Discussion of Apple topics here on HN almost always gets reduced to the argument that Apple is not a monopoly, so what they are doing is OK. I want to present an alternative viewpoint. It's not a monopoly issue, it is an anti-competitive issue.
In Canada, we have three major cell carriers. None of them has a monopoly, or anything close to it. None of them has even 50% market share.
You can have a 10 GB smartphone plan with Rogers for $75. If you don't like that, you can switch to Bell's 10 GB plan for $75. If you don't like Bell, of course you can switch to Telus's 10 GB plan for, wait for it, $75.
The Big 3 operate smaller brands with fewer bells and whistles and lower costs. You can get a 4 GB cell plan from Koodo (Telus subsidiary) for $50, or from Fido (Rogers subsidiary) for $50, or from Virgin Mobile (Bell subsidiary) for $50.
Sometimes one of them has promotional pricing, like $45 instead of $50 for 4GB. The other two offer the same pricing for the same duration. Sometimes one of them increases their prices by $5 a month citing reasons such as infrastructure investments, lower Canadian dollar value, or inflation. The other two increase their prices by the same amount a couple of days later.
And none of this is collusion in the legal sense. They don't gather in smoke-filled rooms and decide how to screw over their customers. There is not back-channel communication whatsoever. And it is not because the competition is so perfect the prices have been commoditized. In fact, Canada has some of the highest cell plan prices in the world, even adjusting for factors such as population density and GDP.
It's just that the big companies have decided to stop competing. If you live in, say Alberta or Ontario or BC, you have three options and they are all the same overpriced crap. Cell carriers in Canada are not a monopoly, but you don't have to be a monopoly to harm customers with anti-competitive behaviour. Apple and Google, Android and iOS do not have a monopoly or a collusion agreement. But they are harming the customers all the same.
You see something like this with gasoline pricing - major brands will have "competing" stations across the street from each other, but their prices moves in lock step without a race to the bottom.
Memory vendors have explicitly colluded in the past, but they really didn't need to - they just needed to copy their competitors' posted pricing. Presumably that is what they do now.
If there are high barriers to new competitors entering the market, then the situation is unlikely to change.
Having worked at one, we would check the prices of the two others on the same road once every hour. These numbers were reported into HQ, and a price adjustment would be made to be lower.
It’s very competitive and people are willing to drive or wait until a different time of day to get a lower price.
EDIT: Maybe I should have said: that’s at least not the case everywhere.
I don’t have downvote yet and you’re tempting me to flag you. The US is a vast and diverse country with plenty of areas that aren’t homogeneously Liechtenstein rich but it’s far from any widely-established definition of a third world country.
Indeed price signaling [1] is a real thing when it comes to anti-competitive behavior among dominant market players - and government economists love analyzing these types of problems for antitrust cases, as they can be like solving forensic puzzles. [2]
I don't think so; the situation of copying the posted price can easily trigger a price war. It is not stable, unless someone is designated as the price master, and the others are slaves. That's the only thing which can explain that the prices can go wildly up and down, yet in lock step.
Everyone acting in complete independence, simply copying everyone else, cannot lead to stability, let alone the durable, persistent lock-step stability that is seen.
A cartel, by my understanding, would require the act of collusion to take place.
The issue in the telecoms market, at least IMO, is the high entry price (spectrum access sometimes meaning there is no option aside from buying an existing operator), combined with scale of the operators (usually large and national-level) meaning there is little entrepreneurial spirit to drive costs down.
It can cost a large company 100x what it would cost a small company to do the same work, and that becomes a price everyone ends up paying for. But absent knocking down barriers to entry, it's a very hard market for a new entrant to get into, unless you are happy to just sell to the existing incumbents as clients.
> You tend to see it with gasoline pricing as well - all the major companies have nearly identical prices.
Yeah because otherwise you make no money on gas. If I undercut the store across the street by a penny, they will then immediately match me or undercut by a penny. Pretty soon, we are at the break-even point and can't go lower without losing money. That's not tacit collusion, that's just a race to the bottom.
There's a big difference between all major app stores taking 30% every time money changes hands, and a race-to-the-bottom industry like milk or gasoline. Try starting a dairy farm - I think you'll find you won't be able to price your milk lower than your competition, and as a result your milk will be the same price everyone else's has been for the past 50 years - ~$2-3/gallon.
I think I have a better analogy: Apple operates a market with a significant portion of economic activity in several industries / verticals, yet it sets its own rules and even is party to transactions. That's basically the definition of a black market.
Black markets are useful in some circumstances, but when they grow too big they have to be regulated and taxed. A lot.
You have changed the definition of "black markets" to something else.
A black market requires illegality. You are conflating "rules" of contracts and "rules" of law.
I agree that Apple "even is party to transactions". I think that's the common problem with Google (eg. Froogle / Google Shopping), Amazon (eg. Amazon Basics), and Apple (apps that compete and undercut 3rd party apps or which don't have to adhere to the same App Store contract clauses).
Elizabeth Warren discussed this frequently.
> Google, Apple, and Amazon provide platforms that lots of other companies depend on for survival. But Google, Apple, and Amazon also, in many cases, compete with those same small companies, so that the platform can become a tool to snuff out competition.
Hm, fair point: the App Store isn't illegal, so "black market" is pushing the term too far. However, the laws in the App Store aren't controlled by a political/state entity: they are imposed by Apple themselves. The fact that they are legal under US law, doesn't make them legitimate: democratic control (via regulation) does.
So I guess my point was this: past a certain size / power concentration a market/platform has to have regulations that are answerable to a democratic/political authority, not to a private party. That's regulation, isn't?
"Grey market" is taken, so how about "brown market"? :)
I can't follow your first paragraph. You are redefining words left and right.
App stores don't create "laws"; they have contractually enforced rules.
Regulations are laws if the regulatory body was granted the power to make regulations.
Your use of legitimate confuses me; I can't grok your intention.
The FTC has the directive and authority to regulate commerce. If Apple is violating an US law or an FTC regulation, the FTC should prosecute. Otherwise this discussion should be focused on what laws (if any) you think need to be created.
Except for it to be a black market illegality needs to be established and it isn't clandestine - the rules are freely available and there are other markets (android) available for apps.
This is a poor analogy.
I am still waiting for a real argument on HN as to what Apple is doing that is anti-competitive or illegal. Still have not found one.
Apple and Google are both charging 30% fees and together, they own almost the entire smartphone market. It is harming consumers due to the higher costs this 30% is imposing on transactions. Whether it is illegal or not is up to the court to decide. But as a customer, I would like to complain about this and state my dissatisfaction. Perhaps if enough people do it, they will change their behaviour.
Also as a voter, I would hope that the legislature make these costs come down. In Canada, the government recently intervened to reduce credit card processing fees. I would hope next they direct their attention to app store fees.
Because - at least in Apples case - customer and developers have no alternative and no choice. There isn't a market setting a fair price for Apple's "service".
You can't get on iPhones (for which people paid already!) without the App Store. You aren't asked if you want to pay for that "service" and there aren't any competitors. If you want to have an app, Apple owns 30% of your business, even if they didn't generate you a single installation.
This is the same as with store owners who have to hand over part of their earnings as danegeld to some gangs controlling their neighborhood. They also pay happily for a great "protection" service.
Would be a pity if something happens to your nice store (or app, in Apples case)!
I don't get how anyone who stands up for freedom of information, a free internet and a fair economy can still own an iPhone without developing schizophrenia..
> customer and developers have no alternative and no choice.
They have Android, which dominates the market.
I get it, Apple Bad! Bad Keyboards! No Upgrades! Bad Bad Bad! And yet people time and time again want iPhones over Android - because they like the way the App Store is, they like iOS, they don't want malware on their phones that is rampant on Androids. Opening it up will be WORSE FOR DEVS.
> This is the same as with store owners who have to hand over part of their earnings as danegeld to some gangs controlling their neighborhood.
No, it's the same as store owners who have to pay higher rent to be on a busy street. Which isn't illegal.
> I don't get how anyone who stands up for freedom of information, a free internet and a fair economy can still own an iPhone without developing schizophrenia..
There are plenty of avenues for information - the iPhone controls apps - but the rules of engagement are clear and 2 million apps managed to get on the app store. If you can't, that's your problem.
They are extracting rent from a market that's now too big and powerful and are enforcing rules that do not have political (as in citizens') legitimacy.
They have obviously won their market position fair-and-square and their rules aren't illegal. But extracting taxes ('rent' in economist-speak) from other companies just because they were successful at some point in the past is uncompetitive behavior now.
Same goes for Amazon/Google: extracting rent from a market-dominant position should be illegal (it isn't) regardless of how that position was won.
Once again - they are not market dominant, they do not have the largest marketshare of phone users. This is false.
> and are enforcing rules that do not have political (as in citizens') legitimacy.
This is basically saying to me "yea you're right, it isn't illegal, but I don't like it!!" They're charging for a service, there is nothing unfair about it. Frankly, it could be even higher.
> Same goes for Amazon/Google: extracting rent from a market-dominant position should be illegal (it isn't) regardless of how that position was won.
Google is a clear monopoly - they dominate the market. Amazon does not - Wal-Mart, Target, are all viable competitors. BestBuy, NewEgg, Ebay, etc.
Google offers clear alternatives to their play store.
Apple offers a closed experience, which is what my parents want. They don't want to be tricked into downloading malware through some crappy facebook post.
This is depriving the market of a valid product, it's unfair to people who want this product, so that devs can make more money, and Epic can rip off more kids for a skin on a gun.
It's a regulation issue. Things were similar in my country until the state decided to sell the fourth frequency range licence at a reduced cost (to offset the lead of the other three) and made routing cheaper. In exchange the new provider had to commit infrastructure investments. At about the same time, it was legally mandated that transferring phone numbers between providers be simple and cheap. The prices cratered pretty much instantly.
I think I'm on a 15€/100GB plan at the moment (plus a bunch a stuff like 25GB a month of international roaming).
It's an argument that comes back often when talking about telco and it does make sense on the surface, but as far as I'm aware most the Canadian population lives in a pretty narrow range of the country's territory. There needs to be some compensation going into the dense areas paying for the infrastructure of the near-empty ones to a degree, but I have a hard time believing it justifies that level of pricing.
Just look at the prices in Australia or Russia. There's no good technical reason Canada should just be massively more expensive than the rest.
> reduced to the argument that Apple is not a monopoly, so what they are doing is OK.
Wait, how can what Apple does ever be okay even they legally don't have a monopoly.
Apple provides a marketplace (which they name store, but it's a marked place not a store) which is the only way to install software (on their phone) for millions of persons which means it's a marked and not just a marked place and they do both run the marked and provide products there but give their products an unfair competitive advantage (access to internal APIs, fast review, not applying app guidlines, subvention developent for the apps etc.) while haven basically rip-of pricing for (at least part of) the competition and intentionally preventing many business model and undermining how companies can freely present their products and company to users inside of their own products...
Not sure how anyone can call it ok, tbh.
Maybe legal due to a laws not yet having arrived in the 21st century but definitively not ok.
I think the terminology you're using ("be okay") is so vague it doesn't mean anything here. You seem to be arguing your own personal value set without telling the rest of us what your values are or what ethical framework you are arguing in.
The only thing I can infer from this comment is that you aren't arguing within a legal framework (although I suspect you might be wrong because "unfair competitive advantage" is something that can be enforced under US and EU law).
I'm not a lawyer, anti trust law and monopoly law a rather complex and subtle things.
Especially if we consider the difference between the intend behind a law and it's current legal interpretations.
Because of this I try to avoid arguing using the actual laws.
I also believe many of this laws need some degree of adaption to the modern world. Sometimes with changes in the law and sometimes with changes in the interpretation of the law.
So yes it's no accidentally vague.
More concrete would be : It should be illegal but might not be due to the law not being adapted to the dynamics of many modern markets.
The usual answer is that people who buy the phones must think it’s ok, otherwise they’d buy a competitor’s phone.
And of course opinions differ on the good and bad aspects of their policies.
It’s not like all the competitors who are complaining are ‘fair’ in any particular way.
Also, your description fits a department store, or Amazon, or pretty much any other store for that matter.
All store owners get to stock what they want, charge what they want, and give their own products advantages.
If your argument is that no store should be able to do these things, then that seems like a reasonable position to hold.
Perhaps we do need to overhaul the notion of marketplaces and intermediaries in general. That seems like a relevant idea to explore.
The people arguing about monopolies are saying that everyone else should be allowed to do these things, but not Apple because they have too much power.
> The usual answer is that people who buy the phones must think it’s ok, otherwise they’d buy a competitor’s phone.
People don't realize what's actually going on with the policies and practices of the app stores. They just buy the phone and use it. If they did know, they would probably be more opposed to it too. They don't realize how these practices actually impact them and their choices on the platform.
As far as I remember it is a perfect Nash-Pareto equilibrium strategy: "keep the same price as the other side until the other side changes it". And, if all sides follow this strategy then prices are always $50
It's likely that the investors in each company are mostly the same institutions, namely index funds and ETFs issuers. When you have investors that own everything, they don't want the companies to compete.
Yup. We have similar behaviour with cell phone companies here in South Africa. The big two have reached a stable state, are happy with their market share, and know that as long as they don't directly talk to each other when raising prices, they are legally in the clear.
> It's not a monopoly issue, it is an anti-competitive issue.
Indeed. It is a common misconception that antitrust only applies to monopolies. You can engage in anti-competitive behavior of various kinds, illegally, without actually having a monopoly in strict terms.
For locations in Canada with a local cell provider or internet provider, the pricing is much better. Either lower prices, more services for price point, or a combination of both.
I suspect this is/was part of the push to get non-incumbents into the cell market.
Even then, it's just a matter of time before they get assimilated into the Borg. Manitoba used to have MTS, until it was bought by Bell. I would not be surprised if in 20 years Vidéotron and SaksTel would be long gone too.
Not to contradict your point, because I agree fully, but given how concisely you put it, I'd be interested in what your thoughts are on Freedom Mobile? I know they're kind of independent, but also their coverage sucks.
I used them for years and quite liked them. Inside a city, you can usually get good coverage. Outside of the cities, you paid a little extra.
But this was back when the best they offered was 3G, and their signal quality wasn't great. After a few incidents where I was downtown in Toronto, full bars of signal, yet couldn't open a single webpage or use my data, I decided it was time to ditch them. I loath the big-3, but I needed reliable service.
I've heard that after they installed their LTE/4G towers, most of those problems went away. Maybe I'll go back, eventually, but for now I'll be gouged like most Canadians.
They have serious coverage issues, even in Calgary, where they are headquartered. By the time their coverage converges that of the big players, I expect so do their prices. Right now, they are not a realistic option for most people because of the coverage issue.
That sounds like the kind of thing that doesn't begin to change until and unless someone either starts putting up their own towers or VoIP becomes ubiquitous enough to be a real threat to the cell business model.
This has been attempted before. Wind Mobile (now Freedom Mobile) was an upstart carrier that attempted to compete. They ended up just getting acquired though.
Their Wikipedia article paints a pretty bleak and accurate picture of the "competitive" landscape:
> Freedom Mobile Inc. is a Canadian wireless telecommunications provider owned by Shaw Communications. With 1,767,155 active subscribers (as of the end of February 29, 2020) in urban areas of Ontario, British Columbia and Alberta, it is Canada's fourth largest mobile network operator with 5% market share.[3]
> Founded in 2008 as Wind Mobile by the telecommunications company Globalive, Freedom was one of several new mobile carriers launched in Canada in 2008 after a government initiative to encourage competition in the wireless sector alongside Mobilicity (later acquired by Rogers Communications) and Public Mobile (later acquired by Telus).
Free did this in France for mobile. It really drastically squashed prices for some time. Then everyone went down to match Free's prices somehow and we're now at a new equilibrium...
Yeah, I spent half a day walking around phone stores in Vancouver trying to find a couple of GB pay as you go sim (expecting it to cost $10-20). Turns out they don't exist in Canada.
It cost me $50 to get a 1GB plan in Montreal because they bundled it with a useless 'calling plan' that only worked in the province. There has to be a special place in Hades for the people in charge of Canadian telecoms and banks, I hope.
But that same complained about phenomenon applies in the UK. Regulators do put at least some effort into trying to disrupt it but it's definitely there.
Example: A few years ago it was legal in the UK to advertise the price of broadband excluding the fee for "landline rental". This recurring fee notionally covers the service cost of the actual copper (in most cases) last mile cable needed to deliver service. In principle you could use it to make voice telephone calls (remember those?) and needn't buy it from the same provider as Internet service piggybacked on the same physical infrastructure.
So e.g. Big ISP #1 advertises Internet is "£5 for first six months†" and then the small print explains "† Plus line rental of £11.50 per month". That's £16.50 customers will actually be paying, and a competitor Big ISP #2 won't get far advertising Internet as "£15 for first six months" because that sounds much more expensive even though it's less. So sure enough they'll do the same thing only more so "£3 for the first six months†" "† Plus line rental of £12 per month".
Still, ISPs argued this is fair because they don't actually provide the service "line rental" pays for, they don't have teams of engineers in vans ready to dig up cable and repair it, that's something a last mile owner does.
Except, since the last mile is a natural monopoly that provider is legally obliged to publish its pricing and rationale. Sure enough it does bill for "line rental". But is it charging £12 per month? £11.50 per month? Er, no, over the modern period its costs have reduced gradually and it's charging those ISPs about £8 per month. So that £12 "line rental" is actually £8 line rental plus £4 "Money we're hiding from our real prices so as to trick customers".
Even if they never met in a darkened room and agreed to fix these bogus prices, the effect was that all large UK ISPs inflated a fee so as to make their prices look cheaper, taking advantage of customers. Maybe no crime was committed, except in the sense that customers got ripped off.
This particular loophole was closed by requiring ISPs to advertise the price that includes all fees needed to deliver the actual service, and sure enough once they couldn't use it to hide the real price the ISPs stopped pretending "line rental" cost 50% more than it really did.
Ha, you should see US prices. I had to buy a T-Mobile hotspot for work-from-home continuity when my home Internet suffered a major outage. The prepaid plans for $40 a month for 10 GB, with no rollover. It's impossible to just buy 50 GB and have it work until it runs out, which is obviously what I want for a failover data plan. When you have your monthly plan, you can purchase an "on-demand pass" to add extra data above your monthly allotment. The largest on-demand pass is 7 GB and costs $50. And each on-demand pass only lasts 30 days.
I think the UK telecoms market has much lower headline prices thanks to the sheer number of MVNOs (virtual networks) - regular operators even own MVNOs to get some brand segmentation (Three owns Smarty, Telefonica O2 owns GiffGaff, just to name two).
The MVNOs compete heavily on price, and drive prices down for savvy customers. You can get 3 GB/month with unlimited calls and SMS (with roaming to 50+ countries) for 6 GBP per month on a 30 day rolling deal, right now.
From working with Canadians, it always supprised me how they seemed fine with these non-competitive practices for Telecom and Banking. It seems that they are systematically over-paying for what they are getting.
Maybe it's a form of pride to have the "Canadian alternative"? Or they feel they couldn't really compete with the US/Europeans?
I wonder to what extent it's actually true though, to what extent are higher prices not simply driven by higher costs, rather than some kind of tacit collusion to drive excess profit?
Population density in Canada is about 4 per square km, in the US about 36, and in the UK (pretty typical for western-europe) about 270.
I know that much of Canada is mostly uninhabited and typical population density is a lot higher, still, to hook up Canadian telecom infrastructure seems to be inherently to be a much more expensive endeavour.
I compared quickly (not very thorough) the profit margins and some ratios of US/Canadian telecoms, and they're really not much different.
What's interesting is to look at the population distribution and not simply density. [0]
It's an extreme outlier in terms of habitable land vs land area. 5% of it's land is arable, as compared to close to 17% for the United-States. I wouldn't be surprised if 90% of the land was simply not inhabited.
Sure I already mentioned this caveat regarding that population density figures, but the caveat is nowhere sufficient to defeat the point.
Sources will state about 80% of Canada is uninhabited, and 47% of the US. In the UK it' 1-2%.
In other words, even assuming you apply the population density figures I mentioned in my previous post to only 20% of Canada or ±50% of the US, you'd still get a large discrepancy in 20 people per square km in Canada, vs 72 in the US, and still around 270 in the UK.
Hooking up the same coverage with 3-4 (US) or 13-14 (UK) times fewer people in that area should naturally drive much higher costs per person connected, which may explain prices.
And given profit margins of all the big telcos aren't exceptionally high for Canada despite much higher prices, that hypothesis seems quite plausible.
That's assuming everyone's getting coverage, which isn't really the case.
What I would really want to see is the density distribution of the parts of the country that actually have coverage. Eg how many square miles do I need to cover to serve 50% of the broadband users, 75%, 99%. That would give us a way better idea.
Lastly, I wouldn't discount the theory that the profit margins might be bad because the companies are inefficient. When there's no competitor or threat to the business it's easy to be inefficient and still end up with profits.
In Canada, Fido has $10/m + tax "Tablet Plan" which can be used on phones and gives you 4GB/m data. You may need to find someone who already has a Fido plan.
I use the 2ndLine app for (very rare) calls and SMS. It gives you a local number. Data-only is the most cost effective imo
You gave an example of price fixing, not anti competitive behavior. They don't have to meet up in a secret room either for it to count. If they are constantly adjusting their prices to all be exactly the same, that is illegal in the U.S. as price fixing.
Price-fixing is an falls under the umbrella of anti-competitive behaviour. For example, at least in Canada, Competition Bureau is in charge of avoiding price-fixing. On FTC website, price-fixing page is filed under Competition Guidance.
Exactly! The example just describes a cartel of companies that have an understanding of non-competition. If it was a truly competitive the prices, features and offers would always be better to attract customers all the time.
While 30% is steep I don’t think Apple is at fault here. You wanna be able to use their carefully constructed walled garden with security protections, servers, payment system and users? You have to pay to play.
The sadder part of this is when one of those not-colluded companies decide to increase a big number their service, the others wait to see is people accept this and then they do it as well. There is where we hurt ourselves.
What has worked in other countries, namely Australia, is MVNOs. The government is considering mandating telecom companies to give MVNOs access to their network, like they mandate cable and internet companies, but it is unlikely such a decision would be made anytime soon. Australia is truly a success story. I wouldn't mind if Canada's telecom landscape becomes more similar to Australia's.
I worked for one of the Canadian carriers, and they are only not a monopoly as far as the paper definition is concerned, but in practice they do in fact gather in smoke-filled rooms and decide to screw their customers (your words, not mine). They are also very good at pretending they don't.
Apple on the other hand has created an infrastructure to enable a billion interconnected devices, and they are now charging a fee to operate. They are not colluding or preventing competition, they are simply saying there's a price to play, and it's 30%.
It's natural that Fortnite doesn't want to share their profits, in the same way that Apple doesn't want to be the only ones taking the loses, but every time this question comes up, lots of comments assume Apple should bend over simply because it's bigger and wealthier.
The strategist in me thinks that Epic Payments is a provocation rather than a product, they've been in touch with state attorney generals about Apple's antitrust situation, and the real goal is to get that lawsuit out, bring the antitrust hammer down on Apple, and maybe get some free PR and marketing from the press cycle.
Motives matter, and taking the motives of foreign-owned businesses into account when dealing with one of the largest businesses in the US is a perfectly reasonable thing to do. What if the motive behind this is to just destabilize the price of Apple? What if it's part of a large campaign to destabilize a lot of US companies, not just this one?
Lawful actions conducted under whatever thinking is lawful, until the action itself no longer is. What you're describing is just euphemisms and excuses to start prosecuting thought crimes.
Law is meant to be kept , even if it isn't in you benefit.
That's the DEFINITION of "constitutional state"/"state of law".
It means the government can't just arbitrary bend the law if it fit's them on a case-by-case basis. If they want change they need to make a new law.
Even if Epic did act out on apple because of Chinese support the US has to handle the case fairly on basis of the facts of Apple abusing there marked power (which they obvious do, through not necessary illegally). Then, after or parallel to this they can decide how to handle the Chinese involvement, but this MUST NOT affect the given suite. That kinda what being a "constitutional state"/"state of law" is about. It's about being able to rely on the law being uphold independent on weather you family (or investors) might be crime lords or foreign powers or whatever.
Except Apple and Google make money from different things. Google makes money from selling your data. So they are fine with giving away software and turn a blind eye to side-loading of apps. Apple makes money from selling hardware and making a cut on software.
Yeah, sure, because if Apple was no longer able to enforce a 30% cut on all in-app purchases, that would totally destabilize the price of Apple (stock, I assume). Because they make the hugely overwhelming share of their money from...in-app purchases?
Just when the "Apple Fellow" Phil Schiller wanted to take some break, These recent App Store incidents starting from HEY will make it very very hard for him!
Doesn’t Epic take a cut out of every single purchase made of a game built with Unreal Engine?
Seems kinda hypocritical that they’re taking this stance when their licensing model is arguably just as burdensome on developers.
In my opinion, Epic should not put their app on the App Store if they don’t like the terms, just as they would tell a developer to not use their engine if they don’t like the terms.
Game console to General computing device isn't exactly apples to apples. But yes, It'd be great if users could install unsigned apps on all the devices they own.
If by great you mean "great for malware makers" I guess so. HN has a big problem of pushing for changes hat benefit highly tech-literate people but in reality the majority of the market needs signed apps so they don't download harmful programs.
I think people need to stop looking at their own immediate interests and start considering long term aspects of things. You can't just throw out technology now without understanding how it empowers bad actors, because it amplifies them too.
Perhaps if running unsigned apps became more widespread, businesses will spring up in the space to offer secure, curated apps as third-party app stores.
Desktop software, for a long time, did not have the notion of specialized app stores or enforcing signed programs. Yes, Windows has loads of security issues. But surely this can be a problem that can be solved over time?
> Perhaps if running unsigned apps became more widespread, businesses will spring up in the space to offer secure, curated apps as third-party app stores.
They should go ahead and do that, then make an OS and mobile devices built around their store, so I have an option other than iOS devices when I want someone in my life who's not a tech nerd to have a reasonably safe and usable computing experience that's still very robust and doesn't require any work on my part. That would be competition and improved consumer choice.
I want more options that deliver the experience Apple does (or better! Please!) rather than fewer. That's the choice I want. I've got tons of only-nerds-can-use-them-safely computing options. I don't need more of those.
Apple is a hardware company that wants to ensure the best possible UX for their customers, and does so by vetting the software that gets installed on their hardware products.
What's Microsoft's parallel motivation in your analogy?
So you're saying that a software company that makes operating systems, and has the incentive to want programs that run well on the said OS, has no interest in wanting its users to be locked into the browser they also make?
I will disagree with dathinab and say of course gaming consoles are general purpose computing devices.
But they are general purpose computing devices with built-in malware that makes the device only useful for the types of computing the seller wants you to do with the device. And that's gaming, of course
Phone run everything from games over office apps to unlocking you apartment doors or handling the check-in at a hotel (yes some hotels have app based check-in).
(And in the end Apps is just a handy short form of Application, so you could say even the name kinda implicates this ;=) )
That's a software limitation, not a hardware limitation. An iPhone is also a general purpose computer that is limited (to a lesser extent ) by the software.
It's not an "undeniable right" but it's also not like there are a lot of other options. You can say "just move to another platform" or "then make your own platform" but you also have to be a realist.
This is why antitrust laws exist - sometimes the market realities make this nearly impossible.
Seems to me the biggest hurdle to moving/finding customers via the Google/Android platform is that they won't spend money over there.
The feature/capability parity between the platforms means they are, in fact, both capable of serving these markets. But people want to vote with their dollars in the iOS ecosystem, and now the players want to change that ecosystem.
I'm not entirely convinced that this is Apple's problem, in as much as it is Google's fault for not fostering a properly competitive revenue delivery platform, even though it has the maturity and standing to do so.
But does that matter when they have milions of people in that marked. Isn't that a size where it really shouldn't matter anymore if there is another similar bigger marked?
Also for some serivces iOs users are the large majority, like more or less any "real premium" service (Like apps you have to pay 10 or so+$ a month or 100+$ when buying them).
End-customers are not locked into a specific game engine in any way, whereas mobile ecosystems have lock-in through devices and already-bought apps. That's a major difference for a software maker.
Anti trust laws (or competition laws) tend to apply to players with an clear control over the market, monopolies that stifle competition. Apple has ~14% of the mobile market, compared to Android's ~86%. I'm curious about how this will play out as it might have an impact in other sectors where smaller players by market share exercise a bit too tight control.
Google Search should be free to only show location results from Google Maps, and ban Yelp, etc.. entirely from Google Search. After all, there's other search engines, right?
There is a history here where using your market position in one area to force your product in another as being illegal (see the recent EU fine against Google for "abusing their Android monopoly" for example: https://ec.europa.eu/commission/presscorner/detail/en/IP_18_... ). Apple seems to be crossing that line rather brazenly.
I wouldn’t be opposed to this but Apple could make a case that using a competing app store voids warranty or care because they can no longer guarantee the software is ‘safe’ for iOS.
General computing platforms, in which you can run arbitrary unsigned code without violating the warranty, exist. In fact, Apple has a major business in manufacturing them (MacBook, etc.)
To a degree they could (although it'd be quite embarrassing for Apple to claim that their OS can't prevent apps from damaging phones), it could be somewhat similar to how Android manufacturers sometimes handle custom ROMs by having the unlock set a permanent flag somewhere. Doesn't necessarily give them an out of legally required warranties.
It's about monopolization. Should a company be able to vertically integrate and install a toll booth to profit off of all developers on their platform? Or does that hurt consumers more than it would hurt businesses to separate that power?
- Yes, every shmuck who buys only iOS cause Apple is the status symbol undermines everyone's ability to choose. But we'd need a consumer union to go after these monopoly-aiders as scabs. Ha ha ha not going to happen.
- All the other hardware manufactures are so shitty and quality control and integration that they are also responsible. Do we wait for Moon's party to break up Samsung so Apple gets more competition? Tell Taiwan to break up TMSC or do more direct-to-consumer?
Fundamentally we have the perfect storm of outsourcing and low quality, precarious Americans looking for status, and nationally-tinged monpolies. The idea solutions are just out of reach in the short term, so I support putting iOS on a stupid pedestal to break up Apple's exclusionary vertical integration.
Because for many applications it's not viable to not provide service for iOs users, which is sad but true.
Consider you not being able to:
- buy train tickets under iOs
- check-in into a hotel under iOs
- do video conferences
- chat with your friend
- cross play with your friends
- open your apartment doors
- check your health data
- do online banking
- securely check your email
- do Ueber, Rbnb, etc.
- buy at Amazone
- etc.
Sure many (but not all) things might be doable over web interface but this crates often much more frictions and due to constraints put onto web interfaces and PWS also has often much worse UX, not providing service for millions of iOs users is often deadly and providing competitively shitty service isn't anygood either, even worse if you have to compete with Apple itself which gives there apps unfair advantages beyond not needing to pay the 30% cut.
Let's be honest any marked which covers millions of people should be handled as a standalone marked even if you could argue it's just part of a bigger marked by any government or you fail your people (and the free marked idea IMHO, but reasoning about this is tricky as it involves considering how the marked dynamics have fundamentally changed and how thinks which would have worked in benefit for the population don't work anymore in the current times and therefore how the marked (laws) has to adapt to it).
> I don’t know why people feel it’s their undeniable right to be able to provide an app to iOS users.
If Apple is using its market power to increase profit at the expense of reducing selection and/or increasing prices for consumers, then that's a very serious problem. It's exactly the reason antitrust laws exist.
> But there are other Smartphone platforms with their own store, correct?
But are they competing or parallel markets? Does Apple changing pricing or terms on the App Store drive business to other app stores, as replacements, or do software vendors choose which app stores to distribute with based on whether each provides a benefit worth the price, but not whether it is a better deal than some other store?
I think that under market/pricing power tests, Apple’s software distribution business in the App Store is not that unlikely to be a monopoly.
Now, establishing consumer harms from the way the leverage that monopoly to extract rents and dictate terms to software vendors might be less straightforward than it would be for a B2C monopoly, and in the US, at least, consumer harm is the key adverse impact from monopoly abuse that justifies legal consequences.
iOS is the market leader by profit share and by amount of money spent on app stores, as Apple fans like to talk about all the time. In a sane world, being a market leader would mean that shareholder and corporate interests are kept in check by society.
Most people don't have more than one phone. Phones are used for more than gaming. If a developer doesn't like Apple's terms, they can't distribute on iOS, except through a web app.
Except you're still locked into Apple's webview, thanks to their policy of disallowing other rendering engines. PWAs on iOS will only ever work as well as Apple allows them to.
> If a developer doesn't like Apple's terms, there are no viable alternatives for iOS distribution.
Lots of opportunities for mobile distribution though. Apple is what, < 20% of the mobile market? (I know where you're coming from, but this is what Apple's legal team will say).
Apple is also very proud of being a a lot larger share of the mobile apps/content market, which is what everyone elses legal team will say. (And which is why this is actually such a big thing: if loosing iOS customers meant loosing <20% of revenue, app makers would be a lot less fussed about this)
.. not covering the iOS marked is for some products not viable and might literally lead to insolvency in the long run.
Today you can tell people that you don't provide a game on e.g. X Box and they might not like but accept it. But you can not tell people that their premium mail service has no iOs app or that they team meating software has no iOs app or that their <insert any software covering a group of people> app doesn't work on iOs.
Tbh. it's probably somewhat true for tipple A massive multiplayer games and games consoles, too.
No, that’s not a correct comparison. Consumers don’t buy a device from Epic in order to run Unreal engine games. Consumers don’t care at all what engine a game runs on, they only care about the game itself (and what platform it’s available on).
If you forgo the iOS platform, you lose out on the vast majority of mobile app revenue. Android may have greater market share than Apple but iOS dominates the market among people who actually buy apps (mostly affluent people in western countries).
If you’re not published on Apple’s App Store then you can’t reach a huge segment of the market that would like to use your product. I don’t think Apple, Google, etc. , should be the gatekeepers between a developer and their customers.
They're not. That's the whole point. These are Apple's customers since they're finding the app in the App Store. Epic has other customers that play Fortnite that are not Apple customers.
Okay, but imagine that Fortnite used Unreal but wasn’t created by the creators of Unreal. Do you think that Fortnite would be more comfortable playing chicken with the App Store and risking getting banned like this, or playing chicken with the game engine that their entire game is implemented with? In practice I would say a game engine has more leverage over a game developer than a single distribution platform.
If Unreal were the problem, Fortnite could have chosen a different game engine at the start (this is not about terms changing after all) and it would not affect their options to sell to customers. And while porting would be expensive, it would be possible without loosing access to customers. Nobody doesn't buy a game because they bought an unreal-only PC somewhere.
> Fortnite could have chosen a different game engine at the start (this is not about terms changing after all)
Right. Apple's terms were clear from the start, so Fortnite had no reasonable expectation to be allowed to violate them. Just like Fortnite could have chosen to use a different game engine if they didn't like the terms of a particular game engine, they could choose to focus on non-Apple platforms (or choose to abide by Apple's terms on Apple's platform) if they don't like Apple's terms. I'm not sure what you're getting at.
> and it would not affect their options to sell to customers [...] it would be possible without loosing access to customers. Nobody doesn't buy a game because they bought an unreal-only PC somewhere.
Which is why the game engine comparison is a bad one.
The Unreal Engine license is like Epic giving you a toolbox for no upfront cost, but charging you 5% of whatever revenue you generate selling goods made using the toolbox.
The App store comission is like Apple charging you 30% anytime you sell one of those goods to someone who lives in an Apple branded house. (To complete the analogy, maybe you're a door to door salesman and Apple charges you a "sidewalk usage fee" or something)
One (Unreal Engine) is a licensing agreement for a tool with no upfront cost; the other is a tax on any sale made to an end user.
Absolutely, it wasn’t my comparison. That Apple has a monopoly and uses it to charge egregious fees is something I’m absolutely behind Epic in fighting.
It's not even remotely the same. They don't require you to distribute on the epic store. Moreover you don't owe them a penny for using the game engine until lifetime gross revenues exceed $1MM.
Note that $1mil lifetime revenue is a very low boundary. A very small consulting operation of 2 or 3 people could easily hit that in a year or two. A single freelancer could probably hit it in 4 or 5 years. It's easy to read "a million dollars!" And think "we're rich!", but running any business has a lot of overhead.
The limit is $1 million per app. How many games make more than $1 million throughout their lifetime? 99% of developers won't ever have a game earning that much.
Doesn't seem a fair comparison given the far more substantial costs of brick and mortar. Brick and mortar retailers do not, traditionally, have very large margins when all is said and done, whereas I think the App Store has quite significant margins for Apple.
Dumb question, but why is a vendor's cost a relevant input to evaluate fairness? Isn't a common theme around here to price based on value, not on cost?
I used to work stock at a bunch of retail stores for a decade and could see what percentage the markup was. It was almost never above 20%, and usually closer to 3-5%.
not sure what the brick and mortar equivalent is. what does that mean?
retailers pay suppliers some wholesale cost for their goods. doesn’t seem like an analogous situation to a marketplace that takes a fixed cut of every sale.
In the olden days of game stores shelf space was at a premium so the power dynamic was on the side of the retailer, particularly with the larger chains who had a lot of room to negotiate their cut rather than buying wholesale.
It’s so strange to me that after all this time they’re sticking with the high fee. The App Store is a major feature of the iOS platform and Apple benefits greatly from a healthy app ecosystem and user lock in. I would argue the 30% fee may not be a net gain for Apple.
It's now 30% for the first $10 million, 25% for $10-$50 million, and 20% thereafter.
Also relevant here would be Epic Games Store, which is 12%. Also relevant here, is payment processors are way, way less than 30%, which is all that's used/needed for in-app purchases.
Paynent processors are entirely irrelevant to this discussion, given app stores do far more than just payment processing.
Given publicly reported financials for Apples services gross margins imply a break even around 10%, I doubt any successful App Store offering similar services could survive on less than 15%.
> Paynent processors are entirely irrelevant to this discussion, given app stores do far more than just payment processing.
Not for in-app purchases they don't, which is why I specifically called that one out. The game provides all the UX there to find & purchase the items, the game "delivers" the resulting purchased goods, etc... All the app store does in that case is facilitate payment. No different than, say, Square.
The store facilitates discovery of your app, secure installation of your app, world wide distribution of your app, and offers customers a safe, trustworthy, consistent and easy to use purchasing system complete with refunds, subscriptions cancellation for all purchases.
One of the biggest developer benefits is Apples app reviews process. While not perfect for devs, it helps ensure customers feel safe buying my apps free of the risk of viruses, malware, and fraud ware. That sells more of my apps.
If you don’t understand these things, you don’t understand your customers.
I'm sure Epic would be willing to forgo all those things, if they could have iOS visitors to their own site click a download button, up pops the ol' install app OS dialog (same as now), face ID / passcode, bam, Fortnite is installed.
You can avoid Google Play on Android by sideloading. You can avoid Steam on PC by distributing your game yourself. You can't avoid the App Store on iOS unless you tell all of your customers to jailbreak.
Businesses don’t exist to define a moral compass. They exist to make money. Any large and successful company will happily play the “do as I say and not as I do” card as often as they think they’ll get away with it.
I’m not saying it’s right but it’s pointless being shocked by the hypocrisy of the logic that businesses are run by.
There’s plenty of businesses that aren’t just motivated by profit. However the businesses that rise to the top are obviously going to be those who are more aggressively profit driven. This is why my previous comment made a distinction about company size rather than making a blanket statement about all companies.
If it were made impossible for businesses to be solely profit driven, then there would simply no longer exist any businesses that are solely profit driven.
> I don't know how effective something like this would be, wouldn't this just incentivize hiring people that fit your political agenda?
That's what all companies already do: the political agenda of every publicly held large company today is to please its shareholders, and only to please its shareholders. The proposal changes the political agendas of large companies so that they also have to please their workers and communities.
> For instance let's say you hire a bunch of Chinese/Indian immigrants on H-1B visas, they'll just vote in people that benefit China/India
Kind of a pessimistic view of humanity there. Immigrants are just as good as native-born citizens at collectively deciding what's best for the organization they work in.
> Also the 1997-2011 era Apple probably wouldn't have worked under a law like this
Apple would certainly be different, but so would its competition.
This is not surprising to me, and I have to say, I completely agree with it. Epic publicly and blatantly bypassed multiple App Store restrictions with their move today.
Surely they were expecting this to happen, so what comes next? Perhaps Epic has been planning a major lawsuit and this will provide them with the reason to launch it?
I'm very sure Epic saw this coming. I assume they, and many others, are spoiling for a fight with Apple over this and are willing to take this risk in bringing public opinion with them.
This seems ill-advised for Epic, in particular. The fight they're picking will logically end in a regulatory hammer coming down and that hammer is going to hit Epic a lot harder than Apple just because Epic is even more reliant on extracting revenue from being a platform owner than Apple is.
Epic's platform is Unreal Engine. The key difference is Unreal Engine is not the only game engine. You can use another game engine and gain access to the exact same user base. You could certainly argue Epic Games have made anti-competitive plays. However, they're not stupid, they even fund their "competitors" https://gamefromscratch.com/godot-receives-epic-megagrant/.
... and the Epic Game Store. They're setting themselves up for building precedent where in the future, an MMO uses EGS for distribution and bypasses the EGS payment model, and they won't have any legal teeth to challenge that without getting hit in the face with precedent they helped set.
Which may actually be the plan, as the EGS isn't the only revenue feather in their cap. If they're fine taking that hit because they get game devs twice (selling them distribution and selling them an engine their game is written in), more power to them.
In theory, one can model Apple the same way (i.e. the App Store is a distribution channel to encourage people to buy Apple hardware so they can use the channel), but it sounds like maybe Apple found a great rent opportunity and is reluctant to let it go. Time for someone to remind them they're a hardware company that writes software as an excuse for people to buy their hardware. ;)
> They're setting themselves up for building precedent where in the future, an MMO uses EGS for distribution and bypasses the EGS payment model, and they won't have any legal teeth to challenge that without getting hit in the face with precedent they helped set
That's not the same at all, there's no devices that solely run the EGS, there's nothing stopping any game studio from taking their game to Steam, Origin, GOG, or even making their own.
The problem isn't that Apple has more of a monopoly than Epic has with Unreal Engine, it's that Apple has a monopoly on a distribution channel to end users.
I know of a business that had a policy that fired someone for missing work 3 times without notice. So... an employee missed work 5+ times and then got fired. That employee sued AND WON because the company didn't fire at 3, they waited until 5. If a company has a policy or ToS they need to enforce it.
a) There are no rules that mandate that a "general computing device" must be open in whatever arbitrary way you've not defined.
b) There are no precedents that state that a platform must have competing App Stores or make them freely available for anyone to publish. In fact the opposite is the default in companies today e.g. PSN, XBox, Tesla, Shopify, Salesforce.
If you have case law that contradicts this please by all means provide it.
What does it being a general computing device have to do with anything? Is it the only general computing device available? PC's and Androids exist, how is Apple in anyway a monopoly when they don't even have control of the market?
The are abusing a dominant position (as the only seller of iOS devices) to cross subsidise their software business and muscle out competitors in the services space (Apple Music vs other music services). That is a fairly clear breach of antitrust rules.
The prohibition of third party transactions or third party App stores are less clear to breach, but there is a case to be made...
Pandora, Spotify, Tidal, and Amazon music are
all available on the App Store - they are not muscling any competitors out. If they were those apps would simply not be available.
Barring clauses that are deemed unenforceable, Terms and Conditions are effectively the same as the law when it comes to interacting with Apple's services. Citing them is actually fair, since the courts will uphold enforceable clauses if someone sues.
If you want to argue that Apple’s TOS are unenforceable, then that’s a different argument.
The law allows for Apple to do this. You don’t have to use Apple products. You don’t have to use the Apple transaction system. It is not a commons, it is not a monopoly. There are other platforms and e-commerce solutions.
If you want to regulate Apple’s behavior, introduce a law (I would support a law to regulate Apple’s cut of App Store transactions). Fortnite getting booted isn’t going to get a bill sponsored or have antitrust regulators take notice. It’s a breach of contract currently, no more no less.
Except there was literally a hearing last week, and multiple plans in EU to stop this sort of behavior, exactly because of the evidence that companies like Epic Games bring to light.
Not doing anything might be worse. Within a month, all major money-making apps would make a similar move, hiding the functionality from Apple’s review process and then activating it once most of their users have upgraded.
Apple could spend time and money trying to find such hidden features, but that would mean many major apps would see no updates. That’s a losing game, too, even if they are successful at detecting such hidden functionality.
They must have thought about this and decided this is their optimal initial response (it need not be the final one. They can put the app back in their store in seconds)
I can understand that. Allowing this is guaranteeing the end of the App Store. Fighting gives them a chance salvaging it, parts of it, or at least, delay the inevitable.
> Allowing this is guaranteeing the end of the App Store
Is it though? Has the play store ended because Google allows side loading?
The issue here is Apple simply doesn't really take risks and innovate to be the first in an industry. They take existing tech, polish them VERY well, and then try to make a lot of money off of it.
Problem is they're trying to leverage their position to run other companies out of business (Spotify and Apple music for example, or Netflix and Apple TV+)
End of the App Store because all high-grossing products would stop bringing in money.
Doesn’t take risks? They spent lots of money on hardware for machining aluminium (a move that turned out good, I think), developed the Touch Bar (got mixed reviews), a new keyboard (not that successfully), decided to move to ARM CPUs in the desktop (potentially, that could bite them in the future. If x86 CPUs ever become faster than Apple ones, the speed difference with Windows may lose them customers for their high-margin devices), etc.
None of those are really innovations with new products, but yeah.
I guess this is moving away from the main conversation. But I don't really see the App Store going anywhere even if third party app stores were allowed.
Really hoping regulators crack down hard on Apple's clearly anticompetitive practices.
If Apple allowed sideloading the entire point would be, of course, moot, but Apple's continued refusal to allow this is really the biggest problem, IMO.
As a user I'm quite happy with Apple intermediating my relationship with companies that seek to do business with me over the phone, and I'd actually be happier if Apple took over more of my relationships.
I don't want a situation where 10 apps means 10 different privacy agreements. I also don't want to deal with app companies directly for returns or their custom payment solutions — an "Amazon" is way better.
> and I'd actually be happier if Apple took over more of my relationships.
I’m really curious what you mean by this. Which additional transactions do you wish Apple would take a 30% cut on? You DoorDash orders, your rent, your salary?
> Which additional transactions do you wish Apple would take a 30% cut on?
That's not what they said. Apple already handles payment processing via Apple Pay for real world goods (Amazon, Food delivery, Wish), and does not take a cut of the transaction. Some people see Apple controlling payments for many companies as monopolistic and overreaching, but some (like the parent poster and myself to a degree) see it as a safer alternative to having trust dozens of different companies.
Apple pay uses the Visa and Mastercard network though. It's on top of the V/MC cut. Apple only adds that you can use your card on the phone. You end up using your credit card anyways.
Apple has none of the risk and somehow thinks it is appropriate to charge per transaction AND customer. Yes, they charge the companies who wish to integrate with apple pay a quarterly fee per card.
Apple customers are footing this bill, of course, as vendors and banks aren't just going to lose money. Apple is way out of line, and apple customers would benefit from informing themselves.
Isn't the situation similar with Amazon? And how much higher are the prices for the consumers, in return for the Amazon experience? What is the Amazon tax to the consumer?
If it meant my work processes were as streamlined and organized as Apple's operating standard? Political antics gone? Safety and security with no negotiation?
Tempting...
(Just experimenting with the idea, not that I actually agree with this line of thought.)
Companies pay 30% of an employee's salary to strealine their hiring efforts - doesn't seem far fetch to me to expand that payment pattern to a consumer level where one is paying 30% on transactions and in return receiving a streamlined process for discovering, managing and reversing them through a centralized gateway.
Again, not that I agree with this...just playing devil's advocate here.
Conversely, one of the things I miss about Android apps is the competition. I recall there being several (free) apps that fulfill some function on Android, and then when switching to iPhone, the apps that provide that function costing $10+ dollars.
There's an obvious trade off for security/reliability, but I've still come across my fair share of terrible iPhone apps. Android definitely has a more freeware/open source vibe.
On Android I pay a one time fee of $25 to get access to the play store. On Apple I pay $100 every year plus they are total dicks about it. The fee is $100 yet I pay even more although my currency is stronger than the dollar plus sales tax!
Nobody is forcing you to side load apps. Just because someone say has the option to install an application that Apple censored it it does not mean you are also forced to install that application.
If you want to be happy with using the store for all your life's needs - that's completely fine. Nobody will argue with you here.
Otherwise, people should be able to download as they please.
Imagine if your electricity company only allowed 'approved Toasters' on their electric grid, complete with special plugins, and a 30% cut of the device.
> Imagine if your electricity company only allowed 'approved Toasters' on their electric grid, complete with special plugins, and a 30% cut of the device.
You mean like the days when Ma Bell limited the selection of phones that people could choose from?
https://en.wikipedia.org/wiki/History_of_AT%26T#Monopoly: 'Each phone was leased from AT&T on a monthly basis by customers, who generally paid for their phone and its connection many times over in cumulative lease fees. This monopoly made millions of extra dollars for AT&T, which had the secondary effect of greatly limiting phone choices and styles. AT&T strictly enforced policies against buying and using phones by other manufacturers that had not first been transferred to and re-rented from the local Bell monopoly. Many phones made by Western Electric thus carried the following disclaimer permanently molded into their housings: "BELL SYSTEM PROPERTY — NOT FOR SALE."'
Additionally, 10 different payment systems. I trust Apple. I'd like to buy whatever subscription, but now "Joe's email app" wants my credit card number. Now I have to figure out if I trust them as well.
I’m a huge fan of Apple Pay and do not begrudge the 0.15% cut they take on those transactions. The cut they take for App Store purchases is over 100x that amount, which is obscene.
But,it's more than that. Not only do I get some security for payment, but I get:
* Some level of guarantee that every app on my phone has been vetted (it's not perfect of course, but is better than nothing). It's unlikely that anything to nefarious makes can make it onto my phone, and if it does, it'll be removed.
* I get a better fit and finish. Apps on the iPhone very often have a better quality to them.
* I get the ability to refund when needed.
* Personally, my support requirements go down. When my nephew calls me with a problem, I know that he didn't go download some random app from instructions he got from a friend.
Clearly, there's also some profit in there.
Edit: Perhaps to get to my point -- these were ALL known when I bought my phone, and for me, were part of the reason I bought it. If I was not ok with this, I would have bought an Android phone.
And I'm sure that other companies could be more efficient with the 30% App Store cut, or less than 30%, but the power of markets and competition are stifled by Apple's restrictive limitations.
Bandcamp, for example, provides both digital and physical assets, and only takes a 10% - 15% cut. They provide a secure experience for their customers free of ads, malware, spyware and spam.
You're comparing apples and oranges, two completely unrelated industries.
One is payment processing, the other's a unified market of 155 countries and 1+ billion users where all the headache of payments, local sales taxes, APIs, etc are taken care of.
Comparing a payment processing fee to hosting content on a store site is completely disingenuous. The costs are wildly little different and it’s unlikely any App Store like Apples could even pay for itself with only a 10% cut, for example..
Do you have access to information the rest of us don't? Apple doesn't release the operational details of its AppStore in its financial disclosures. Shocking you know a 10% fee isn't enough to maintain it.
How about we do what's often suggested: we spin the AppStore off as its own non-profit governing body and they can disclose their operating costs and increase / decrease their fee as needed. The rules then apply equally to Apple vs. non-Apple companies.
Apple breaks out a services line in their financial reports. You should read them. Services has a gross margin of around 67-68%, but that includes a $9B check from Google every year with near 100% margins. So the App Store is very likely to be less than 67%, maybe as low as 15%.
It’s not just payment processing. They provide other critically valuable services to developers such as App Review, Hosting, International Distribution, CoMarketing, Store APIs, Security, etc, etc, and they all have thousands of employees and cost billions to provide.
Please provide anything to back up these claims. Until you provide something, here's a breakdown from Forbes of an estimate of Apple's App Store revenue in 2019: https://dashboards.trefis.com/no-login-required/7JGMQ7wT/Bre... (there's an adjustment to the take percentage to see their estimated revenue if it's lowered, feel free to play around with it)
Apple Services:
- AppStore $ 15 billion
- Licencing $ 10 billion
- Apple Care & Others $ 7.5 billion
- Apple Music $ 5.4 billion
- iCloud $ 4.5 billion
- Third-Party Subscriptions $ 3.6 billion
Total: $46 billion
Remember, you're stating that Apple isn't able break even at a 10% fee for the App Store. Recall that Apple charges developers a yearly subscription (99 USD for non-enterprise accounts per year) to be able to submit something to the App Store. And additionally remember that your "co-marketing" cost should include the money Apple makes from advertisers on its App Store [1].
The items you mentioned as costs are standard for many similar internet service (hosting, security, customer APIs, etc. etc,.) that do not make nearly the amount of revenue Apple does with its App Store.
Let's do a worst case and cut Apple's estimated App Store revenue from $15 billion to $5 billion a year to show how ridiculous the claim that they can't break even is.
Read their financials, the gross margins for services are listed in every one of their reports.
And the $99 and ad revenues are service revenues. So their audited financials say, taking all of those revenues, that services expenses are roughly 32% of their revenues. Obviously this doesn’t include administration costs, interest costs or taxes.
32% of 30% is 9.6%, so it’s possible that’s their break even level, or even a little lower if App Store margins are higher than other services. But it’s unlikely because it’s likely the billions in the Google Safari placement check is close to 100% margin, meaning the rest of services has to have margins well under 68%.
I don't see the problem here -- Epic adds their own payment option in addition to Apple's. I believe Apple could mandate that they always be allowed as an option like they do with sign-ons. If you only trust Apple and you want to pay 20-30% more for your purchases that can still be an option.
The question will be if developers start abandoning the platform will you be a happy user if you're unable to access popular apps on your locked down Apple computer.
They absolutely do not allow that. It is against the ToS to distribute apps using developer signing - that is only allowed for in-company testing and development, and potentially for some limited beta testing.
Free certificates last a week. You can also pay Apple $99 to get a certificate that lasts a year, or pay a "UDID registration" website around $10 for the same (with some limitations).
In order to test developer beta releases, you need a paid Apple developer account. Obviously it wouldn't be great if you had to pay $99 for every device (or employee at your business) just to test on the latest beta release, so Apple allows you to register up to 100 devices on your paid developer account.
Some people realized that they could sell each of those 100 slots at $5-10 to people who really wanted to use the beta (NB: previously iOS did not have public betas), hence "UDID registration".
Later, some of those people realized they could also sell you the code signing certificate that's generated by the real Apple developer account; valid for up to 1 year. That means you have the option of purchasing a real code signing certificate that allows you to sideload apps on non-jailbroken iPhones.
>Starting at $8.99, we also provide Certificate & Provisioning files that can be used to install any app, including apps you've created and those not found on the App Store.
Looks like they're essentially "sharing" developer accounts.
What is Apple’s end game here? It seems like they’re fighting a losing battle and digging their own antitrust grave.
Pretty clever on Epic’s part to specifically highlight how Apple’s app store fee hits the user directly. Pretty short-sighted of Apple to immediately pull an app for providing consumers with additional disclosure about where their money is going.
The interesting thing is that it didn't hit the user directly until now - from what I can tell, Epic Games were quite happy to charge the same amount on platforms like PC and pocket the extra 30% right up until the day that they pulled off this stunt and needed to spin Apple's cut as something that cost consumers money rather than Epic, and presumably they'll put the prices right back to normal if they win.
The other interesting thing is that they're charging the reduced price on consoles which I believe take a similar 30% cut to Apple.
if you look at iPhone sales over past 6-8 quarters or so growth is slow to non-existent. they are squeezing services revenue like this to continue growing their top line.
personally i don’t see it as sustainable and surprised the stock keeps hitting all time highs.
They certainly have a lot to lose if they back down, and a court battle's outcome is uncertain.
What is also certain is that Apple has enough cash sloshing around to out-lawyer and outlast anyone on the planet. They very clearly do not have a monopoly, and the charges of anti-competitiveness are a bit flimsy. Seems like a worthwhile risk to take.
Good lord - on HN the monopoly comments are so crazy sometimes. What is the monopoly issue Apple has? Use android if you don't like Apple's product line. Apple is at 22% share.
> Courts do not require a literal monopoly before applying rules for single firm conduct; that term is used as shorthand for a firm with significant and durable market power — that is, the long term ability to raise price or exclude competitors. That is how that term is used here: a "monopolist" is a firm with significant and durable market power. Courts look at the firm's market share, but typically do not find monopoly power if the firm (or a group of firms acting in concert) has less than 50 percent of the sales of a particular product or service within a certain geographic area.
Geographic area is an interesting term here. If you take "iPhone owners" as a geographic area, then Apple has a 100% monopoly on that market. Geographic area == captive audience, and since iPhone users are a captive audience of the app store.
I think there's a reasonable argument that users buy iPhones with the expectation of a market in the app store (I can get or buy apps from any company that cares to develop one), so when Apple charges a 30% fee (far above normal payment processing fees) on every transaction made through the app they are abusing a monopoly position.
I suppose the next case will be against Walmart for not allowing me to setup my own kiosk with my own payment processor in their store if you define markets in this way. They have a monopoly in their stores on sales of items.
Walmart clearly falls under a geographic area. There's a physical store. You can measure the competition in that geographic area and you can look at what other choices consumers have.
An iPhone is clearly a different case. Measuring what options users have is not limited by a geographic region but by what policies and app stores govern the device.
>on HN the monopoly comments are so crazy sometimes
what's crazy is harping on a technicality about the word "monopoly" and then to ignore the actual issue that is implied by the criticism, market power.
Even two companies aren't a market, if you get hung up about monopoly call it a duopoly. The state of affairs is ridiculous. There should be a thriving market of competing stores, payment systems, operating systems and so on, yet we're stuck with at best two alternatives, both of which are extremely locked down.
But is that required on each and every platform available on the market?
Sure, there should be more platforms available. I'm into that. Personally, I bought an iPhone because of the closed ecosystem. I don't want to have to think about my phone that much, but I want to be able to rely on it. That's what I paid for and that's what I'm getting.
From my perspective demanding that the platform be open to any and everything is a bit like going to a carwash and demanding they also do your house.
Agree. Other comments raise the point of “what if Windows decided to do this... is it okay because Linux exists?” and the answer is clearly no. I bought an iPhone with the expectation that I would be in a closed ecosystem; if win10 updated to mirror win8 RT where you could only use the windows store, that would obviously be a problem because win10 users purchased a license with the expectation that they could install whatever they wanted on it.
> I don’t want to have to think about my phone that much, but I want to be able to rely on it.
I’m in the exact same boat; I have no interest in sideloading every app that decides to get into a pissing match with Apple (and as Spotify’s hinted at it before, they will certainly be losing my subscription if I need to sideload their app). For every app that has a legitimate reason to sideload (i.e. payments), there will be another app that sideloads to bypass the user-beneficial aspects of the App Store (i.e. Onavo from Facebook).
> There should be a thriving market of competing stores, payment systems, operating systems and so on
That sounds terrible. Myriad incompatible ways to find apps, having to give your financial information to lots of different systems you have to investigate individually, or not be able to do business with someone using a different system, apps only being available on the small number of devices running the OS they were developed for.
All the things you mention benefit massively from network effects, which can greatly benefit consumers.
>apps only being available on the small number of devices running the OS they were developed for.
that is a weird complaint because that is the status quo due to closed platforms, I can't run facetime on an android phone.
Diverse ecosystems develop protocols to enable interoperability, that's where the slogan "protocols, not platforms" comes from. This is how the internet works, despite the fact that you can hook up anything from a fridge running windows ME to a supercomputer running suse to it, everyone communicates just fine.
It's strange that there are different hardware vendors, it's just that making your own software experience seems suicidal. Perhaps in an alternative reality, the US government would've invested in Firefox OS among other competing projects.
It's not about using a different OS. The monopoly is that if you want to distribute through Apple, you have to go through their app store. There's not another app store that you can go through.
At least with Android you can go through f-droid if you don't like the Play Store.
I'll defer to Epic's official court filings to make the argument for a monopoly for me. I'm not an expert on such topics, and it would be out of turn for me to speak more on it.
"Apple monopolizes the iOS App Distribution Market".
How do they reconcile that with the fact that it's possible to side load apps on iOS? Apple might monopolize the Apple App Store Distribution Market, but is that relevant to the legal argument?
We're on Hacker News, so the amount of people that are comfortable with sideloading apps on iOS is definitely going to be skewed.
I don't think that it's a good argument to make that anyone can do it, because it does require _some_ technical knowledge in order to do it. I'd make the argument that if it's not accessible to everyone, then I don't think it's a viable replacement for an app store.
To lean on F-droid as an example on the Android side, outside of the initial installation of F-droid(which can be done from your phone), you can easily browse F-droid and install apps.
I don't think it's as easy to sideload apps on iOS. I haven't done it in years(since my jailbreak days), but I remember that you needed to be on a Mac and needed xcode to do it. It's probably updated now to make it a bit easier, but from a quick Google it looks like you need to download a separate program in order to do it. It looks like other ways to sideload apps requires some abuse of developer certificates to make it work.
No company can sell or distribute an app without having to use the appstore. Sideloading is restricted by design to not work as a standard installation method
There are multiple stores that you can try and get your product on. If Walmart doesn't work, then you could try Target, or Aldi, or Amazon.
You have literally one option to go with on iOS. You can't even "drive to a new store", as switching to Android costs hundreds of dollars, and not everyone is in a financial situation to purchase a new phone on a whim.
I won't argue about the specifics of this, Epic paid lawyers millions of dollars to draft a court document about the monopolization of the iOS app distribution store. I'd urge you to read the document first before drawing pretty poor parallels.
It's crazy how he won't respond to you know, since people purposely keep saying that Apple is not a monopoly, and when someone shares a stat where Apple has around 50% marketshare, then they just disappear in the ground.
I don't have time to respond to every comment. The court case argues that apple monopolizes the iOS App Distribution market. So they claim a real monopoly.
Similarly, I'm sure Walmart monopolizes the Walmart distribution market.
As that law has been interpreted, it is not illegal for a company to have a monopoly, to charge "high prices," or to try to achieve a monopoly position by what might be viewed by some as particularly aggressive methods. The law is violated only if the company tries to maintain or acquire a monopoly through unreasonable methods.
They STARTED the app store with these terms, that is literally the OPPOSITE of achieving a monopoly with predatory or below market pricing. They did such a good job that despite the high price most developers make LOTS of money on the app store, and users value many of the elements as well.
Anyways, will be an interesting case, but it's not "crazy" that someone doesn't have time to respond to every point on HN - seriously HN has gone full outrage / offense these days with no ability to just discuss merits, consider other viewpoints.
Exactly this - I'm a "high spending" customer. Because they take pretty good care of their store, because there are no surprise auto-renewals and on and on I spend money freely - it's pretty safe to.
I always seem to regret signing up for subscriptions elswhere. Did anyone have the myheritage fight - I did that 5 years ago - total nightmare. I mean - how is stuff like THAT legal (hadn't used service in a year, no notice prior to the renewal being billed), no way to get out of paying.
We roughly know their profit margin on the App Store from corporate reporting though so seems unlikely to be any significant spending on curating, and a lot is to curate away competition like Steam's streaming that allowed PC game purchases to be remotely made through streaming your desktop and big picture mode.
Huh?
All of Apple is (or soon will be) an entirely closed garden. You can harp on the literal meaning of the word "monopoly" all day, but Apple still makes a profit from a market dominating position.
30%? Just to be distributor? Really?
If their H/W would be free I'd have some sympathy, but as is you pay for their devices and then pay a 30% fee. In my book this is way-laying.
I'm not using any Apple products for exactly that reason (other than what my workplace forces upon me.)
On my Android phone I can install any 3rd party app I please - there even is "F-Droid", a non-Google app store for open apps, which I use a lot.
And for desktops I use Linux. I guess I'm in the minority - even here on HN.
I've been an Apple user for 15+ years. However, my first 3 smartphones were Android. In 2016 I switched to an iPhone and I prefer the "lock in". I prefer the "walled garden".
In my youth I had the energy and desire to individually assess how much I trusted what I downloaded. Today I do not want to spend the energy/time so I spend financial capital to have Apple assess trust for me.
Does that mean that app developers have a harder time selling me their software? Yes. I empathize, but I don't want to be an early adopter anymore. I'm happy for those developers to first build trust, then have access to me as a customer.
So if in a year a product comes out that I really want to use, the product really wants to support apple, but apple says "no we're not going to allow you". I have to create more ewaste by going and buying an android phone instead?
Is this what we're advocating for? More consumption of rare resources?
No, you know that the app might not be available for your new iPhone and accept the fact when you buy it or you just do not buy an iPhone and buy Android/LibreOS/etc instead.
'Monopoly' is just a poorly phrased way of saying abuse of market power.
Edit as reply: I'm not accusing them of breaking a law, but of abusing their position. That there might not yet be a law against this specific kind of abuse doesn't make the practice any less abusive.
If you are accusing Apple of doing something contrary to US law, you have to be specific about what that is. What do you mean by "abuse of market power"? What is the law or regulation that you are accusing Apple of being in breach of?
Apple platform is closed like gaming consoles. Epic almost certainly knew this was going to happen. I think they are trying to build a case for regulatory intervention.
US Antitrust is still in the 80's Chicago School era where antitrust is solely based on consumer benefit and and efficiency. EU has more broad approach where economic power in the public interest is important. It may be up to the EU to change how Apple does business.
If Epic is planning to rely on US anti-trust intervention, they will be waiting a very long time, even in a best-case scenario situation.
Unless they know something the public doesn't about a prior case file, this stuff takes a long time to be fully investigated and go through the courts.
Apple can argue its 30% surcharge protects consumers from their payment information being tied to each individual product, making canceling easier and buying things safer.
Then let the market decide if they're ready to pay 30% for that, when they can get <1% at larger competitors who are not even allowed on the platform. iOS is so ubiquitous at this point it should be treated by regulators as a platform, not as a product.
... and competitors do the same for less than a tenth of that cost. The only thing that allows them to do so is complete control over the ecosystem to shut out all competition.
That's literally the value add Apple is selling. A completely controlled ecosystem not infiltrated by 20 payment middle men. Youre paying a premium for noise filtering.
If that were the legitimate reason, then they could accomplish the same goal by requiring all in-app purchases to have the option of going through them, rather than exclusively going through them. Then people who cared enough to pay the 30% Apple tax could have that protection, and the rest of us could save a lot of money.
I agree that is a sensible compromise, like login. "If you support our competitors, you must support our implementation to benefit from placement in our index."
We have been given court-side seats to a sophisticated game of feints and dramatic negotiation. Pre-Game, Epic lined their shot with care. They've come prepared with media and assets, (no doubt) lawyers (and potential lawsuits?), PR strategy, regulatory strategy etc. They know the argument they would like to make. And they know how to make it.
How will Apple respond? Will Epic's strong start lead to a strong finish?
Their machinations have been laid scandalously bare. If you listen closely, you can hear your local business school clickety-clacking away to a ludicrously overpriced case study. And the local #hustle blogger RSI their way to a million views.
O'Think of the great blog posts and MBA lessons this drama will make!
It's interesting how the industry is shaking up in so many different ways lately.
1. TikTok and WeChat getting banned (This will also have a huge side effect for Apple)
2. Uber and Lyft regulated to classify drivers as employees
3. Influential companies trying to tear down the Apple payment walled garden (Last time it was Hey, but this time it's Fortnite, which is infinitely more formidable). Now the only thing left is for Google to come out and say "we're going to charge zero commission for our in-app payments", and the wall will be down pretty soon.
I feel like there's some pattern here that may change the overall game of the tech industry. Grabbing some popcorn and waiting for new opportunities to open up!
You could say that the disruption is being disrupted.
Regulators are slowly getting sick of the tech industry's behavior of overthrowing markets by VC-ing out competitors to establish their own monopoly all while dodging taxes through global schemes.
I am ignorant of the rules applying to apps with payments in the apple app store. Is it true retailers do not have to pay a percentage to Apple when people pay to reload cards through the app?
How so? If, over the long term, Epic wins this fight (e.g via an antitrust case) Apple would either allow sideloading, or reduce their cut. How is that not a benefit for small developers?
I mean, there's obviously business-related reasons as well, but cutting dev cuts to 12% on EGS, waiving royalties on first $1MM of revenue for UE5 games, and providing source for UE4 have all been incredibly massive boons to the indie game dev scene. Benevolence within the industry can foster good will with developers, which positively impacts their bottom line.
Apple and Google are able to gatekeep what you can install on entire generations of devices, from smartphones to tablets. Their power to gatekeep billion dollar markets needs to be looked at through the lens of antitrust legislation.
More people in the world use mobile devices than PCs by a huge margin. These two corporations essentially decide what apps humanity is allowed to use and how all software and services are built. That is a lot of power and it shouldn't be used for the benefit of a single corporation.
Pardon my hyperbole but this is nearing the level of a human rights issue. The freedom to run the apps and services you want to is so core to the way our society works that most people don't think about it. Having one corporation dictate how all apps for the entire world work is not compatible with a free society and actively harms innovation. This is becoming a big problem and regulations are being very slow to react to it.
Google gatekeeps by default but you can trivially bypass and install custom app stores or sideload apps. Apple gatekeeps, and does everything in its power to prevent you from bypassing that. Seems like a rather striking difference...
Third party app stores can't implement background installations, auto-upgrading, or batch installs because of the restrictions Google put in place on Android. Using third party app stores is hindered experience on Android.
The Play Store can do background installations, auto-upgrading and batch installs of software, while competitors can't. That's anticompetitive behavior in my book.
I don't think "freely" is the adverb I'd use to describe the sideloading process, considering how "freely" and effortlessly I can install apps in Google's preferred way through the Play Store.
Google made it so third party app stores like F-Droid can't even implement auto-upgrading, or background installations of apps. App stores outside of the Play Store and 3rd party apps are 2nd class citizens on Android.
It is similar to how Gatekeeper works in macOS. Developers that didn't pay Apple $100 a year to develop and notarize software have their apps get treated like they're radioactive by Gatekeeper.
App store fees are on the unjustified side in the current spectrum of value assessment.
The more reasonable approach is to figure out ways for customers to get more values from the platform, instead of extracting more efficiently.
I bet this decision is some form of lower-to-middle level decision, without consulting Tim and his close subordinates. I would expect Tim and his close subordinates to be sensitive enough to at least not doing something so abruptly (not that it's not complying with the rules). I would guess this decision didn't even surfaced to VP level. AFAIK, VPs should be owning such sensitive decisions at Apple.
Has Google done anything yet? This is in violation of their guidelines as well from what I can tell. On the Google Play store only games must use the Play Store In App purchase system. Other types of apps can link to their own.
This is really bad for Apple users like me and ultimately for Apple.
People are talking anti-trust, but I don't think it'll take a legal case for them to eventually lose this broader fight. Apple has enough money they COULD do whatever they want for as long as they want, but if this grows to even more companies, Apple's negotiating position becomes weaker.
>Epic agreed to the App Store terms and guidelines freely and we’re glad they’ve built such a successful business on the App Store.
>The fact that their business interests now lead them to push for a special arrangement does not change the fact that these guidelines create a level playing field for all developers and make the store safe for all users.
A choice between "Allowing your users to use your software" and "Nobody can use your software" is not really a choice at all. Even the mob gives you a choice, so maybe they aren't so bad after all?
And there is nothing stopping Epic from releasing Fortnite on the iPhone (in-fact it was there for years).
The rules could be unfair[1] but this issue is just Epic not wanting to follow the rules to make some more money.
[1] We can discuss what a fair price/percentage should be. Arguably the market and Apple customers have decided 30% is fair, but we can discuss. Meanwhile, side-loading or not charging would make my iPhone experience worse.
My conversation with you was entirely about "the iPhone being a general purpose computer".
It seems we have both settled that either an iPhone is not general purpose, or all consoles, TVs or IOT devices with downloadable content are general purpose devices.
If you'd like we can now start discussing if the price Apple charges is fair.
I've already stated, the market decides to buy iPhones understanding (even appreciating) that the user cannot side-load non-Apple approved apps (other than through a less trusted channel i.e. the browser). As such the market through demand, has decided there is a niche ecosystem where 30% fees for in app purchases are appropriate and fair.
I've already stated, the market decides to buy iPhones understanding (even appreciating) that the user cannot side-load non-Apple approved apps (other than through a less trusted channel i.e. the browser). As such the market through demand, has decided there is a niche ecosystem where 30% fees for in app purchases are appropriate and fair.
Why is this market dynamic an issue given there are so many games and tons of competition on and off iOS?
Just cause you both bridged from my comment, first thanks.
But I disagree that consumers agree to 30% because they continue to buy expecting sideloading to be relegated from relevancy.
If polled, I doubt consumers would guess the royalty is even that high. Someone should run a survey.
I am in general, very favorable toward Apple as a company. I’ve commented before that I believe in the company’s stance toward privacy. I see Apple as a benevolent dictator in its continued security restrictions on MacOS. With some exception to his deference to Trump, I admire Tim Cook as he presents himself as a person.
However, I have also sold apps through the App Store.
And there’s no real way around Apple’s massive financial success. It’s so big, if it were a person they would be burned at the stake.
There is an upper bound on reasonable net income.
This isn’t even about tax revenue, it is about any developer getting more than 70 cents on the dollar for their work.
Getting an app into the App Store barely means anything; you have to market it. Sure it is “safe” and incredibly easy to install. But good luck thinking that because you see a Ready For Sale message your app is going to be a hit.
In my experience, Apple is snobbish in interaction with developers.
At least historically, there is very little goodwill, even when Apple magically decides to “feature“ your work. Which is again self-serving because they take their cut regardless.
I am having a hard time defending Apple’s rate. Not because of Epic but because of someone like me who wants to sell software on the best (and only other serious) mobile platform.
> If polled, I doubt consumers would guess the royalty is even that high. Someone should run a survey.
This is definitely the right mental model. I am fully onboard for more data.
However, to clarify my previous point when I said "customers agree" I meant customers understand and are generally accepting of "priced in" convenience. For example, in some convenience stores they offer a discount for using cash or debit. Most big stores tho, "price in the cost of credit transactions". Customers understand this and are happy for the convenience and happy for the points.
With the Apple store, digital goods are 30% more expensive, and seemingly customers are ok with it because they are making purchases, while getting the conveniences of the AppStore vetting, refunds process, permissions model, advertising model, privacy, etc.
> Epic doesn't need to pursue Apple iPhone customers
Apple does not get to decide how the market operates. Only government gets to do that. Your statement makes it clear that they are committing anti-competitive practices.
Doesn't the Sony Playstation, or Microsoft's Xbox get to control how they operate?
Don't movie theaters get to decide which movies are shown/not?
Don't service providers like a nail salon or grocery store get to deny service? Other than for "protected categories" like sex, race, religion. e.g. "No shirt, no shoes, no service".
I'm not sure I understand what you mean by "stifle"?
Fortnite is a clear example of a success story of competition on the iOS platform. Epic has been making tons of money (billions in profit) for years thanks for Fortnite and in some part to iOS and the AppStore.
This current battle between Epic and Apple is about profit sharing and that's all. Have you seen the number of successful games on the iOS platform? Competition is thriving! But I do agree both companies are greedy.
Question: How is Apple's 30% cut different from the transaction fees that are charged by Visa / Mastercard and payment processors like Stripe? I can see the big percentage but is the argument in favour of removing the entirety of the cut or reducing it down?
1. The percentage cut is a lot more in Apple's case (30% vs 2-3%).
2. (Directly resulting into 1) There is no competition for distributing apps on Apple devices. You cannot sideload or implement your own app store. You cannot use any other payment processor.
I think you're right in that the argument is against the huge, rent-seeking percentage, and not necessarily the concept of taking a percentage. If Apple forced all payments to go through them and added only a few percent on top, I doubt this would be as big of an issue.
How does it technically work? Is the app forcibly removed from every phone that has it, or is it just not downloadable/upgradable anymore.
If the latter, can people who have it already keep on playing or are there some other obstacles involved?
ok am going to put a highly objectionable comment.
I buy stuff on apple store because its easy and SAFE.
That safety point is more important than ever, if there was no app store or lets say having 10 other app stores , i wont have the same level of confidence and heck i wont even be spending any dollars out there.
Over to Apple's 30 % cut, i dont know whats the call here, to make it 0%? ,10% , 20%? what if the same fortnite (or any other company) increases the bill to $9.99 next week :)
Am saying this purely from a consumer perspective that i dont care how apple and devs split the money as long as it doesn't bite me ...
The problem are not the rules on the App Store (that Epic actually breached), but the App Store having a monopoly as you can't easily install external apps or stores like you can on Android.
Apple famously makes its money on the hardware; if they claim the cut is for the app store tools, then they better start charging less for the hardware. If the tools are indeed paid for by the hardware sales, they should reduce or eliminate the cut they take.
Based on the reports of how hard it is to develop for the app store and all the third party tools to help deal with signing apps, I have a hard time believing the self-proclaimed greatness of the tools Apple provides.
Apple claims level playing field, but that's obviously nonsense.
This is great news, it will take a handfull of 'killer apps' to possibly move the needle.
App makers could start to 'play games' like trying different pricing models that 'go outside the bounds' and the 'come back' - making sure to blame Apple for the problems.
App makers could group together and 'go black' for a few days in protes.
App makers could group together and all circumvent the rules at the same time.
I find it obscene that Apple feels it deserves a third of each and every microtransaction.
I also find out obscene that Epic tried to used its size to circumvent that when its smaller competitors wouldn't dream of doing so.
But I'm more annoyed by the first bit. It's such an obscene cut to take when it's clear you are only facilitating the transaction by choice instead of by necessity.
People will take sides in this and I think they will be missing the point. These are just 2 greedy corporations strong-arming each other and trying to win some hearts in the public space.
Epic would do the same if they were in Apple's position and Apple would do the same if they were in Epic's position. This is just 21st century politics and it’s all about money.
This is a naive take on the situation. Sure they are both companies and looking to make money but this issue transcends both of them and is a core freedom of choice issue. As a society are we allowed to run software that we want or are we okay with being told which software is deemed acceptable for us? This question would be thorny if it even were a political issue but at this point it's literally a private corporation with no accountability unilaterally deciding what software is deemed worthy of use for a large portion of the entire world. That's dangerous and not at all a good place to be in.
It has been like that for 10 years since the start of the Appstore.
The difference now is that these platforms are getting big enough that public opinion are starting to look at them as classical infrastructure / utilities. That’s why it needs to be regulated and I agree with that 100%.
But Apple is obviously just one example among thousands. Even Epic runs their own marketplace.
If the names were swapped, one of them would still be wrong and the other right. Taking sides on this issue the whole point of this discussion regardless of who's involved.
pgrote posted this tweet elsewhere in the thread [0]. They literally gave users the option for apple app store pay for $9.99 and Epic direct payment as $7.99.
> How is the apple app store not the definition of a monopoly? Is there an competing app store on iphones that Epic could be using?
I think it's all about how you define the market. Is the market for "apps on the iPhone" or "computer software in general"? Apple has monopoly control of the former but not the latter.
This. Antitrust lawsuits almost always focus on what exactly the market is that the players play in. "Monopoly" is a highly technical economic and legal term that is scrutinized on a case-by-case basis. It is not the broad stroke that the public likes to use.
Why is everyone so obsessed with the non-monopoly status? At least in the EU, antitrust cases don't require a monopoly, it is enough if burdens for market entrance are imposed, or cost for market entrace is too high (and especially purposely set too high by companies to prevent competition). Is this something specific to the US?
Because the iPhone is not a monopoly. Apparently Apple has 58% of the smartphone market in the US so it's not really all that comparable to Microsoft back in the day. So if you don't like the App Store, you can switch to Android.
(I personally don't agree with this viewpoint but it's how it is viewed by many. For one, I've spent $X on iOS apps, if I switch platforms I lose all of those apps. Feels unfair!)
Apple has something like ~40% of US market share of smart phones. Therefore it is not a monopoly even if within that market share they have complete control with app store.
That's only the difference between a monopoly vs duopoly though, and as far as the app developer is concerned I'm not sure it makes much of a difference.
Reality is anyone releasing a for-profit app aiming for mass appeal can't afford to ignore either the Android or iOS ecosystem. They have to release for both, so there's no real competition involved.
There are a ton of competing app stores, the fact that you can't access them on an iPhone means nothing. Apple made a platform, they have every right to set the rules. Don't like it go somewhere else there are plenty of other choices.
"Apple made a platform, they have every right to set the rules. Don't like it go somewhere else there are plenty of other choices." is not necessarily sound reasoning here. US telecoms were broken up as a monopoly even though they made the platform and had every right to set the rules. "go somewhere else" implies buying a new phone, potentially under contract, and smartphones aren't cheap.
US Telecoms were broken up also because they offered little choice to the customer. Ma bell owned the vast majority of them and owned the lines making it hard to impossible to offer other services. Apple isn't even the most popular smart phone. Nothing forces you to use Apple.
In what way? If I don't want to use or develop for the app store ... I just don't, I build for Google Play or the Web. Nothing forces me to use Apple Hardware and if I want to use Apple Hardware I have to agree to the terms.
If you are a user of an iPhone you cannot get an app from elsewhere. If I develop an app and sell if for $4.99 on the app store (price based on projections of downloads, how much apple takes, etc needed to make my money back). However I could offer the same app for $3.99 on an appstore that took a more reasonable percentage cut and get more downloads since lots of users are price sensitive. From this perspective, it looks like a textbook case where prices are higher for consumers due to the lack of competition.
Even if one builds for the web, apple only allows a single browser engine which is their own. They unilaterally can decide what to implement and what features to add or remove.
This is one of the games Apple likes to “feature” regularly. They basically strongly encouraged people to buy this game one week, and yanked it from the store the week after. The game “owners” should be livid.
It's like you're dating a hot girl and you like showing her off. Then you find out the next week she cheated on you then you dump her. Wouldn't you do the same thing in Apple's position?
If any company then I think Tencent has the money and will to bring Apple to the court (they have 40% share in Epic). And won't be surprised if this will be a new chapter in the US v China trade fight.
Remarkable that TikTok is still available on the App Store, despite the risk it poses to national security. I guess Apple and China sleeping together is truly a case of friends with benefits. Maybe Epic Games should please Apple more often?
Also, perhaps I’m mistaken, but the majority of Epic Games is owned by Tim Sweeney. Meanwhile, TikTok majority is owned by ByteDance, which I don’t think we can confidently believe is truly a separate, sovereign entity from the CPC. And all this is somewhat besides the point; Apple is clearly more dependent on TikTok (China) than Epic Games.
I sometimes wonder why app makers don't "unionize", to collectively threaten to boycott the Apple ecosystem, to pressure Apple into reducing its cut. An iPhone without apps is much less valuable than an iPhone with apps.
This is a highly technical forum so I really think all of the "Apple is within their rights to determine what software users can run" folks should think about how they would feel if Windows could only run software that Microsoft publishes. Are you okay with that? Does the fact that Linux exists make this okay? It sounds like the answer from a lot of people is "Yes, of course" which baffles me.
It doesn't take much imagination to see how different the world would be if a single corporation decided what software was allowed to be used by society. Anything that is the least bit controversial wouldn't exist. Napster, Torrents, Emulators etc are obvious and people would no doubt argue they shouldn't exist anyway, but I imagine even web browsers themselves (Apple already doesn't allow them on iOS), networking tools like IPFS, game streaming services (also banned by Apple), etc just wouldn't exist in that world. I could go on with examples but that's the point, there's a LOT of creativity and complexity out there and it's impossible for a single gatekeeper to do a good job of deciding what has a right to exist.
My post is being downvoted and I have no idea why. I didn't say anything against the rules and wasn't being annoying I don't think. I guess this topic is too political for discussion.
In Canada, we have three major cell carriers. None of them has a monopoly, or anything close to it. None of them has even 50% market share.
You can have a 10 GB smartphone plan with Rogers for $75. If you don't like that, you can switch to Bell's 10 GB plan for $75. If you don't like Bell, of course you can switch to Telus's 10 GB plan for, wait for it, $75.
The Big 3 operate smaller brands with fewer bells and whistles and lower costs. You can get a 4 GB cell plan from Koodo (Telus subsidiary) for $50, or from Fido (Rogers subsidiary) for $50, or from Virgin Mobile (Bell subsidiary) for $50.
Sometimes one of them has promotional pricing, like $45 instead of $50 for 4GB. The other two offer the same pricing for the same duration. Sometimes one of them increases their prices by $5 a month citing reasons such as infrastructure investments, lower Canadian dollar value, or inflation. The other two increase their prices by the same amount a couple of days later.
And none of this is collusion in the legal sense. They don't gather in smoke-filled rooms and decide how to screw over their customers. There is not back-channel communication whatsoever. And it is not because the competition is so perfect the prices have been commoditized. In fact, Canada has some of the highest cell plan prices in the world, even adjusting for factors such as population density and GDP.
It's just that the big companies have decided to stop competing. If you live in, say Alberta or Ontario or BC, you have three options and they are all the same overpriced crap. Cell carriers in Canada are not a monopoly, but you don't have to be a monopoly to harm customers with anti-competitive behaviour. Apple and Google, Android and iOS do not have a monopoly or a collusion agreement. But they are harming the customers all the same.