
Apple’s app store and other digital marketplaces [pdf] - mudil
https://www.analysisgroup.com/globalassets/insights/publishing/apples_app_store_and_other_digital_marketplaces_a_comparison_of_commission_rates.pdf
======
supernova87a
Hacker News readers are a pretty biased sample of people -- they generally
have direct interests in lowering commissions paid because they run businesses
paying such commissions. And advocating that any platform provider is a
monopoly restricting free exercise of selling goods. Often, the arguments will
be phrased in terms of "should" or "fair" or "can't".

But this is the oldest position in the book and is a fight that comes
naturally with commercial activity -- everyone wants to not have a middleman,
and fight against it.

The question is, are you entitled legally to have some certain % charged to
you? As a matter of "fairness"? Is a platform that controls access to a
fraction of mobile device software sales an exclusionary monopoly? Has that
prevented you from selling software elsewhere, or exercising your trade as a
programmer? I personally (and I have no financial interests either way) think
the issue is not as principled as some people make it out to be.

~~~
mthoms
Good points. I think the thing that irks people is Apple's bullying. They just
don't seem to be operating in good faith. For instance, from the report, here
are Apple's "Anti-circumvention Policies":

>2\. “Multiplatform Services: Apps that operate across multiple platforms may
allow users to access content, subscriptions, or features they have acquired
in your app on other platforms or your web site,... provided those items are
also available as in-app purchases within the app. You must not directly or
indirectly target iOS users to use a purchasing method other than in-app
purchase, and _your general communications about other purchasing methods must
not discourage use of in-app purchase._ ”

Apple is dictating what I can tell my customers in "general communications"
where Apple is not involved. That's not a free market, it's abusive. If a
customer comes to my site from a search I should be able to say "Here are the
purchase options. Please note that Apple takes 30% if you purchase through
their store. If you purchase direct, our processing fees are only %2.5".

In that statement, I'm not making any judgement call on whether Apple is good
or bad. I'm simply stating a verifiable fact. If the value proposition of
Apple's store has benefits to the consumer then its merits should stand on
their own.

For the record, I believe the App store offers many solid benefits to
consumers. I'm just saying we should let the consumer decide if the benefits
of the App store outweigh their other chosen criteria.

TL;DR Apple has no business inserting itself in my customer communications on
my own website so long as I only state facts.

Edit: This is from the perspective of say, an eBook author or MacOS developer.
I realize that iOS apps can only be purchased through Apple so the point there
is moot.

~~~
Despegar
>Apple is dictating what I can tell my customers in "general communications"
where Apple is not involved. That's not a free market, it's abusive. If a
customer comes to my site from a search I should be able to say "Here are the
purchase options. Please note that Apple takes 30% if you purchase through
their store. If you purchase direct, our processing fees are only %2.5".

Everyone that argues against the rule that says you can't advertise in your
apps ways to bypass the App Store for payment are basically arguing that they
should be able to free ride on the platform, something discussed in this
study.

>In addition, for their business model to be successful, digital marketplaces
often have to rely on rules that prevent customers from free riding on their
services. Free riding involves buyers and/or sellers avoiding fees after the
platform has helped connect them, which means that the platform is not
compensated for the successful match and the use of the platform’s technology,
tools, and services to facilitate and promote valuable transactions between
buyers and sellers. A review of the policies and rules of large app stores and
online marketplaces that distribute physical goods and services — marketplaces
for which the risk for free riding is particularly high — shows that digital
marketplaces routinely forbid behaviors aimed at avoiding fees.

>In addition to the commission on paid apps and in-app purchases of digital
content, services, and subscriptions, Apple imposes guidelines that govern the
use of the App Store. Among those policies are rules about in-app purchases to
prevent users and developers from free riding on Apple’s App Store services
and investments. Apps cannot explicitly steer app users away from in-app
purchases — for example, by providing external links that bypass the App
Store.

~~~
mthoms
My example was about communications with customers who come to me without
Apple's help. Such as on a website that I paid for, and the customer comes to
me via a Google search ad (or good SEO) that I paid for.

Ultimately, a mobile app [0] will be purchased through Apple. Should they get
a commission? Of course. But since they didn't provide the "discovery" or lead
generation it should be much less.

[0] I'll use mobile apps in this particular example because it's less
ambiguous.

~~~
supernova87a
How are we to determine who came from what source the customer came from?
Offer them a choice to say, "I found this book on my own and just want to buy
it here, discount = -10%"?

~~~
mthoms
Referral links have been around since the late to mid 90's.

------
herf
This is a fine bit of research, but exclusivity should be the first question--
the high-order bit. There has been essentially no market discovery of prices
because of exclusivity.

Since 1992, there has been "free" distribution online for software (e.g.,
Quake launched this way in 1993), and makers of software were able to find
their own distribution models without retail in the middle. This is also how
the entire web happened, when Netscape Navigator launched in 1994.

To compare pricing in mobile app stores to things like brick and mortar boxed
software is a mistake. It ignores the internet entirely, and how the industry
worked for the 15 years before the iPhone launched. There are much more price-
efficient models than this.

~~~
dfabulich
As the report shows, all of the major stores charge 30%, not just Apple, even
when the store has no exclusivity.

Apple App Store charges 30%, and it's the only way to publish a native app on
iOS, but the Google Play Store charges 30%, too, and Android supports
sideloading. The Windows Store and Steam both charge 30%, too, even though
it's trivial to download games for Windows from any web site.

It would be reasonable to guess that Apple would exploit its market position
to charge higher rates than the Google Play Store or Steam, but that hasn't
happened, and it doesn't seem like it's ever going to happen.

~~~
supernova87a
I'm no legal strategist, but I would take the position that even if Apple's
store charged double or triple what others do, that is not the standard by
which what is legal should be measured.

Apple (or any platform) provides a service for people / companies to
voluntarily develop software to offer to the users of that platform. What cut
they take is an agreement entered into based on people's assessment of the
costs and benefits provided, and people are free to decline it and take their
efforts elsewhere. Their terms for their platform are not hindering people
from competing and offering services on another platform. Each developer is
free to make his/her own judgement about whether that commission is tolerable
and desired, for the value created.

If the agreement if free and voluntary, Apple could set any price it desires.
You, in your own business are free to (and probably generally also try to) set
the maximum price you desire. By some similar logic, all apps should charge
the same price to be seen as fair. What principle says that one platform's
price has to be in line with others? It's what your offering can justify, and
what people are willing to pay, with free choice.

~~~
dfabulich
I wasn't making an argument that Apple isn't doing anything illegal, but I
think it's not credible to argue as @herf did that "there has been no market
discovery of prices due to exclusivity."

The market for Android and Windows app stores has settled on _exactly_ the
same rates as iOS apps, which is _exactly_ same rate as game-console platforms
that have only one exclusive store. 30%, across the board.

Android alone is sufficient evidence that sideloading doesn't force the
dominant app store (Google) to lower its rates to compete.

~~~
supernova87a
Oh, sorry, I wasn't speaking in the form of direct "you", I was just
piggybacking on your comment to state a parallel point.

------
Despegar
I think this is mostly a response to David Cicilline's comment that Apple's
30% is "highway robbery" [1]. It compares it to other marketplace take rates
showing that Apple's 30% isn't "highway robbery", but also that Apple does
much more to earn their 30% than say GrubHub given that iOS apps rely heavily
on Apple tools and technologies to create and distribute apps.

[1] [https://www.theverge.com/2020/6/18/21295778/apple-app-
store-...](https://www.theverge.com/2020/6/18/21295778/apple-app-store-hey-
email-fees-policies-antitrust-wwdc-2020)

~~~
damnyou
Do developers have a reasonable choice other than to use Apple tools? You
can't even compile an iOS app on a server-class operating system and instead
have to overpay for low-spec Macs for CI.

~~~
dfabulich
It's not practical to cross-compile an iOS app on Linux (or a macOS app, for
that matter), but it's not an App Store policy to forbid you. Apple just
hasn't shipped any software or documentation to let you do it.

Is it your view that Apple has an ethical responsibility to ship cross-
compilation build tools for Linux? (Is that because it's unethical to ship a
closed-source operating system with a closed-source build tool?)

~~~
sdflhasjd
I'm not sure what you mean by "not practical". It is definitely possible for
macOS apps, and it seems to be possible for iOS apps too.

I have worked on an open source game, we cross compile for macOS on Linux
without any Apple hardware.

As far as I understand - or have been told, this violates some Apple license
terms.

~~~
saagarjha
Surely building a binary that links against their SDK, as long as your are not
using their toolchain, must be fine?

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t0ughcritic
The anti trust case can’t come soon enough. Apple is definitely taking
advantage of its position, the fact that they also ‘help’ developers remove
many reviews where users complain of price proves that costs are pushed to end
users which is not good.they get them deleted so there is no evidence for
anyone to say it’s a problem. Well played.

------
PaulHoule
When you're comparing your client to Ticketmaster you are in trouble. You're
out of touch: go work for a politician that needs a few Mooks.

~~~
mthoms
Exactly. They also managed to compare themselves (favorably) to high end
auction houses like Christies. What a bizarre comparison.

------
grezql
whats more interesting is how much Apple paid for this report.

~~~
martimarkov
I don’t see how that is more interesting when the data in the report is
accurate. So I don’t think they made stuff up in the report. The data is
pretty much public.

~~~
RealStickman_
If you torture the data long enough it will confess to anything.

~~~
kanobo
That's an excellent and funny way to say it, makes me chuckle, I will add it
to my brain archive if you don't mind.

