-app purchases. I haven't purchased many comics since.
But yet you can by directly from Amazon in their app without using Apple. How can Apple say that they cannot sell eBooks directly on Kindle app, but allow direct sells from the retail store?
You can’t buy Kindle books with the iOS Amazon app. It only allows to download a free sample.
Amusingly, when you tap on an Amazon link to a Kindle book in iOS Safari, it redirects to the app (because of the Amazon URL), but then the app notices that it’s a Kindle book page and redirects back to Safari.
It's because then Apple Books would have to compete with the Kindle app on fair terms. IE Apple is being anti-competitive and giving their own app an advantage. This is basically a part of what the original lawsuit was about.
Apple doesn’t ban sales of eBook, but claims that those are software and would apply a 30% processing fee to them like on all virtual goods. They also demand the price to be comparable to other sources, so Amazon has to decide between
1. taking a 30% hit on its iOS sales,
2. forgoing them, or
3. raise its prices of eBook by 30% on its main app.
There are enough few enough iOS sales, and free sample downloads lead to enough conversion on the website later to go for 2.
Apple doesn’t make the same claim on physical goods.
> Apple does a really good job of warning me, I feel, and centralizing subscription cancellation etc., and that's huge. Like, if I have to go to your app--or worse, your website--to cancel a subscription? I'm gonna just not use your stuff, because I'm going to forget about it until you whack me for another year or whatever.
So then we have two possibilities.
One, you're an outlier and nobody else cares.
Two, many users care about this enough to refuse payment systems that don't have it. In that case there will be a market for another payment system that has easy cancellations but charges ~5% instead of 30%.
* Two, many users care about this enough to refuse payment systems that don't have it. In that case there will be a market for another payment system that has easy cancellations but charges ~5% instead of 30%.*
That line of reasoning holds when all else is equal, which it almost never is when it comes to apps. No matter how passionate anyone is about payment systems, it’s still extremely unlikely to rise to become the determining factor when deciding to install an app. If a person wants to play Fortnite with their friends, but doesn’t like the payment system, they don’t magically get to choose a Fortnite clone with a payment system that’s more to their liking.
> a market for another payment system that has easy cancellations but charges ~5% instead of 30%.
I’d happily pay for such a system if I could *trust* them to continue acting in my interest by not leaking my details or interest and actually cancelling subscriptions without pushback from the provider (say, will the free version still grant access to my files).
I don’t know many players that I would trust with that and that are big enough to not be intimidated by providers.
That trust can be misplaced: God knows I trusted the NYTimes for being a nice company, but their unsubscription process was horrific, demanding to call from a US phone number (guess what: it’s really hard when you are not based in the US) and then refusing to cancel a non-US subscription if you do…
After dealing with that too much, I genuinely only trust Apple to do it consistently. I might trust Google too; I’m hoping that data scientist at Facebook know to model the brand impact on retention to argue it’s financially preferable to let people cancel… Even companies where I lead the analytics team and where I made the case passionate for instant cancellations, it was such an uphill battle. And it was lost again as soon as they thought I turned my back, because of some middle-manager obsessed with their short-term number.
> Companies will want it, but I'm not sure users will.
Is Amazon was allowed to run a store on iOS, Android, and Fire devices, and if you bought an app you were guaranteed the equivalent version on other devices if it existed, I think there would be a lot of incentive for people to use it. I wouldn't necessarily prefer Amazon be the entity running it in the end, but they're probably best poised to do so with customer trust.
> Apple does a really good job of warning me, I feel, and centralizing subscription cancellation etc., and that's huge.
If there was actual competition between stores, this could be an item of competition, and a minimum acceptable level of support for this might emerge in the front runners. Amazon is already pretty good at making customers happy, this might be something they'd happily take on (and don't they already do subscriptions for magazines?).
The whole problem is that people keep looking at this as "Apple may be bad at X, but they do Y really well and I don't want to lose that" when they should be looking at it as "Apple is bad at X, maybe if they get some competition they'll do better at X, and Y will still be done well by them".
I can't understand why anyone would assume Apple having competition on their platform would make them worse. They would actually have to address problems for once otherwise worry about losing people to other stores, not entire phone ecosystems which require multiple hundreds of dollars and losing access to all your purchases.
If some company is really trying to get out of the Apple controlled system not because of costs but because they really want access to your personal info or to make it hard to stop paying them, maybe they should be allowed to leave and they can get less customers and hopefully change or die. Chances are they're trying to figure out the info using other methods right now anyways.
You’re using the term “competition” here like this is something that will be exposed to consumers, but it isn’t. Companies aren’t going to offer a “light pattern” option out of the goodness of their heart, the choice will be dark pattern or don’t use the app.
Which is fine for flashlight apps but as someone else put it heee, you don’t have the option of choosing another fortnite clone with a better payment provider - all your friends are on fortnite and you can either play with them or not.
Sijilaely, had the court forced Apple to open up “third party app stores” via sideloading, you would have Facebook and others immediately block web access via safari and Force all iOS users to install a full-permissions rootkit like they already got busted for. And sure you would have the choice to not talk with your friends via Facebook ever again, but network effect is a real thing.
> Companies aren’t going to offer a “light pattern” option out of the goodness of their heart, the choice will be dark pattern or don’t use the app.
That might be the case with a market that doesn't already have a competitor offering it, but Apple has already positioned themselves as pro consumer with fairly well known differences. Any competitor store on iOS will compared and contrasted to the App Store. I have no idea why you think any dark patterns that Apple specifically has rules and procedures to combat won't be obvious points of comparison, and won't be something competed over.
> Which is fine for flashlight apps but as someone else put it heee, you don’t have the option of choosing another fortnite clone with a better payment provider - all your friends are on fortnite and you can either play with them or not.
Or, Apple is forced to compete on price, and their cut goes down, and Fortnite is available through the App Store at a slight markup (that is, not 30%) or through the Epic Store without that markup. And if Epic chooses not to list on the App Store, well maybe they lose customers for that choice, but it's the customers choice.
If you actually care about combating bad behavior of companies with regard to private data, put your efforts behind legislation or regulation. Markets can't completely deal with that, and a single market definitely isn't doing so. All you're supporting is a system where those with more money get to pay for the rights we all have. There's no reason someone should have to opt into the expensive Apple ecosystem when a $50 whatever phone should have the same safeguards. Letting Apple prevent competition doesn't help that situation at all. I would argue it makes it worse (with competition, we might see better options arise).
> Force all iOS users to install a full-permissions rootkit
Allowing a separate store does not mean allowing rootkits. A sane permissions system where the store is not the only defense over what is actually allowed would be better for everyone involved, even iOS App Store users.
If Apple wants to say certain permissions just plain aren't supported, even for App Store apps, there's nothing wrong with that, and it would keep the whole phone more secure.
In the end, if Facebook really wants to pull something like that, let them try, and let them face the backlash for it. Ultimately, Apple is not a good steward for your interests, because your interests only matter to them as much as they align with their profit motives, and there are places where they definitely do not align, such as App Store pricing. Just because you're happy with what Apple says they're doing right now, and perhaps you actually are coming out ahead (but it's important to consider that Apple advertises where they help you, but they hardly advertise where they hurt you, so there may be harms you're not yet aware of), but there's no guarantee that the balance will stay that way or that you can even accurately assess it.
> I can't understand why anyone would assume Apple having competition on their platform would make them worse.
Apple having competition isn't a problem. That competition selling me to that competition's actual customers--enabling difficulties and dark patterns that Apple does not--is a problem.
I like Stripe as an app developer because I pick them as a seller; they're not there to serve my customer and are there to serve me. I am reasonably confident that Apple's there to serve me at least as much as an app developer because I as a buyer picked Apple. For B2C interactions where I'm the C, I want the platform on my side.
Why would your selection of Stripe ever put the platform on my side? Why should I want this as a consumer? The money's already a rounding error, the time and stress aren't. If the end result here is "you must use Apple's subscription system, must honor one-click cancellations through a centralized clearinghouse, and sure you can use your payment provider on the other hand", then that's great. Anything else is worse than the status quo ante.
> Apple having competition isn't a problem. That competition selling me to that competition's actual customers--enabling difficulties and dark patterns that Apple does not--is a problem.
Then don't use that competition? It's not like Apple is special here. They've developed a reputation for not doing that, which is what you're relying on for them to not do it. Any other competitor could develop a similar reputation if they chose to compete on that level.
> For B2C interactions where I'm the C, I want the platform on my side.
And in what way is any of that untrue or different if a different store is allowed to compete on iOS.
> Why would your selection of Stripe ever put the platform on my side?
Why is the options Apple pay or Stripe? Why isn't it App Store + Apple pay or Some other store + stripe or some other service that attempts to put the same constraints in place?
For whatever reason, people only seem to see this issue in terms of straw man arguments. There is nothing unique about any one aspect of Apple or the services they run that some other service couldn't attempt to do the same or better, and maybe that might actually make Apple's version evolve to be better than it is, so I'm confused why people are so against this.
The unique aspect of Apple is that they are uniquely invested in getting me to buy the next iPhone.
Stripe doesn't care about having me do anything. The business using Stripe is their customer. I am an incidental aspect of their arrangement with that business and if that business decides to be an asshole, Stripe just shrugs.
Apple doesn't.
I mean this as politely as I can: that you're writing this off as a strawman argument sounds like deliberate misunderstanding.
That I considered it a strawman seems to be because we're making different points, and talking past each other, and you might be forgiven in thinking I was doing what I accused you of.
I've been very clear that I'm talking about a separate store on the platform, while you're talking specifically about payment processing. Both are somewhat related to the discussion (with payment processing be more directly relevant to this ruling). To be clear, I don't mind a store getting between me and who I'm paying, but only if there's a level of choice involved that means people have a way to opt out of a third party being involved if they want. If that's at a store level and Apple requires all payments go through Apple pay and a different store does not, I'm fine with that. I feel confident that very quickly what we'd see is that the premium on payments like that, whether for an app or a recurring service/subscription, would quickly drop to a more representative cost of what it takes to offer that feature, just like the store cut would likely change to something more competitive with other stores, based on what it offers.
That you like this feature now and see it as a benefit is not surprising. Because of Apple's position, they're able to fold it into their store fees, which traditionally developers and publishers have not felt they could charge additional for to make up the cost. But that is not something that can be relied on, especially for services and subscriptions, which are generally more cost aligned than application pricing. Epic, for example, is/was charging App Store users that additional amount over the base cost, and Apple's rules were such that they weren't even necessarily allowed to tell people that Apple was causing them to be overcharged.
Consider a world where the status quo shifts, and for services and subscriptions it's more the norm to see things charged extra when bought through App Stores that charge quite a bit over market rate for payment processing. If you had to for example pay an additional 25% for services and subscriptions, would you think it was quite as good a deal? For small things, probably. For large things, maybe that's less likely? If you pay $100/mo for some service, maybe $30/mo to protect your name is a bit steep?
All I can say is that I think we're far more likely to have one or more good providers that will offer this service one multiple platform years from now if we actually open this up and let people put their money where they care. I don't think Apple can be trusted to be stewards of what's best for us overall. Like any public company they are beholden to their board and the stockholders, and the mandate for increased profits. That right now you benefit from their interests does not mean you are guaranteed to do so in the future. Relying on corporate interests to align with our own instead of promoting a system where what we want could be provided by any competitor that wants to provide is seems a poor way forward, to me.
The issue of subscriptions gets worse --not better-- if there are more companies competing for subscription revenue. Having to use more than one service to manage all your subscriptions would make things even more of a headache, so I don't see how consumers would benefit.
Ex. if a 3rd party makes their own subscription management that somehow allows you to cancel subscriptions faster than Apple does, maybe that is more convenient, but now you have to figure out which of your services work with that provider and likely would have to use both as neither could offer you everything you wanted. I understand how the idea of competition for revenue could incentivize better management from the likes of Apple and others but I just don't think the market for this will be competitive at all.
I know I'm in the minority but Apple does a shitty job on subscriptions. I frequent 2 countries. As such I need apps that are only available in one country's store (banking apps). In order to download needed updates have to switch stores. Switching stores cancels all subscriptions.
Another example of place Apple is failing (though I know of no alternatives), I went to a restaurant, the waiter told me I could pay by scanning the QR code in the receipt. This took me to a webpage that allowed me to pay via Apple Pay, but there was a message "Your email will be share and used to send ads". No way to opt out. I hadn't entered any email address, Apple was just going to give it to them. I closed the page and paid cash but was frustrated that Apple gives out email addresses.
I would blame the developper who built the payment system — although, I’m sure if they don’t include that, they loose the sale of their solutions to restaurants.
I’m surprised that Apple didn‘t mandate the hashed email solution that they advertised when introducing Apple Pay. That felt an effective solution to your concern. It’s likely that the developper had to include that copy (honestly, that cantor is almost fresh these days) but forgot to mention that this could be hashed if you chose to do so in your Apple Pay settings.
Shopify's "Shop Pay" has already introduced a seamless payment interaction across many sites without a need for a separate account or to trust so many people with payment info - the idea that something similar wouldn't be created and get adoption for subscriptions on mobile seems highly unlikely.
I have subscriptions and accounts all over the web, and I have never have had an issue canceling anything via a website - the only exception being the NYTimes and all its dark patterns.
Out of probably 10+ subscriptions we use (Netflix, Spotify, HBO, Hulu, etc), I have only ever had one through the Apple system, and it's not even active anymore.
Just using a password manager and having a separate email for junk/mail from various accounts keeps me in the loop on what accounts I still have laying around. The Apple subscription section is the absolute last place I look when I don't know where a charge came from.
Im sure every random app wont be rolling their own payment system. Paypal’s transaction fees for example are significantly lower than Apple (less than 4% vs Apple’s 30%), and millions of users already have a Paypal account, so they could buy your product without having to create an account or enter payment info.
Idk if Paypal lets you cancel subscriptions directly through them, but they could certainly implement that if there’s demand. The same goes for any other payment company that wants a piece of this new and enormous opportunity.
If you're going through PayPal ( https://www.paypal.com/us/webapps/mpp/merchant-fees ), a $0.99 micro transaction is $5% + 0.09. That's $0.14 which is about 15%. It also means you get things like PayPal deciding to not release the money it holds for some reason.
At that point, for the small developer, it appears to be a wash for how much you're making. Yea, this goes down if you've got bigger IAPs. It also goes up if its an international transaction.
Furthermore, it means that you (the developer) needs to manage your own IAP system. Website with 100% uptime? User accounts and passwords (more friction to creating the account to purchase the IAP)? Network connectivity issues (can a solo game be played off network)?
Is there any doubt but that this is _the_ motivating factor for these companies? They employ all sorts of dark patterns to charge customers on the sly and make cancelling recurring payments as difficult and painful as possible, but at least if they want to sell on the lucrative iOS market they can't do this at the moment.
This is their business model, they've already shown they'll stop at nothing to put these practices in place, obviously this is just the next step in pushing it further.
It doesn’t really matter what customers want. If companies have an option to offer a lesser user experience but keep more revenue, they’ll nearly always take it. The only exception would be if “underdog apps” start seeing “we still use Apple IAP” as a selling point.
>. Like, if I have to go to your app--or worse, your website--to cancel a subscription? I'm gonna just not use your stuff, because I'm going to forget about it until you whack me for another year or whatever.
Managing subscriptions is separate from payment processing. Apple could still have a central hub letting the user know what is going on. Apple grabbing 30% of sales for a digital only product is not something most people support.
Worse still, is having to re-install a removed application when the renewal hit in order to then kill your account that was created during first run of said app.
If I'm buying a subscription/app from a sketchy dev, sure, I'll happily to default to use Apple, as it's providing me real value in terms of protection.
But for buying stuff from trustworthy providers, like Netflix or Amazon, etc, then why should I give Apple their cut? They give me 0 extra benefits, as I don't need protection from those companies. They're as likely to mess with me as Apple.
But that already happens. Apple did not invent online payment and subscription. Consumers do not have a problem buying things online outside the walled garden, and most could not tell you when they’re actually using a Stripe form in a WKWebView or whatever; those that can don’t care much either.
The most powerful force in play here is consumer indifference, which Apple have been relying upon.
Apple would not allow you to open that Stripe form in a web view before, so we don’t really know what consumers prefer.
I think you’re also underestimating the degree to which normal people hesitate before putting in credit card details on a web form - almost everyone has heard stories about difficult cancellation processes, stolen card databases, etc. Services like ApplePay offer assurances that almost certainly result in sales which otherwise would not happen, so I’d expect this to consolidate on a few companies (Amazon, Stripe, Google if they can stay on message for more than a promotion cycle) which are relatively trusted as intermediaries.
There’s no need to try reasoning things out from first principles. People have been buying online for decades now, and all the experience shows most consumers are indifferent and clueless.
If you don’t believe me, ask a non-tech-sector family member what they think Apple Pay is.
> You can stop trying to work things out from first principles. People have been buying online for decades now, and all the experience shows consumers are indifferent and clueless.
Who said anything about first principles? I’m describing real problems which are well known in the industry – and having been involved since the mid-90s I wouldn’t say that “indifferent and clueless” is remotely accurate. I know more than a few people who’ve had to replace cards because a small vendor was compromised and, unsurprisingly, they favor Apple/Google/Amazon now.
Most of the non-tech sector people I know think Apple Pay is what they use to buy coffee, lunch, groceries, etc. It’s not just tech sector people using it — if you look at their usage numbers, the tech sector just isn’t that big.
People/apps that use alternate payment SDKs aren't going to care how difficult it is to unsubscribe, and very few people (citation needed) care enough to look into an app's cancellation flow before buying in.
It’s worse than that. Developers will actually seek out alternate payment providers that allow dark patterns. The whole reason dark patterns exist in the first place is because they’re more profitable for businesses than light patterns.
Apple doesn't need to monopolize payment to centralize subscription cancellation. More importantly, Apple's fee structure prefers cheaper trashy apps over expansive to produce quality apps. I hope users will feel the difference with an overall better app selection.
Example: Apple takes a flat 30% fee while Stripe takes (IIRC) 0.3 + Y% (when Y much lower than 30). So a cheap app will pay the same or less with Apple, but an expensive one will lose a lot with Apple. I know not all expensive apps are quality ones, but at least this model will be economical now.
After using Apple Pay, centralising my subscriptions, and things like Apple-managed IAP’s I’ve little desire to go back to handing my card details over to n different apps, with varying and unknown degrees of payment security. Centralising the subscriptions is worth it alone.
> Companies will want it, but I'm not sure users will.
Explain to the user that a $10 / month in-app transaction is $13 or $15 because Apple wants 30-50% of every transaction, and I am pretty sure most Apple users will recognize this as plain extortion and not appreciate it.
You’re not wrong but it might not apply universally for everyone with every subscription anyway. I’m not really all that frugal but I’ll happily sign up with a credit card through a browser if I see a 30% price difference.
Apple’s decision to force subscription services to use their payment system and charge exactly the same cut as they did for a single transaction app purchase was obnoxious. Sure, charge a fee for allowing access into the walled garden-but 30%? That’s 30% of $10-$15. Every month. They had the right to do that of course but that’s such an infuriating move.
Some companies didn’t play ball at all and just hoped users would connect the dots between the app’s home screen that was featureless except for a two form fields and seeking out the service in a browser. Even a link to a support portal would need to land on a version of your portal that you created to strip out any links that could, eventually, lead (indirectly) to a page where your customers could sign up for your service.
Some other companies just accepted it and then charged 30% more in-app for a subscription.
It’s probably fair to say some if not all of this is outdated. They may not charge as much and relaxed the requirements. But Apple is still Apple. I’m glad governments are moving the needle on this. Despite loving many of their products the way they behave and communicate is so conceited and nearly devoid of any humility or capability to deal constructively with mistakes or errors.
> Apple’s offerings are quite polished so I don’t think they’ll fall out of favor
Any iOS devs care to weigh in? Apple's system could just as easily be a godawful mess. No personal experience but I've seen people online complaining about how StoreKit sucks.
They've had in-app purchases since 2009 and no competitive pressure from other SDKs, because they can block them with app store policy instead of needing to offer a better product. That sounds like an easy environment for it to become an afterthought; the people using it have no choice in the matter if they want to be on the App Store.
As a dev, StoreKit sucks. StoreKit 2 basically fixes all the development pain points, but is iOS 15+ only so basically unusable for everyone until late next year. Payment models are limited to basically paid, free + IAP, free + subscription. No real trials, no paid upgrades, no configurable subscriptions (IE pay for 1-X seats.) That leads to things like Twitter's setup where every plus account has an individual subscription SKU.
On the code side you have to run your own backend purchase server because there is a ton of subscription information that is only relayed to the server (Cancellations, upgrades, downgrades, cross grades, billing problems, etc.), as the app has no way to know directly (Until SK2.) Services like RevenueCat help small devs deal with this, but then you have another cut out of your paycheck.
Things like price testing require more backend setup because Apple offers no way for an app to grab product information from themselves (You have to know every identifier, there is no way to just request "all available IAPs" via StoreKit.)
So basically, there is a ton of room for improvement on the dev side, and a lot of easy wins for someone like Stripe to capitalize on.
As a user, I don't have many complaints, other than not having an easy way to request a refund, other than finding the App Store email address and pleading your case. It should be something you can do via your purchases screen directly. As a dev, not being able to issue customer refunds sucks, as many users will think you are dismissing them by saying, "You've got to ask apple for a refund."
As a user, Apples is the best and easiest payment system.
I’ll frequently not buy from sites that want registration and card info because of the hassle.
I’ll probably end up using things I already have accounts with (amazon, Google, steam) but will never buy from apps that require me to sign up with them to buy stuff. I already hate registering with companies to play games.
I'm just speaking from the user experience: I know that there are issues with the App Store's model for upgrades, trials, etc. so those are valid considerations but if you're just using an app it is really convenient to that you can buy something securely with a tap and a double-click and have zero problems getting a refund or canceling a subscription.
Basically I'd expect successful competitors with Apple to be companies which do the same. Abusive companies aren't going to be popular but I suspect Stripe, Shopify, Amazon, etc. could convince a fair number of people that they're no worse on that regard and better in some other way.
Yeah, I would be perfectly willing to set up subscriptions through Stripe if they gave me a way to manage all those subscriptions in one place.
My worry with the "anti-steering" requirement being removed is that every company will redirect me back to their own website with their own payment system, and I'll have to manage all of them individually, or phone up their call center to try and get anything cancelled.
Easy to avoid by not subscribing to anything, but every app seems to be trending that way.
Oh I agree with you. I think 30% is highway robbery and that opinion hasn't changed since day one.
But also just take a look at the number of subscriptions we all have these days - Entertainment stuff (Spotify/Music, Netflix/streaming, HBO, Xbox Live), Donations (Charity, Github Sponsors), Software (Password managers, backup solutions, Jetbrains, Adobe), Membership (Prime/equivalent, internet, mobile), ... yada yada yada. It's a huge unwieldy list.
I have tried my best to keep at least all the app ones in iTunes/Apple (in my case - weather app, dating apps, productivity apps). My alternative is I just won't subscribe. I'm sick of the subscription economy as it is. This would be the last straw. If Bumble tells me I have to give them my cc info and have to call them to cancel (like NYT does), I just won't subscribe.
Essentially I'm subscribed to some of these apps because I'm not being forced against my will to stay subscribed using terms and conditions that are outrageous (looking at Adobe with its annual contract).
This wouldn't be an issue if credit card providers offered a standardized system for making subscription charges. When you sign up, you'd pre-authorize them to charge your card a certain amount per time period. You could revoke the authorization through your credit card company's website, along with your other subscriptions. If the service wanted to change the price, they'd need a you to re-authorize it.
If they were doing that, they should also overhaul the whole system so you're never giving your credit card number directly to the sites. Similar to how if I use OAuth to log into a site, that site never has a chance to see my password.
You are totally right, and I also feel we won’t get out of this situation for a while.
Let’s be honest, my Amazon payments will never fit into Apple’s bubble. The things is, I prefer to deal with Amazon than Apple. Same for things like Patreon, I don’t think they do, but I can’t imagine Apple getting a cut of each donation.
So to me the status quo was just the worst outcome.
I would choose PayPal over Apple payments every time.
It's a good way to centralize and easily cancel subscriptions, and it handles more than just Apple's overpriced ecosystem. PayPal's site is not perfect, but it's still much more usable than Apple's subscription management running on iTunes' corpse.
On the other hand, I love how apple lets me use a visa gift card purchased in cash at the local convenience store. When trying to pay for a VPN service anywhere but the app, they reject the card, but Apple let me use it to purchase the subscription.
I once wanted to buy Minecraft but it wouldn't take a prepaid card, not through paypal either, but paying another paypal with my paypal then using the 2nd paypal with the balance worked. I wonder if that "exploit" is still around and why it was ever necessary.
Unless something has changed in the past year since the last time I've made an Apple ID, they don't verify the phone number. For 2FA, you can also give it an email address. And I'm almost certain I've used a Google Voice number with an Apple ID before with no qualms.
For at least a year creating a new Apple ID requires verifying the phone number by providing Apple with an integer code sent to the number.
Getting a Google Voice number requires a Google account. Creating a Google account requires a phone number (which you must maintain access to, because they will periodically reverify it).
I agree with this. On top of that, the experience in games is often downright weird. I'm no Apple user, but on Android, you're in the game, you try to buy something, it pops the Android payment UX, you pay, then you wait a sec or two, get your thing in the game.
If its a Gacha or something, you then are getting some in-game currency, that you then have to redeem for the item you wanted. The extra steps are really annoying, and if its a company I trust, it would be easier to give them my info to smoothen things up (big if, mind you)
You're talking about oranges. This case is about In-App Purchases -- for things that are used digitally, in the app itself. The Amazon app is selling physical goods, delivered outside the app. This is already permitted by Apple; the Amazon app already does this; in fact if you have an app that sells stuff outside the app you are not allowed to use Apple's IAP system for those sales.
>the Amazon app is highly likely to have people using their existing Amazon payment method.
Let's say you want to sell your original product on Amazon, but you also have your own fulfillment center and a storefront on your website. What if Amazon removed you from their store, because your instruction manual included a URL to your website, and it was against the rules to tell your customers that you accepted payment outside of Amazon's ecosystem in any way.
That's what Apple did with software, though suspiciously they left the largest, most litigious companies like Amazon alone, because they've been free to use their own payment systems for in-app purchases of physical products for years now.
Given how polished everything that Stripe makes is, I wouldn't be surprised if this becomes the de-facto non-Apple alternative. Heck, it wouldn't surprise me if they'd already built an SDK to cover this very eventuality.
This is true, and the solution for Apple is to go cross platform themselves with their functionality. Make IAP a service usable on other platforms/apps. I am not sure how successful they will be though if they go that route.
The ability to use Apple Pay on the web more seamlessly than I can use Stripe on the web will probably be Apple’s killer feature in this area. I’ve already noticed a change in my purchasing behavior because of it.
You can already buy stuff from the Amazon app using your existing Amazon payment method. All of this controversy is about in-app purchases of digital content.
That's what I was referring to. Try buying a Kindle book — you have to wishlist it (you can't even add it to your cart) and switch to a browser to actually buy it.
This is also why I mention Amazon a lot: while I favor ApplePay for purchases, there's a 0% chance that I want to use it for my Kindle purchases because simply owning a Kindle means I've already committed to use Amazon to buy content for it.
Apple likes to imply it's only about frivolous things like powerups in games or iTunes songs, but software is eating the world, so the whole economy is moving to being "digital".
Also scammers will want to redirect people to alternate methods, as well as those who engage in not-quite-scam-but-still-unsavory-business practices. Games aimed at kids are the biggest offenders, possibly using this as a way to circumvent parental controls on purchases or just to introduce some additional friction to customer service requests or requests to terminate subscriptions.
This is all stuff Apple can design around or codify into their approval standards, obviously. Which is why it's imperative they act on their own so they can dictate how it shakes out rather than having a poorly considered implementation forced on them by regulators.
> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. Every iOS and macOS user will prefer to use the Apple system.
the apple developer ecosystem (with regards to subscriptions and app purchases) in my experience has been quite awful for a multi trillion dollar company. really bad API docs, really poor experience around understanding what is even happening in their black box. i'm honestly astonished at how "unfinished" the whole experience feels. something like Stripe is on another level
I'm not sure if you ever used StoreKit or their subscription API... its so full of holes and poor documentation and poor implementation that it's a nightmare to work with (particularly subscriptions). Don't believe me? There's a YC startup raising millions of dollars dedicated to solving the subscription implementation problems Apple has created...
If you could choose between 30% of a billion dollars, or 15% of twenty billion, which would you pick?
There are externalities to each choice, of course, but the correct answer is, actually, the obvious one. Apple is not in the right on this one, from any perspective. If they care about their users and developers: they'd drop the commission. If they cared about their revenue and investors: they'd drop the commission.
Fortnite's protest should have been the wake-up call for the people dead asleep at the wheel of their App Store division. Epic very likely would have stayed on the App Store indefinitely at 15%; the issue has metastasized, and now Tim Sweeny has taken the stance of "alternate payment frameworks or nothing", but I'd bet every dollar I've got that if Fortnite's IAPs were at 15% before they left, they'd still be on the App Store. Everything is about money at the end of the day; Apple doubled-down, so now Epic had to double-down.
Imagine a commission so reasonable that Netflix could sell its subscriptions there; that Amazon could sell books; that Fortnite could (maybe) return, and the next triple-A gaming hit that hadn't even considered mobile because of the commissions. That's the money Apple is leaving on the table. These companies WANT their products to be easy to buy; nothing makes that easier than App Store IAPs. There's a number that could work for everyone, but Apple comes to every negotiating table with their fingers plugged in their ears yelling "nah nah nah I can't hear you 30%"
Apple's App Store policies throughout the 2010s will go down in history as the biggest blunder big tech has ever made. I am absolutely certain of this. They're throwing away an empire that could last a hundred years, because they think they're invincible. Tim Cook literally said, under oath, "we don't know how profitable the App Store is". They've publicized proudly about how they employ five hundred whole people to do hundreds of thousands of App Reviews. This is not malice or greed; its complete and total incompetence. Why are investors not OUTRAGED at Apple's leadership?!
I actually think it’s the exact opposite and Epic would have picked a fight with Apple even if the fees were 15%.
This isn’t about fees and it’s not even (just) about Apple - Apple is just a relatively unsympathetic defendant for them to fire their opening shot. As noted, Microsoft fees are 30%, Google fees are 30%, etc, and yet Apple was singled out (with those companies actually jumping onto the lawsuit against Apple too).
This is, more generally, about prying the Apple platform open, and other similar platforms like it. Remember, Epic didn’t start this suit over anti-steering clauses, the real goal here was epic getting their own third party store, which means they don’t have to pass an Apple review before being able to request permissions that let them mine data/etc. Thats a way bigger prize than (checks notes) 30% of 12 million dollars.
Nail on the head, this is entirely about Epic wanting carte blanche access to a lot more eyeballs and wallets so they can ram in as many v-bucks purchases or whatever into the applications and funnel as much cash their way as possible.
This was never about fairness for all developers, it was always Epic wanting a bigger slice of the pie factory.
One of App Store's biggest draw for any developer is that they are compliant with VAT/GST of multiple countries. With Europe's MOSS now gone, I can't imagine individual app developers hiring an EU rep just so they can comply with EU VAT legally. And that's just EU. You can't even easily comply with Indian GST without incorporating a subsidiary there. Now Canada is also in the mix. And those are just 3 regions. US Sales Tax is another money pit, with proper compliance costing hundreds of dollars per month for each state you develop nexus in.
Add to that the fact that App Store purchases are riddled with fake cards and usually draw a much higher MDR from merchant accounts. If people are rejoicing that they can just hook up their Stripe and world will be rainbows, they are in for a shut down email pretty soon.
It's not just that. As a developer I wouldn't want Apple to know who my paying customers are. Right now, there is no option. With this hopefully there will be more options.
I, as a customer, don't want to pay many companies directly. The prime example is any news publication. There are many I'd happily pay for except (like gym memberships it seems) it can be incredibly difficult to cancel. I won't reward that model so they get none of my money.
Why not? Not that I think it's an unreasonable position, but there's generally going to be some payment processor who knows who your paying customers are, right?
Apple is also in the software business. Payment processors aren't. They're a potential competitor with the power to build their own version of your offering after seeing your numbers, and lock you out of the store.
Stop using apple then? Why do you need government to tell apple how to run their company? All these seems really absurd and incompetent coming from Epic.
> most developers will happily just opt for Apple's system if the rates make sense
The _buyer_ experience with Apple's IAP is mostly good, but I would argue that the developer experience is downright horrible. Working with subscriptions and IAP receipts is clunky. You can only use one of about 100 SKUs, which makes it difficult to offer discounts and customized pricing at the higher price tiers, where the gaps between amounts are quite large. Until recently, it wasn't even possible for developers to issue refunds!
Even if Stripe charged 30%, I would choose them every time over Apple's IAP.
> “They’ve made the process a bit smoother, but developers still can’t initiate refunds or cancellations themselves,” notes RevenueCat CEO Jacob Eiting, whose company provides tools to app developers to manage their in-app purchases. “It’s a step in the right direction, but could actually lead to more confusion between developers and consumers about who is responsible for issuing refunds.”
> In other words, because the forms are now going to be more accessible from inside the app, the customer may believe the developer is handling the refund process when, really, Apple continues to do so.
Stripe's rates are $0.30 + 3% ( https://stripe.com/pricing ). Paypal is a quite a bit better at $0.09 + 5% for micropayments.
For a $0.99 IAP through Apple (with all of the associated infrastructure to handle IAP) that would cost $0.15 to the developer.
That same purchase through Stripe would cost $0.33... and the developer would need to provide some way to handle IAP. Paypal would be the same as through Apple.
That "set up some way to handle IAP" is going to be interesting too.
Defaults matter. Based on what they've shared so far developers must qualify for and choose to enroll in this system. In other words, Apple isn't charging 15% for small businesses, they're charging 15% for Small Business Program participants. That's an important distinction.
I don't think you do. Stripe and PayPal are only payment processors. If Apple now has to allow other payment processors then they're either going to charge fees for hosting the files or they're going to charge fees for the other services that people are using (OTA updates, reviews, localization, etc.). All that stuff will still have to be in place so it'll just be an issue of whether or not these companies will have to stand up their own versions of this (or if they even can) and whether or not it'll be as seamless for the end user.
Yes. And good. The more Apple and Google are forced to line item their charges for users, showing what each charge is for, the closer we get to a free market.
The central evil of all of this has been the bundling of everything together, so that nothing can be independently valued.
"30% is fair, in exchange for all the things we provide you", etc.
Edit: As an example, in the US this is mandated for home mortgages. "These are services you can shop for" + "These are charges for each service". Any platform having to offer the equivalent of a Closing Disclosure / HUD-1 doesn't seem like such a bad world.
>The more Apple and Google are forced to line item their charges for users, showing what each charge is for, the closer we get to a free market.
Historically line itemization makes it harder, not easier, for users to understand what they're being charged for. Compare Verizon versus Google fi statements, for example. The complexity hidden in all those fees confuses people, and let's Verizon (and others) claim monthly fees are X in ads, then listing that fee as X, then tacking on a lot of line items that make the actual payment much more.
I mean you also assume that it will be line-item'd instead of "give us 30% of your revenue made through iOS" in the ToS to publish an app which has any paid features or content.
> If Apple now has to allow other payment processors then they're either going to charge fees for hosting the files or they're going to charge fees for the other services that people are using (OTA updates, reviews, localization, etc.)
Why? Apple has been arguing that iPhone, iOS, Safari and App stores are so tightly integrated in that they are in fact an essentially indivisible single business. With this logic, all the revenue comes from iPhone/iPad hardware can subsidize operation costs for App store right?
Because Apple doesn't break out the money from the App Store from the rest of their software/services business, and iOS isn't free, it's licensed with the purchase of a iOS device. If money from every iPhone sold goes into the software/services budget, one could conclude there's enough money coming into that budget from device sales to pay for their CDN/developers/etc.
You answered why there might be enough money to subsidize developers. Apple has a lot of money, there's no question about that, but I was asking why they should subsidize developers (or why we should expect them to).
I think you don't understand the answer. When customers buy iPhone, they already paid a plenty amount of money for accessing third party apps via App Store since it's so essential and inherently indivisible value from iOS and iPhone, in favor of Apple's argument. Apple may not be obligated to subsidize developers with direct cash, but to pay operational expenses for App Store since there is no alternatives. Otherwise, it would be a textbook example of abusing monopolistic power.
I don't really see why there would be any expectation of that from the legal system or for ordinary people, other than that Apple obviously shouldn't drastically reduce functionality of iPhones which they have already sold. But again, I don't think anyone is suggesting that Apple might stop having an App Store altogether, or that the outcome of any of these legal battles would be that iPhone users would have significantly reduced access to third-party software. You're just talking about who ought to pay for the costs of distributing third-party software to iPhones.
Summerlight's point was that if you take Apple's argument at face value (that iOS and the App Store are so tightly integrated as to be indivisible), then it boggles the mind that Apple could then turn around and sell you iOS (via an iPhone purchase) but not include the App Store in that same transaction.
Or, in a sentence: you can't claim something is indivisible, and then charge for its pieces separately and at separate times.
Your point is probably that developers and customers are two separate groups, and there's a history of making a thing free to customers (the App Store) while charging vendors (developers) for the privilege.
> Summerlight's point was that if you take Apple's argument at face value (that iOS and the App Store are so tightly integrated as to be indivisible), then it boggles the mind that Apple could then turn around and sell you iOS (via an iPhone purchase) but not include the App Store in that same transaction.
I just don't see how your "then" follows from your "if" at all! The integration of iOS and the App Store is from a user's perspective. No one seriously believes that Apple is claiming that the two things are literally physically impossible to split up technically. You might as well be arguing that it boggles the mind for the calculator app to be free, but for iCloud storage to cost money!
> No one seriously believes that Apple is claiming that the two things are literally physically impossible to split up technically.
Except Apple in the court does. That is the exact stance why they cannot allow third party stores and browser engines since those are technically a part of indivisible OS services. Of course, this is obviously BS and inconsistent to many other Apple's business practice, anyway it's their official legal stance in nearly all of its antitrust lawsuits.
That's not true at all. They're not claiming they can't split it up technically. They're claiming that part of the end-to-end user experience is that users trust the App Store because Apple has oversight into the entire chain from downloading apps to the OS to taking payment information on their devices. If they have to open it up to other parties, then that chain of trust is broken.
If you want the ability to use a third party store, why not buy an Android phone instead? Apple doesn't have a monopoly on the market as affirmed by the outcome in TFA. Users choose to buy Apple devices for a reason.
Because I already have invested thousands dollars into the iOS ecosystem? What you're saying is something like "You don't like the only internet provider here? Why don't you move to other cities!". Life is not that simple, unfortunately.
Unless you invested those thousands of dollars before the App Store and most of the relevant modern policies existed, I don't think your complaint is reasonable. This is nothing like moving to another city or country. It's a smartphone, which people tend to replace at least every 3 years, and I don't think Apple has significantly changed any of its policies in the last 3 years.
> Unless you invested those thousands of dollars before the App Store and most of the relevant modern policies existed
Oh, so every iOS users need to understand all the app review policy and TOS before spending their money on iOS ecosystem. Otherwise they cannot complain about what Apple's doing? Customer protection and antitrust regulation don't work like that.
> This is nothing like moving to another city or country.
Why? The main reason of using alternative store is mainly having cheaper apps and contents, usually several cents per each. And you're suggesting that I need to spend ~$1000 upfront cost as well as giving up all the apps and contents that I purchased in iOS? I think it's pretty similar to "moving to other cities", which illustrates how classic monopolist lock-in strategy works.
Subsidizing 3rd party developers, would be if Apple paid app developers to be on their platform, on top of a 0% commission.
Instead, what people want, is for users who already own their own phone, to be able to do what they want with it, without an uninvolved 3rd party (Apple) getting in the way of transactions made between the user and the developer.
Sure they can and should charge for all the other "services" they provide transparently. Many of those services not dependent on my DAU, or the kind of usage users have via IAP.
This is none of Apple's business they don't need to provide me any services(if i don't use their payment) if my user uses 5 IAP transactions a day or one.
As a developer I get to choose which model makes more sense for me and in turn pass on benefits of that to my user, right now there is no choice and this ruling allows only for that.
I'm not sure apple is interested in destroying user experience to spite developers. IPhone will still make incredible amounts of money with lower app store margins because it's still the best product on the market. Pissing off users isn't how they built the best product.
They're not pissing off users. Users overwhelmingly approve of the App Store process that Apple has in place and developers overwhelmingly benefit from the value of the customers Apple provides them. It's not about the lower margins, it's about recouping the costs that Apple spends to provide the end-to-end experience that they do.
Even if you implemented the whole checkout process yourself, you'd still be paying at least ~3% to your credit card processor -- more if you're handling small payments, as most processors charge a fixed fee as well.
10% to handle the entire subscription/checkout process isn't bad at all, especially if it means that many of your customers can check out without entering any billing details.
Retail stores have a finite and very small amount of shelf space. Publishers pay a lot for a significant percentage of that shelf space devoted to their product.
The App Store has effectively infinite space. There are so many products and search is so broken that it's extremely difficult for users to discover your product.
Rather than comparing the experience to brick and mortar stores a more apt comparison would be to throw your products in a landfill, junkyard, or extremely large flea market and expect your users to find them. Would you pay high commissions to a junkyard for tossing your product in a pile "somewhere in the back"?
Trying to hang onto systems where your customers resent paying you is not where you want to be. You bring up an interesting proposal, fundamentally Apple needs to create a system where developers WANT to pay the fees because of the value they get in using the system and services. And all those connected credit cards and customer identities definitely have value.
> Trying to hang onto systems where your customers resent paying you is not where you want to be.
OK but like, dark patterns exist and everybody knows users don’t like them. Developers use them anyway because they’re profitable. Yeah I guess you feel bad but the bags of money help dry those tears.
If there’s no chance of customers altering their decision )because you have something exclusive for which there is no substitute, or no good substitute) then there’s very little downside to dark patterns. And this is true even for something as banal as a newspaper subscription, where you would think there’s a lot of substitutes.
Maybe I'm just optimistic, but I believe that good and honest companies will generally prosper over those actively employing dark patterns in the long run.
Any exclusive niche employing dark patterns makes an opportunity for an honest broker to come in and clean house.
> 1. Cut down the IAP commission to 15% for everyone. 2. Cut down the commission to 5% for those who pay for a Business Account, say at $5,000 a year.
Payment processors and their networks are infinitely more complex and resource intensive than a mobile app distribution store, and their commissions tend to only be between 1% and 3% per transaction.
> Payment processors and their networks are infinitely more complex and resource intensive than a mobile app distribution store
First of all - citation? Have you run a mutli-billion$$ App Store with hundreds of millions of individual customers, and the associated support channels etc?
Secondly, Apple is also providing those 'infinitely more complex' payment processing services on top of the App Store, so even if true, your argument is kinda moot.
For the hypothetical case that there will ever be Steam on iOS I'd rather pay through the Steam account I had already setup on the PC rather than through the Apple payment system. Same for 'cross-platform' subscriptions like Spotify.
> Call this function from account settings or a help menu to enable customers to request a refund for an in-app purchase within your app. When you call this function, the system displays a refund sheet with the customer’s purchase details and list of reason codes for the customer to choose from.
People will prefer to use Apple's system if the cost is close enough to the same. The larger/more trusted the brand making the app is, or the higher the cost difference, the more likely the user will be to go to the trouble of going off platform to make the purchase.
Most of the revenue Apple makes is from top apps and top brands, which is why they had no problem cutting the rates to 15% for the little guys already, the little guys are a tiny slice of the overall pie.
There is no way this will overall increase Apple's revenue, especially as companies concentrate on building solid 'Apple fee avoidance' funnels. Not to mention that many pay-for apps will very likely convert to free to download and then push the user to pay for the app externally to the app store as a 'one time lifetime subscription'.
This is going to cause a massive revenue loss for Apple if it stands.
> Every iOS and macOS user will prefer to use the Apple system.
Speak for yourself. I am from India, and we already have much better payment systems then Apple's:
1. All our debit / credit card are chip-based.
2. No card transaction can happen without the PIN. Some online transactions require both a PIN and a password.
3. For any online transactions, the payment processors often support the following options to pay - using debit / credit card, directly from our bank account (Net Banking with 2FA), Unified Payments Interface (UPI) ( https://www.npci.org.in/what-we-do/upi/product-overview ) which is another online digital payment mode that even allows for easy peer to peer payment between parties and umpteen online / mobile digital wallets.
4. Best of all, using any of these payment modes won't allow Apple any access to my financial data.
(And naturally Apple supports none of these popular modes in India because otherwise Apple would come under closer scrutiny from indian regulators.)
As far as App Store commissions are considered, from a developer's perspective Apple can go screw themselves if they want anything more than what competing payment processors charge. (Like Epic, I am disappointed that consumer rights weren't considered at all - ultimately it is us owners / users of Apple devices that pay these 30%-50% or whatever commission!)
> The moment they drop rates and ease restrictions apps that are not being built because of these rules will get built, and these apps will gladly pay the market rate of 5% to 10% for a full service payments system.
I have an app like that that's already done and in the app store. We would love to take advantage of Apple Pay for subscriptions, but the 30% tax means we literally can't. We'd have to jack our prices so much that the cost becomes prohibitive, and if we take the 30% hit ourselves we'd basically be giving things away for free.
If the cost would drop to somewhere in the 5-15% range it's a whole new ballgame.
EDIT: For anyone who's wondering – we basically use the same strategy as Netflix et al, the app is useless unless you already have an account and in order to get one you have to sign up elsewhere. We don't have links or information on how to sign up, you have to just magically end up on our site or have an account added through one of our partners.
As iOS and macOS user, I always subscribe directly through the app developer if they allow this. I stopped trusting Apple subscriptions when I called them asking to reimburse the subscription I forgot to cancel (just a few days later) and they said “no”. I never encountered any internet service declining this kind of requests.
> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system.
Apple only takes credit card in most countries. This makes sense in countries where credit cards are the norm, but not in countries where credit cards are not the norm and far from ubiquitous.
OTOH, external payment providers (eg: stripe) often integrate with local payment mechanism.
In my case, local payment mechanisms are far simpler, easier, and secure. Using a credit card requires me moving money into my Wise account before I can pay anything, adding so many extra steps. Not to mention that I have to remember to transfer money every month before subscriptions get charged.
Plus, the whole online payment system with credit cards is utterly unsafe: share your "secret number" with all merchants and pray none of them leak it or overcharge you.
Given the option, I think most customers would absolutely rather use the company's system, if the company offered lower prices for buying through them. Of course, that assumes both systems would be on offer - but if there's market pressure for companies to offer Apple as an option, that may be enough.
> "they can / should do a couple of things, which might actually increase revenue."
cutting prices that drastically will most certainly not increase revenue. in a competitive market, pricing is near/at the price elasticity equilibrium. in a monopoly situation, pricing is much beyond that point, in the company's favor. you're suggesting they move prices in the opposite direction, which would most certainly impact revenue negatively. note that these are not nascent, high growth markets where the growth rate can overwhelm the price elasticity dynamics.
the court should be mandating broad, open, and honest competition, not dictating prices, which is will practically always get wrong in some way. price is a signal for how competitive a market is, not a lever to drive competition.
Would you be willing to pay 30% more? Why not let people choose how they wish to pay. If you like that UX and are willing to pay for it, app developers should be able to offer it along with cheaper alternatives.
One of the things the App Store protects against is abusive practices like making it difficult to cancel a subscription. I wish there was some way they could protect their customers and allow outside payment services.
FWIW, the streaming services I want easy unsubscribe options are typicall $5-$8 / month and yes, I would pay 30% more for a better experience.
As a counter point, I always avoid subscribing via the app as the prices are higher than if you subscribe via the website. Google One has this where you pay more to use the apple method.
The thing is that it is still worse than an open system. Why pay the bridge bandit? There is some infrastructure and that is fine, but I hate to see the tendency in tech to insert themselves as middle man. OS that don't do that are superior targets.
Another option is for Apple to offer their digital store as a service to larger players for a lower % fee. Akin to MVNO (Mobile Virtual Network Operators) and equally on some levels comparable in a way that building that type of network in the first place is costly and in Apples case, it is battle proven software back-end as well as front.
> no customer wants to use any company's half-assed bug-riddled purchase or subscription system
They have this brilliant Apple Pay workflow that's almost completely unused in IAP — it bothered me that we couldn't just use Apple Pay to purchase a Spotify subscription directly in-app. Perhaps soon we'll see this.
> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system.
I have been paying for things online for decades now and never once have I used Apple's payment system. I assure you, plenty of us will use payments not provided by the fruit company.
As a user my dream is that Apple actually puts in the effort and makes the changes to convince these companies to use IAP. My nightmare is that they don't and everyone drops IAP for a wilderness of credit card web forms.
Apple has always given me a refund for shitty apps without question, whereas shitty apps who have their own payment system, like CouchSurfing, never even respond to requests for refunds at all.
The silent majority – the users – will always prefer to go through Apple. But HN seems to be full of user-hostile devs (as you can tell by looking at all the downvoted comments here who speak from a user’s PoV) who only hear the companies that want to break down the garden’s walls to prey upon users.
The Apple fee model favours cheap shitty apps because that's the best way to not get gouged by Apple's fees.
Relaxing that model will lead to better apps overall because finally you can invest and charge appropriately, you just need to trust yourself to not pay in apps you don't trust.
> All Apple has to do is to make the rates competitive enough
No. All Apple has to do is amplify a few horror stories, for example people using [any competitor]’s renewable subscriptions and not being able to unsubscribe. Or amplify a story of a virus/malware on, hopefully, Epic or Steam.
This is certainly what makes you choose a MORE expensive product, that’s certainly why I buy my fire extinguishers $200 instead of $50 for the same model (but a trusted source). Apple should be able to keep a more expensive margin based on reputation alone.
I'm really happy to see this moving forward, but I loathe the potential future landscape. Every fortune 500 is going to immediately pivot to their own IAP options which will make my life harder compared to Apple Pay.
I'm hoping with this movement, tools like Stripe/Paddle will develop some better IAP flows to make it as easy as possible. Adding my card information to 50 different in-app wallets does not sound appealing to me, despite the win for consumers and developers.
I guess what I'm trying to say, is that it's unfortunate we have to make a tradeoff at all.
Hopefully, this move will put downward pressure on Apple's payment infrastructure that incentivizes devs to keep using Apple payments because it's the same fee structure as whatever 3rd party they might move towards.
Just to be clear here (and this fact doesn't really detract from your point) - Apple Pay is very different to Apple's In App Purchases. Apple Pay can be used anyhere, and it could still be used if a company rolls their own purchase system on their website that they link to from the app. Apple only gets a very minor % cut of Apple Pay transactions, from the bank, compared to Apple IAP where Apple gets 30% from the developer.
Besides, isn't the competition here what we want? Apple IAP are still easier, and probably will convert at a higher rate than pushing a user outside the app to do the payment on a website, so there's still incentives for developers to use them. If Apps switch away from IAP, then Apple is incentivised to actually compete (imagine that!!) and make something better that developers actively want to use.
It says something about the state of competition where Netflix can just say "no, we no longer want people to sign up on an iPhone and give us money". That says they don't think IAP is good, and Apple should actually work on building something that companies want to use.
In my opinion not in this specific case. As an iOS user I WANT a system where everything conforms to certain guidelines. I do NOT want to fiddle with some weird custom in-App payment dialog which does it's own thing again.
It'll be interesting to see how this court order will be "implemented", my guess is that not much will change for now.
Yea, but obviously no company will offer that option unless forced. This decision undeniably benefits app developers, but the benefit to customers is murkier.
Apple couldn’t previously require payment flow through Apple’s payment systems, as evidenced by apps like Audible where you have no purchasing in the app and just have access to the content that you purchased through their website. Since Apple couldn’t outright force app vendors to monetize through Apple payment channels, their cudgel has been to ensure that app vendors have no way to link to external purchase options in the app, and hope that this was inconvenient enough for app vendors that they would choose to integrate with Apple’s payment channels. And it worked for most, but not all of them. Some apps, like Audible, just chose to live with having no way to sell anything from the app.
If Apple can’t even do that, they lose the ability to provide for their customers a consistent payment experience across apps.
This is an example of application of the policy I described.
> “They stumbled upon something in the app that mentioned there were paid plans, they went to the website and saw there was a subscription you could purchase, and then turned around and demanded we add IAP.”
> Today, Apple confirmed to us once again that the rule is more lenient than it sounds: “free apps acting as a stand-alone companion to a paid web based tool” don’t need to use IAP as long as the apps themselves don’t offer purchases, and as long as the apps themselves don’t ask users to make purchases outside the app.
They might try to force developers to offer Apple IAP as an option for centralized in app purchases. I don't think they can enforce the default setting though.
And developers will have the right to offer a cheaper non-centralized in-house IAP payment system, of course.
apple pay is not the same as Apple's In App Purchases on iOS.
Apple pay is like a credit card, usable like one. IAP is the method by which apple forces app developers who sell through their app to pay the apple tax.
> Besides, isn't the competition here what we want?
Depends what you mean. The subtlety that is always lost in these conversation on HN is how deep does the competition have to go? I don't think anyone seriously argues that iPhones do not have viable competition in the smartphone market. And yet, if I as a consumer want to use a smartphone which places strong restrictions on third-party developers (which is one of the most significant reason I use iPhones and recommend them to friends and family), somehow those restrictions are considered "anti-competitive." If these restrictions are lifted or prohibited, that clearly removes one of the key differences between iPhones and their competitors (mostly Android phones), and it baffles me that this could be construed as a more competitive smartphone market for consumers.
> which places strong restrictions on third-party developers
Malware isn't under the probe here; IAP is. Apple's behavior has been objectively awful specifically concerning the subject being discussed. Broadening the argument to Apple's desirable curation process is a misrepresentation of the issue.
People will continue to be able to enjoy the convenience of Apple IAP. Savvy users might seek better prices externally - but convenience does hold immense value. Developers can now also, as a pertinent example, ask for donations for open source projects without being taken down.
Malware was absolutely under probe here until today’s ruling (which closed the door to forcing Apple to allow sideloading).
Had third party app stores/sideloading been allowed to happen as epic demanded, that would have made it impossible for any app sufficiently large enough to demand it from their users.
The risk here was very much a return to the Google/FB “gift cards for root access” scheme, minus the gift cards of course, if they had prevailed they would have just blocked web access to iOS and just demanded you root yourself for them if you want to use their service.
On the other hand if we had sideloading, we could finally get a browser on iOS that isn’t just Safari reskinned.
Mayne then we would have PWAs that work the same way everywhere.
The existence of competition might even motivate Apple themselves to adopting new video codecs and image formats that weren’t invented inside of Apple Hq.
Go buy a different phone. No one is forcing you to support Apple, and if you already use Android, get off your high horse and stop screwing with a product I like and you don’t.
> The risk here was very much a return to the Google/FB
Only Google?[1]
In addition, there's a very steep slippery slope in use here. It is currently possible to sideload on Android, and has been since day one, and yet we don't see the kind of end result you have predicted.
As a user, I have zero desire to use some random payment gateway, using Apple makes my life easier, I can reasonably trust Apple not to let someone steal my money, how am I supposed to trust 50 different gateways?
Also if people move away from giving Apple any money for the App Store, I expect the annual fee to increase to make up for it, and might Apple make you pay more if you don't use Apple's gateway? I don't see the ruling as forcing Apple to lose money.
If I were Apple, I would have gone nuclear early on, and eliminated all % fees but made the annual fee per app of $X to each developer (whatever $ makes sense) and then you can collect money however you want. This would likely kill a lot of small app developers, but the big ones would not care. The ruling makes Epic a big winner, but everyone else loses in the long run, because Apple (and Google) will find a way to recover lost revenue.
Some people also want to have 1000 app stores allowed. Good luck with that one... imagine having to build an app store just for your app, or supporting 25 different app stores.
Are you willing to spend 27% more for everything to use Apple payment gateway? Do you love it that much?
At the end of the day, services have to provide value. If your customers don't want to pay for your services, they do not value them. That's a dangerous position for any company to try to maintain. The mobile software industry generally has been chaffing at the fees for quite some time now, these are the warning signs that all is not well.
There’s tons of value in a unified payment system, which is why it’s app developers who were unhappy, not users. For instance, ease of cancellation of recurring fees is enormous. You can bet that’s going to get harder as developers get more control. And anyway, The app developers have no motivation to charge you less, the market already bears the fees, they just want to capture that profit for themselves.
Personally I probably just won’t buy things that require me to sign up for a new payment system, but I don’t play mobile games so I’m probably not representative of who this impacts the most.
> which is why it’s app developers who were unhappy, not users
The judge commented on that
>> "Apple created an innovative platform but it did not disclose its rules to the average consumer. Apple has used this lack of knowledge to exploit its position.
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> Personally I probably just won’t buy things that require me to sign up for a new payment system
You, as a consumer, will now have a choice, which you'll get to exercise! You will be able to send a market signal for products (either the service you might subscribe to, and Apple) to get better and attract more developers/users. This sounds like a win!
Not if I wasn't interested in having the choice to begin with. Now some apps will not be purchasable by me unless I go through their account flow, which I don't want to. It's strictly worse (for me).
There will be larger players who won't bother with any cut -- they want to own the relationship with the customer, and view any intermediary with hostility.
They’re either already not on Apple’s IAP (Netflix or Spotify) or they are very sensitive to optimising conversions, and would pay a premium to give users an easier option (which Apple is now incentivised to lower)
No one wants to own the payment instrument. That's useless, causes missed sales, and is a security nightmare. Companies don't reinvent their own Visa or Mastercard, for example, because that's a huge pain and the fees for using the existing products are low.
App developers were mad about Apple's egregious 30% cut for doing payment processing. If Apple wants everyone to accept Apple IAP, it can simply lower its fees to competitive payment processing rates.
> App developers were mad about Apple's egregious 30% cut for doing payment processing. If Apple wants everyone to accept Apple IAP, it can simply lower its fees to competitive payment processing rates.
Apple has never characterized the 30% as "payment processing" -- it's it's always characterized it as a commission, which the court affirmed and explicitly mentioned that Apple is allowed to pursue that commission, even if the developer chose to use another payment provider. Apple's IAP has been an enforcement mechanism for that 30% cut.
What big names haven't developed iOS apps but may do so now? I'm hard pressed to think of any. They may not always allow in-app purchases, of course, but they generally exist.
It's not guaranteed, but one realistic outcome is that its IAP services get worse, because e.g. automatically saying yes to all refund requests is less feasible when margins are thinner. Retailers like large supermarket chains are only able to have no-questions-asked refund policies because nobody is actually taking a bad box of cereal back to a store, but in digital, it might too easy right now for a 3% cut + absorbing chargebacks to be sustainable. Similarly, having cancellation be one-click and done is great for the consumer but if you're in the razor thin margins game unfortunately making unsubscribing difficult is a competitive edge.
IAPs are only indirectly a product that app customers get a choice in; the primary customer is app developers who have vastly different interests. There may have to be a shift on some of these axes for Apple to compete on price.
I trust Apple will force developers to provide a drop down menu of options for payments. I don't think they'll allow dodgy redirects and webviews. That's not in line with Apple's design principles.
I already had a choice. That’s one of the primary reasons I chose iPhone and tend to recommend iPhones to friends and family. This decision will by definition reduce the amount of choice available to smartphone buyers.
I highly doubt every, or even many mobile game devs who could suddenly switch from IAP to Stripe would pass those savings on to the consumers... Let's be real here.
That’s getting into pretty basic economic theory, costs going down across the board in a very competitive market will generally bring down prices, eventually.
I think if you offered the two options to users with even partial differences in price, most users would go for the cheaper option even if they had to do cartwheels to process payments.
I would. I'm very careful about what I pay for anyway. If you want me to pay for your product it needs to be something that brings me real value. Even then I limit myself, as I only have a certain amount to spend anyway, so you're competing with other products for my limited amount of budget.
Apple's IAP makes it incredibly simple to cancel service. It's consistent as well, which means I don't have to keep hunting through your site to find it because you hid the location of canceling behind "Please contact us to cancel" type crap.
Do I think Apple is charging too much for their cut? Yea, I do. But as a consumer, the benefits outweigh it. As a potential business owner, yea... I would be upset too.
The ability to simply cancel any subscription without clicking through increasingly desperate "Don't go!!!" nag screens is easily worth an extra 30% for me, too.
Yup. As a consumer, Apple's IAP and Apple Pay driven experience is pretty darn good. I wish their business didn't revolve around subscriptions as much, but at the very least it does make purchasing really easy as a consumer.
> This means that competition is working, because you would choose apple's IAP, over the third party, even if it was more expensive.
Aren't you heavily assuming these developers would even bother integrating apple's IAP? This ruling will allow the developers to completely go around apple and never use apple's IAP at all.
>Apple's IAP makes it incredibly simple to cancel service.
This doesn't require Apple's payment monopoly. IAP would just need to make an API call to some 3rd party API. Besides did everyone forget they can call their credit card issuer and suspend payment?
> Besides did everyone forget they can call their credit card issuer and suspend payment?
This does not get you out of your contractual obligation to pay, if you have one. You could end up getting an annoying surprise from a debt collection agency a few years down the road. An important thing that Apple was able to provide that a credit card processor suspending payment can’t is to force the vendor to let you actually cancel the subscription, not just the payment.
Apple can't remove contractual obligations either. Any subscription which requires serious amount of money (enough to make a lawsuit worthwhile) should be very carefully managed.
Otherwise calling collections is a very bad deal for the vendor who will be penalized by the credit company and by the courts and by bad PR.
> Apple can't remove contractual obligations either.
They can’t remove them, but they can prevent them from existing in the first place. It’s their platform, and they can and do make it a requirement that the app vendor’s subscription contract conform to a standard where ending the subscription from within Apple’s subscription management UI actually terminates all future obligations for the customer. This is why many subscriptions that are otherwise quite hard to end and involve deliberate inconveniences like requiring calling in during business hours can just be cancelled from the subscription page if they were started via the app.
> Otherwise calling collections is a very bad deal for the vendor who will be penalized by the credit company and by the courts and by bad PR.
This is just not correct. Vendors do this all the time, credit companies don’t care and have no policies against it, since it’s the customer’s responsibility to have a legal justification to tell the credit company to refuse charges, and the PR blowback is demonstrably nonexistent.
Honestly in some cases, yes. Subscription in-app purchases are the only subscriptions I have ever signed up for that are easy to cancel.
I prefer to subscribe to services through in-app purchases over the service's website itself because it's always easy to cancel subscriptions made through Apple, and I never forget I'm getting charged because I get payment receipts.
>Are you willing to spend 27% more for everything to use Apple payment gateway? Do you love it that much?
Most in-App purchases are in the range of 1-5$. If I pay a couple of cents more to have a unified experience, yeah sure.
It'd be interesting to see how much users spend on in-App purchases. For me it's almost nothing, maybe 1 purchase a year? The big money is probably in the free2play market where players spend a lot to buy booster packs or "gold".
> Are you willing to spend 27% more for everything
This makes what is, IMO, an unjustified assumption: that competition in the payment scene will drive prices down for the same item based on payment method.
Instead, I think we'll see the same thing we see with the cash/credit card split: The same price regardless of your payment method, with price differences lining the publisher's pockets.
True that cheaper payment methods may not drive down the price of an app or in-app transactions. But as a user, you would be more satisfied knowing that that the $10 you are paying for an app (or for some transaction within it) is going to the creator of the app, rather than some arbitrary percentage (decided by Apple) of your money. As a user, you would even feel worse knowing that Apple simply pockets the remaining amount.
> Are you willing to spend 27% more for everything to use Apple payment gateway? Do you love it that much?
Honestly, yeah. I'm way more likely to click "subscribe at $5/mo using your normal payment flow" than go through a whole new account creation flow and wonder how cancellation will work somehow down the line or how trustworthy this vendor is with my data.
Yes, if it saves me from having to call to cancel my subscription or going through a bunch of weird "are you sure", "how about 2% off", "how about 5% off", "how about we bill you $5 less", "why do you not like us? Fill out this 75 question survey to cancel". Yes it does.
There this weird misconception floating around the topic that if Apple where to reduce their cut, things would be cheaper for people, conveniently forgetting this is a fight between providers and distributor for margins and not between consumers and sellers for pricing.
Some of the services I pay via Apple's subscription workflow is cheaper. Unbelievable, but true. Pocket is one, Evernote is other. However, they later synchronized their pricing to be cheaper everywhere, but it doesn't matter. It makes my life easier.
If I'm paying for a cross-platform service, I can happily use their own methods, but if I'm paying for an app-store only application which either runs only on iOS or macOS, good luck to them. I won't subscribe via their methods, because it makes my life more complicated.
> Are you willing to spend 27% more for everything to use Apple payment gateway?
This is the argument Epic's tried to make, and it isn't particularly convincing. The iOS App Store is filled with cheap apps, to the point where many people react to a one-time price of $9.99 as disturbingly expensive. Apps and games that are literally identical on iOS to other platforms are frequently cheaper in their iOS releases because that's what the market expects. So in practice, the 30% cost is usually being eaten by developers, not passed on to consumers. There's a lot of good arguments to be made for cutting that 30% share down to 15% for everyone across the board, but "now you'll only be charged $4.99 instead of $5.99 for this game you would have paid $14.99 for on the Switch version" just isn't one of them.
> This is the argument Epic's tried to make, and it isn't particularly convincing.
It's not an argument, it's a question. Some people have clearly answered it as yes, yes they would. This shows some distinct value provided to them by Apple. Value that's worth something, though perhaps not 30%.
Apple's next step is to provide a compelling enough offering that developers and consumers alike pick it over the soon-to-be competing offerings. Wouldn't that be awesome if they pull it off?
My concern is less about random one-off purchases but more the management of on-going subscriptions. Having Apple handle that, is a blessing, from a user perspective. I have a single place to manage all the random $1 - $10 subscriptions that I have, making it easy to change/cancel at any moment's notice, and from any device.
I don't think there's anything in this injunction that stops Apple from building a mandatory subscription-cancelling API, which I wouldn't be surprised if they're actually already working on due to earlier rulings this month. In other words, you might be able to subscribe to FooCalendar using their Stripe API system, but FooCo has to make sure that your FooCalendar subscription shows up in your list of subscriptions, maybe under a "Non-Apple Subscriptions" list, that still lets you cancel with one tap -- or at least one tap to take you to that app's subscription management page.
(I'm sure there will be some people upset at that kind of interfering overreach, but it's the kind of interfering overreach most of us would actually like.)
Why would Apple make and provide something like that? They won't get anything for providing such an API to make the billing experience nicer for their competitors. It's directly in their interest to have as many scam billing providers as possible so they can point at them and tell us that this is what they protecting us from.
What is to stop you from searching for services that still let you use Apple Pay? No one is stopping you from living in your tight-knit Apple world, but you seem discontent with the idea that people will no longer have to live there and would rather find ways to force them to stay there with you.
I think what it will eventually turn out to be is - Apple will require IAP/Storekit but will be forced to allow others. And you will see something like this - $10 - Pay by Apple, $8 Pay via Amazon/Google/Whoever big name enters this business, $7 pay by credit card directly. And you can chose if you need Apple's unsubscribe, want to trust Amazon for $2 discount, or want to get a further $1 discount by entering your credit card number and risking doing a chargeback in the future if the developer is really crappy.
Eventually Apple will get down to make the Amazon not turn profit out of iOS IAP and then you will be left with two choices.
> As a user, I have zero desire to use some random payment gateway, using Apple makes my life easier, I can reasonably trust Apple not to let someone steal my money, how am I supposed to trust 50 different gateways?
I think this is a fair argument, and I believe also shows that if options are available, that is where us as a consumer have our freedom. I also personally like the ability to quickly pay when needed for things using Apple, but in return - if I was able to pay for it because another offer, or option, or something was presented to me that was easier, I would totally take that that too. However, I can see how that would be a loss for the people writing and maintaining the app and the associated services.
The problem I see is that this swinging at the moment between a single payment gateway and every payment gateway out there is a huge pendulum that is swinging to the extremes of both, neither side actually gets anything good out of it.
It would be lovely in a world where the option was to use Apple + an external, and letting users decide what they feel safe with. Some will be happy going direct with Apple, some would be happier with <insert payment style here>.
I think it is mentioned below, I can see larger companies immediately dropping the Apple method because it loses them the extra profit, and just making the ecosystem harder. People lose faith in paying for services, and then another service comes along, charging 30%, and we are back where we started.
So yeah, IMHO, it is good it is being recognised, but at the same time, its going to be a bumpy ride.
> how am I supposed to trust 50 different gateways?
It's your government's job to make sure that you have faith in financial institutions and trust the infrastructure through which financial transactions happen.
If not, corporates like Apple will continue to exploit your misplaced trust by charging you 30% - 50% on every transaction. The solution isn't Apple or Google or some other corporate, but your government and better regulations.
HN libertarians: “This isn’t the right approach! You need government regulation!”
Everyone: so could I get some regulation on [literally any exploitative startup practice”
HN, creepy smiling face: “haha eat shit”
The reaction to GDPR, or the Cali privacy law, or the Uber employee classification, or literally any other regulation* shows how hollow those words are. When anyone tries to regulate these sorts of things you’ll shriek like a banshee about how unfair these regulations are.
As a Developer, I also don't look forward for integrating 50 frameworks for payment, deal with the limitations of each and every one and go through the bureaucracy of 180 countries for export compliance and taxes.
When you sell something through Apple, depending on the location of your user, Apple will act as Agent or as a Commissionaire. This makes everything easy, even for a solo developer. Sold an in-game coins in France? Apple collected the money, paid the VAT to the French government. If you do this through your own means, you will need to establish a relationship with the French government so that you can pay them the VAT that you have to collect from your users.
This will ultimately benefit large companies who can jump through the hops of managing all this, putting the independent developers in a disadvantaged position due to the high barrier of entry into improved margin(compared to Apple Store where everyone gets the same cut) payments. In some places you can be required to send a printed receipt to the user.
It would not be fun to watch, let's say Zynga, collecting their low cost payments across all their portfolio by making users sign up once and having indie games instantly losing a payment or falling back to high commission options because users are tired of entering payment info for each game.
Sad day for the little guy. Do you see independent Devs cheering for the %2-%3 commission or is it Epic, Netflix, Spotify who will benefit from this? Unless you do low margin commission work (like platform where you take a cut, i.e. online tutoring) the %30 commission is a non issue.
Game crystals don't really have a cost, so %5 cut or %30 cut doesn't really matter that much. However, one company having access to the %5 and other not having access to it will change the landscape because the large company will be able to advertise more thanks to its better margins, wiping out the rest.
I'd be stunned if everyone starts using niche payment providers. I think it's more likely the larger providers will step up. It'll be more along the lines of:
Pay With --- Apple IAP ($1.43) - Stripe IAP ($1.06) - Paypal IAP ($1.06)
That's also why Epic is disappointed. If Apple were forced to allow competing app stores, Epic is in a perfect position. They have app store tech with payments, commissions, etc. built in. If Apple's only forced to allow competing payment providers to become more prevalent, everyone thinks of Stripe, Paypal, etc. first. Epic probably has their own payment processing fees to cover, so they'll never be able to compete on price and that's where things are heading IMO.
I think it would be more like Apple IAP($1.43), Your Local payment($1.43), Paypal($1.43).
They will add something like a bonus if you choose the alternative ones. I'm baffled why people expect that the margin will go to the user. Do you think that Epic sued Apple because altruism? To help users save money? They are are after the margins.
Because of the "Your Local payment" option, binary sizes will grow(Uber has this problem, they need to ship the framework of numerous payment providers on every market) or you will start maintaining different binaries for each country.
Also, each payment provider will come with its own rules. One will say "this is too close to gambling, no unless put this text next to the price to clarify" the other will be like "is this related to crypto, you can't do that", the next one will be "I think you must provide 3 months refund guarantee. Also, coins allowed boxes not allowed".
Then you will have to do the legal work for each country separately or work with publishers who do that for you for a hefty cut.
The business side of things is a full time job. That's why when you publish a book or release a song you tend to get tiny amount of the price payed.
I am afraid, this fragmentation has the potential to turn the App&Game business into Books&Music business where you don't make money unless you are superstar.
When costs go down, and profit margin increases, the price point where a company can achieve maximum profit also goes down. This doesn't require altruism or stunts or a fixed profit rate.
Is there anything in the ruling that prevents Apple from requiring all prices be the same or preventing companies from providing extra "value" if their payment processor is utilized?
You make It sound like apple's service will disappear over night. If you're fine with them taking 30% then that's your choice. And if your app does become big enough to reap the benefits of implementing mutiple payment providers then thats even better.
It doesn't work like that. Friction destroys revenues, large companies can remove friction by having their portfolio of users with credit cards collected. Small devs cannot do that because the user will need to enter payment details each time. The best chance would be to use something like Paypal, which is again a huge friction since the user will need to switch apps or enter login information.
As a result, unless you are a huge publisher you don't actually have a realistic chance to sell over alternate low-cost methods. This is not because you can't put the code there but because it will make the user experience so bad that a fraction of your users will proceed.
It's not about being technically possible but it's about being feasible. It doesn't matter that you can technically do it if not enough people want to play along and deal with it.
Maybe I wasn't clear. The problem is that smaller developers will not have access to the same frictionless services anymore. 180 million people have an account with Epic, who knows how many of them have already provided the CC.
If you are an indie, you don't have access to the 180 million people, which creates uneven competition.
When the only payment in town is Apple IAP, you and Epic have the same margin. Suddenly, Epic has %28 more margin with at about the same level of friction. If you need to match Epic's margin, you need to introduce friction.
Are there App devs on this site anymore? It feels like arguing with people who have no idea.
> will not have access to the same frictionless services anymore.
Yes they will... They will have access to same exact Apple In App Purchases feature that they had before.
> Suddenly, Epic has %28 more margin
Ok, so then it is not about you having access to the exact same thing that you had before.
Instead, it is that other developers, have more money, and don't have to pay an Apple fee.
Thats pretty different.
You are not complaining about losing something. Instead, you are complaining that other developers, have to pay a lower fee than they had before. But you still have exactly the same thing as you had before.
Generally speaking, lowering costs are not something to complain about.
Large corporations not paying taxes is bad, because it means society has less money to pay for things.
That is very different from companies paying less money to a multi trillion dollar company. Companies paying less to a multi trillion dollar company is a good thing.
It is dishonest to equate that to necessary government services being underfunded.
Lower costs are good. So no, I reject that this is bad for small developers.
It is most bad for apple, as they get less money.
> Tough luck
There is no tough luck. Smaller developers can continue to pay the same amount as they were paying before.
They are not disadvantaged by it, as they get access to the same deals that they had in the past.
The only different is that now, some companies, have the ability of no longer having to pay large amounts of money to a multi-trillion dollar company (apple).
That is a win.
The fact that less companies have to pay many millions and millions of dollars, to one of the most valuable companies in the world, is a win.
And small companies, still have access to the same exact programs that they had before.
> As a Developer, I also don't look forward for integrating 50 frameworks for payment, deal with the limitations of each and every one and go through the bureaucracy of 180 countries for export compliance and taxes.
It sounds like you should be using some kind of service that does that for you, maybe even provided by Apple?
> Do you see independent Devs cheering for the %2-%3 commission
Independent devs seemed pretty happy overall with the 15% concession they already got as a result of the legal scrutiny on Apple. No doubt they'll enjoy further improvements to the terms once there is an actual threat of switching.
The point is not that smaller devs like to pay more, the point is that smaller devs would like to compete on even playing field.
The lower the commission, the better. That should be obvious, but it is not better if it comes at cost that is potentially much higher than the reduction of commission.
It would be hilarious if the end result was iOS users no longer being as valuable to app developers, if the ecosystem just starts to feel sketchy and people stop spending as freely on it. I don’t think it’s likely, but it feels plausible enough to lol at the idea.
This doesn’t stop Apple from controlling which apps can be installed. It stops them from using a link to external payment as a criterion.
I do think this will have some effect that you describe (e.g. perhaps Epic suffers a breach in their payment system) on the end user side but it’s not as bad as the android store situation. if anything it will make iOS users more attractive to devs as they can now keep a larger percentage of IAP sales.
But when IAP costs less than 30% I expect all paid apps to go the IAP route.
On Android, I use Google Pay all of the time for in-app purchases, and it doesn't require Google to take 30%.
It's just another payment processor. It often shows up beside "add a credit card" in apps. I use it to order food, pay for rideshare, buy tickets, etc.
According to google, that is not correct. They levy a 30% fee on all Play Store transactions for apps and IAP. I've seen articles that say they are cutting the fee to 15% for businesses with under $1m revenue, but that's not what the support page says.
To use Google Pay this way, you'll have to find a payment processor that handles local taxes and all that. As a developer from a country where Stripe isn't available, it's a significant hurdle.
I agree. Literally makes no difference to me whatsoever. Even using a websites payment system is usually trivial because Android's autofill is pretty smart these days.
> Adding my card information to 50 different in-app wallets does not sound appealing to me, despite the win for consumers and developers.
this is not an unresolvable issue though. Apple could force developers to make their payment option as the default payment option similar to how they forced devs to use Sign in with Apple (when they have third party login). Big companies like PayPal could provide an SDK which can be used by devs to complete trasaction similar to web. I could think of many more ways to solve this issue.
How many developers do you have already, that 35% more money would let you hire 4 more? Back-of-the-envelope calculation says you've got 7, does that match up?
It’s more about what our annual app fees to Apple are, 1.2mm. We have diverse revenue streams so the correlation between Apple revenue and salaries isn’t apparent.
Uh, if the correlation between Apple revenue and salaries isn’t apparent, then how are you sure Apple dropping their take will provide you with 4 new salaries?
Sorry I might have been confusing you, I was only referencing the reverse calculation of current mobile devs on team. We would hire four people, maybe five, and distribute some to mobile some to backend.
I would absolutely take all the savings from the fee drop and hire as many people as it allowed, napkin calculations says that’s between four and five for me.
The win would be that you're actually able to sign up for more things in the iOS ecosystem that you previously weren't able to, like Netflix or Spotify.
No, and it wasn’t meant to. It was meant to let companies keep more and give Apple less. That’s all.
In all likely hood things will get worse for consumers. I will definite not buy apps requiring custom payment platforms. Hopefully it’ll settle on stripe companies will offer multiple payment methods rather than trying to force their own.
I look forward to it making Apple lower its IAP fees for everyone. I’d still like to use their infrastructure, but without the enormous fees (15% for small devs is still huge).
I think it will ultimately boil down to 2-3 major payment gateways such as Stripe after initial chaotic 'every app trying to be force their own payment processor' phase
It feels ironic to ask customers to bear the burden to make big companies behave, in a thread about a court ruling regulating anti-competitive behavior.
the burden has always been with the customer. But the fact that apple had been able to mandate the use of their IAP means the customer could not have exercised this "burden" until now!
Customer rights are always balanced with corporate rights, and laws and rules are there to assure neither customers nor corporations act in detrimental ways to society.
Customers can choose what they want to succeed, but none of the choices should have strong moral implications. I shouldn’t have to choose between destroying the env. or not, or support crushing rival businesses or workers rights or not, etc.
So no, I don’t think it’s customers burden to have companies behave. Except if by “burden” you mean suing the companies collectively.
Apple Pay charges the banks a percentage per transaction on the credit card, despite not taking absolutely any of the risk in that operation. Plus a quarterly fee per card.
Do you think the banks are going to foot that bill? Of course not: it's us, the consumers.
Are you willing to have everything be a bit more expensive, for everyone, so that you, apple users, can have something a tiny bit more convenient?
Isn't that how any convenience works? Credit cards already increased the price of everything for the convenience of using credit cards, as an example. I'm old enough to remember there was once one price for cash, and another for credit cards.
> I'm old enough to remember there was once one price for cash, and another for credit cards.
Some businesses in my town still do this. When I see it, the only thing I think is "they must be committing light tax fraud". Maybe it's wrong, but I know what merchants pay for CC transactions and it doesn't justify the whining from business owners who have been accepting cards for decades and suddenly decided CC transactions were unprofitable because business is slumping /rant.
It is not tax fraud [1]. Merchants are violating the terms of CC provider. The merchant agreement explicitly forbids merchants to have different cash price from what is charge with the card.
It is fairly common in geographies where CC providers can't litigate/enforce easily . It is not a penal crime, only a contract violation between two private parties and settled in arbitration/civil courts .
[1] Such Merchants also may commit tax fraud if they don't declare the cash income for tax purposes, that however is not directly related to Credit Cards or payment medium and usually even if they do commit tax fraud, they don't pass on their tax benefits for GST/VAT or Income Tax (10+% in most countries) to the customer.
Not sure about other countries, but in the US, the Dodd-Frank Wall Street Reform and Consumer Protection Act (2011) ensures that merchants are allowed to offer cash discounts.
> A PCN cannot stop you from offering your customers a discount or another incentive for using a certain method of payment, as long as you offer it to all your customers and disclose the offer clearly and conspicuously. For example, you can offer your customers a discount or a coupon if they pay with cash or a debit card rather than a credit card.
Correct- it is 0.15% on credit card transactions, or a flat $0.005 per debit card transaction.
Stripe (which charges 2.9% + $0.30) is willing to eat this fee, presumably because of the benefits of vastly lower fraudulent transactions and chargebacks.
Right, but the only reason for that is it prevents circumvention. I would assume after this injunction they will allow using apple pay in order to re-capture some of that revenue.
Will I be able to use it with King's implementation, or my local pizza place's outsourced app?
edit: I was instantly downvoted without any discussion, which doesn't add to the conversation. The reason I ask is because that's what the key value add is of Apple's IAP - I know that my payment method is accepted on the app store.
>I loathe the potential future landscape. Every fortune 500 is going to immediately pivot to their own IAP options which will make my life harder compared to Apple Pay.
Then maybe Apple shouldn't have gotten greedy...
This is the problem with major companies that think they can just control everything. Then when the government steps in they say what they were doing is anti-competitive and suddenly the consumers now have to bear the brunt of the negative aspect of full on competition. Had Apple just been reasonable and not charged egregious fees from the get go, this wouldn't have been an issue.
The most likely move here is that Apple forces developers to put a drop down of payment options, with Apple Pay being the default. Same way Google did when Android was forced to offer a choice of default search engines
I think the judge didn’t specify how equal access needs to be given to alternatives means of payments. It’s very straightforward to design a payments SDK where card data gets stored on the phone and payment providers are forced to use that SDK so that all of them would absolutely the same experience as Apple pay. You can even force them to provide subscription cancellation like Apple does. But Apple wants you to believe that’s not possible, so probably they won’t do it.
I'd prefer allowing apple to do whatever they want in their appstore, and forcing them to accept third party app installation, including alternative stores
When Apple announced it was introducing intentional security vulnerabilities to their Apple Pay platforms last month that was the signal that they were done trying to be a bank. I wonder if that decision was made knowing the likely outcome and downstream results of this case.
I've been saying this for years now: this is why Apple should've ushered in lower commissions on larger publishers themselves because otherwise a court, a regulatory authority or a legislature was ultimately going to do it for them.
And you're almost always better off making that change yourself.
Big publishers have their own payment processing pipelines. Apple's is just extra overhead. Smaller publishers still (IMHO) can see a lot of benefit from Apple's 30% cut. It's those large publishers who are most likely to challenge your rules in court or lobby against you.
If the very largest publishers were paying 10% as a Preferred Partner instead of 30%, they would be a lot less willing to challenge the status quo when they might lose that privilege.
We've already have ridiculous workarounds for Apple's policies here like how you can bypass it to buy directly from Amazon through the app for physical goods. The carve out for digital goods is and was always a tortured post facto justification.
Where once the 30% cut funded the App Store (when it was small). It's clearly transitioned to being a massive profit center and Apple executives couldn't see past the short term revenue to see the writing on the wall. Woops.
I agree. It also allows the judge to slap them without agreeing with the other side. Epic didn't get anything they really wanted. This change will not make much difference. No change to single app store model. As far as I can tell, Apple will have to allow communication in the app about payment through other means. That's it. I think it is likely that Apple will require apps to offer Apple payment as an option alongside the new communication about an external payment system. That is just a guess on my part, but it wouldn't be surprising.
If I guessed right, Apple's income probably won't go down much. I would rather use Apple payment system. Lots of other people will also. It is simple and allows me one-stop management of subscriptions and purchases. Some folks won't of course, but it is the easiest choice.
> I would rather use Apple payment system. Lots of other people will also
You might be in this mindset because up until now almost only apps that nicely fit Apple’s rules have stayed in the AppStore. I hope this ruling and subsequent changes will being in more services that made no sense before but can at last come into the AppStore with their payment system.
I see this ruling as basically Apple forced to give everyone the same position that Netflix had to bargain hard. I actually hope this will be positive for Apple, with more activity, better user experience for their platform.
The price would be higher if you used Apple payment system. That is how companies would get consumers to be enticed to use other payment systems.
That is what Epic did with their V-bucks: either use Apple system at the usual cost, or use Epic payment system at a permanently decreased cost (20% cheaper in August 2020).
The ruling has no comment on Apple contractually limiting devs to charging the same price, so it is not at all clear that the price will be lower. These kinds of contracts are quite common in many retail sectors, so it wouldn't be unusual. Apple App store is still the only way to get on the platform. Devs will get a bigger cut.
The quote from the injunction is that apps may now provide "external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing."
They will simply force developers to only put payment options at the last step of the checkout process, which prevents any discount offer for one certain payment system
Sure; you also "risk" the regulating authority deciding it's no longer an issue. Best case, you get to frame the solution; worst case you get the same outcome, the regulator deciding, BUT with you having demonstrated willingness to address the issue.
The only reason to defend yourself is if you legitimately think what you're doing is defensible.
Personally, I am surprised at all the anti-competitive actions Apple has been able to get away with over the years:
Bundling the OS with hardware
Enforcing an App store
Dictating/Castrating Browser on mobile
And the list goes on.
I'm not saying this as a ding on Apple products, because I genuinely appreciate them, but I think at the same time Apple has resorted to creating roadblocks rather than innovating.
One fact that has emerged is that Apple is pushing lock-in as a strategy. So to everyone who has ever felt like they are too "invested" in the ecosystem to leave- that is by design. You are victims.
An example of lock-in is making a conscious decision not to port iMessage to Android, specifically because it would make it easier for iPhone users to move to Android[0].
Making Apple products work well with other Apple products isn't lock-in. Purposefully making Apple products work worse with other systems, phrased within the company as a way to punish users who switch, is the kind of thing we're talking about when we describe lock-in.
Is your argument that Google doesn't try to engage in lock-in? Or is your argument that lock-in is good for users?
Either way, when there are literal emails in the company saying that the reason iMessage isn't on Android is because otherwise it would be too easy for Apple users to switch to Android -- then that's what lock-in is.
I don't get the whataboutism here. It's lock-in. Google is also a crappy company, but that doesn't change anything about what Apple is doing, and it doesn't change anything about the fact that the court case has revealed enough documents to show that lock-in is a deliberate market strategy that Apple undertakes.
Google also acting crappy in a few cases does not mean that the very concept of lock-in is suddenly invalid. People forget that Apple is not the only company being sued for antitrust in regards to their app stores.
I don’t have time right now to expand, but the greater argument is that data portability is a much larger problem. There is nothing nefarious about Microsoft deciding to not support Office on Mac, just like iMessage on Android. It’s a business decision. There are plenty of cross-platform alternatives. If Apple actively blocked messaging apps from exporting their data then we’d have a story.
Absurdly, I've done it multiple times. It runs over SMS, literally any phone that can receive SMS' is already compatible.
I believe many of the messaging apps on Android also support exporting your messages as an archive, but no idea whether iMessage has any support for importing message history.
>Making Apple products work well with other Apple products isn't lock-in.
Cool. iMessage works perfectly well with SMS, which is the only true open messaging standard, and therefore will work with anything else that interoperates with SMS. Job done.
I agree that Apple not bringing iMessage to Android is lock in and very purposeful. But I don't think (at least not initially) it's because it works better than plain old SMS. I think there is quite a bit of social pressure to have "the blue bubble" especially in middle/high school.
Most of the iMessage features, text, video, pictures and "reactions/tap backs" work over SMS. The only real feature missing is delivery and read receipts but most people in my experience have read receipts turned off. Apps also don't work but I've yet to see someone actually use that feature.
> Most of the iMessage features, text, video, pictures and "reactions/tap backs" work over SMS
Other than 'text', none of those things use SMS:
Sending pictures and videos uses MMS, which is one of the most flakiest parts of the old feature-phone ecosystem because it's inextricably tied to the level of support from both the sender's carrier and the receiver's carrier for particular MMS message content - and how carriers love to charge insane $-per-byte for SMS/MMS content. While in the US exchanging video MMS between the 4 (or 3...) major carriers you likely won't experience any problems provided the video is under a few megabytes and using a well-supported codec like H.263/H.264, if you see what it's like for the rest of the world (Europe, India, etc) you'll understand why services like WhatsApp are so popular: because carrier SMS/MMS service is awful... if not obscenely expensive.
The "reactions" thing you mention, to my knowledge, is not supported by SMS either - it's either an Android-specific MMS extension or you're using RCS - and Apple has no incentive to support RCS, excepting any kind of laws requiring phone carriers and handsets to fully support RCS (I wish...) in order to be sold in a giving region.
Some time ago I received an ordinary SMS on the iPad but I couldn't read it until I signed into iMessage!
So iMessage app doesn't work like SMS reading app. It forces you into using iMessage account to just read an SMS. Later it lures you into using iMessage instead of SMS to make it harder to switch to another OS later.
Not mutually exclusive. You can build systems that work well together and are easy to use without lock-in. Users should want to use the product because it is the best, not because they feel trapped.
Sounds to me like the invisible hand of the free market economy. Use that phone, then. A given company is not obligated to serve all of your specific needs and desires.
Until these systems start aging and are no longer interoperable with more recent versions. It's not like Apple is giving us a bash like experience where things just work for decades.
Is this really an issue? I agree Apple has been pretty shady but this is a facet of any hardware you buy today from any manufacturer. Now, preventing/obfuscating the install of _other_ OS software, I agree, total bullshit.
In my opinion it should be, it should be an abuse of Apple's monopoly on the hardware (including patents preventing someone else from building an equivalent device) to create a monopoly on the software.
Legally I don't think it is today though, and my understanding of the law is that it's precisely because they haven't advertised their hardware as open as you say.
I can't speak to where it stands in the current legal framework, but personally I don't think the vendor of any product should have any rights to determine how it's used once the customer has paid for it.
> Isn’t it common sense to not buy a toaster expecting it to be a server even though they both have circuit boards and technically can both compute?
The key here is control, not computational power. An ideal law, in my opinion, would be one which prohibits building and selling any device that can run code in a way which allows the manufacturer to have more control over it than the legal owner after the sale has been completed. I think this idea is actually great because it never limits how limited a device can be, it just prohibits it from being made in a way in which the OEM/maker can control it more than the end user/new owner could.
As an example, say you make a "smart toaster" with Wi-Fi and all that "good stuff" in it. If you just burn the firmware into the sillicon and that program has no way of updating itself, then you're good to go because both the company and the end user are stuck with the same level of control (In this context, "control" means "ability to make the computer parts run the code that you wish them to run")
If you include the firmware in a writable EEPROM, and no further checks for the update firmware besides checksums, you're also golden, because then both the new owner and you (OEM) can exercise the same level of control over it.
If, however, you decided to include signature checking using a public key burned in the sillicon, then and only then you would be violating this hypothetical law, because that creates a situation in which you, the OEM, can exercise more control than the device's legitimate owner after purchase.
So, to summarize, from the OEM's point of view under this law, less control is good, equal control is good, more control is bad.
I think this is what should be proposed as a new bill in U.S congress, although I have to admit the Open App Markets Act serves a great purpose as of right now for some specific devices.
I think it's reasonable that if your toaster has modifyable software memory, that if that modifiable memory is locked down cryptographically, that the toaster manufacturer be required to include that cryptographic key with purchase of the toaster, yes.
We've had all these debates. It was called "TiVo". It should be illegal for manufacturers to sell hardware with capabilities specifically denied to the owner. That's not when any sane person would have thought "ownership" meant prior to 1980.
Why isn’t a toaster a general purpose computer? There are toasters with wifi, touchscreens and other functionality.
As for your car question - why not? No one would buy such a crippled device. The problem would resolve itself.
If a car manufacturer sold a car without a steering wheel that self drove, perhaps people would buy the car in spite of the limitations. What they shouldn’t do, is buy a car advertised without a steering wheel and then complain that it doesn’t have one.
Come on, to assert that a "smart toaster" is not categorically different than a laptop or a smartphone is a bad faith argument.
I think market forces don't work well in cases where you have a lot of vertical integration, and increasing consolidation.
The "just don't buy it" argument only works in a competitive market with lots of offerings. What we have in the world of computers is more of a lesser-of-a-few-evils choice in virtually every technology choice.
It's an issue given that I'd be more interested in using a Mac if I could choose which graphics card I get to use instead of perusing a pre-approved list of B-rate processing units.
Technically, if you've got the know-how, you could code your own graphics acceleration drivers for nVidia cards on MacOS, it'd just be extremely hard and expensive to do so.
You’d run into the same obstacle NVIDIA has, namely that Apple won’t sign your driver so it won’t run.
NVIDIA isn’t morally opposed to Apple, it’s largely Apple that’s opposed to NVIDIA, for reasons like the cuda ecosystem and how it locks you into something that’s not an Apple product and how that would affect Apple’s leverage in future negotiations. Apple wears the pants, not their suppliers.
It is not an issue. MS is the outlier here in that they sell their software to anybody (Linux is given for free), like you said everybody else (TV manufactures, cars, etc) bundle theirs.
You could, maybe, make the argument that what Apple does is anticompetitive, but in the laptop space they are the ones being hurt by a monopoly, not the ones who benefit.
Are ultraportable laptops tethered? Would you call them mobile?
Anyway, "mobile" has long been used as a short form for "mobile phone" rather than a "mobile device". E.g. the iPod was not called a mobile, and AFAIK barely anyone uses that term for tablets.
"Desktop OS's and software" is an arbitrary definition. Smartphones are just computers that make calls. Steve Jobs even famously said that the iPhone ran "OS X" when it was first launched.
It is somewhat arbitrary; yeah, smart phones can run whatever, but practically, they don't.
For many reasons, the vast majority of people stick with the OS a device ships with, and mobile OSes are directed towards app stores and limited filesystems, and desktop OSes are directed towards applications (with a side of app stores) and visible filesystems and what not.
You can run Android on a desktop PC, and you can (if you try really hard) run desktop Windows on a phone or a game console, but that's not how the devices are generally sold, and that's not how the devices are generally used. Apple sometimes claims their tablets are as useful as a computer running a desktop OS, but they don't provide Xcode for the iPad, do they?
Yes, you can buy them, but not everyone does. Phones are by default portable with their own network connection, whereas iPads have to be specifically chosen to have cellular data service. It's alright to overlook them.
What about bundling camera, speaker, screen, processors etc? They are selling a product. You don't complain about car companies bundling 4 wheels and a motor.
I'm not. Amazon does the same thing: produce a great end product, and users won't give a shit about what you did behind closed doors to get it that way.
I believe people are over conflating the "friction" involved with using an outside payment system (such as Stripe or PayPal). Apple ID's already allow you to attach your PayPal account as primary funding...this is just giving developers that direct choice now.
PayPal, you confirm checkout total, login to paypal, confirm subscription or price. Done.
Stripe, you can use their standard checkout page, autofill your card info, or just use Apple Pay to confirm the subscription/item, pay. Done.
What's changed is just giving developers that flexibility. Ultimately saving them money, they can hire more devs, and make their products hopefully cheaper (and better).
Most consumers will still have no idea that their checkout is not happening with Apple, and it's happening elsewhere (aside from PayPal Checkout being obvious with their checkout/login flow).
Apple could absolutely adapt their native subscriptions SDK to support the status of a third-party app, though I doubt they ever would. They tried to do this with streaming services (HBO, Netflix, etc.), but they shut this down recently
Apps based around "physical goods" (read: food ordering) have been able to do this for ages, and if the trend I see there expands into "normal" apps, about 50% will support Apple Pay, 25% will support PayPal without AP, 10% will support card scanning, and the rest will make you manually enter your card number, billing address, name, email, firstborn child, etc.
So no, I don't think the flow will remain nearly as seamless as it is today, and that's disappointing to me. I don't pay for much IAP-wise (though I do order plenty of DoorDash), but I guess this will give me even less motivation to buy crap I don't need.
>What's changed is just giving developers that flexibility. Ultimately saving them money, they can hire more devs, and make their products hopefully cheaper (and better).
The only ones who can save money on third-party payments are big developers or apps that charge a lot of money. For usual $0.99-2.99 in-app buys, you won't be saving much, in fact, you are likely to pay more. And of course, you have to do VAT, refunds and other things yourself. I just don't see how a small dev is benefiting here. I'd rather pay Apple's 15% and be done with it.
This is somewhat surprising to me. I thought Epic had a reasonable chance of getting an eventual win on some points, or in getting enough attention that regulators stepped in. I also thought Apple had a pretty decent chance of winning.
But I did not think that Epic had a particularly strong chance of getting an injunction like this.
I hope that the takeaway people take from this is "it's tricky to guess what a judge will do during a contentious case", and not, "the judge was always obviously going to issue this injunction." I still personally think knowing what I know now, if I went back to the start of this case I still wouldn't be able to confidently predict this injunction.
But maybe other people are better at reading court signals than I am.
I did follow the trial, and actually probably commented on that exact compromise hint at the time (although I'd need to look over my comment history to know for sure).
I didn't read a "compromise" as indicating that an injunction was particularly likely, and most of the commentary I read on HN at that time didn't read it that way either.
I think people are looking back with the benefit of hindsight at something that was not by any means a generally assumed outcome, even from people who were covering and talking about the trial on HN itself or on other social media sites I followed.
A hint that the judge is curious about finding middle grounds in a lawsuit is definitely not a promise of a permanent injunction.
Something that I like to do, when discussing these issues with people, is get the other person to commit to a position, ahead of time, and go back to those comments later to see who was right.
I had multiple discussions, with many commenters on hacker news, where people were way too certain about the court case, when clearly it could have gone many different ways (Thus, I agree with you that "it's tricky to guess what a judge will do during a contentious case" ).
> “The court cannot ultimately conclude that apple is a monopolist under either federal or state antitrust laws,” she writes in the ruling. “Nonetheless, the trial did show that apple is engaging in anti-competitive conduct under California’s competition laws.”
It's nice to see that you don't have to be a monopolist to be legally barred from anti-competitive behaviour. I hope this puts a permanent stop to all the thread on HN arguing one way or another whether Apple is a monopoly.
Whether the current definition of a monopoly needs to change.
If you are mixing the two arguments discourse can go nowhere because you're substantively discussing cause and effect. The current definition of a monopoly needs to change, imo, then we can talk about whether Apple is a monopoly.
I'm also interested in discussing conglomerates and whether they are good or bad, and how to control them similar to monopolies, but that discourse can't be had until we can agree on something like the definition of a monopoly.
In my opinion we don't need to change the definition of monopoly, we need to integrate "conflict of interest" more into anti-competitive practice discourse.
Apple, Google, etc. are having their cake and eating it, too. They have platform which they charge others to use (ok), and then they study usage data (somewhat shady) and then launch direct competitors (<<super>> shady).
That's the root of the problem in many cases.
Of course, this needs to be coupled with stronger anti-cartel enforcement. Because tech is rarely a pure monopoly, but extremely often is ends up under the control of a cartel.
Honestly the shadiest practitioner here is Amazon. Google and Facebook are possibly second and third. I think Apple is a pretty distant one, maybe behind folks like Netflix.
Most of the apps that Apple sells are already in highly competitive markets like music, video streaming, cloud storage, etc.
I really don’t feel bad if some developer selling a leveler app for 99¢ goes out of business because Apple pre-installs a free leveling app on the iPhone.
Agreed. Lina Khan is one of my favorite voices on this matter for that reason.
Edit:
Stating my opinion without why isn't very HN-ly of me, eh?
She's been on Planet Money and discussed her ideas, where they come from, etc before. I don't think I'd quite do them justice explaining them myself. Apparently she's now a chair of the FTC as well (which I was unaware of).
In one of the podcasts she dives into the history of anti-trust. She talks about how after Standard Oil we convinced ourselves everything was a monopoly and stifled a lot of innovation, which led to some reforms later and the anti-trust we have today which are demonstrably too permissive. She has picked on Amazon (as a wider corporation) quite a bit, but a lot of it has to do with the practices of their ecommerce division and the extent to which Amazon can compete with it's vendors. Basically, she believes there's a middleground to be found between the two anti-trust time periods and that it's important to be concise in how we do that. You can see some of her specific criticisms in the article above.
I initially downvoted but thought it would be better to ask for the information I think would make your comment more helpful.
Would you mind linking to something pertinent, in order to add to the discussion? What does she say? Where does she say it? Why does that appeal to you?
To be fair, when Hacker News publishes "____ Has Died" posts and makes the title bar black, 99% of the time I have absolutely zero idea who "____" was. So I don't think it's terribly over-burdensome to expect the curious to highlight a name, right-click, and select "Search".
In this case, the opening of the person's Wikipedia page probably sums it up right away:
> In the article, Khan argued that the current American antitrust law framework, which focuses on keeping consumer prices down, cannot account for the anticompetitive effects of platform-based business models such as that of Amazon. She proposed alternative approaches for doing so, including "restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties."
She's been on Planet Money and discussed her ideas, where they come from, etc before. I don't think I'd quite do them justice explaining them myself. Apparently she's now a chair of the FTC as well (which I was unaware of).
In one of the podcasts she dives into the history of anti-trust. She talks about how after Standard Oil we convinced ourselves everything was a monopoly and stifled a lot of innovation, which led to some reforms later and the anti-trust we have today which are demonstrably too permissive. She has picked on Amazon (as a wider corporation) quite a bit, but a lot of it has to do with the practices of their ecommerce division and the extent to which Amazon can compete with it's vendors. Basically, she believes there's a middleground to be found between the two anti-trust time periods and that it's important to be concise in how we do that. You can see some of her specific criticisms in the article above.
The problem is that the proposed new definition of "monopoly" generally goes something like "any company who has a product that I like and does anything at all with that product that I don't like." Like, regardless of what the iPhone's market share is, if I like to use my iPhone, but I don't like one aspect of the iPhone, that means that Apple is acting like a monopoly because they're not completely honoring my personal preferences and the only option I have is to switch to another smartphone which I don't want to do.
The issue is more that they are conglomerates - they control the device, the discovery mechanism, the payment mechanism, and the identity mechanism. In each of those areas, they may or may not be a monopoly - but together their broad control creates an anti-competitive environment.
How would you like the definition of a monopoly to change? Or to avoid sniping over details if you're not sure of a definition text, how would you like it to change and to what objective?
Personally? I think we should get away from "monopoly" and move towards "excessively large market entity."
The problems now have more to do with market capitalization / revenue than they do with physical control.
Apple or Google aren't trying to buy all the railroad tracks between Cincinnati and Kansas City (app stores aside). They're trying to assemble a company that owns all the disparate but critical pieces in an ecosystem, then leverage those into extracting higher than free market rents.
Consequently, remedies shouldn't be the same as for monopolies (read: breaking up companies). They should instead of targeted on (1) classifying corporations by their size & (2) placing limits on their actions, in places where that size provides its own monopolistic-esque advantage.
Afaict, these should take the form of prohibiting acquisitions of competitors (Facebook shouldn't be able to buy Instagram or WhatsApp, but Instagram and WhatsApp should have been allowed to buy each other / merge) and stricter limits on market entry (FAANGM or SoftBank deciding they want to throw stupid money into a hole to poison the well and capture market share).
I'd rather stay away from focusing on the size of the org itself, and moreso on the "markets" that they create.
When a platform or market is created by an entity, and that platform reaches a certain scale, they must allow free competition within that market.
Here's an extreme example. Say somewhere down the line Facebook invents some metaverse or VR world. This becomes the primary form of interaction between people... 99% of interactions take place in this virtual world. It's clear the scale and extent to which this platform impacts people's lives is substantial. So Facebook logically would have to allow other sellers to enter this virtual world and compete to drive prices towards a free market equilibrium.
Past monopoly legislation has focused on competition outside the walls, product vs product. But nowadays the walled gardens are getting big enough to the point that these companies have large control over our lives.
Maybe that example just muddies things, but the important thing in my mind is to identify "private markets" and enforce that competition be allowed.
It's a good point. To quantify it, I guess you'd look at total user count and percent of all users on the platform?
Most of the ills we're trying to avoid don't seem to easily slip around, if there's a law that says "If you control more than 25% of a market of more than 1M users..."
I don't think anyone is arguing that Apple shouldn't be allowed to create an iEcosystem.
But what we all want is a future where Apple's ownership of the iEcosystem can't be used in such a way, and generate enough profit, that no one can ever overturn Apple's position.
Your describing a monopoly. IMO the real question is what actually harms consumers.
Requiring companies to open their platforms is one option for regulation, but perhaps not ideal. Great for tech companies sure, but possibly a huge opportunity for scammers. Consumers and companies are often at odds, banning app coins for example is great for gamers and the opposite of an open platform.
A flat regulation that all software platforms are limited to X% fees might be a better option.
What probably harms consumers the most is that companies with large purses have an outsized influence on policy and typically write their own regulations that serve to generate additional profit and make it difficult for new entrants to the market to emerge. You don't need to have a monopoly for that, just a good old fasioned colluding industry and a politician who cares more about their individual wealth than the collective good of their electorate that they represent.
You're right that the analogy was not quite right.
Here's a better one. Facebook creates a virtual world where 50% of the population choose. Apple creates a different virtual world which the other 50% choose.
If you simply look at the boundary/entrance you can say there's freedom of choice. But whether you choose apple or Facebook, there's 0 competition once you're inside that world.
Further, once you've established a home and connections within one world, switching to the other becomes quite expensive.
Competition at the gates, monopoly within.
I might add that this is very similar to the concept of company scrip whereby the local coal mine had a monopoly over local jobs and gouged workers for basic necessities. Absolutely you could have moved a town over, but the cost to do so was deemed too high in many cases.
When cost of switching is high, monopolistic power can be enforced upon customers. It's a similar situation with a lot of SaaS who have pricing power to strong arm their customers into high margins due to the cost of switching to alternative technologies. In a truly competitive market, SaaS margins should be close to 0. Obviously that's not the case today.
Regulation will catch up to all of these tricks, just a question of the timeline. Capitalism only works well when there's an environment of competition, and leveraging high costs of switching or large gated systems to enable profit margins well beyond what a competitive market would bear is antithetical to this concept.
That's why antitrust law is so important, and needs to evolve to handle modern business structures.
That’s not really it though, HN like most websites are 100% HN once your inside their walled garden. That’s the normal situation, nobody complains because McDonalds happy meals only contain toys sourced by McDonalds. In the past it’s only monopolies where companies dominate positions gave them leverage that was an issue, otherwise consumer choice was upfront and that worked.
Xbox, iOS, and Windows are platforms that also provide basic utility where third parties are part of the basic product. It’s by owning a platform they gain some control over that relationship between consumers and those other companies. Such complex relationships aren’t completely new, malls are gatekeepers for the stores within. But, such relations are normally heavily regulated.
The obvious difference is the scale. Sometimes difference in scale is difference in nature.
All of what you listed are easily substituted, and not very impactful to somebody's life.
The same games exist on Xbox and Playstation (95% overlap). McDonald's is a buy one time product, where you can easily choose on a given day to go to BK or Wendy's. You buy an iphone, you aren't going to just buy an Android the next day if Apple raises costs. Isn't it obvious how different these are?
You can bet that if Microsoft charged any third party apps on windows 30% of their revenue they would have been regulated long ago. You really think otherwise?
I don't understand the Apple defenders. Encouraging actual competition within the platform is the pro business stance. Competition is the basic element that makes capitalism work.
You don't have competition if cost of switching is high, it's that simple.
Platforms with sufficient impact on people's lives, and sufficiently high cost of switching will be regulated to require competition. It's as simple as that, though fanboys will kick and scream for the next few years until it passes into law. It's the obvious outcome, and china is already paving the way on legislation.
I just want take the time to compliment this question. I find it difficult to articulate exactly what you've done here, but I wish I saw it more often.
Why would we want to change a term that is used in countless legal and economic contexts just to dumb down the definition for the sake of a few people who haven’t bothered to do a bit of light reading on the topic?
Have you any idea of how many laws would need to change, not to mention all the academic papers, legal and academic commentaries and textbooks?
I'm sure it won't put a stop to it, I love to read discussions about "Does company X engage in anti-competitive behavior and are they a big enough player that it's a problem". That seems to be a much more useful discussion (i.e. it gets at "do they need to be reigned in by We The People") than "are they a monopoly" which is just bickering over what words mean (with some shades of "if they _were_ a monopoly, then We The People should do something about it).
At the end of the day, who cares if they are a monopoly or not - you don't have to be a monopoly to be in a position to do Bad Stuff to The Market.
> if they're a monopoly, then they simply shouldn't be allowed to exist.
Market driven de-facto monopoly are allowed. If you own >90% search engine marketshare it is fine as you have earned it. If you abuse the marketshare to enter shopping, travel market it is monopoly-*abuse* and it should be blocked/fined.
Abuse would include if you were charging ridiculous amounts of money for your monopoly service, like Ma Bell did, right? What about deterring competition with portfolios full of braindead patents? Buying legislation that puts high barriers around the market? I think the separation between government and big business is a farce, today, and in combination they're way more oppressive than high priced telephone service was way back when.
You are very confused.
Courts don't make calls as to whether companies are monopolist in general. The judge doesn't even try to do that (though someone is trying to make it seem like they have).
They make a call about whether a company has monopoly power in a specific market defined in a specific case.
In this case, the court does not believe Apple is a monopolist in a specifically defined digital gaming market.
That has no bearing or relevance on whether they are a monopolist in some other defined market (or even on a different day in the same market!)
That quote is a bit of a cherry pick resulting a wide interpretation that isn't supported.
The actual ruling is something more like "Epic failed to prove that Apple is a monopoly in the market the judge decided is the relevant market: digital mobile gaming transactions".
Here are the relevant sections of the ruling:
> The Court disagrees with both parties’ definition of the relevant market.
> Ultimately, after evaluating the trial evidence, the Court finds that the relevant market here is digital mobile gaming transactions, not gaming generally and not Apple’s own internal operating systems related to the App Store. The mobile gaming market itself is a $100 billion industry. The size of this market explains Epic Games’ motive in bringing this action. Having penetrated all other video game markets, the mobile gaming market was Epic Games’ next target and it views Apple as an impediment.
> Further, the evidence demonstrates that most App Store revenue is generated by mobile gaming apps, not all apps. Thus, defining the market to focus on gaming apps is appropriate. Generally speaking, on a revenue basis, gaming apps account for approximately 70% of all App Store revenues. This 70% of revenue is generated by less than 10% of all App Store consumers. These gaming-app consumers are primarily making in-app purchases which is the focus of Epic Games’ claims. By contrast, over 80% of all consumer accounts generate virtually no revenue, as 80% of all apps on the App Store are free.
> Having defined the relevant market as digital mobile gaming transactions, the Court next evaluated Apple’s conduct in that market. Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws. the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws. While the Court finds that Apple enjoys considerable market share of over 55% and extraordinarily high profit margins, these factors alone do not show antitrustconduct. Success is not illegal. The final trial record did not include evidence of other critical factors, such as barriers to entry and conduct decreasing output or decreasing innovation in the relevant market. The Court does not find that it is impossible; only that Epic Games failed in its burden to demonstrate Apple is an illegal monopolist. Case Court does not find that it is impossible; only that Epic Games failed in its burden to demonstrate Apple is an illegal monopolist.
> Nonetheless, the trial did show that Apple is engaging in anticompetitive conduct under California’s competition laws. The Court concludes that Apple’s anti-steering provisions hide critical information from consumers and illegally stifle consumer choice. When coupled with Apple’s incipient antitrust violations, these anti-steering provisions are anticompetitive and a nationwide remedy to eliminate those provisions is warranted.
>I hope this puts a permanent stop to all the thread on HN arguing one way or another whether Apple is a monopoly.
Are those threads arguing about a legal definition, because if not then this would have little impact on them. Even if they are arguing form a legal perspective, it would have to be within the same legal system as this court and thus could be argued for other legal systems. And even then one can argue the judge is wrong, look at how many judges end up being wrong based on appeal results. Technically you can't be sure which judge is actually wrong, you know which one is in the court that overrules the other, but you can still point out that the disagreement means one of them is wrong even if you can't say definitely which one is.
> I hope this puts a permanent stop to all the thread on HN arguing one way or another whether Apple is a monopoly.
Why would it? The court basically dodged the question, so we still don't have an answer provided by the court system. Until that happens, we can discuss it to death if we want!
Edit: excerpt from the ruling is:
"Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws. (...) The Court does not find that it is impossible; only that Epic Games failed in its burden to demonstrate Apple is an illegal monopolist."
Hmm. I'm reading "the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws" as "we cannot decide on this matter". Is this not the right interpretation?
That is not the right interpretation. They didn’t say they cannot conclude one way or the other - they said they cannot conclude that Apple is a monopolist, period - meaning that they have concluded Apple is not a monopolist (under current state and federal laws).
They did not say “we cannot ultimately conclude whether Apple is a monopolist” which would be your interpretation.
[edit] Given the downvotes (really?) I suppose I should add the nuance that all of this is based on this specific case and evidence presented; the case did not conclude that Apple can never be a monopoly (in another case, with other evidence) but that in this case, it isn’t.
They literally did, at the bottom of page 1 of the ruling
> Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws. [snip explanation] The Court does not find that it is impossible; only that Epic Games failed in its burden to demonstrate Apple is an illegal
monopolist.
Bialpio has a reasonable interpretation for court-speak. The fuller relevant quote is this:
"Having defined the relevant market as digital global gaming transactions, the Court next evaluated Apple's conduct in that market. Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws. While the Court finds that Apple enjoys considerable market share of over 55% and extraordinarily high profit margins, these factors alone do not show antitrust conduct. Success is not illegal. The final trial record did not include evidence of other critical factors, such as barriers to entry and conduct decreasing output or decreasing innovation in the relevant market. The Court does not find that it is impossible; only that Epic Games failed in its burden to demonstrate Apple is an illegal monopolist."
Borski's interpretation is right under the "innocent until proven guilty" burden-of-proof in criminal cases. Bialpo's interpretation is correct in that this Court has not made, as a finding of fact, that Apple is not a monopoly, only that the evidence brought by Epic to this trial does not prove Apple is a monopoly (i.e. another case on this topic may be brought if more compelling evidence is available).
The judge found that Apple is not a monopoly _in the market for payment processors for mobile games_, not that Apple is categorically not a monopoly.
> “The relevant market here is digital mobile gaming transactions, not gaming generally and not Apple’s own internal operating systems related to the App Store,” Gonzalez-Rogers wrote.
> Under that market definition, “the court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws,” she continued.
My main point of surprise is that anti-trust was even relevant in a lawsuit between two private parties. I thought this would only be relevant if the state were trying an anti-trust case.
Why twist the words straight from the ruling ? If they “concluded Apple is not a monopolist” they would have said so. They deliberately choose a different turn of phrase for these words, let’s respect the nuance they cared to put there.
The judge issued a injunction based on another law that didn't require Apple be a monopoly, found that the record did not prove that Apple was a monopoly (and thus against Epic on that theory), but took the time to clarify that Apple might be a monopoly, it just wasn't proved.
I seem to recall reporting around some Supreme Court ruling that was phrased as "there is a ruling but the question is still undecided". It may have been Google v. Oracle, where it didn't say APIs are copyrightable or not, but Google's use fell under fair use irrespective of that. So just the existence of a ruling doesn't mean there is an answer to the question that was asked.
"the Court concludes that Apple is a monopolist under federal / state antitrust laws"
"the Court concludes that Apple is not a monopolist under neither federal nor state antitrust laws"
Instead, the court went with the third, which to me means "we have not ruled on whether Apple is a monopolist or not, lawsuits welcome". Is that not the right way to look at it?
Yes, those laws in California are not uniform among states. If Apple is not a monopoly and violating Federal Law, then on appeal, to higher than state laws, the case is more likely to reversed.
Since other states do not have the same laws of California, the Supreme Court will likely apply Federal Law, not California law, on appeal.
Epic is headquartered in NC, after all. Thus this will fall under interstate commerce clauses, and California law only applies to transactions in California.
> It's nice to see that you don't have to be a monopolist to be legally barred from anti-competitive behaviour
Can someone ELI5 why Apple is considered to be anti-competitive for not dedicating resources to assisting another business in creating a competitor to a market for a platform they and they alone created?
If Epic wants to have their game on a phone, it makes sense they abide by the rules enforced by the company that allows the whole ecosystem to exist. If they don’t like it, they can go and create their own phone hardware and app ecosystem.
Apple is in several markets in the same time and using its position in one to control the competition in another.
There are limits to what you can do in a vertically integrated business stack, especially when you invite third parties to participate in pieces of that stack.
As a consumer, I can't have a phone for every software vendor I want to purchase from, that's obviously ridiculous. If Apple wants to create a marketplace, it has to allow certain things to happen in that marketplace. If the App Store was an entirely separate business not tied to hardware, the restrictions would be significantly less.
> Can someone ELI5 why Apple is considered to be anti-competitive for not dedicating resources to assisting another business
(emphasis mine)
Nobody said anything about Apple assisting other businesses. They could easily just let everything be, but instead, Apple is going out of their way to prevent competition.
Imagine if your favorite Linux distro only allowed you to install software from their package repos, and you had to jump through tons of hoops to install software from outside their repos, and adding other repos was impossible.
I know you'd say "I'd just switch distros!", but in the mobile world, you effectively only have two choices.
I don't think anyone is saying that they need to provide support for third-party payment processors themselves, but their rules can't restrict someone else from supporting them.
I don't know why that would be controversial.
Imagine a world where Google required a 30% cut of everything bought through Chrome. How is what Apple's doing any different from that?
Because end-users own their phones, and Apple restricting the ways software can be loaded onto the phone is robbing those users of their rights. The same applies to game consoles and other similarly locked-down devices.
If I buy a table, I can choose to stain it a different color, or put a tablecloth over it, or cut the legs off, or burn it for firewood. I have the right to use it however I want for whatever purpose I want, because I own it. For some insane reason bootlickers are willing to throw such rights out the window the moment you try to apply them to computer hardware and software.
Well the table manufacturer is not obliged to make it possible or easy for you to use the table as a chair, a bed or an airplane. I'm not really a fan of Apple but it's not that they are hiding the fact that you can only install software on the iPhone via the app store. It's the way they choose to design their product and it's an inherent feature of it (and part of their business model). Should all companies which build devices which include general purpose computers internally be legally obliged to make it possible (and easy) for users to install arbitrary software on them?
>If Epic wants to have their game on a phone, it makes sense they abide by the rules enforced by the company that allows the whole ecosystem
What about the sucker that bought the phone? why the company that created the device should decide what the owner can do?
Isn't ironic Apple prevents someone showing you a link to the product webpage and the explanation is that you are too stupid to be let opening a webpage from the app = will they remove the web-browser ?
Because it's vertical integration and refusal to deal. To me, it's very similar to the Hollywood anti-trust case, when movie studios used to own movie theaters. By your reasoning, those theaters should have just made their own movies?
> . If they don’t like it, they can go and create their own phone hardware and app ecosystem.
What do you even think a monopoly or anti-competetive behavior is?
During the standard oil trials, would you support the argument of "If people don't like it, they can go build their own railroad!"?
Do you simply not believe in any forms of monopoly law? Because your argument could be used in literally any monopoly trial, if you actually believe it.
Apple goes beyond not facilitating other businesses; they actively ban other app stores (because the only legit way to get an app store on an iPhone is to install it from their app store).
Famgopolies [1] behave different than monopolies. But they're every bit, if not more, dangerous.
They use their incredible market power and cash piles to enter new markets with ease and put price pressure on the incumbents. It's hard to compete with free. Then all the other famgopolies enter the space too, and it's just a famgopoly watering hole.
Their objective: capturing attention and keeping their users on their platforms longer. They use their platform bubbles to capture a large group of users that will never leave their services. Like Apple users. They're all in a bubble, and if you want access, you have to pay a steep tax and jump to the beat of the their whims.
And this isn't a new kind of monopoly? It's a monopolization in a new sense: they wrap their shroud over individuals and companies and keep them attached at the hip. Switching costs become incredible.
Apple, Google, and Amazon are turning us into serfs. They have a quasi republic going on that they tax and control. You can't start new businesses. You can't escape. If they target your small market, you're screwed.
The DOJ needs to break these companies up into twenty or so smaller ones that don't form a cobweb of entrapment.
Apple/Google/etc fans and shareholders will disagree, but these companies are hurting our industry and soaking up all the innovation.
[1] FAAMG companies with supremely anticompetitive behavior
I don't think we need a new word for this. What you've described is a cartel [https://en.wikipedia.org/wiki/Cartel]. To the extent that they restrain trade, prohibit competition, or artificially increase costs on consumers, cartels are already illegal in the US.
What you're describing looks more like the supermarket shelves. Some 80% of products in the cereal aisle are owned by three companies. Nobody really cares, but the switching costs to get a cereal outside that controlled space turn out to be pretty high (just try it with a family with kids).
If you want to make your own cereal, good luck; the supermarkets trust the Big Three and are pretty uninterested in flighting something new; shelf space is finite and people don't trust off-brand cereals.
The cereals care more about attention than price-competition. They know it's all the same crap; they want you to care more about whether there's a bear or a frog on the box.
And the same companies that make the cereals make several other verticals too, all carved similarly.
This configuration has not, generally, been considered illegal in terms of market regulation in the US. The standard is harm to consumers, not harm to non-incumbent manufacturers. Your battle to show why either of these spaces should be regulated more stringently is uphill against the default in the US to take a hands-off approach to market activity unless necessary to cure an obvious ill (and the ills here are non-obvious; how do we show the cereal market, or the software-services market, don't look the way they do because the incumbent players have hit on a locally-optimal approach to give value to customers, while customers are satisfied? Amazon, for example, are bastards, but they're bastards that have managed to unlock such efficient distribution and value-satisfaction for their customers that they rendered an entire ecosystem of competitors as obsolete as the buggy-whip manufacturer).
I think you have that analogy backwards. Google, Apple, and Amazon are the supermarkets. But they're also filling the shelves with their own products. It might not be too different from Walmart, save for a few points:
- They make it hard for consumers to shop at other stores. Or repair their devices (bad analogy).
- They're doing all kinds of things a supermarket would never do. Like turning into music and movie studios.
- The really sad thing is that before the giants sprang into existence, you could distribute your software and services without the need for a supermarket. Famgopolies created an artificial warehousing system and forced us all into it.
- They make it hard for consumers to shop at other stores.
As a user of Apple, Google, and Amazon tech for decades, I simply disagree on the other two. You'll have to clarify in what way Google and Amazon make it hard to shop at other stores. Google, in particular, enables side-loading on every Android device. Of the three you've named, Apple is the biggest offender, and it appears they have touched the hot stove, unless this Court's ruling becomes reversed. But they touched it in a way that Google and Amazon do not, unless I'm missing something.
I don't think a world where F-droid continues to exist is one where we can claim Google, in particular, is a supermarket that makes it hard to shop at other stores.
- They're doing all kinds of things a supermarket would never do
That's not by itself illegal, or discouraged. Traditionally, companies have considered such expansion a bad idea because they expose themselves to outsized risk in a market downturn. But there are examples of other companies doing that. Sony is a hardware manufacturer and a movie producer. Disney owns theme parks and movie production. Proctor & Gamble make some 90% of what goes in, on, or around the American body and home that you can buy off a store shelf (including many apparently-competing products). ViacomCBS owns theme parks, television studios, book publishing, heavy-industry machinery, and nuclear technology.
- The really sad thing is that before the giants sprang into existence, you could distribute your software and services without the need for a supermarket
I remember, and what I remember is, I think, one of the reasons American law tends to take a relatively hands-off approach in this space.
The user experience from the era you're describing, to be blunt, sucked. Mobile devices, when apps could be loaded on them at all, where hard-to-manage, the apps were buggy, and they were hard to find. Lack of standards, lack of oversight, no trust that any given app wasn't a security mess (or just a Trojan) without something like brand recognition to rely upon. It wasn't just Apple and Google who changed that; we saw Steam come along and regularize the games-on-PCs space, we saw package management get more robust in the Linux ecosystem... People weren't forced into software catalog ecosystems, they ran to them and brain-drained alternatives because most of the alternatives were actively painful.
The government wants to avoid stepping on the neck of a better customer experience inadvertently via over-regulation.
And perhaps most importantly: you can still do that. You can still write an Android app and put it on F-droid, or self-sign it and give users instructions for enabling side-loading. But you won't see the adoption you will in using the big app stores, because the big app stores are a way better experience for most users. Outside of those app stores, discovery, reputation-tracking, consumer communication, anti-Trojan safeguards, etc. are '90s era.
> >The really sad thing is that before the giants sprang into existence, you could distribute your software and services without the need for a supermarket
> I remember, and what I remember is, I think, one of the reasons American law tends to take a relatively hands-off approach in this space.
It is a false dilemma that you either have vetted apps with Apple, or unvetted apps.
You could still have other app stores reviewing apps. That would increase competition but still let users choose safety over a Wild West.
And brands who have gone to great efforts to obtain user trust can sell directly.
How does this differ from traditional brick and mortar retail? The retailers posed a barrier to selling to consumers at scale and wholesale prices, I think, were closer to 50% of retail markup.
Sure, manufactures could find small retailers and build a following from there, or find ways to market direct to consumers. But it seems like that is still true, if not even easier in the modern age. So what is different. I ask this not rhetorically, clearly there are differences. Is the scale the difference? Was it always wrong and we just didn't see it a clearly? Is the smaller number retailer the major factor?
No brick and mortar store has anywhere close to Apple’s dominance on mobile apps and the retail industry is not a defacto duopoly. Apple and Google control 95% of the global app market. Apple alone was 65% last year.
For reference, Walmart and Amazon have about 14% and 10% market share respectively. Numbers differ from report to report, but the scale of difference is pretty clear.
> It's a new game, and we need new definitions. [..] Famgopolies (FAAMG companies with supremely anticompetitive behavior) behave different than monopolies.
There are many authors that have been exploring the economic aspect of platforms. As such nowadays that phenomenon is know as "platform capitalism" in literature due to Nick Srnicek's 2016 Polity book of the same name. [1]
So, Apple was in the wrong about forcing app devs to use their payment processor (and taking a 30% cut at the time - 15% or 30% now), and they have to change that.
But Epic was also in the wrong when they tried to go around this rule, and they have to pay 30% on every transaction they made after their update in which they used direct payment?
But if Epic didn't try to go around the rule and loudly complain, there would be no judicial case, and no ruling forcing Apple to change?
I guess the judge's logic is that Epic could have sued without breaching the contract first, even if the contract was actually illegal. I don't agree that it should work that way, but the damages are immaterial. The bigger issue is: can/will Apple permanently terminate Epic's developer account for breach of contract and prevent them from releasing Fortnite despite this ruling, and possibly even cause problems for Unreal on Mac? It seems to me that they can.
I think this is unlikely. Mac gamers need Unreal more than games developed using Unreal need Mac users. Mac is an incredibly niche market for games - they're not going to rewrite their game using a different engine to run on Mac, and Apple knows that.
Of course, Apple could decide they don't give a shit about native Mac games, why don't you play our iOS games, but that just seems petty.
Apple is an incredibly spiteful company. They will happily cut off Unreal Engine to spite Epic even if it fucks over their users and developers. They did exactly the same to Nvidia and to Khronos group, and they will do it to Epic too.
Apple already terminated Epic's Mac developer account for Unreal, and refused to reinstate it until the judge forced them to with a restraining order earlier in the trial. So they've demonstrated willingness to retaliate in this way. And now that the trial is over I think they are not bound by the restraining order anymore.
> Apple could decide they don't give a shit about native Mac games
I think it's possible to make persuasive argument that this already took place around the time that they killed OpenGL support and/or refused to allow Vulkan support. Requiring a proprietary API that only works on a tiny subset of gaming devices* seems like they've already made their position on this topic very clear.
* I'm excluding mobile devices here since mobile games were called out as a different market in the parent comment.
The judge explicitly said, yes, they can (page 179):
The relief to which Apple is entitled is that to which Epic Games stipulated in the event that the Court found it liable for breach of contract, namely:
(1) damages in an amount equal to (i) 30% of the $12,167,719 in revenue Epic Games collected from users in the Fortnite app on iOS through Epic Direct Payment between August and October 2020, plus (ii) 30% of any such revenue Epic Games collected from November 1, 2020 through the date of judgment; and
(2) a declaration that (i) Apple’s termination of the DPLA and the related agreements between Epic Games and Apple was valid, lawful, and enforceable, and (ii) Apple has the contractual right to terminate its DPLA with any or all of Epic Games’ wholly owned subsidiaries, affiliates, and/or other entities under Epic Games’ control at any time and at Apple's sole discretion.
This may very well kill Epic's Unreal Engine business (at least on Apple platforms) if they no longer have the necessary licenses to use Apple's developer tools.
The ruling explains the logic near the last page of the decision -- it's basically "Epic didn't have to break their contract in order to sue". I think it's the judge slapping Epic on the wrist for grandstanding, even though they basically-won.
> It is certainly a victory for junk legalese that you can write an illegal contract, have it ruled illegal, and still enforce it.
From the ruling (page 172):
> In California, “where a single contract provision is invalid, but the balance of the contract is lawful, the invalid provision is severed, and the balance of the contract is enforced.”
In other words, even though the judge found the anti-steering provision of the contract to be illegal, the rest of the contract was still legal and enforceable, and Epic violating the other terms of the contract entitles Apple to damages.
It wasn't illegal until this ruling. She didn't make it retroactively illegal, so Epic were still in the wrong at the time. Seems pretty obvious to me.
Epic only has to pay out ~$4 million for their "damages" so it's largely moot and ceremonial for them. Nevertheless, I agree with you that it seems contradictory.
They seem to have ruled only that you can’t prohibit links to alternative payment methods (which would not be IAPs). You can still prohibit alternative actually IAPs, so Epic’s alternative IAPs must pay the fee.
Edit: Note that this a descriptive statement regarding the ruling, not a normative statement of my opinion.
I am unclear about this actually. I think the actual injunction will be a separate document released soon. But here's the judge's description in the ruling:
> a nationwide injunction shall issue enjoining Apple from prohibiting developers to include in their Apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to IAP
Obviously this would seem to imply that developers are allowed to accept payment from alternative systems to unlock digital content in apps. But it doesn't explicitly say that. All it explicitly says is that developers can link to alternative payment systems. I hope the actual injunction is more explicit.
I just want to say I follow a lot of court case within the Tech Industry mostly Apple, Samsung, Qualcomm, Intel. And Judge Yvonne Gonzalez Rogers is the only Judge that seems to have clear, well reasoned verdict in all of her cases. Compared to many others cases where the Judge were clearly biases from the very beginning.
The other thing that really irritate the heck of me from Apple's PR, are their insistence of mentioning how App Store has provided jobs in each country. Creating X amount of Jobs. Below is the statement from Apple on this verdict
>Today the Court has affirmed what we've known all along: the App Store is not in violation of antitrust law. As the Court recognized 'success is not illegal.' Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world. We remain committed to ensuring the App Store is a safe and trusted marketplace that supports a thriving developer community and more than 2.1 million U.S. jobs, and where rules apply equally to everyone.
>Compared to many others cases where the Judge were clearly biases from the very beginning.
Judges in the US certainly have varying political persuasions and values, but you would be hard-pressed to find a federal court judge who isn't trying to faithfully decide each case on its merits. It's part of their oath or affirmation.
Judges are professionals and can express preliminary views on issues without being 'biased'.
>but you would be hard-pressed to find a federal court judge who isn't trying to faithfully decide each case on its merits.
>Judges are professionals and can express preliminary views on issues without being 'biased'.
Except that is not what's happened. I dont mean biased just in their verdict but actual ruling. The worst and most eye opening was Apple vs Qualcomm. Where evidence and explanation from Qualcomm were completely tossed out by the Judge. It was so bizarre that I wasn't the only only one who noticed it. But Twitter, Social Media and MSM only wants to cover Apple's narratives.
An assertion of bias against a judge is not to be made lightly and an adverse evidentiary ruling against a party falls well short of indicating bias. There are many good reasons why evidence may be rejected that does not result from judicial bias.
A judge who is biased against a party is not qualified to sit on a case. And if bias was established, the aggrieved party would no doubt seek the judge's recusal.
I see unfounded accusations of judicial bias as being similar to unfounded claims an election was rigged. You need a good basis to make such claims. The fact the media may have construed it this way is of no moment. It's not beyond the media to embellish reality for a good story.
I'm referring here to explicit bias: that the judge leaves court and says 'Well, I like Apple, so I'll decide for them'. This is not what is happening. I'm not venturing into the area of implicit/social biases, like what is dealt with in the book 'How judges think' by Richard Posner.
One thing that's bugged/occurred to me. People keep acting like Apple will no longer get to charge 30% to developers for in-app purchases, but it seems like they may still be entitled to their 30% and even in this ruling Epic still owes that 30% -- Developers will be able to use alternate payment providers, but may still owe a commission to Apple? Tim Cook alluded to this in his original testimony, and the judge doesn't seem to have had an issue with it, and she ordered Epic to pay the 30%.
In other words, only the anti-steering violated California law, but otherwise, she validated that Apple's business model is reasonable under the law and supported the commission structure, it seems.
That seems like a whole can of worms. How will Apple know what to bill developers for apple sourced transactions? Do they need to build new reporting APIs? Within the next 90 days? Is it the honor system? Will developers raise rates on their sites to cover Apple's commission? Will this all have been moot? What if a developer doesn't pay? Can they be removed? Does apple send them to collections? What does that do to developer relations? Or does Apple abandon commission for external sales they alluded to needing to collect.
Edit to add Tim Cook quote from Epic trial [0]:
“IAP helps Apple efficiently collect a commission” — for payment processing, but also customer service and the use of Apple’s intellectual property. Without in-app purchases, “we would have to come up with another system to invoice developers, which I think would be a mess.”
You're right and this has been glossed over by much of the commentary in this thread. If you read the ruling the judge repeatedly stated that Apple is entitled to compensation for its intellectual property, regardless of whether that is achieved through IAP or some other means:
> Under all models, Apple would be entitled to a commission or licensing fee, even if IAP was optional.
> Turning to the intellectual property justification, the Court agrees with the general proposition that Apple is entitled to be paid for its intellectual property.
> As established in the prior sections, see supra Facts §§ II.C., V.A.2.b., V.B.2.c., Apple is entitled to license its intellectual property for a fee, and to further guard against the uncompensated use of its intellectual property.
> The Court also notes that in the but-for world where developers could use an alternative processor, Apple would still be contractually entitled to its commission on any purchase made within apps distributed on the App Store.
In other words, even if developers are allowed to link to alternative payment processors inside their app, Apple may very well still be entitled to some sort of commission/licensing fee for the use of their IP.
I believe the money owed to Apple is a seperate concern, raised from their apparent breach of contract.
At the time Fortnite was available on the App Store, the Apple In-App Purchase mechanism was the only contractually allowed method of purchase, and for the short time Fortnite enabled purchases via other methods, their contract with Apple was breached. As a result, the judge ruled that Apple is owed 30% of that revenue - money they would have gotten had those purchases been made via Apple IAP.
In addition, the judge ruled that Apple was well within their power to terminate Epic's developer relationship and App Store access, because of this breach of contract.
This new injunction only takes place in 90 days time, and doesn't nullify any power Apple has to determine who they wish to allow on their App Store. As a result, they are seemingly choosing to not permit Epic back on the App Store, again, due to their initial breach of contract.
My interpretation of this this new ruling is that Apple isn't entitled to money raised through other payment methods going forward, as likely the App Store developer terms of service will be revised to reflect the new state of the law. However I'm sure this will become clear in due course when we see the new terms.
So it could be just a coincidence that the damages she awarded Apple were specifically 30% of Epic's in-app VBuck sales, the exact same amount Apple would have been entitled to via IAP. I guess that's plausible and I read too much into her selecting 30% of their sales.
But I'm still thinking about how Apple suggested without restricting IAP to Apple's system, they'd have to collect that 30% in a more complicated way. I think you're perhaps right that today's ruling is orthogonal to that, but Apple may well still have that in mind, and be within their rights to impose that?
Reading this, I cannot help but imagine someone at Apple thinking to themselves "I wish we had granted Epic an exemption like we did with Netflix".
The court proceedings and the documents that they were required to disclose were surely bad for PR and now it looks like they won't even keep the monetary benefits.
Fortnite will come and go but Unreal Engine will be generating revenues forever.
Epic are more motivated by transferring the excess profits of Apple into modest profits for developers, who then redistribute 5% of their revenues (as part of the Unreal Engine license) back to Epic.
I wonder if Epic will sue Steam and console developers next...
Epic sells Unreal to Sony and Microsoft, so suing them is probably unlikely. But Valve could definitely be the next target.
I think Epic has a good relationship with console developers, generally, because they help each other out. Epic seems happy that it actually gets something back for giving up that 30%.
Valve would simply refer the judge to their rather-successful competitors, including:
- Epic Game Store
- Origin
- Blizzard Store
- Microsoft Store
- GoG
- Itch.io
- Ubisoft Store
- Bethesda Store
And to further their point, Valve would show how many games on Steam are found on other stores, and Valve doesn't prevent other companies from listing games on other stores.
Valve does not have a monopoly; not by a long shot.
Not even a monopoly question (the ruling says it can't call Apple a monopoly).
However Steam is not a walled garden. Feel like they charge too much? Go to itch.io or make your own website with Paypal button. It is your machine, your OS.
Not only that, but Valve is bizarrely happy with developers selling games on their own website, or even competitor platforms, and then providing Steam keys for free. As a consumer it is amazing.
Valve only did this so that it could effectively bundle its software with retail CD copies of games, back when they existed.
When you dive into Steam, you'll see that it hasn't really changed in a decade. Valve are basically sitting back happy with the $billions pouring in each year owing to their 'first mover'/monopoly position.
Uh, didn't it always seem like Epic was itching for a fight no matter what happened? That's the impression I got from the case but I also didn't follow it super closely.
I imagine it would have hurt their case if someone else, say Unity Technologies, sued. I really do think that Epic would have failed on the standing argument and not have even gotten to the fact finding stage of the trial where it could hurt their case.
On the claim that Epic won, the courts finding on standing is already "just barely"
> Thus, although the question is close, the Court finds that Epic Games has standing to bring a UCL claim as a quasi-consumer, not merely as a competitor.
Netflix did not get an exemption. They still don't link to Netflix.com from the app since Apple dictates that they can't direct people to paying for subscriptions outside the app store. When Netflix did do some IAP subscriptions, they costed more to the user and were only available for a limited time.
If Fortnite did same things like Netflix, they'll be banned. Why Netflix or Kindle isn't banned is because Apple arbitrary allowed such app for some category, but not for games. See Hey case.
Hey and xCloud tried to release an Netflix style (only allow login by existing account) app, but Apple rejects them. Finally Hey accepted but xCloud still not.
I've read the doc like 10 times. I think there are two key takeaways.
First, Apple can't stop companies like Epic from including links to other payment tools. Practically speaking, that means things like Kindle can now have a "Purchase on Amazon.com" button (which it currently does not have in order to avoid the 30% cut).
Second, the App Store itself is a-okay. Apple does not need to allow side loading or a second App Store.
Analysis from me: it's a win for Apple. They get to keep their App Store, which would be tremendously bad for them if they were forced to allow alternatives. There will be revenue loss from in-app purchases that are done via external links now, but Apple's own mechanisms are likely to continue being the easiest and most seamless, so that revenue stream will hardly go to $0.
Epic's statement (via Tim Sweeney): Today’s ruling isn't a win for developers or for consumers. Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers. Fortnite will return to the iOS App Store when and where Epic can offer in-app payment in fair competition with Apple in-app payment, passing along the savings to consumers.
Apple's statement: Today the Court has affirmed what we've known all along: the App Store is not in violation of antitrust law. As the Court recognized 'success is not illegal.' Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because or products and services are the best in the world. We remain committed to ensuring the App Store is a safe and trusted marketplace that supports a thriving developer community and more than 2.1 million U.S. jobs, and where the rules apply equally to everyone.
And there's nothing in the ruling that says Apple can't still demand a cut from in-app sales transacted through another mechanism. It's more work for Apple, but they're still legally entitled to do it, if developers must agree to Apple's terms in order to use their intellectual property.
Tim Sweeney, Epic’s chief executive, said on Twitter that he was not satisfied with the ruling because it did not go far enough in allowing companies to complete in-app transactions with their own payment systems, versus having to direct customers to outside websites. He said Fortnite would not return to the App Store until such rules were in place.
“Today’s ruling isn’t a win for developers or for consumers,” he said. “We will fight on.”
That’s how I interpreted “buttons, external links, or calls to action that _direct_ users to purchasing mechanisms” (emphasis line): that the user will be directed to an external payment mechanism outside the app.
There isn't anything in the ruling that specifically and only protects a payment mechanism through a web page. The ruling protects linking to any alternative payment mechanism. That should include a payment mechanism implemented in-app.
> Epic Games has announced that it plans to appeal the judge’s decision from today’s Epic v. Apple case. Although today’s ruling says that Apple must relax rules around In-App Purchase and allow apps to link out to third-party payment systems, the judge ruled in Apple’s favor on all other counts.
> For instance, Apple was not shown to have a monopoly nor must be compelled to allow third-party app stores or alternative third-party payment systems inside the app itself, as Epic had hoped. In a statement, Apple described the decision as a “huge win for Apple”.
> Apple must [...] allow apps to link out to third-party payment systems.
> Apple [must not] be compelled to allow third-party app stores or alternative third-party payment systems inside the app itself
It sounds like Apple cannot legally sanction a developer account when their apps open their own self-hosted payment page in a WebView instead of going-through iOS' IAP system - while Apple is under no obligation to allow iOS's IAP system to use a different payment back-end.
...shat's the effective difference here, as far as a regular punter's experience is concerned, though?
Hopefully this will eventually lead to a day where users once again have full control over their devices. Android is a bit better, even if alternate app stores don't have the same system privileges as Google Play, but Apple devices are wholly authoritarian in what you can run on a device you supposedly own.
It's a case of choosing how you lose. Android certainly is more open and free in terms of what you can do with it, but you become Google's product and they will mine all meaningful data from your interactions.
What would be swell is an open device you fully control which doesn't spy on you. Turns out that cuts off most of the ways to make big bucks.
You can basically have this today - you might have to give up a few niceties, but if you don't rely on anything too fancy, Lineage + F-Droid, with optional MicroG will generally do the trick for most apps.
Gotta be a bit of tinkerer to set that one up though, not something for grandma.
If she had an iPhone, how many paid apps or in-app purchases was Grandma going to make anyway? Probably none.
Heck, I'm a developer and tech enthusiast that owns numerous Apple devices, and I honestly can't remember the last time I made a financial transaction through the iOS App Store or IAP.
Freedom is not a boolean, it is a scale and google offers more than apple at the moment.
Ironically the pixel devices are one of the few where bootloaders are unlocked in the US and you can flash a customer google free rom.
Assuming there is no hardware based surveillance this is as close to free as we can get at the moment.
> permanently restrained and enjoined from prohibiting developers from including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and (ii) communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.
This sounds like the same agreement Apple came to a few weeks ago [0]. They can’t bar developers from linking to external payment methods, but doesn’t require them to allow other forms of in app payment.
You're thinking of a different concession they made a few years ago. This one is specifically about developers reaching out to their customers outside of the app, for example via email (which they may have obtained from the app).
But it doesn't force them to allow other purchasing mechanisms, just that they cannot bar "calls to action that direct customers to purchasing mechanisms". My read on that is that Apple is still allowed to force Apple-only IAP, but they cannot bar CTAs to external purchasing mechanisms.
> [Apple] are hereby permanently restrained [..] from prohibiting developers from including in their apps [..] buttons [,..] that direct customers to purchasing mechanisms [..]
I'm not sure how exactly to interpret that but it seems reasonable to interpret that has being able to put a button in your app that takes someone to a checkout page.
I disagree here. My read on it is that Apple is prohibited from prohibiting "calls to action that direct customers to purchasing mechanisms", not "purchasing mechanisms" themselves. So Apple can still say App Store IAP is the only allowed form of IAP, but they have to allow CTAs to other mechanisms.
Wow, this is huge! We'll see how this holds up, but definitely seems like a turning point.
The effect of this order seems to be Apple can't prevent apps from telling customers about alternative in-app purchasing methods, which is a central issue of the case at hand in Epic vs Apple.
I'm going to put this comment on every Apple vs Epic thread from now on, regardless of how many internet points I lose.
Instead of trying to ruin Apples ecosystem, Epic should try and develop their own.
If Valve can make the Steam Deck, Epic can make a Fortnite Phone.
Epic could then choose to make the phone as open or locked down as they like. They could have their own app store policies, and they could allow any payment platforms they like.
It could be an Android fork, or they could have a look at what is going on in the Linux phone community.
Would it be a success in the market place? I just think that depends on Epics choices it makes along the way. But I do know that millions of kids would rather have a cool gaming phone rather than an old fashioned iPhone.
> Instead of trying to ruin Apples ecosystem, Epic should try and develop their own.
So instead of 2 silos, you now have 3. How does that improve anything?
The whole point is to move away from this idea that developers are apple's "ecosystem", like cows in a cow farm. They are not cattle, but independent people with the right to compete in a fair market, much like how apple is competing in a fair market, which is provided by general market state regulations.
> So instead of 2 silos, you now have 3. How does that improve anything?
Only on HN could you possibly find people arguing that an additional competitor entering the market somehow “reducing competition and not making anything better” while also arguing that attempting to use the legal system to destroy one of those competitors’ unique offerings to customers and force them to adopt the model of their competitor, leaving no customer choice for the curated-ecosystem model, is good and pro-competitive.
I wonder if Apple is allowed to put warnings on apps that contain directions to non-app store payments. Something like "This app may direct you to a payment method not reviewed by or governed by the App Store's strict security guidelines. Use at your own discretion. Apple is not responsible for any issues related to this non-Apple payment method."
Apple is far more likely to just require a cut from in-app sales transacted through any other mechanism, something Apple is still legally entitled to, and can be clarified in the developer terms which must be signed in order for others to sell products which integrate Apple intellectual property.
To be clear, I'm on the side of Epic here, but in rulings like this where it has been judged that someone did some wrong (just focusing on Epic breaking their contract) and the punishment is getting them to pay exactly as much as had they done the "right" thing, the expected value is always going to favour doing the "wrong" thing, as sometimes you won't get caught. Any fines or decisions like this should include the likelihood of getting caught and make the expected value negative. A fine for not having a train ticket is not just the price of a ticket.
Very good point. I believe that the judge just gave a slap on the wrist to Epic Games with that fine (that's why it was equal to just the "back-pay") for breaking a contract (which is wrong, legally speaking.)
I believe the judge did this (just a slap) because Epic was right and Apple was anti-competitive.
I could be wrong though. I have very little knowledge of anti-competitive laws.
I'm honestly not sure, because it seems to me that contract disputes should be limited to making the other party whole. They are civil matters, not criminal ones, so why should there be additional punishment?
I'd have to agree with you, as this lawsuit was a PR play more than anything, especially if it means they don't get their App back on the app store (yet?).
I think it's worth stressing that both sides did something wrong. Apple's contract was also just ruled invalid, and they also aren't being forced to pay any penalties for that. They aren't being forced to compensate Netflix, Spotify, etc... for all the years those companies have been unable to link out to subscription signups on iOS, for example.
So consider instead that Epic and Apple were both penalized an identical amount rather than neither side being penalized at all.
Why, the curt said follow the terms of contract (Since the contract is valid). Why should you get a penalty because you legally have a chance to dispute a contract? You might need to pay the legal fees etc but the default must be to have the fair chance to challenge what you might seem unfair in said contract.
His argument was that if you don't pay all the time and get caught some of the times, then you only have to pay some of the time.
If fees is $100 each time and you don't pay 100 times and get caught only 50 times, then you only pay 50 times 100=5000 rather than 100 times 100=10000.
And we are talking in tens of millions, so legal fees are negligible.
Should Apple appeal? I don't think so; they now have much bigger thing to worry about. If they decide to appeal, it'll generate even more publicity and congress and public are going to be more engaged. Apple desperately wants to get it over with as silent as possible.
If they appeal, they'll be on the line to lose even more (and Epic is itching for this fight to continue, so Epic might appeal). Apple can cut its losses and be happy with the current, quantified ruling, or roll the dice and possibly run into a terrible precedent for other jurisdictions that have been rattling their sabers at Apple.
> n the counterclaim, in favor of Apple on the counterclaim for breach of contract. Epic Games shall pay (1) damages in an amount equal to (i) 30% of the $12,167,719 in revenue Epic Games collected from users in the Fortnite app on iOS through Epic Direct Payment between August and October 2020, plus (ii) 30% of any such revenue Epic Games collected from November 1, 2020 through the date of judgment, and interest according to law.
I personally don't care what courts say and what devs do. If your app wants me to buy a subscription out of IAP system - I won't do it. I want my subscription to be present in a central place with a single-click cancellation.
Bravo to Epic and team, but I have to say that the web will win out long term. It's cross platform, "just works" everywhere, and developers are free to choose from any payment system. They also don't have to live in fear from retribution by the platform owner.
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Wow this is unexpected, until now Apple had a solid case, or so I thought. This is welcome of course, since it means other developers can use that judgement AGAINST Apple. Was it worth it for Apple to go to court all things considered? I guess they were really confident the court would rule in their favor.
The lawsuit was filed in August of last year, and arguments in court spanned most of May (and were conducted in-person, not virtually), and then the judge issued her decision today. That's not exactly lightning quick.
The rate at which court cases proceed really depends a lot on the complexity of the case, the length of the discovery phase, etc. Both Apple and Epic didn't want to have a jury trial, so there also wasn't the matter of empaneling a jury.
It took over a year for this ruling to come out. Also, this was a bench trial as opposed to a jury trial, which also makes it faster.
Of course, what really makes court cases take very long is when they get appealed to hell and back -- see Google v Oracle for an example of such a case.
(And this is a final order, so it can get appealed).
Online court systems are here to stay. They're much more efficient than traditional in-person court, both in terms of overall time spent and in manpower.
There are still a lot of kinks to work out, such as how to handle court decorum & technological disparities such as low availability of high speed internet and good quality camera systems/lighting/privacy.
Personally I think the federal government should contract for an app other than Zoom because if I had to go to trial I wouldn't feel very comfortable knowing it was all being hosted by a private company, but that's a minor gripe.
This injuction only applies to Apple, as it says pretty clearly in the decision. That prohibition does benefit all developers using the App Store, not just Epic.
There is a good chance that this precedent will encourage other lawsuits that will lead to more injuctions, such as one that applies to Steam.
This seems pretty big, like it should have an immediate impact with everyone who ever wanted to use alternative payments on any app store should be submitted an updated app today kind of big.
Are there strings like appeal rights that means we won't see a change for years?
Judge seemed to have reached into the narrowest possible ruling, a reasonable decision in a case which is likely to be appealed by both sides.
Apple learnt that the monopoly definition argument doesn't prevent rulings against anti-competitive practices, and Epic learnt that if it wants to attack App Store fees it needs to bring an objective criteria to the table and have it accepted.
The judge skirted the App Store issue, but I never felt that was important: IMHO, 99.999% of iPhone users would have used Apple's store even if alternate stores were available; The only alternative store with any chance of success would have been an OSS store - hardly what Epic wanted.
I think it will be fine, but the one big worry that I have, is that I expect a significant percentage of these "alternatives" to point to scams.
That will put Apple in another hot spot. If someone reports that an approved app has scam links in the app, will Apple be on the hook to block the app? If they do, will that, then open them up to charges? What about if they don't?
I have been quite impressed with the ingenuity of scammers. The Apple customer base is a lucrative target. I am constantly getting hijack attempts and phishing scams, aimed at my AppleID.
IANAL, but I'm not sure that this order actually forces Apple to allow alternative in-app purchasing.
> ... hereby permanently restrained and enjoined from
prohibiting developers from (i) including in their apps and their metadata buttons, external links,
or other calls to action that direct customers to purchasing mechanisms, in addition to In-App
Purchasing ...
To me this reads as Apple must allow people to be able to link out to an external purchasing mechanism. So, for example a link to the Epic Store web page must be allowed, but a different in-app purchasing mechanism could still be limited. Which, I think that was the main complaint for many other developers -- you couldn't accept payments outside of the App Store (like on your website).
So users can be directed to alternative payment mechanisms, but that doesn't mean they must be allowed in the Apps themselves. This seems to be a pretty common-sense written injunction, meaning that developers are allowed to communicate with users and accept payment outside of the Apple garden. This seems pretty straightforward and would cover many (most?) of the developer complaints for dealing with their customers.
permanently restrained and enjoined from
1) prohibiting developers from
a) including in their apps and their metadata:
i) buttons,
ii) external links, or
iii) other calls to action
that direct customers to purchasing mechanisms,
b) in addition to In-App Purchasing and
c) communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.
But that's not how the clauses are written grammatically, which is why I'm unsure. There are two clauses: one about purchases and the second about communication.
The second clause is easiest to deal with. It is:
communicating with customers through points of contact obtained voluntarily
from customers through account registration within the app
This means that the developer can communicate with the user -- using information the user gave them, not information that Apple has to give them. I think we can agree on that one.
The first clause is tougher, and I think there are multiple ways to read it (at least for a non-lawyer... lawyers might read this only one way).
prohibiting developers from (i) including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing
The way that I read it is: developers can include links, buttons, etc that point a user to external purchasing mechanisms, in addition to the existing Apple In-App purchasing.
The other way to read that is (which is how I assume you read it): developers can include links, buttons, etc that point a user to external purchasing mechanisms, as well as allowing non-Apple mechanisms for purchasing inside the app.
Without knowing how the judge has defined In-App purchasing, I'm not sure you can tell which is the right interpretation. The capitalization of it is curious to me, but maybe that's just how they referred to all purchases that happen inside an App, or maybe that's how the Apple App Store managed purchases were referred to.
I'm sure there will be some kind of better legal analysis appearing soon enough (I hope).
> So users can be directed to alternative payment mechanisms, but that doesn't mean they must be allowed in the Apps themselves
How do you foresee Apple disallowing that in the apps without violating the injunction? The injunction gives apps free-reign on UI elements that direct customers to non-Apple payment systems.
The way I read it (which might be wrong) was that the developers could put links to external websites in the app, but not necessarily require that the transaction be allowed to occur in the app itself.
In the case of Fortnite, Epic could include a link to their online store where you could buy V-Bucks that would be linked to your Fortnite account. This link would open in Safari, but could also be done on any other computer.
Under the old rules, Epic couldn't do this. Nor could Netflix send you a link to their webpage, or Kindle a link to the Amazon web site to buy a book.
Maybe it's the legalese, but the phase "direct customers to purchasing mechanisms" makes me think that the judge is referring to these external methods.
But as I mentioned on a sibling comment, I'm really unsure as to what is meant by "In-App purchasing". Is this Apple's mechanism, or any mechanism? It isn't clear to me, without more context. There may be a couple of interpretations.
There's no such reference to "external websites" in the ruling. I'm not sure why so many people are taking this logical leap.
The injunction simply references "directing to purchasing mechanisms". There's no such qualifier that the purchasing mechanism must be an HTML document displayed from web browser.
I think the reason is the phrase “direct to purchasing mechanisms”. The developer can direct the user to a purchasing mechanism. This would by definition be something external (otherwise you wouldn’t direct them to it, you’d just let them purchase it).
It could be a website, a phone number, mail order, whatever.
Also, the sentence specifically includes “external links” as part of the App Store metadata/description, so that’s a logical step.
If there is a reference to allowing in-app purchases, it would be the next clause, but it isn’t clear to me what the proper interpretation is. It could be allowing a purchasing mechanism in addition to the existing Apple In App purchasing pipeline, or that Apple can’t disallow In App purchasing.
I bet it’s the former, but I’m sure it will be part of the appeal.
I agree this is confusing. Pages 149-150 of the ruling explicitly conclude that it is not illegal for Apple to require developers to use IAP for purchases of in-app content. On the other hand, the injuction on page 168 says Apple cannot prohibit developers from linking to other purchasing mechanisms besides IAP.
The way I would interpret this is:
1. If you want to make a purchase inside the app itself, you still have to use IAP.
2. But you are allowed to leave the app to make a payment that does not use the IAP system, and Apple cannot prevent developers from telling users about such alternative payment systems.
That’s exactly how I’d interpret it. Which is not what many people here have been arguing. If this is the case, it’s not what Epic ultimately wanted and still lets Apple avoid allowing alternative In-App purchasing mechanisms. But it makes a lot of sense… protect people inside the garden, but still let people buy their VBucks anywhere else they want to. This also mirrors what happens on other game platforms - if you buy vbucks on Xbox, it has to go through Microsoft. But you can also buy prepaid VBucks gift cards at Target.
If this is the case, it’s a minor win for Epic, at best. And limits the collateral damage to other game platforms (Sony, Microsoft, Nintendo) that also have the same in-app purchasing restrictions.
Well, I wouldn't even consider it much of a win for Epic considering:
1. The court affirmed Apple's right to terminate Epic's developer account and ban them from the App Store which will have underlying consequences to their Unreal Engine business.
2. The court fully rejected Epic's monopolization claims which deals a huge blow to their goal of running their own app store.
3. It's not clear whether Apple is prohibited from charging commissions or licensing fees on purchases made outside of the IAP system. Everyone is assuming so, and the accounting would be much more complicated, but if you read through the ruling the judge repeatedly agrees that Apple is entitled to some sort of compensation for the use of their intellectual property. It may very well be that developers will be allowed to add external payment options but will still owe Apple some form of commission/licensing fee in exchange.
> The developer can direct the user to a purchasing mechanism. This would by definition be something external
Huh?
There's nothing about the definition of "direct" that has any notion of externality.
If a judge rules that I have the permission to direct visitors in my house to a bathroom, that surely does not mean the bathroom must to be in another building.
On the one hand this great for consumer choice, on the other, it will undoubtedly lead to a loss in purchasing confidence of regular users and a flood of scams or scam-like apps. Especially with regard to subscriptions, we’ve seen this play out via SMS-based ringtone subscriptions of days past.
Personally, I will never subscribe to anything on my iOS devices if I cannot view and cancel it via the built-in subscription management. Here’s to hoping that Apple is going to make integration with it mandatory.
Way to cherry-pick and dismiss. I would argue the possible long-term loss in purchasing confidence by the customers who were burned by a bad experience weighs a lot heavier overall.
Regarding scams, keep in mind that the ones I mentioned will come in addition to the existing ones, not displacing them, making an already non-ideal situation potentially way worse. To stem this, the app approval process could get even slower than it currently is.
A better solution would have been to somehow force Apple to lower its fee structure. This however is incompatible with certain economic liberties we take for granted and would set a worrying precedent, so the current outcome is probably the only pragmatic one.
Should apple appeal this? Is it really worth further damage?
It turns out the little guys were right all along. It's surprising that it took legal action for apple to realize that, when you invite millions of third parties in your marketplace, you should treat them with some respect. And when this leads to prices of purchases going down, how are people going to keep justifying apple's position.
I think the biggest win is that micropayment services will grow which is good for all developers (not just in iOS)
The ruling could cost them billions of dollars in revenue. It's absolutely worth appealing. Even if they lose in the long run, they'll make a few billion more in the mean time.
how many billions? It seems their max app gaming revenue lost would be 64 * 70% * 30% = 13.4B for 2021 , but it's probably a lot smaller due to special deals, and also this would assume they would lose ALL the revenue. In reality they'd lose about,maybe ~$3B ?
The alternative would alienate some of their best developers -- who knows, maybe they'd leave?
If someone has read the full ruling and is familiar enough with the case, what are the odds Apple appeals this - and if they do, is it likely they will win the appeal?
(Not a lawyer, or really an expert on anti-trust law)
I fully expect both sides to appeal. To much money is on the line to not try.
Even if Apple knew they would lose the appeal, I expect they still would, to try and get a stay on this ruling pending the outcome of the case.
I've always been very sympathetic to Epic's side of this case, still am, personally I don't expect Apple to win appeal [1], but I also wouldn't rank the odds of that happening as significantly lower that I thought the odds were of them winning the initial case.
Epic might be willing to settle without an appeal in exchange for the ability to continue developing unreal engine for iOS... but given that Apple is not likely to be willing to settle (see above) I doubt that will happen. Apple might choose to unban epic anyways, since the game engine only being available for android hurts them, but I doubt it.
[1] Though if a detail here or there changed in Apples favor that would not be surprising.
> Epic might be willing to settle without an appeal in exchange for the ability to continue developing unreal engine for iOS
I wonder which parts of the lawsuit are even amenable to a settlement at this point. Sure, the breach of contract claim is between Apple and Epic, and Epic could negotiate away their right to appeal.
But presumably the injunction just issued is NOT negotiable, as this is based on behavior that Apple is alleged to have engaged in against all developers?
Reading only a snippet of the opinion, 100% chance of appeal. At the very least, the court effectively says it has no authority as to why it can issue a nationwide (instead of statewide) injunction; you'd be a fool to not at least appeal that. The fact that the court also came to a different decision from both Apple and Epic as to what constitutes the appropriate market for determining monopoly also seems like it would be fruitful grounds for appeal.
Will Apple win? I don't know 9th Circuit or the applicable law anywhere near enough to answer that question.
This has to be an insta-appeal though so much dirty laundry has come out in discovery maybe they won’t. Then again App Store profit margins are so high … maybe they will take the hit on the 30% and double down on App Store advertising instead since first party advertising is blessed now?
One strategy Apple will explore is turning the Apple appstore into an Apple Arcarde/Plus -like service and use dark patterns to basically convince/force people to use it. Because the other alternative will be for customers to deal with malware on iOS for the first time (as any other appstores on iOS will always have lesser security because Apple's system isn't free and open) [1]. Apple didn't allow users to change their default browser until iOS 14. That's 13 years on from the release of the original iPhone in 2007. They sure as hell aren't going to make it easy for other appstores to exist.
Business customers will be able to afford this new Appstore 'service', but the negative costs will be carried by everyday people, who will, due to the closed nature of Apple's walled garden, be forced to get by with much less security.
If anything goes wrong with these other app stores Apple will deflect criticism by blaming the govt. for not allowing them to control the full 'iOS experience' anymore (or in business speak: 'to control all the verticals'). This of course is the weaponized rhetoric of a monstrous monopolistic entity who uses illogical arguments to misrepresent and confuse the average user/customer. We've already seen how far these profit-seeking firms are willing to go to even directly mislead customers into voting against labor protection laws with Uber and Prop 22 [2].
yawn Apple is getting a mild slap on the wrist and the outcome of the case is probably the best for everyone. It did away with the most entirely absurd and egregious restriction but still lets a company like... choose how to run their business. If anything this is likely to drastically improve the quality of some big-name applications on Apple's platforms, further increasing their bottom line. I would bet money technologically illiterate people have sworn off of Apple's platforms because they bought a device for a single purpose (like watching Netflix) and then couldn't signup for the fucking service on the device. Is that going to be a huge boon for Apple's bottom line? Nope. But it will likely make their ecosystem stickier because there's less friction for groups of consumers. Chances are Apple-HQ is poppin' open some champagne today having a laugh that they ever were allowed to prevent links or calls to action.
The real winners here, no one seems to be talking about, are the console manufacturers who I'm sure had their buttholes puckering at nearly the speed of light waiting for the verdict. While Apple could surely continue on without an exclusive AppStore on its platform, Nintendo and Sony would begin to feel some absolutely critical burning. Both manufacturers have de-facto monopolies on their platforms, and those monopolies are at least as restrictive as Apple's if not more so because they act as barriers to entry into their markets (i.e. If Sony doesn't like your game idea, you can just fuck off with no recourse).
The one thing about this case that pisses me off is Sweeny running his mouth like he and Epic are really victims here. His refusal to put Fortnite (which I've never played) back on the app store is pathetic, childish, and anti-consumer. It is honestly as disgusting to me as Facebook trying to peddle their unwavering commitment to tracking their users every waking-action as "pro consumer." If Sweeny and Epic brought this same case against Nintendo and Sony, I'd maybe be more sympathetic to his bullshit because at least then it would be consistent. My thought is Epic is likely big enough to bully Sony or Nintendo into better deals on their platforms; while, Apple doesn't have to take it's shit for a single solitary second because Epic poses no threat to Apple's revenue. Then this inability to bully the platform owner threw Sweeny into an _epic_ tantrum and here we be.
> back on the app store is pathetic, childish, and anti-consumer.
This makes no sense. If the price of something is too high, then a company is not going to purchase it.
I am sure that Epic would be happy to put fortnite back on the app store, if Apple charged 0%.
But you can't go around saying that it is "petty" for a company to think that the price of something is too high, and then refuse to pay that price.
Apple doesn't own fortnite. They aren't owed anything, unless you are going to make some reverso uno argument, and claim that actually fortnite is a monopoly, but that would be silly.
Good. Epic knew full well what they were doing was in breach of contract, and that the consequence would be termination of their account. And the court has just confirmed that this is correct, valid, and appropriate.
Enjoy your worthless banned developer account, because that’s what Epic wanted to happen and that’s what did happen exactly as everyone expected.
play stupid games, create civil precedent for disallowing modern anti-trust abuses. I'm pretty happy with how it turned out. I'm not convinced epic is unhappy.
There is a point here which really confuses me. This is an order by a California district judge. So that means it must only be valid in California? So Apple is allowed to keep its practices outside of that state? Or if not, then how can a California decision apply outside of the state? And why do none of the articles on this topic address this point?
> This is an order by a California district judge.
No, its an order by a federal district judge in California; specifically, a judge of the US District Court for the Northern District of California. (Media reports often use sloppy language which confuses federal courts located in a state with courts of a state.)
> So that means it must only be valid in California?
No.
> Or if not, then how can a California decision apply outside of the state?
It's a federal decision. In any case, even if that wasn’t the case, much Apple conduct occurs in California even if it impacts users outside of California.
The permanent injunction applies to the conduct it specifically mandates and/or prohibits and the named parties it says it applies to (so long as those parties are subject to US law, but that seems likely to be th case for Apple for the foreseeable future.)
Apple Pay is a separate system than the normal IAP system, but I expect there are going to be tons of apps with tiny web views hosting nothing but the web Apple Pay button. This would cut down on some of the friction of having the user re-enter their credit card info for every app while still cutting out Apple’s 30% cut.
>In a separate judgment, the court affirmed that Epic Games was in breach of its contract with Apple when it implemented the alternative payment system in the Fortnite app. As a result, Epic must pay Apple 30 percent of all revenue collected through the system since it was implemented — a sum of more than $3.5 million.
Well, that seems rather BS. To even try for the antitrust case they were required to show how it would hurt consumers. So they did. Which went against Apple's rules obviously.
So it's decided that Apple isn't allowed to do what they were doing, but, Epic has to pay out a fine anyways? Would the case have even made it this far if Epic hadn't done this?
I'm sure Epic is happy to pay the $3.5 million in return for this, and other companies are surely just as pleased. But to have to pay it at all seems like a bit of a legal flaw here.
However banning Epic from the store would be great honestly, then maybe the next injunction would be to force Apple to allow users to install what they want.
Someone correct me if I'm wrong, but this ruling only applies for in-app purchases correct? E.g. Apple cannot force apps to default to and only use to its payment infrastructure for post-sale and within app transactions (which comes with 30% fees).
In other words if my app costs $10 and in-app transactions are $1 apiece, Apple still gets $3 from initial purchase but instead of $.30 from each subsequent in-app transaction, I could potentially keep $.97 (assuming 3% credit card fees).
If so I think the long-term impact will be most interesting in that will Apple raise its developer fee significantly and/or discourage "free" apps to cover its hosting, review, other overhead costs. It would also incentive app developers to become more like game developers: every feature becomes its own add-on/DLC.
Alternatively in a parallel universe,
Apple will transparently price their other "services" basis the actual cost incurred such as number of reviews they do, number of downloads, OTAs, number of IAPs/ recurring subscriptions etc, and developers can figure out the best mechanism for their user case.
I think the biggest takeaway from this ruling is being overlooked, read page 159
Apparently the Sherman Antitrust Act only applies to a service if it strictly cannot be replicated otherwise.
In other words, since iOS allows the installation of and does not control the distribution of "web apps", it therefore has the right to control the distribution of "native apps"
It doesn't matter that web apps don't have access to most of the iPhone's API, it doesn't matter that they can't send notifications or run in the background, it doesn't matter that they can't run fullscreen or in 64bit, what matters is that they get an icon on the homescreen, they thereby fit the definition of an "app" so technically Apple does not entirely control app distribution on iOS
I think the other, possibly more meaningful issue, is Apple's control over who can and cannot make an app for their devices.
If you put a product in BestBuy, it's understandable that BestBuy would not want you to offer a very cheap upfront price, and then to have all sorts of 'add ons' sold directly to consumer where BestBuy doesn't make any money.
It's fair that BestBuy sets terms that they can participate in the follow ons.
The limiting factor here, however, is competition.
If anyone could make an AppStore for iOS, then the issue of Apple's or BestBuy's 'terms' could be side-stepped.
The power imbalance is caused by a lack of competition.
If there was competition, app makers would find a place where they were not constrained by in-app purchases, or something along those lines.
I don't see developers dropping their price now they can use their own payment processor. All I see is me, the user, having to struggle through using their janky home-made payment processors as I pay and/or try to end my subscriptions.
It's possible they could use the difference for promotion too. In the PC world there's things like nexus.gg that I've been seeing more of lately. It allows creators and streamers to set up a game store so you can buy from them and the creator gets the (rough) equivalent of Steam's cut.
That's a much better model IMO. The creators and streamers are actually promoting your product to a core audience that's likely to buy, so they're more deserving of that big cut. For example, the YouTube channel where I learned about that is from a creator that plays the style of games I like, so their nexus.gg store is actually pretty good as a discovery mechanism (for me).
So smaller developers can keep uniform pricing, but leverage other forms of promotion where the people that are actually driving sales benefit instead of some rent seeking middle man like Apple or Google.
That's not some "janky home-made payment processor" either. I set up an account with the primary platform (nexus.gg) and I can buy from / support any creator curated game store I want within that platform.
I am wondering how Apple will react to this. It seems likely that big companies (who pay for much of the App Store) will take the opportunity to implement their own payment option. Small devs probably won't bother, since overhead on small purchases + additional accounting is likely to be higher than Apple's 15%.
Will Apple introduce some sort of tiered pricing model, where apps with third-party purchase option have to pay a listing/API fee? Or will they just take a revenue hit?
I'm quite sure that they already planned for this, given their reaction to the verdict. They don't appear to be very concerned ...
Seems like this essentially kills the game console business. If 3rd party Xbox and Playstation games are allowed to sell content with their own payment system, why would anyone buy games through Microsoft/Sony?
I haven’t seen my class of app discussed here. In my case, a mobile app is useful for a subset of features of my web app, but it would never replace to full experience. Very few customers would ever think to look for my app in the App Store. Nonetheless Apple wanted to force me to offer the subscription through the App and then take a 30% cut forever. I ended up just releasing an Android version as they were more lax about not including any payment option. I could see this opening up the option for a lot of business apps that augment functionality elsewhere.
If an app has been blocked from the app store because it doesn't have In-App purchases (it has its own credit card form), do we know how this judgement affects things?
It sounds like the app would be allowed to link to an external payment system, but it's not clear if a non-Apple in app payment system would be allowed.
It's also not clear to me if In-App purchases (through Apple) could be required for approval into the store? I assume Apple would still have the power to require use of their payment system.
> On the counterclaim, in favor of Apple on the counterclaim for breach of contract. Epic Games shall pay (1) damages in an amount equal to (i) 30% of the $12,167,719 in revenue Epic Games collected from users in the Fortnite app on iOS through Epic Direct Payment between August and October 2020, plus (ii) 30% of any such revenue Epic Games collected from November 1, 2020 through the date of judgment, and interest according to law.
What do you think is unjustified here? The 30% is literally the money they collected while breaching their contract, that was money Epic agreed to pay Apple and Apple is rightfully owed.
The big picture here is that Epic lost the case - they were ruled to be in clear breach of contract and Apple was determined to not have acted anticompetitively except in one specific respect (the anti-steering clause).
Epic gets no third party App Store - meaning ”platform” app stores are not anticompetitive, a ruling that 30% app store fees are not anticompetitive, a ruling that Epic still owes the money during the time when they were knowingly and willfully breaching their contract, a ruling that they have to pay apple’s lawyers for the frivolous suit, and no requirement for Apple to reinstate Epic’s account after all these shenanigans.
Oh yeah and anti-steering clauses are probably illegal. Big win for Epic there.
Despite newspapers racing to frame this as a big loss for Apple, it’s really Epic who lost here (and that’s why they get to pay the lawyers, pay the breach of contract, etc). It’s completely consistent with the rest of the ruling, because that’s what happens when you lose a suit.
It isn't clear to me if they need to allow third-party payments on the iPhone or they need to allow third-party payments in the App Store. I suspect Apple is less likely to do the former (as presumably that means sideloading) but the latter is great news for open source developers that are getting kicked off app stores for donation links or even webpages in various app stores (Apple isn't the only one guilty of this).
> 43 With respect to the appropriateness of Peely's "dress," the Court understood Apple merely to be "dressing" Peely in a tuxedo for federal court, as jest to reflect the general solemnity of a federal court proceeding. As Mr. Weissinger later remarket, and with which the court agrees, Peely is "just a banana man," additional attire was not necessary but informative. Trial Tr. (Weissinger) 1443:17.
Since many developers will now be able to opt out of payments through Apple and Apple will lose that revenue, I foresee Apple changing the terms of service for developers so they can get revenue by some other means not affected by this ruling.
Would Apple charge developers based on the number of downloads / installs of the developers' apps?
What other ways might Apple make up for the lost revenue?
This makes me very curious if we'll see things like the Amazon Kindle store coming to iOS, as well as an increased amount of paid Amazon Prime content. It's absurd that you can read books on the Kindle app but there's no CTA to buy them. Whatever ends up happening, this upends whatever status quo existed between the companies.
Great news for mobile developers (and for Stripe). Everyone doing in-app purchases has a huge incentive to quickly find some drop-in replacement that charges 3% instead of 30%.
I would be surprised if Apple ends up keeping the fee at 30%. If this injunction holds up, I think they will drop it within the year.
This still allows apple to mandate same price on and outside the platform, and still allows apple to mandate apple pay be an option.
This is great for customer experience, because users still have the option to use apple their polished system. But if a (big) player offers a better experience, users get to pick that.
Is this going to affect subscriptions? If so, I’m cancelling all of my current subscriptions through apple, they’re the ONLY company that makes cancelling easy and that will go away if this includes subscriptions.
I don't understand why Epic is dissatisfied with this. Doesn't the injunction mean that Apple now has to allow other payment processors? Is it that Epic wanted third-party app stores on iOS?
No. This injunction is allowing info\link to website where you can use other payment processor. And Epic wanted to integrate a different payment system directly into the app.
The main reason is the court affirmed Apple's right to terminate Epic's developer account and ban them from the App Store. In other words, this verdict benefits all other developers except Epic.
This is not a good enough outcome. It's never been about IAP methods. The problem here is that Apple is stopping you from using software on a physical device you own.
All apps; the language in the ruling against Apple is:
>>
permanently restrained and enjoined from prohibiting developers from including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.
But since Apple is known to refuse store submissions for opaque reasons, what would stop them from retaliating against apps that provide links to external payment processors with vague unrelated reasons? I would not put that past them.
Also, I hope the anti-monopoly part gets picked up at the federal level; no one can deny Apple & Google are de-facto duopoly.
It's possible but it will be hard to get away. If there's an official policy to do it, there might be whistleblowers or people might notice patterns. If that happens, courts tend to take a very dim view of what they see as intentional retaliation or creative workarounds to not follow the court orders. The court might first tell Tim Cook to appear in court to answer what exactly happened and who decided to do it.
Strictly speaking, retail games are also part of the same platform. Game consoles have the same lockout policies Apple does - in fact, they were literally invented decades prior to the iPhone by console manufacturers. You still have to pay a platform royalty on physical copies; except now you also have to throw margin to distributors and retailers, too; and the games can be resold without you making a penny.
Taking direct payments is absolutely insane if you're a small developer. I mean, have fun accounting for zillions of tax laws in every country in the world.
30% is a lot, but considering all the other services you get, it's not particularly unreasonable.
For big companies, sure, you have accountants and lawyers and your own infrastructure, so you don't need any of that stuff.
It depends on the effort needed to "do it yourself" which is a lot if you're accounting many many tiny transactions. There's definitely a market there, or at least there was during the FB games era.
This will certainly get appealed and bogged down even more in the legal system, right? What are the chances this actually happens? And when?
Secondly, this is such an easy way to increase your take by 20+% that I would imagine almost every publisher is going to be offering their own payments platform, not just the biggest ones like Epic.
It will be interesting to see how many small companies figure out that tax and general compliance is worth every penny that Apple charges them. Smart ones will opt for a seller of record approach, but many will get burnt.
Stripe provides a lot of tooling ( more than apple) for compliance. Apple is hardly the only payment provider which simplifies payment processing for small developers.
"Tooling for compliance" sounds a hell of a lot more complicated than "you sell my app and send me a check", which is the deal on the App Store, Steam, etc.
Finance and compliance is lot more complicated than send me a Cheque for most businesses.
Stripe ( and others) have products right from incorporation (Atlas?), identity verification, custom reporting, fraud/risk, Charge backs, Tax reporting/ filing and even PoS terminals etc.
Most businesses have to deal with multiple channels (Android, web, iOS and others), custom reporting, and different risk/compliance will need solutions well beyond what Apple is offering
Why would the app store model stop working? Paying through the app store has a direct benefit to usability. Before in app purchases the app store model worked fine.
Even if the Epic lawsuit goes completely off the rails and Apple is forced to allow external app stores on iOS, they can still maintain a profitable app store if they provide the best experience to end users. Building an app store is very hard, and convincing people to install an alternative store is even harder, so I doubt they'll lose much there.
The app store is so ludicrously profitable that the exclusivity they enjoy can't possibly be the only reason it's making them money. This cut into Apple's (and Google's) profits, but it certainly won't mean the end of app stores as we know them.
> if they provide the best experience to end users
I don't think they can. Their DNA on this evolved as a monopoly. They won't be able to compete, they will be slow and boring while clever people will overpower them.
I think they will find a way. The Mac App Store is far from a monopoly yet it still remains profitable as far as I know.
My grandma isn't going to use any alternative store, she probably doesn't even understand the concept of different app stores. I think Apple will be fine, at least until competitors somehow gain a MASSIVE usability advantage.
It doesn't kill it much more then it killed the android store in the past when it wasn't (roughly, in practice) enforcing the same thing.
It's a revenue cut, but at least for the beginning it won't be a problem at all for apple, this might change at some point, but stocks have no reason to majorly drop now they still can do so in the future if it makes sense.
That Apple collects high fees ought to be considered separately from whether Apple mandates at least the use of Apple Pay. As a user, I love Sign in with Apple + Apple Pay. It allows my family members to give over very little information over to app companies.
This is a level of consumer privacy that's not found anywhere else.
I believe this will cause managing subscriptions to be a lot harder and untrustworthy. I will probably have to sign up for different payment systems I never heard of… the store won’t be able to track when subscriptions expire, and this will open up so much room for fraudulent behavior.
Why would that be the case? Can’t apps still use Apple as one of the payment options? If subscriptions are important to you, keep doing it through Apple.
Unless the discounts are significant I don’t see myself going through the 3rd party payments. I already try to avoid subscriptions anyway. But for one off purchases, it’s nice to have options. I think this is a modest win for consumers.
It's worth noting that this ruling was not particularly great for Epic as their ultimate goal was to run their own app store under the theory that Apple was unfairly monopolizing app distribution on iOS devices.
The court fully rejected Epic's argument that Apple held a monopoly over the iOS app distribution market, concluding that the relevant antitrust market did not consist only of iOS devices:
> "As demonstrated with respect to the relevant market, Apple does not have substantial market power equating to monopoly power. While considerable, Epic Games has failed to show that Apple’s market power is durable and sustaining given the current state of the relevant market. For that reason, the Court finds that Epic Games failed to prove the first element of a Section 2 claim: the possession of monopoly power in the relevant market." (Page 152)
Consequently all of Epic's Sherman Act claims and California Cartwright Act claims were rejected by the court because Epic failed to prove Apple held monopoly power in the relevant market.
With specific regards to Epic's specific claim that blocking alternative app stores was an unreasonable restraint of trade, the way the court analyzes these types of claims is as follows:
1. The plaintiff first has to show that the restraints have an anti-competitive effect.
2. The defendant is then given the opportunity to show a pro-competitive justification for the restraint.
3. The plaintiff then has to show that those pro-competitive justifications could have been achieved via less restrictive alternatives.
In this case, the court agreed with Epic that the constraint was anti-competitive. However, they then accepted Apple's pro-competitive justification with regards to security of the platform (page 145):
> "Here, the Court finds Apple’s security justification to be a valid and nonpretextual business reason for restricting app distribution. As previously discussed, see supra Facts § V.A.2., centralized app distribution enables Apple to conduct app review, which includes both technical and human components. Human review in particular helps protect security by preventing social engineering attacks, the main vector of malware distribution. Human review also helps protect against fraud, privacy intrusion, and objectionable content beyond levels achievable by purely technical measures. By providing these protections, Apple provides a safe and trusted user experience on iOS, which encourages both users and developers to transact freely and is mutually beneficial. As a result, Apple’s conduct “enhance[s] consumer appeal.” See Qualcomm, 969 F.3d at 991."
They also accepted that the difference in approaches between iOS and Android promoted competition between the two platforms (page 146):
> "As a corollary of the security justification, the app distribution restrictions promote interbrand competition. The Supreme Court has recognized that limiting intrabrand competition can promote interbrand competition. Leegin, 551 U.S. at 890. For example, restricting price competition among retailers who sell a particular product can help the manufacturer of that product compete against other manufacturers. Id. at 890–91. It is this interbrand competition that “the antitrust laws are designed primarily to protect.” Id. at 895. Here, centralized app distribution and the “walled garden” approach differentiates Apple from Google. That distinction ultimately increases consumer choice by allowing users who value open distribution to purchase Android devices, while those who value security and the protection of a “walled garden” to purchase iOS devices. This, too, is a legitimate procompetitive justification."
Epic tried to argue that a less restrictive alternative was possible via enterprise certification or notarization, but this argument was rejected by the court (pages 148-149):
> "However, missing from both the enterprise and notarization models is human app review which provides most of the protection against privacy violations, human fraud, and social engineering. These proposed alternatives would require Apple to either add human review to the notarization model or leave app review to third-party app stores. Apple executives suggested that the first option would not scale well. Under the second option, Apple could in theory set minimum guidelines for app stores to provide a “floor” for privacy, security, and quality. However, security could increase or decrease depending on the quality and diligence of the store. Evidence shows that at least on Android, the experiment shows less security.
...
> In short, Epic Games has not met its burden to show that its proposed alternatives are “virtually as effective” as the current distribution model and can be implemented “without significantly increased cost.”
...
> Here, Apple’s business choice of ensuring security and protecting its intellectual property rights through centralized app distribution is reasonable, and the Court declines to second-guess that judgment on an underdeveloped record.
...
> Accordingly, the Court finds that Apple’s app distribution restrictions do not violate Section 1 of the Sherman Act."
While this decision will no doubt be appealed by both sides, it's not looking particularly good for Epic's goal of forcing open alternative app stores on the iOS platform.
Finally, the court also affirmed Apple's right to permanently ban Epic from the App Store for violation of the developer agreement (page 179):
> (2) a declaration that (i) Apple’s termination of the DPLA and the related agreements between Epic Games and Apple was valid, lawful, and enforceable, and (ii) Apple has the contractual right to terminate its DPLA with any or all of Epic Games’ wholly owned subsidiaries, affiliates, and/or other entities under Epic Games’ control at any time and at Apple's sole discretion.
Apple isn’t required to reinstate Epic, and it actually also enforces damages for the breach of contract during the time when Epic was stiffing Apple for the fees.
Despite a lot of reporting about how this is some big win for Epic, the court is siding with Apple there, the ruling is Epic was in the wrong (breach of contract) and needs to pay up, and if Apple decides they don’t want to do further business with epic then oh well, “play stupid games…”
Next time you want to try and negotiate a lower contract rate, don’t breach a legal and valid contract and then try to use the courts to do your dirty work. The courts are not your sales rep.
How do people say that this is Apple's victory? The next lawsuit is already on horizon when apps will force users to pay more when going through Apple pay and Apple will force the pricing through new ToS.
Even then, this verdict has consequences of epic proportions. If anything, Epic has done more for developers than any lame duck politician.
It's hard to draw parallels to Steam, because this case was about iPhone + App Store, not just the App Store itself.
If you don't want to pay Steam's cut, or follow their restrictions you have plenty of other options. You are not restricted in the sense you are with iPhone + App Store.
> Notably, the judge rejected both parties’ definition of the marketplace at issue in the case. “The relevant market here is digital mobile gaming transactions, not gaming generally and not Apple’s own internal operating systems related to the App Store,” Gonzalez-Rogers wrote.
I guess the question is does Mobile gaming cover handheld game device like Switch? If so, it may impact Steam Deck as well.
Steam does have rules about it, but they are not strictly enforced. If your game have it's own backend / website then you can freely bill people there after you onboarded them via Steam.
IAPs are different: here Valve actually require you to process payments through steam when game is running via Steam. But even in this case a lot of games can be launched independently after installation through Steam.
Also on top of this Valve already decreased it's comission from 30% for large publishers.
>The decision concludes the first part of the battle between the two companies over Apple’s App Store policies and whether they stifle competition. Apple won on 9 of 10 counts but will be forced to change its App Store policies and loosen its grip over in-app purchases.
>Rogers said that Apple was not a monopolist and “success is not illegal.”
>“Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws,” Rogers wrote.
Glad to see nobody knows what a monopoly is anymore. It's like the Grant administration all over again...
> Dr. Hanssen’s survey is also severely flawed and ultimately unreliable. First, he reports that 30-
43% of respondents “regularly” use a Microsoft Windows phone even though Microsoft had 0% market share in smartphones in 2018 and no longer sells phones.
Apple with their completely truthful experts here.
Afaik they cannot ignore a ruling. And they don't need 30% fees for maintaining IOS ecosystem - when you buy an apple phone for $1000, you pay Apple enough for it to maintain its AppStore.
Also they earn money from AppStore advertising (which apps out of the millions should the small screen show); so maintaining AppStore should not be a problem.
This doesn't apply in this case because Apple is not stupid. They are not gonna ignore a court ruling because it will land their execs in jail.
Rather than that, they will use legal means such as appealing the ruling. They are a 2T$ company, and they will try their best to use their money to change this decision in their favor.
Because that’s not how the law works. Sure, they can technically ignore the ruling, but they’re opening themselves up to a whole host of lawsuits, and any judge in those lawsuits would not look favorably on Apple.
"Apple must allow the use of third party payment processors" does not mean "Apple cannot enforce any other rules against apps using third party payment processors". If they decide to go on a harassment campaign of petty violations against third party payment using apps or put undue requirements on them, those parties can complain to the courts and likely succeed. If the third party payment provider is stealing credit cards or obviously malicious behavior in some other area, Apple would likely prevail when pointing to that as the reason they banned them.
> What's the penalty for Apple just ignoring this ruling, if any?
In addition to whatever penalties are available in law for the act outside of the ruling, they would also face additional consequences for contempt of court. And its generally easier to prove a violation of the order than a violation of the law justifying the order.
>If any part of this Order is violated by any party named herein or any other person, plaintiff may, by motion with notice to the attorneys for defendant, apply for sanctions or other relief that may be appropriate.
The penalty for contempt of court is often incarceration. Note that the order enjoins not just Apple the corporation but also Apple's officers. It would be highly unusual for the CEO of a major corporation to openly and defiantly flout a court order, but if it happens, he can expect to be arrested for contempt.
does this mean that if disney resorts open up to third party vendors (assuming they haven't already), they can't require them to accept the disney payment wristband?
apple is not a monopoly, nor is it anticompetitive. it is, however, opinionated and differentiates itself in the marketplace with that opinionation. there are less opinionated, yet very competitive alternatives and both users and developers are free to switch to them.
>does this mean that if disney resorts open up to third party vendors (assuming they haven't already), they can't require them to accept the disney payment wristband?
No, this is equivalent to the vendors having the ability to accept other forms of payment, such as cash or other credit cards, if they choose alongside the wristband.
but then because the wristband is more expensive, they'll hide or break the wristband machine and the next thing you know, downtown disney is now the bowery with sketchy ad men in pinstripe suits chasing everyone around. the whole reason why people pay to go to downtown disney is because they don't want to deal with that shit.
the simple fact no one wants to admit is that the msrp for an iphone or an android does not even come close to the r&d costs for the software, hardware and backend platforms. android is open, but in exchange for that, users pay by broadcasting all their activity to creepy marketers. ios is closed, but rather than take money from creepazoids who are stalking and trying to sell to and complicate the lives of users, they charge a tax on all commercial activity on the platform... to pay for the platform.
now third parties are saying "we don't want to pay the platform tax" but this is couched in all this bullshit about app store freedom or choice in payment processor or whatever.
if you don't want to pay the platform tax, don't do business on the platform. don't try to wreck the platform's business model and value proposition for the users who choose it over the digital advertising dystopia that is the "open" internet in 2021.
As a consumer I trust how Apple payments work and like the fact that everyone was using it on iOS. Now I will need to cut back on apps and do more due diligence to avoid scams and other issues.
Hard to see how this is a win for consumers in addition to developers.
Nothing in this injunction prevents Apple from requiring that if apps offer purchase options they must also offer IAP as an option.
I'm certain that even if the injunction were to go into force, Apple would continue to require that.
Apple could probably even mandate that the other purchase options not be cheaper than IAP pricing by more than apple's 30%, preventing developers from putting absurd prices on the IAP option, and only put real prices on their alternative methods. from the wording of the injunction itself is not even actually clear that apple cannot mandate the IAP and non IAP prices must be the same (the dicta might provide more clarity on if that would be permissible).
Then it becomes up to you if whatever discount is offered for non IAP purchases is worth the extra risks, or if you would rather use IAP.
What do you mean? If purchases are directed to a developers own payment system I don’t have a choice, I cannot force that developer to use Apples payment system can I?
You have the same choice developers had: their way or the highway.
Though, developers would be likely to:
- choose established and trusted payment processors (like PayPal or Stripe) rather than rolling their own solution or a small unknown payment processor, and
The ruling is that Apple cannot forbid linking to other payment methods _in addition to_ IAP, not _instead of_. Apple can still require that IAP must be one of the options.
I don't see anything to suggest apple cannot force apps to offer apple pay as an option. Only that they cannot force apps to make apple pay the only option.
More choice is always a win for the customers. Customer can get to decide who is providing a better quality of service and go with them instead of the current situation of having one choice forced down their throats because the vendor decides that is whats best for the customer.
Not if it solely results in fragmentation. Having the choice between Ubisoft Connect, EA Origin, Steam and Battle.net isn't a "choice", it's just 4 different storefronts for me to manage credentials for.
You cannot have choice without fragmentation, you cannot complain about lock-in without wanting choice. Choice and fragmentation go hand in hand, and customers get to decide who wins and who loses.
But fragmentation doesn't guarantee a choice. Take web streaming for example. I don't have a "choice" between Netflix and Disney, the choice is made by the content they provide. Now I'm essentially required to have two accounts to access the services that could appear on just one.
Music streaming is a different ball game altogether; I have an actual choice here between Spotify and other providers. Yes there are some exclusives but for the most part I'm choosing based on the features they provide, brand loyalty, price, etc.
Games consoles are somewhere in between (largely due to the methods of funding video games) - you choose between Xbox or playstation (or Nintendo I guess) and get access to a wide range of games on your platform. Yes there are some exclusives (most of which are funded by the console maker and just wouldn't exist if it weren't for this), but by and large your choice is dictated "where are my friends", gamepass, price of console + services, brand loyalty.
This is going to end up like origin vs uplay vs battle.net, where you don't have a "choice" on where you play because there's no overlap, you just have to have axcpunts with them all and deal with all their individual crap, and shitty practices rather than just Apples
Likewise with video streaming services: Netflix, Disney+, etc. It would be nice if content could be unbundled from distributor in this case - like what you see with music.
If and when Apple is forced to allow other app stores (and Google is forced to give them the same abilities and privileges as their own), the wailing and gnashing of teeth when “competition” ends up like the much derided state of PC gaming will be hilarious. At least there’s the login with google/Apple ID thing and OS level restrictions on program privileges?
[EDIT] trivial and clear illustrative case that should be easy to apply to murkier situations: a regulation that bans known poisons in food reduces choice.
[EDIT EDIT] more relevantly, and a bit tangentially to the example above: thanks to coordination problems it's possible for more-desirable states to be unmaintainable without reduction of choice—it's possible for someone's—even everyone's—favorite outcome to require a reduction of choice, and for that option to cease to be when more degrees of freedom are introduced.
My reading of this is that it's nowhere near the big deal people are making out in the comments here. According to CNBC's report "Apple will no longer be allowed to prohibit developers from providing links or other communications that direct users away from Apple in-app purchasing" [0]. That's a long way from forcing Apple to allow alternative IAP providers or installing alternate app stores. It suggests you'll have to step out of the app to make a payment (which adds friction) and it'll be up to the app developer to validate back in the app that the right person has made the right payment. This sounds similar to what Apple had already conceded they'd do [1]
1. Cut down the IAP commission to 15% for everyone. 2. Cut down the commission to 5% for those who pay for a Business Account, say at $5,000 a year.
The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. Every iOS and macOS user will prefer to use the Apple system. All Apple has to do is to make the rates competitive enough, that after considering building their own purchases system, factoring in sales tax and VAT, most developers will happily just opt for Apple's system if the rates make sense. Many people are putting up with 30% already — bringing the rates down to something reasonable with an upgrade path to put them on par with payment processors like Stripe (with VAT and Billing and Radar) or Paddle will just increase revenues for them.
The moment they drop rates and ease restrictions apps that are not being built because of these rules will get built, and these apps will gladly pay the market rate of 5% to 10% for a full service payments system.