US Supreme Court declines to hear appeals in Apple-Epic Games legal battle - https://news.ycombinator.com/item?id=39014642 - Jan 2024 (162 comments)

https://twitter.com/timsweeneyepic/status/174740814726057173...

> Apple is already pretty clear in its developer agreement [0] that the 30% commission is for "its services as Your agent and/or commissionaire" (Schedule 2 3.4), not for its services as a payment processor. They are contractually allowed to take the 30% fee out of payments collected, but merely using a different payment processor doesn't remove the obligation to pay them for their other "services as Your agent and/or commissionaire".

0: https://developer.apple.com/support/terms/apple-developer-pr...

In addition, from the original ruling:

> Yvonne-Gonzalez was skeptical of the 30% fee during the trial, and in the ruling she was suspicious about Apple's justification of the commission, writing that "the 30% is not tied to anything in particular and can be changed," but did not order Apple to do so.

Mind you, you can be blocked from doing needed Apple dev stuff (eg sign binaries, etc) until you've manually logged into your Apple account and clicked on the "I accept" button whenever they change terms.

This happened to us (sqlitebrowser.org) in recent weeks, as our CI just stopped working one day.

It turns out there was a new developer agreement that needed signing, and until I'd logged in and done that then Apples servers would no longer sign binaries.

There's literally no choice but to sign the things - regardless of terms - if you want your users to have software that runs.

This gets to be a real nightmare in large organizations with multiple Apple Dev Portal admins, some of which may not even be authorized to sign legal documents on behalf of the company.

I suspect the EU will at some point, they have haven't already, make terms that must be accepted to continue void.

I.e. Epic's goal here isn't about whether Apple charges 99% or 1% rather it's about allowing other payment methods (theirs in their case of course) to compete with equal footing regardless what Apple wants to charge to do it through them instead.

And the fact the developer is to hide the fee and not list it on the receipt (subscription: $10, Apple tax: $3)

And the fact you cannot charge less for the same service if you sold it outside the platform (as you'd like to do as you didn't need to collect the Apple tax).

I thought that was expressly permitted - just that Apple Tax still must be collected:

> The link can mention the specific price of content on a website, or that content is discounted on the website from the App Store price. Comparisons are allowed.

Netflix has an app, Netflix “is not” an app. Google Chrome, Airbnb, Epic, anyone who has spent marketing bucks promoting their service and providing a supporting app, was rather acting as a marketing agent for Apple than the opposite.

Apple’s new stance has no merit. We all understand it’s fair to participate in the funding of the Appstore, but it is a very bad defense.

Epic's goal is to pay lower platform fees to Apple and Google, presumably lower than the (30%?) platform fees they pay to Nintendo.

Anti-price-gauging laws have already been ruled as constitutional, so there is case law for "You're charging too much"

Price gauging has a very particular meaning; it isn't simply a subjective "you're charging too much".

It is the practice of significantly increasing the prices of goods, services, or commodities during a time of crisis or high demand. This can happen when there is a sudden shortage of a product, like during a natural disaster, or when there is a surge in demand, like for popular concert tickets.

Characteristics of price gauging include:

- unconscionable prices

- taking advantage of a crisis

- limited supply or high demand

In the United States price gouging is illegal after a state of emergency has been declared.

You can read more here: https://oag.ca.gov/consumers/pricegougingduringdisasters

The 30% App Store tax does suck but I’ve never understood why it’s singled out. My best guess is that people hate platforms because it’s a 3-way transaction, which makes everything harder, including price negotiation. And also the service isn’t particularly unique, unlike the house, or a status symbol, unlike the Gucci handbag.

Ironically, if Apple made App Store publication more expensive but invite-only, like a high end Bugatti sports car, I don’t think it would’ve ended up in court.

https://game8.co/articles/latest/epic-believes-nintendo-sony...

The argument that the consoles are subsidizing the hardware is just an excuse which has the causation reversed. They're not charging 30% because they have to subsidize the hardware, they're subsidizing the hardware in furtherance of their scheme to charge 30%. Without it they would stop subsidizing the hardware, but so what? People would pay less for games and more for hardware.

You might even pay less for hardware, because there would be no more reason to restrict games to a particular console and then you would only need one to play all the games, and Sony/Nintendo/MS would compete like (or be replaced by) Dell/HP/Lenovo.

(Not defending anything here)

You know given they charge exactly the same way for Unreal Engine.

Apple isn't charging for use of the iOS platform SDKs; the developer agreement is much more vague and weasely about what they're charging for, being the developer's "agent and/or commisionaire".

Per-sale licensing for a copyrighted (or patented) work is pretty normal and done in many industries. Apple's agreement doesn't specify any fees for licensing at all.

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

> In such a hypothetical world, developers could potentially avoid the commission while benefitting from Apple's innovation and intellectual property free of charge. The Court presumes that in such circumstances that Apple may rely on imposing and utilizing a contractual right to audit developers annual accounting to ensure compliance with its commissions, among other methods. Of course, any alternatives to IAP (including the foregoing) would seemingly impose both increased monetary and time costs to both Apple and the developers.

https://casetext.com/case/epic-games-inc-v-apple-inc-2

We really do live in clown world

How are they even going to attempt to enforce compliance. Is every store required to integrate with their payments API?

If they’re taking payments from the platform and it does turn out to be a scam, now their hands are dirty as well.

This is worse from the original restrictions _specifically_ because the original restrictions were chosen to simplify from this sort of scenario.

If Apple says all app purchases and purchases of digital goods/services within the app are subject to the 15/30%, and those payments are always made through Apple, then Apple can check for non-compliance with the contract terms up-front (via App Store review) and then there are no separate books to audit, there is no commingling of revenue from in-app purchases vs independent web purchases or purchases made on other platforms, and so on. No need to audit the company's books, because they are using Apple's books.

It is hard to take Apple to task for charging too much, because the 30% ceiling and who pays it has effectively been the same since day 1 of the App Store. They have only created special cases to reduce that percentage (small business program, multi-year subscriptions).

Regulators can say that you can't block other companies from the "iPhone in-app payment for digital goods" market without being anti-competitive, but it is much more onerous to force a company to continue to provide a set of services (maintaining developer tools and SDKs, reviewing and signing binaries, providing backward compatibility in new OS versions) but for a fee schedule determined by regulators.

> Taking a commission from a company that’s already paying for payment processing can’t possibly be seen as reasonable.

Why not?

There's a decades-running assumption by some that Apple was a ridiculously expensive payment processor, only existing because they gave you no other choice than to use them for certain things (and outright forbade you from using them for others).

But Apple provides other services and access to developers per a financial agreement, and was doing payment processing to meter the revenue split.

The regulator argument is that Apple is blocking other companies from taking in-app revenue for digital services. Apple has now split that out in a few markets for companies willing to take on such complexity.

IMHO the only apps I think actually have benefited from the split are dating apps in the Netherlands - because quite frankly the way many dating services charge people is user hostile and/or discriminatory.

A rather obvious thing they could do is just prohibit the fee from being a percent of the developer's revenue. If Apple wants to charge everyone $1000 for a copy of Xcode and the iOS SDK, go to town. But then, people should be able to make competing developer tools and SDKs for iOS, and have competing stores where someone other than Apple is doing the reviews etc.

The main issue isn't even what they're charging, it's that they constrain you from using the alternatives that would induce them to charge less via competitive pressure.

Per the judge's own words, Apple is allowed access to the company's financials and other information that would allow them to audit developers' use of third-party payment systems.

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

> In such a hypothetical world, developers could potentially avoid the commission while benefitting from Apple's innovation and intellectual property free of charge. The Court presumes that in such circumstances that Apple may rely on imposing and utilizing a contractual right to audit developers annual accounting to ensure compliance with its commissions, among other methods. Of course, any alternatives to IAP (including the foregoing) would seemingly impose both increased monetary and time costs to both Apple and the developers.

https://casetext.com/case/epic-games-inc-v-apple-inc-2

They did back when they were part of the developer program. If they can make their case that it is bad faith compliance as part of their original case before the Court goes “c’ya, we’re done here”, they might have something, but Apple revoked Epic’s membership for violating their terms in the developer program worldwide and at the conclusion of this lawsuit, Apple has not been ordered to reinstate it. So Epic can’t really argue that they have or will have suffered a harm under these new terms since they’re still in a position where Apple isn’t doing business with them and their lawsuit under which they did have standing is basically at its conclusion.

Again, little surprises me in the legal system these days, but I have to think courts would be very skeptical of an argument where a potential defendant controls the gates that decide whether a potential plaintiff has standing.

- Epic pushed an update to Fortnite at some point to the App Store that would allow them to issue an update from the server side to enable a flag to offer Epic’s own payment processor where you could buy in-game currency from them instead of IAP. They then issued a server update toggling this flag and began advertising it to Fortnite players immediately.

- Apple removed Fortnite from the App Store for violating their policies.

- Epic files suit almost immediately and begins a PR and advertising blitz they had clearly prepped far in advance. In other words, picked a fight. Epic has standing for this suit because they have suffered a harm (Apple removed their app).

- After a grace period in which Apple explicitly laid out to Epic that they were risking their developer account, offered them time to get back into compliance and resubmit Fortnite to the App Store, they terminated Epic’s developer program account. This ended Apple’s business relationship with Epic.

- That lawsuit has now concluded. Apple took it on the cheek for the anti-steering provisions and has come up with a plan to comply which they are now implementing, all appeals have been exhausted, and Apple and Epic no longer have a business relationship.

(I’m missing some details, and the language is vague because I honestly can’t remember the full timeline of events and would rather be vague than wrong here, but that should the gist of it.)

Put another way, when you choose to be in a business relationship with Apple, Apple is also agreeing to be in a business relationship with you. Apple has not chosen to re-enter a business relationship with Epic, and has rejected Epic’s offers to do business with them. It’s a simple as that. So how can Epic now argue that they have standing for harm caused by Apple’s plan for compliance that affect the way they do business with developers in their developer program when they are no longer in Apple’s developer program?

Once the judge decides they’re done and there’s no more avenues of appeal or additional grounds for appeal, they’ll have no more standing than some random guy off the street who has never signed a single agreement with Apple, not even an iTunes ToS agreement. From what I gather, the Judge wants to be done here too, Epic has had their days in court with the full due process of law but there are other cases to be heard and Epic doesn’t get to hold up the courts any longer because they didn’t get the W they were looking for.

Somebody else, if they think they can do it, can try to have a go at Apple next, but even with the one L they took on anti-steering, I think without some new laws being written their entire business model just got a lot more legally resilient.

Now why is standing important? Put simply, in theory, you can basically file suit against anyone for anything, but if you didn’t actually suffer a harm, and you can’t convince a Judge in the jurisdiction in which you allegedly suffered the harm that you did, then they’re going to throw out your case. It’s a waste of the courts time if there’s no case to be made, you filed suit in the wrong jurisdiction, or you filed suit under the wrong provisions of the law under which you are arguing you suffered a harm.

Maybe they want to be the competing payment processor for third party developers who are in Apple's developer program, but don't have the resources to litigate against Apple themselves.

And doesn't Epic Games Store already do payment processing for third party game developers? We know they want to offer the whole store on iOS but if that isn't yet possible then you do what you can.

Yes, but they don’t currently offer it for iPhone apps and games. Just to reiterate, I think this is the best argument for standing I’ve seen, but it’s not an easy sell and if Epic does get into this business, it leaves them in a position of basically trying to undercut the 3 percentage points that Apple is valuing their payment processor at.

> Maybe the argument would be that Apple is actually charging more than 3% for payment processing and is continuing to charge the difference even when you use a third party payment processor, to discourage anyone from doing so. Which could provide a new chance to raise the issue of their high fees, if this is the first time Apple has tried to declare a split.

Judges don’t usually want to get into the business of setting prices for private businesses. Judge Yvonne Gonzalez Rogers has already determined that Apple has a right to collect their commission, and Apple has already had to define the value of what the payment processing portion of what that is in the Netherlands. ~3% is also generally what you can expect to pay a payment processor to begin with which is why it never, even from the beginning of the App Store, for people to interpret “30%” as Apple’s payment processing fee because even back then, that’s not what any reasonable payment processor charged. If needed, Apple could probably produce documentation showing what they pay a processor.

Isn't the whole premise that they want to be in that market and Apple precludes it?

> ~3% is also generally what you can expect to pay a payment processor to begin with

But that's kind of the point. If Apple is charging more than that for payment processing but then only refunding the ordinary amount when you don't use their service, it precludes anyone else from competing with them on price because the customer is still paying Apple the remainder of Apple's payment processing fee which isn't refunded.

The way to evaluate this isn't to look at what payment processors charge, it's to look at what the rest of what Apple ostensibly charges for would cost in a competitive market.

At which point the first thing you'd have to ask is, why is this still a percent of revenue? It is for payment processors because their fee has to account for fraud risk, which scales with the amount of the payment being processed.

Fees as a percent of revenue are quite unusual for providing any kind of hosting services or marketing or development tools etc. Even sales commissions are a percent of the sales attributable to the salesperson, not a percent of all sales including the ones via other sales channels.

Charging a percent of revenue is a strong indication of a monopoly rent because it's so hard for anyone but a monopolist to get away with it. Even when Visa does it, the fraud risk is more of a fig leaf and the truth is a big chunk of that amount is going to fund credit card rewards programs intended to get people to prefer credit cards to other payment alternatives and the credit card networks only get away with charging it because of the weak competition.

And in any event the balance of what Apple provides is typically extremely inexpensive. Development tools are widely available for free, search engines don't charge to be included in search results (and the fee can't be for search advertising when it's paid by everyone), the per-download hosting cost for an average-sized app on Amazon S3 rounds to zero cents. What are they doing that could explain 27% if it isn't a monopoly rent? Why is it 12% for smaller entities, when economies of scale go the other way?

> Judges don’t usually want to get into the business of setting prices for private businesses.

Which is why the better solution is to prevent this kind of tying of products and services together, so the prices can be set individually by the market instead of trying to disambiguate the price of each service when they're all tied together.

Apple's public comments to the point have been that Epic is free to resume publishing under the developer program if they abide by the developer agreement, and Epic's CEO has stated they have no intention to do so.

Agreeing to the program terms would seem to put them in a position where they can either argue they have standing or that they have been caused harm, but not both.

> Agreeing to the program terms would seem to put them in a position where they can either argue they have standing or that they have been caused harm, but not both.

Agreed.

Apple gives much more consistent terms.

The speculation is that the 15%-after-first-year subscription change was something they had actually negotiated with Netflix in an attempt to keep in-app subscriptions, which they then rolled out to everyone rather than keep as a Netflix-only deal.

I'm sure Apple is not sad Epic is off their platform, because they are a bad partner. But they would still let them back under the same terms as everyone else, if they agreed to actually abide them this time.

The issue is the last time I recall them saying that was before they terminated Epic’s developer accounts. That was a couple of years ago at this point.

So my question was not about any of that, none of it is new to me, my question was the following: how recently, to your knowledge, did Apple say they would let Epic back in the program? I tried searching around but I didn’t turn up anything recent, or anything from after 2021, but I don’t think Apple’s statements from before they terminated the relationship are applicable at this time, so I was hoping you could provide some additional information that I am lacking.

Apple is likely asking for 27% cut for non-IAP w/Apple because they are saving 3% by not processing credit cards directly. They don't need devs complaining it's MORE expensive to use their own payment processor.

I'm repeating the words of another commenter, but most app devs aren't competing against Apple but other devs. They aren't billion dollar businesses that stand to benefit by trying to get a lower rev share.

But I do agree that most developers probably wouldn't be interested. They don't want to stand up their own payment processor, or don't care to do integrations with a bunch of third parties, and tolerate the fees to use Apple's payments platform. And for many of these developers, their entire business is built on their relationship with Apple. Getting their developer accounts terminated would mean shutting down entirely.

It's the weakest objection you can have, and typically would only be sufficient to get relief in very, very specific circumstances where the unfairness could be proven (as intended). But this case involves broad policies for millions of developers, and it's perfectly compliant with permitting other payment processors.

So: there's almost no chance it would be "shot down" on those grounds.

They're clearly making Apple's in-app purchases the preferential choice by prohibiting developers from using anything but a single plain text link, and scaring users with strongly worded warnings.

If we’re talking about the details of the implementation, maybe.

If it’s about the commission that still needs to be paid, then no. That’s directly mentioned in the original ruling by the district court, a commission is due regardless.

You agree to keep accurate books and records related to your development, manufacture, Distribution, and sale of Royalty Products and related revenue. Epic may conduct reasonable audits of those books and records. Audits will be conducted during business hours on reasonable prior notice to you. Epic will bear the costs of audits unless the results show a shortfall in payments in excess of 5% during the period audited, in which case you will be responsible for the cost of the audit.

Ironically, this is something that is bothering the appellate court as well if you read between the lines of their judgment[0].

They gently criticize the district court for both saying that developers should be able to link and sell outside the app while simultaneously saying that it’s undesirable for Apple to audit developers because it’s too cumbersome.

But the appellate court isn’t meant for do overs, just for when courts have erred in a significant way, so they only gently lament this, instead of doing something about it.

0: https://cdn.ca9.uscourts.gov/datastore/opinions/2023/04/24/2...

For every value created a customer receives there is value captured by a company paid by this customer. Let's say a company creates a service valued as 1X by the customer and the customer pays 1X for that. This balance guarantees accessibility and interest among many customers.

Apple tax demands for a customer to pay 1.43X for the same value of 1X (0.43 = 30% of 1.43). It means that the balance is ruined and customers do not get enough value for what they pay. In value, they still get 1X despite paying for 1.43X.

There is a price elasticity curve that measures how many clients a company loses after each step of the price increase. In other words, a company gets significantly fewer customers due to the increased price at the same time, it’s unable to benefit from an additional 0.43X customers paid. A drop in the revenue is significant. At the same time, the company needs to increase its marketing budget effectively decreasing its margin even more. That makes business unsustainable.

Imagine what a decrease in purchases a product gets if its price is increased by 43%. This ruins all economic assumptions of a business.

Not to mention that if it has any network effect, significantly fewer users result in a degraded experience for all users.

I'm considering using PWA for the next mobile app and not investing in native iOS development. Even 50% fewer users due to PWA installation is better than being a lifetime slave to Apple which extorts 43% of what a company gets after Apple TAX from a user.

1. A user knows they want to install a certain app; they do so using the app store since that's the only method Apple allows.

2. A user discovers an app while browsing the App Store, but Apple isn't involved beyond that.

3. A user discovers an app through Apple's marketing, e.g. from WWDC.

With (1), it feels very unfair for Apple to charge 30% just to essentially get out of the way. It's not too far off from Apple threatening to block websites from Safari unless they agree to a ransom payment.

With (2), Apple did refer the customer in some sense, but it still feels unfair in a way since the user was essentially forced to use their App Store for discovery.

With (3), at least Apple is putting in some kind of work (specific to the app) rather than purely rent seeking. Still feels morally questionable since developers have no choice to opt out, though.

Keep in mind Apple sells advertising in the App Store. They make $ beyond just the 30%.

Disclosure: I am APPL shareholder and sometimes app developer.

[1] https://www.ign.com/articles/2019/10/07/report-steams-30-cut...

> it ruins value-chain and makes it uneconomical

This is empirically not true. If the value-chain is so 'ruined' and 'uneconomical'. Why are there so many iOS devs? Lots of people are participating in the system and lots of people are getting rich.

Examples of truly uneconomical ecosystems are Windows Phone and Blackberry - which is why all the devs left and those platforms are dead.

Survivorship bias. You only see businesses that have high enough margins to eat the fees. Whether that's a desirable set of incentives for long-term prosperity of everyone involved is a different question.

Apple could raise their fee to 90% and there would still be plenty of iOS developers using in-app purchases, because selling a few bytes in a database is effectively free. It would all be trash, but they would definitely be there.

That's exactly why the apps succeeding financially on the play store and app store are casino-like games.

I found this discussion of the Apple v. Epic ruling to be informative:

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

Indeed, while the Court finds no basis for the specific rate chosen by Apple (i.e., the 30% rate) based on the record, the Court still concludes that Apple is entitled to some compensation for use of its intellectual property.

https://stratechery.com/2021/the-apple-v-epic-decision/

The judge hinted here and there that Epic should have sued over the size of Apple's cut, not it's right to take a cut.

Every single framework and the OS itself up to the Mach OSS Kernel is Apple IP.

It would be entirely unfeasible to run anything on an iPhone without some Apple IP. You'd be looking at an Asahi Linux for iPhone.

Apple is also benefiting from developers IP, as they enrich their value proposition.

Should Intel or AMD get a cut from any app (including Open Source) on Windows and Linux? Should MS get a cut of every app you run on Windows?

You buying the device compensates Apple IP. Commonly their marketing showcases heavily third party apps.

A developer writing an app for iOS can use the APIs provided by Apple without agreeing to license them.

(Granted, you can't get your app into the App Store and onto iPhones/iPads without agreeing to whatever Apple wants you to agree to. Which... is part of the problem.)

[0] https://en.wikipedia.org/wiki/Google_LLC_v._Oracle_America,_....

If it were possible to run unsigned code on the average iDevice (and Apple's framework/drivers disabled for unsigned code) then this would have already been done, a long time ago.

If that one person does it and lets everyone use it, will they do it for free or should they charge for it, perhaps as a percentage of revenue of the developers and applications who use the code?

The consumer, who bought the device? Surely the cost of development of said IP is in total recouped from device sales? The device doesn't work without said framework.

The developers who provide a reason to buy the device? Why should they be forced to use a monopolistic platform only because Apple's marketing has successfully clouded consumers' heads?

Humans are terrible at actually boycotting, but I'd love to see what would happen if 90% of app store devs pulled their apps from app stores. Would people buy as many iPhones? Ooooh, now we realise the value proposition that devs are _offering_ Apple, not taking from them.

Watch and Mac are more or less failed developer platforms (how many native 3rd party apps exist for them?) yet are also both huge businesses just with Apple apps.

Here's another caveat: assume the bundle I distribute is dynamically linked into the underlying operating system, such that I'm definitely distributing nothing except my own code that I wrote. Or, similarly: I ship nothing but my own code, plus a script I wrote the purchaser has to run to statically link the package with iOS libraries present on their Mac.

If you were to compile it yourself such that the end-user device would need to be jailbroken because it lacks the necessary digital signatures, IANAL but I think this would be totally fine on your part, and the end-user would be protected by the jail-breaking exception to the DMCA;

> Jailbreaking and Unlocking Smartphones and Tablets

Since 2010, the DMCA has allowed users to jailbreak their smartphones in order to execute lawfully obtained applications unauthorized by the phone manufacturer. Last week’s announcement reaffirmed the rationale that using unapproved applications on smartphones is fair use and limiting users’ ability to execute such applications hinders choice and impairs innovation.

https://jolt.law.harvard.edu/digest/latest-dmca-exemptions-r...

This is a non-solution.

Many free apps on the store who can get away with charging outside do it. Uber, Banks, etc...

Why can they use Apple's IP for a flat $99/yr and others don't? It's not a fair system. Paid apps are essentially subsidizing the free ones.

What makes the iOS situation different? Aren't apps essentially "digital accessories"?

The concept that Kroger (for instance) has a monopoly of customers in its own store is ridiculous. There are other stores, and other bazaars.

What analogy would you use to describe this situation that clarifies your position?

I'm not making the argument from a legal perspective, but from a reality perspective, I think that's a very poor analogy to the way operating systems (and "platforms" generally) work.

The very nature of operating systems is that they have much more control than a simple store. For example, if you want to switch from Kroger to Safeway, just go to Safeway. There are almost zero switching costs. I actually was strongly considering switching from Android to iPhone solely to get iMessage access (that's a whole different ball of Apple anti-competitiveness, but I digress...) But in the end, even after buying the iPhone, I decided to give it away as a Christmas gift because I just couldn't stomach how painful switching would be after a decade-plus history on Android: I'd lose all my Android apps, I'd lose all the easiest access to things that live in Google's ecosystem, I'd lose my day-to-day familiarity with my phone, etc. To be clear, I'm not saying that's impossible, but it's just a much higher burden that deciding to go to a different grocery store.

Note the government has often developed special laws for "platform businesses", for example railroads, telecoms, etc., understanding the unique positions these companies are in when it comes to controlling the larger economy. I wish they would regulate operating system platforms in a similar manner.

That very much depends on how much you're invested in a particular platform.

Using the store analogy, if you decide not to shop at Walmart anymore because you detest their policies, and the closest store that carries the products you're used to getting is 20 minutes away, or maybe you now have to go to multiple different stores to get everything you need, making an extra 50 minutes of driving, that's a considerable burden of switching as each time you make your purchases (plus pay higher prices).

This unethical model is not any better in our modern world.

[1] https://en.wikipedia.org/wiki/Company_store

Apple represents the town government, and the App Store is the only general store in the entire town; other stores have been banned. Don't like it? You're free to pack up and move to another city!

The reason I'd characterize it this way is that changing phone platforms is nontrivial. It's not as simple as just going to another store that day.

Your iMessage history disappears; Google can't transfer that to your Android phone. They claim to be able to transfer SMS/MMS history, which surprises me: I'm not sure how they accomplish that. I'm sure there's a ton of other user data that they also can't transfer. (Speaking of iMessage, any group chats you were in are now broken.)

Google of course has an interest in telling people that switching is easy and painless. It's not, though.

Everything else you mention is part of the nature of changing operating systems: software incompatibility / unavailability. That never has and unfortunately never will be solved. It’s hard enough to keep old software working on new releases of the same OS.

You can't force everything to be uniform and support all of the same features to make switching between manufacturers of a product-class "trivial". How's that part of a healthy free market? Requirements to that effect kills all creativity and specialization of products for different purposes. Android and iOS are different and that's a good thing!

You shouldn't. It's a marketing page.

This argument doesn't work if you don't believe the part about getting all the same apps, which is objectively not true.

It's a fun way to mock google, but it has nothing to do with the merits of this issue with apple.

There are no other stores, or other bazaars. If you want to sell an iOS app, your only option is the Apple App Store.

Apparently the courts don't believe this is a monopoly, presumably because you can also choose to toss your iPhone and buy an Android phone instead. I disagree with that reasoning; to me that's like if Whole Foods also exists in addition to Kroger, but if you want to switch to Whole Foods, you have to get an expensive operation to swap out your stomach, because the groceries at Whole Foods don't work with the stomach that works with the groceries at Kroger.

You also have the entire internet, no tossing required.

not saying it's good (in fact, it's much worse than what Apple is doing), but no one contested its legality

As a vehicle owner I'd like to be able to have a choice whether I want to install OEM parts or after market parts. The after market parts might be cheaper, or have features that the OEM parts lack. I would like to be able to purchase these parts without a 30% markup that goes to the car manufacturer.

As an iPhone user, I'd like to be able to install apps on my iPhone without having to pay the iPhone manufacturer a 30% markup.

I realize that this analogy doesn't directly address the issue of whether Apple has a monopoly on the market of iPhone apps, but it's how I think about it as a consumer.

[1] https://www.npr.org/2024/01/15/1224401179/kroger-albertsons-...

Not under US law according to the very court case being discussed.

Why are people still making this claim when the judge literally concluded otherwise and then a panel of appeals court judges confirmed her ruling?

Courts get rulings wrong all the time. How many times has someone on death row been exonerated for a crime?

The App Store is a monopoly by definition. It is the only form of app distribution to 100% of iPhone users. Going further, it is the only form of app distribution to greater than 50% of the US market. Vertical integration is a very valid argument to make here, same as it was with Standard Oil, and other companies of the early 20th century.

Looks like whoever developed iOS and all the hardware it runs on and the ecosystem that makes it appealing for rich users is actually providing Epic a ton of value and profit, but Epic doesn't want to pay for it. I wonder who's greedy here

(Also it's insane how we just accept that Epic with its massive profits and margins is the one who wants to get a discount from Apple, if anything they should be charged double what small business single person devs pay.)

Epic developed a cross-platform game that runs on half a dozen platforms. The appeal of the game is exactly because of that. And you claim that Epic should pay 30% to Apple, because "we are friends with rich people".

Not to mention that the "is actually providing Epic a ton of value and profit" claim is completely bollocks. Can you point to any iOS-exclusive games that matter out there? Ah, right. They don't exist. Because there's (comparatively) very little money in iOS gaming.

What?

> "is actually providing Epic a ton of value and profit" claim is completely bollocks

If it was true Epic wouldn't be clamouring so hard for App Store presence and iOS users. Epic is the first to admit that App Store provides a ton of value and profit. The whole rigamarole is Epic wanting it but paying less or nothing for it.

> there's (comparatively) very little money in iOS gaming.

According to whom? Epic filed a lawsuit because they were losing ungodly money after millions of iOS based gamers stopped playing Fortnite. What did they expect, users will start buy gaming consoles just for this? Sorry but that's ludicrous, there's plenty of other good games on iOS. Many of them also don't try to leech money off you or your kids like Fortnite.

> Can you point to any iOS-exclusive games that matter out there?

That's true of any big game, most games are released for multiple platforms because it'd be stupid not to do it if you can.

It's $1000, most people have acess to that kind of money, even if they need to finance it and even if it is a terrible financial decision for them to buy one, many still do.

"Most people" don't. I maybe do but it's at least half of my monthly income after tax & rent

Worldwide, iPhone user = rich person (and also almost any American = rich person). By being on App Store, Epic had access to those users. Then they lost millions of users after Epic left App Store. You reap what you sow.

Just something to think about if you want to argue that a 30% commission is too much for facilitating a high trust purchasing environment with customers who are ready to spend money.

Oh yeah, and you’ll never guess what Amazon’s policy is about steering customers off of Amazon.

iPhone users don't carry a second Android phone, and their purchasing decision has committed them to only buying on the App Store for at least a few years at a time. And the crazy part is they are paying the Apple Tax even for services like Spotify that they might primarily consume on other devices. You can't make a store that ships to Apple users - only Apple can.

The parent seems to be saying that when you take the difference between physical and digital goods into account, that Amazon is leaving him with a similar slice of the revenue.

You seem to be arguing that he has alternatives to Amazon.

However, you also seem to be making the point indirectly that the motivation for selling on Amazon, and why businesses sell in the App Stores, is that they want the additional sales that come from targeting those marketplaces.

Isn't then there little real distinction from selling products on Amazon (where you could sell elsewhere, but dramatically fewer would see and purchase your product) or the App Store (where you could make a web app and sell elsewhere, but dramatically fewer would see and purchase your product)?

Web apps are not a real alternative. Firstly, an app you can only use on a desktop is a non starter for almost every use case. So you need a mobile layout. Now, some features like background audio and video are not available as a web app. Some are less reliable like user sessions, timers, push notifications and offline behaviour. Technical innovation is not possible due to the standards based approach - for video calls you have to use WebRTC for example, for games you have to use WebGL. Some features like notifications, vibration, were delayed by Apple until users were trained to only accept native apps. There's others like battery status, Apple Watch, Settings pane that I don't know the exact status, but I'm sure App Store gets an advantage there too.

Now that they're trying to capitalize on it they're becoming worse as a store and I can't remember last time I used them (in NL).

If you buy an iphone there is no one to compete, Apple does not have to play the low margins game because there is no other game in town. Amazon does not take 9% if you sell somewhere else and does not care if you sell cheaper elsewhere, Apple does.

This. The problem is not the 30%, the problem is that iPhones do not have an option to buy apps from, lets say a Amazon Store or Epic Store.

However then people get shocked that Apple says ok, we've rolled out the ability for third party app stores, we still review all the apps before signing, and the store owes us a 20% commission.

If it's shipped via Amazon.

Their App Store monopoly is the most literal definition of anticompetitive bundling in the 21st century; they're tying the primary product (Apple hardware, software, APIs, etc.) to a secondary product (the App Store) that can be offered from multiple competitors.

Apple will continue to take a cut to make apps for the phone. The App Store and in-app purchases are how they take their cut today.

The bundling is anticompetitive against the potential market for third party payment providers and third party app marketplaces, sure. However, decoupling it is independent of reducing Apple's high fees. Apple will continue to charge a substantial fee for their part, even if due to regulatory compliance they offer less services to developers.

Someone would need to make a legal case directly against the fees Apple charges. I suspect that is a very challenging thing to do - least of which because they have never raised rates. The fees Apple collects have been the same since the first app was sold for iPhone, and the success has grown under that framework.

What I expect is that, for the first time, Apple and their App Store partners will be forced to reckon with user choice. Their business will have to change if their success is predicated on a neverending source of R&D funding from payment processing revenue.

So we do sell on other e-commerce platforms and you’re never gonna guess what their fee structures are.

(Basically the same as Amazon’s)

Whereas Apple could start charging 50% tomorrow and still have all the major apps in the store because of their market dominance position combined with ecosystem lock-in and walled garden.

e.g. Spotify, Twitch, Patreon etc. Most of the funds go to the creator. Completely breaks the model when Apple forces a 30% cut of gross.

That being said, i'd also argue Apple's app store is a complete monopoly on iPhones. Iphones and app stores are such an essential part of life, they deserve to be neutral a la internet neutrality. Not sure how we all become pro internet neutrality but somehow suffer Apple's 30% tax.

"You can't upgrade to premium in the app. We know, it's not ideal"

You have to go to their site to upgrade your account. Apple gets a 0% cut of Spotify's subscription revenue

2. Because some products might be sold at breakeven price to attract and retain customers

3. Because some products might be loss leaders to attract and retain customers

It's not anymore; the reason they continue to be so popular is locked-in mindshare (just like you think of going to Google to search the web) and because of the fast shipping and easy return policy (esp through Prime).

b) I don't know if parent poster was talking about FBA (fulfillment by amazon) sales or not. If they are, then Amazons cut includes shipping and storage costs, which for low value items are often more than the stuff costs itself.

I've been burned by too many places to just start arbitrarily buying from someone I've never purchased from before directly. I've had companies just not respond, accuse me of stealing, tell me missing packages aren't their problem, charge enormous restocking fees, and in more than one case call me an idiot that doesn't know what I'm talking about. None of that with Amazon.

Maybe after establishing a relationship of being a reputable brand I could be swayed over, but even then there's no benefit to me unless the price is cheaper.

But genuinely, your comments enrich this sort of thing. I love your input.

Apple will lower their cut to 15% if you earn less than $1 million USD/year across your app businesses, or if you sell subscriptions and your subscribers persist for longer than 1 year (so 2nd - Nth year of subscriptions are split at 85/15)

Not defending the size of their commission, but in practice it does vary from the 30% that is commonly quoted

The fact that they have a browser and allow “3p browsers” is only because the web was already established and customers wouldn’t have bought in without it.

iPhones and iPads are not general purpose computing devices. Not by tech, but by policy.

https://krausefx.com/blog/announcing-inappbrowsercom-see-wha...

I always thought that a company should make an app those does something trivially, but also has its own in app browser as the true functionality.

Making things proprietary when they should be commodities is a step backward, and we should fight that, tooth and nail.

Firefox hooks into the Android type display settings. I would like to see chrome support this. It really adds to the app feel.

When you make a PWA you have to remake native components. Material Design 3 Web Components is not done yet. Apple has nothing for you so just set your border radius to 17px or whatever they use. Backdrop filter blurs.

You don't get the advertising from the app and play store. You don't get discoverability. However, discoverability is a marketing function. If your acquisition costs are under 30% of your product fees then there is no reason why you can't drive users to your mobile optimized website.

Added: I will also add that the icons I'm using are very basic. Found in many ui kits. The minus symbol, arrows, trash can. The only one that is recognizable to the trained eye is that I'm use the copy symbol (two pages). So if it's going to be an issue for that one I would be fine to use something from Google. I just want Apple to know that I'm on team Apple. I want people to use Apple products. When they come out with SwiftUI Kit for web, I will be the first user. For a product like mine, most users are iphone users.

Hopefully they all figure something out eventually to allow Kindle purchases from the app.

I kind of figured this already when there's no way to filter apps by "doesn't have in-app purchases".

If you attempt to purchase a kindle book from within the kindle app, you will not be able to. Nor will there be any messaging explaining how to make a purchase (because apple does not allow such messaging). You’ll just be mysteriously confused about why you can’t buy a book.

No idea why the price through the app was better than the price on the website. Maybe some kind of promotion? Weird.

You can use your credits from your subscription, but you cannot pay for a new audiobook in the app.

It’s a relatively recent feature (past year), but it’s possible.

I don't see how Apple would prohibit me from visiting a website, and they've allowed use of content/subscriptions purchased elsewhere in iOS apps for a while now.

What has not been allowed (at least until today) is to directly link to that external website.

Although I think this sounds extremely petty-bullshit of them, in part because that flat 3% is basically calculated to make this cost more for developers who do this overall, the court in the Netherland did go along with it. So we'll have to see how it'll work out under US courts now.

(I feel that them charging some sort of fee for the App Store isn't entirely unreasonable, though this seems too high -- we can debate the actual amount that'd be acceptable. It's the lack of an alternative via sideloading that makes this egregious.)

No Apple's argument is that this is a fee for everything e.g. SDKs.

As well as being a highly lucrative distribution channel.