Who is the court, or any of us, to say what should be the charge for selling a game on a marketplace? That's like someone telling you what your profit margin should be for a product that everyone wants. Why should it be tied to your costs?
I mean, in many cases it is, due to customer demand reasons, but there are tons of things that you pay for that have prices nothing close to what it costs to provide.
That's why I think it will fail in court at least (maybe not the SEC, or Congress). The argument that 30% is unfair goes nowhere in court -- so what should it be? Courts are not the forum for that question.
Anyway, I finish with snark: if Epic invoked its same logic on itself, clearly it should reduce its profit / subscription charges to a "reasonable" level. Epic is the only one I'm able to buy Epic games from -- clearly they're a monopoly and need to have their market-abusive behavior and extortionate pricing regulated? Right?
I find irony in many people who get probably so knee-jerk opposed to Google/Apple and "on Epic's side" will find themselves justifying why they should be free to set their own prices when they launch their next product.
It's not like Apple and Google can't move, there's like 200 countries, that's like a hundred times more countries than app stores
Your sarcasm about the flight of capital and corporations is maybe more right than you realize.
Sadly, maybe also the part about not having to justify its laws at all...
We don’t have laws that Apple is breaking. Almost all legal analysts agree Epic’s case is a long shot designed to attract legislative intervention.
Not really. Court cases are all about justifying why an action or inaction meets or fails a law. Legislation is all about justifying why a cause requires legislative action.
Exercising freedoms, for a person or group of people pursuing common enterprise, does not need to be justified. The moment it does, it’s not a right. And choosing how to price an unregulated inessential good outside emergency conditions is not activity Americans have to justify to their government.
No, choosing how to price things is needed for modern capitalism to work which is why we have antitrust laws. The question you should ask yourself is "if the 30% tax is many times higher than what it costs Apple to deliver the service, what forces would cause Apple to reduce said tax?", if you can't come up with an answer then we need antitrust action here.
The cost of the service for Apple is irrelevant in this court case.
Reads like a joke now?
Oh, absolutely 100% positively 'not true' - the US 100% has to 'justify it's laws'.
While 'something should be done here' I don't think prices need to be regulated, rather, just opening up fair market conditions in different layers of the value chain.
Just making 3rd party apps and app-stores available on each platform would suffice.
That falls under competition law. It's in a government's interests to encourage companies to compete with each other, and to prevent a single or a handful of companies explicitly or implicitly agreeing to control market pricing to the detriment of consumers.
In this case, both Google and Apple set the same 30% pricing, and clearly neither have any incentive to rock the boat and compete with each other, and every incentive to dissuade or prevent other companies from creating competing app stores. When competition in a market fails, it's up to the courts or government to step in.
"I find irony in many people who get probably so knee-jerk opposed to Google/Apple and "on Epic's side" will find themselves justifying why they should be free to set their own prices when they launch their next product."
Its not hypocritical (or even ironic) to say that there should be different rules for companies operating as part of an oligopoly, compared to small business competing in a crowded marketplace.
You would be ok with different tax rates for different size corporations?
A committee / agency to decide what is or is not an oligopoly? So, someone coming up with a new app that does something never done before, that would be a monopoly or oligopoly, right?
Markets have to be overseen by the state to some degree, because free markets rely on certain conditions being met in order to work optimally. One of these conditions is that the companies in the market must be competing.
> You would be ok with different tax rates for different size corporations?
You mean like how individuals are taxed at different rates dependent on the size of their income?
> A committee / agency to decide what is or is not an oligopoly?
We already have that: the court system. I'm not describing anything new here. Competition law in the US dates back at least to the Sherman Antitrust Act of 1890.
> So, someone coming up with a new app that does something never done before, that would be a monopoly or oligopoly, right?
Having a monopoly by itself is fine; you just can't leverage that monopoly to artificially inhibit competition.
The role of courts is not of fact finder, market minder, or regulator. You should educate yourself on that topic before proposing stuff like this.
You would have to create an IRS-like body to determine the monopolistic status of every market, industry, company. And tell me, are you just concerned about big tech companies making 30%, or would you regulate grocery chains that make 4% just the same?
It's like people don't think of the details and implications of an idea before proposing that they've got the answer.
Then what do you call United States v. AT&T? Or United States v. Microsoft Corporation?
> The role of courts is not of fact finder, market minder, or regulator.
It's certainly the courts' job to enforce anti-trust legislation.
> You would have to create an IRS-like body to determine the monopolistic status of every market, industry, company.
You mean like the FTC?
But again, it's not whether a company is a monopoly; it's whether they're engaged in anti-competititive practices to maintain that monopoly. The FTC and the Antitrust division of the DoJ investigate antitrust violations, not so-called "innocent" monopolies.
> And tell me, are you just concerned about big tech companies making 30%, or would you regulate grocery chains that make 4% just the same?
It doesn't matter how much profit a company makes, or how much it charges; it's whether or not it's artificially reducing competition in order to keep prices high. There's typically less barriers to entry to selling groceries, but its certainly not impossible for a grocery chain to engage in anticompetitive practices.
> It's like people don't think of the details and implications of an idea before proposing that they've got the answer.
You seem to be under the impression this is an idea I'm proposing, but what I'm describing is how competition law has worked for the last century.
Companies working to create bottlenecks in society instead of removing them really is bad for everyone, so governments needs to step in to fix that.
This is called our court system. And they have been handling anti-trust law for a century now. And they have done a pretty reasonable job of it.
Anti-trust law is not something new. It is well established.
You think that's what the courts are supposed to do? You have a serious flaw in understanding what courts are for if so.
No I am not! I am calling for the existing law, known as the Sherman Anti-trust act, to be enforced in the same way that it has been enforce for literally a century!
There are already laws that cover this! They have been around for literally 100 years. And our existing court system is more than capable of enforcing our existing laws, in the same way that they have been doing, for a literal century.
> You think that's what the courts are supposed to do?
Courts have already enforced the sherman anti-trust act, and have been enforcing it for 100 years. And they will continue to enforce it when violations come up.
> by the status and concentration of its market
I recommend that you go research anti-trust law, and how it is enforced.
The courts already use the "concentration of the market", in existing anti-trust law evaluations. They have been doing this for a century! It is entirely standard, in basically every single anti-trust evaluation, that has ever happened, to look at how concentrated the market is.
Absolutely. There is a cost to society when business is concentrated in a few large organisations. It descreases competition (which forms the bedrock of the capitalist system), and concentrates wealth (extracting it from local communities). It seems completely fair to make theae comapnies pay for that cost. If it means that they can't compete and get outcompeted by smaller companies then... good.
If it's not easy, maybe you should think about why then. And not be so quick to dictate how things should be otherwise.
The technology aspect of this is barely even relevant. If there was a market for 10 mobile operating systems, they would exist. They don't exist due to network effects making such systems DOA, not because it's technically impossible to create a good mobile OS. Simply put, no one wants or needs a new OS without a million apps for it. And no one wants an app store without a million apps in it.
This is very obviously the kind of monopolistic market that the government should be regulating. Too bad they've gone soft on such stuff in recent decades.
Multiple massive corporations with essentially unlimited funding and desire failed in this space repeatedly, some with enormous head starts. The thought that someone can simply start another mobile platform is naive bordering on absurd.
This is an established market that clearly can support only one or two participants. We have seen this movie.
It helps that the Google Play license would kill the existing product lines of any of the large phone manufacturers that tried. As far as I am aware courts seem to generally agree that Googles license is hilariously anti competitive in nature.
It's 'not easy' because the current monopolists will crush any attempt to take their turf - which is the whole point.
It seems like a lot of markets -- maybe most -- go through consolidation, and the more the market is one whose players benefit from network effects -- like, say, incompatible computing platforms -- the more rapid this consolidation is. Look at the personal computing market: there were a lot of players in the late 1970s and early 80s, and nobody was an obvious winner. Yet by 1990, the IBM PC already had over 80% of the market, Apple was struggling, and other once-major players were on the verge of bankruptcy or had thrown in the towel and started making PC clones. And none of that happened because IBM was "crushing any attempt to take their turf".
Frankly, I really didn't expect a repeat of that in the mobile space. It was clear to me in 2007 that the iPhone was going to be a big deal, but it wasn't clear to me that Android was going to take off the way it did, in no small part because I didn't expect everyone else to dramatically collapse in three years. One of the other players was Microsoft, for heaven's sake. Nokia was a market leader and had MeeGo almost ready to go (right? right?). Blackberry had bought QNX and were surely going to leverage that talent into a next-generation OS (right? right?).
The market as it exists now is down to two players, but this is kind of the confounding factor here: neither Apple nor Google got to their position in the mobile phone market by "playing dirty." Apple got there because people keep buying iPhones; Google got there because just about everyone who isn't Apple went with Android.
So supernova87a is, I suspect, fundamentally correct that we got to where we are now because of market dynamics. It's arguable that because the market now is down to two players -- and is orders of magnitude larger than it was a decade ago -- that there are antitrust concerns around app stores, although I think that's actually even more complicated.
As former Nokia employee, the whole Symbian vs Linux was a big deal to what happened, hence why the first Linux tablets lacked any kind of phone capabilities, despite us in internal road shows about future devices providing that as feedback.
The Symbian dev community, despite not being in love with Symbian C++, what spoiled everything was the continuous reboot in dev tools (Metrowerks with Perl scripts, 2 Eclipse based IDEs, Qt) and then came the burning memo telling them that the efforts to go through all those Symbian reboots were in vain, and it was time to start from scratch with .NET (Silverlight/XNA).
Microsoft, for rebooting the platform multiple times, PocketPC/Windows CE into the constrained Silverlight/XNA of WP7, followed up by a complete reboot for WP 8, yet another one in WP 8.1 to align a bit more the platforms (UAP), followed by the UWP rewrite once more when Windows 10 came out. Ah and in the process they failed to uphold to their promises of which devices would get the updates for the new OS versions.
Yet, despite all the dev and consumer anger in the WP eco-system regarding those decisions, they managed to slow and steady arrive to 10% market in Europe, which could have kept increasing if they were willing to bleed a bit more, while sorting out their politics.
Meanwhile Windows slowly owns the tablet market, at least here in Europe, everyone that wants a tablet with detachable keyboard and isn't willing to pay Apple prices, goes either with 2-1 laptops or convertible ones, which with the ongoing Reunion project roadmap means devs are back with a Windows 7 tablet programming model alongside an improved COM for the ride (yet another reboot to add up to the previous ones).
And this mostly because how much Google tries, most apps for Android tablets are just phone apps running on bigger screen, while Microsoft has learned to take advantage of their market share in laptops as the hardware turns into better tablets.
Nokia was optimized for another field entirely, it's rare that companies can pivot.
The issues you highlight are side effects of that.
They were already on Symbian before iPhone was even an idea.
And in what concerns Android, their phones (yes manufactured via HMD) are one of the best in what concerns updates, with their traditional hardware.
With one of the offices being the Espoo building that I visited so many times.
BlackBerry was an 'in between' and was really good at the killer feature 'email' but nothing else.
Microsoft was too late with a decent offer.
Nokia was a feature phone company that died with the feature phone era.
Calling devices with touch screens, C++, Java (ME + Symbian extensions), Flash, Python and a Web Runtime a feature phone.
Not only it is rediculous, it proves how little you understand Nokia's offering before iPhone was even an idea.
Nokia not only is alive, it owns Bell Labs nowadays.
The entered smartphone market as it was starting with $50B in the bank and unlimited resources etc..
What I pay an ISP is a monthly fee for them providing a service. I paid Apple/Google/manufacturer a fee when I purchased a device.
My ISP does not receive more/less in fees each month based on how much online shopping I do.
They are monopolies, or more precisely, an oligarchy.
Mobile devices have become 'essential utility' not quite but almost like roads, internet access etc. and Google/Apple have absolute control.
Imagine if Verizon and AT&T said: "We're going to charge 30% of all revenue derived form Internet Usage".
What would be the difference?
Could we just 'refuse to engage' and 'not use the internet'?
We scream 'net neutrality' when it comes to network access, we need to recognize some of the same logic applies here as well.
Sometimes it's hard to demonstrate 'consumer harm' when we don't know what the market would look like otherwise: in Canada, literally up until the 1980's, the telephone system was a de-facto government monopoly called 'Bell Telephone'. You had to buy everything from them, they set prices etc. etc..
Imagine what would happen if iOS and Android 'banned' anything other than Safari and Chrome.
Imagine if theY forced Bing and Google only respectively as search engines and banned all others?
How would we react?
In much the same way Europe has required users have the ability to have the choice of Search, even default search, I think the minimum requirement would be to allow 3rd party apps and 3rd party app stores.
Well, mobile operators used to charge up to 80% on their Symbian, J2ME, Windows CE/PocketPC, Blackberry, Brew stores.
The analogy here could be something along the lines of "device manufacturers cannot be in the business of content creation or distribution" or even "content distributors cannot be in the business of content creation".
I don't have a strong opinion on this, I'm just providing some historical context. I'm sure there are many more examples and interpretations.
Historically, computer hardware makers have both made their own applications -- not just system-level software and bundled utilities -- and distributed software others make for their platform for about as long as there's been computer hardware. Unless this was somehow so narrowly tailored to Apple that it couldn't apply to anyone else, it would be a seismic change.
(Also, I continue to be skeptical that forcing Apple to spin off the App Store is really a useful way to address the complaints people have. A separate company with an exclusive contract to run the App Store doesn't solve anything, and if you're going to force changes to make it non-exclusive, you can arguably do that without spinning it off.)
But the problem is very obvious. A 30% cut for something that is completely free on other computing platforms is evidence of excessive monopolistic power. This power is exercised by means of restricting what kind of software end users can run.
It is not hard to imagine several reasonable ways to restrict that power depending on how far you want to go and what tradeoffs to take. The only seismic effects would be to owners of walled gardens mandated by device manufacturers, i.e. Apple, Google, Sony, etc. – exactly those who are currently abusing their market position.
You also seem to assume vertical integration is the only way to provide a stable, secure and private computing platform. That is not obvious to me and I don't believe regulators could (or should!) arrive at such a conclusion.
The question for regulators is simply if the market is operating with sufficient competition.
Apple for example is not completely vertically integrated. They buy glass from someone else, and screens. I don't think they mine aluminum. Clearly it is possible to deliver their product by working with other companies they do not own. This means it may be possible for them to deliver a product with similar capabilities even after spinning off the app store as "apple apps co" which provides apps for "apple device co" but they may occasionally also make apps for "Samsung Device Co". This is further reinforced by the fact that the vast majority of apps on Apple's (and Google's) platform are not written by Apple.
Kinda like how Boeing and Airbus both buy engines from Rolls Royce and Pratt & Whitney (which used to be part of the same company as Boeing). Or even like how Apple buys processors from Intel but also used to buy IBM processors.
If consumers are willing to pay 30% more for guarantees of security, privacy, experience, then that's fine.
Imagine if MS and Apple today banned all Desktop apps out of their own stores or took a 30% cut. We would immediately rethink the issue.
With phones, this was the model from nearly the beginning, and everyone opts in, or chooses not to.
If "it was bad from the start so that makes it ok" was a great argument, nothing would ever improve.
A lot of industries were bad from the start and were regulated into much better versions. Everything from food to air travel to financial services was made into better markets for consumers through regulation. Mobile computing is just as essential today as those other industries and needs a similar shakeup.
> After the Air Mail scandal of 1934, the U.S. government concluded that such large holding companies as United Aircraft and Transport were anti-competitive, and new antitrust laws were passed forbidding airframe or engine manufacturers from having interests in airlines.
Also if Boeing were allowed to create an airline they could, say, not sell airliners to any other airline, or charge them much more. Or just pass on the airliner sales margins to consumers as lower fares... until the other airlines went out of business.
But I guess the airlines could just make their own airplanes right?
Yes, there are "basically" two manufacturers of airliners if you define airliner as "planes made by Boeing and Airbus" and ignore... all the other airliners. Without CRJs, E-Jets and Q400s the US airline industry doesn't exist as it does today.
There are three airline alliances operating in the United States . Of the top 10 airlines operating in the United States  only three are currently members of an airline alliance. When Alaska joins Oneworld it will be four.
> Maybe it would better if there was a vertically integrated airline company
Do you have a more compelling reason than "maybe" to suggest why changing these regulations back to a model that was already shown to be anti competitive would provide better service? 
> why wouldn’t it?
Because we tried it and it was found to be anti competitive. 
I think it is safe to say that Airbus and Boeing hold a strong duopoly in their market segment—similar to Apple and Google in mobile actually. 
Yes you are right about the airline alliances.
> Do you have a more compelling reason than "maybe" to suggest why changing these regulations back to a model that was already shown to be anti competitive would provide better service?
Maybe there would be benefits to consumers if a manufacturers focused more on user experience? Maybe service would be cheaper. Maybe more planes like the 787 would be built. I’m not necessarily advocating for this, I’m just not convinced an anti-trust case from 100 years ago over mail delivery, before modern airlines existed, is a solid reason to keep the law in place
No, but this is to my point. The current airlines in the United States are trash and have been getting worse throughout my lifetime.
I don’t necessarily believe deregulation is the answer, I just don’t buy that this particular type of “trust” would be a problem for the market these days. Vertically integrated companies are successful because they are efficient and it seems silly to punish companies for achieving this
What is it specifically about airlines that are "trash" today? How was it better in the past?
If a monopoly is created and enforced by the state, it is their duty to regulate it.
If it wasn't run by a complete and utter dickhead I may have more sympathy.
Is there some particular reason you don't like Tim Sweeney beyond his failure to be a diehard Linux crusader?
You don't have to be a "diehard Linux crusader" to see that dropping support from a platform because your store doesn't support it is a shitty move. Running the Windows version of Linux software via Wine isn't support.
They do if they want to be on the mobile market, as evident by them being kicked off 98% of the mobile market when they decided to not engage in it.
Would you really believe that such behavior would not break anti-trust law? Because the courts already ruled against microsoft in a much less extreme situation.
And furthermore, are you really OK with that behavior, if microsoft forced every single windows PC in the world, to disallow unapproved apps?
> The argument that 30% is unfair goes nowhere in court -- so what should it be?
The lawsuit has nothing to do with the 30% cut. Instead it has to do with Google and Apple engaging in anti-competitive behavior, and using their significant market power to prevent competition.
They should not be forced to change their price. Instead, they should be force to stop their anti-competitive behavior, and allow other apps to be installed, in an easier way (in Apple's case), where as Google should be stopped from forcing OEM providers to not preload the epic app store.
> why they should be free to set their own prices
It has nothing to do with price setting. That is nowhere in the lawsuit. Instead, Epic is trying to stop anti-competitive behavior.
By their logic, all the supermarkets in my neighborhood are colluding on the price of tomatoes.
Steam has a 30% cut because it's so big that the smaller stores don't move the needle much. So there's no real market force pushing prices down, because the other offerings are just not substitutes. (Eg. there's GOG Galaxy, the other ones are too tied to certain publishers.)
This comes down to what I call competitive capitalism VS Hobson's Choice capitalism. Android doesn't really have any competitors - Amazon, Samsung, they have zero legal access to the apps on the Google Play store unless they go through Android. As such, if they refuse to allow competitors to force them to compete, they have a responsibility to compete despite the lack of competition and if they refuse to do that it's the government's job to beat them until they comply.
Again: the problem here isn't "freedom", it's competition. Your next product probably doesn't have a major captive sub-market.
But let's address the " freedom" argument: what I call Hobson's Choice capitalism. "If you don't like it, you're free to rewrite the OS from scratch, then convince every single app on the app store to switch over while starting with no hardware support and no app support. This is a Hobson's Choice - it's not about making an improvement on Android, it's about making a unilateral improvement on the entire universe just to push Android forward. It's absurd and not a real choice.
But more importantly, if you consider Hobson's Choice capitalism to be capitalism, then technically the government is equivalent to a private corporation as long as you can forfeit your citizenship and move to Somalia to be free of your country's obligations on you. This basically contradicts the standard definition of the free market, but that's the point - everyone rejects the Hobson's choice out of hand, because it's just so absurdly irrelevant to competition.
So let's talk about competition: would Google rather take a lower cut, or legally permit Amazon and Tizen to access Google Play apps from their non-Android OSes?
Because right now, they're not competing. They're just sitting on their chicken-egg problem based laurels.
As for Epic: I sort of agree with your pejorative - copyright is intended to provide funding, but the right it actually grants is the right to deny a copy. Some companies simply sit on copyright they never actually intend to monetize, and others keep hold of it far longer than they need to make a healthy profit proportionate to its success. The notion that all copyright needs the exact sake period is also absurd, as some industries are much more fast-moving than others. I think we need to take a long, hard look at copyright monopolies, starting with the absurd "lifetime plus 70 years" duration.
Besides, our devices are computers. The next evolution of laptops for most people. We should be able to run whatever software we want on them. Google and Apple purposefully acted like mafia to keep them as locked down as they could, while they both benefited from the web and open source to rise to and ultimately cement their position.
Fuck them both.
You've got some kind of purist ideology, maybe reminiscing about some past generation of tech. Borderline fanatical I dare say. I hope representatives are getting more balanced input than just yours.
It's the fact that both Stores do not allow apps that circumvent Apple/Google's payment systems for in-app purchases (and in Apple's case, the fact that side-loading is prohibited, forcing you to use the App Store for any software you want to run on portable Apple devices).
If you took a favourable interpretation, a 30% commission only becomes anti-competitive once Apple/Google take away any alternative.
That being said, I don't agree with that and I'm still not clear what the legal basis for that argument is. I'm leaning towards Epic losing this one mightily.
But to get there, their argument obviously can't be "Apple is a monopoly allows it to extract 30%, which is too high, so we want it reduced to zero". That's not going to work.
Rather, they get it to zero by saying "Apple is a monopoly and prevents competition by banning apps that implement their own payment processing system, so leave the 30% as-is but let any app implement its own payments".
So the actual percentage, and the restriction against accepting payments outside Apple IAP, are two slightly different concerns. Reducing the percentage to 20% would obviously be a net financial win, but it's definitely not their main objective.
Do we really want to live in a world in which a few tech companies get to shave 30% off of all the value produced by a significant portion of the entire economy? Why should we put up with that? Because we made a rule a long ago that in general companies can decide their own pricing structure and device policy? Is a slavish adherence to this rule worth making us all 30% poorer? Why?
We can and should make an exceptionion to the general principle of corporate independence whenever we find ourselves in a situation in which a key piece of public infrastructure happens to be privately owned --- and app stores have definitely become public infrastructure). We shouldn't let a blind adherence to an abstraction prevent us from ensuring that this public infrastructure is run in the public interest.
An app store that sells games and voluntary entertainments is not a public infrastructure, operated in the public interest. That's almost laughable.
And don't be so quick to conclude that now because you reap the benefits of a system that was previously set up, you can simply decide that you think the % is too high and take it back "in the public interest". Go ahead, propose that every company only be allowed a 5% markup on its costs. Let's see where that takes us.
When you have a natural monopoly operating key public infrastructure, regulation is a clear and justifiable option.
The iOS and Google platforms have barely existed more than a decade, and the platforms + app ecosystem are constantly evolving. New platforms and app ecosystems are emerging too, with Facebook/Oculus, Valve/Steam, Amazon with Fire/Alexa, etc.
Enshrining today’s dominant app ecosystems as the government sanctioned ones will surely stifle their evolution and innovation, because that’s what declaring something a utility does: assumes there is no differentiation, so slow government regs / bureaucracy can control it.
I don’t believe Apple and iOS are the end of history of ecosystems. Atari wasn’t, Microsoft wasn’t, IBM wasn’t.
"Go ahead, propose that every company only be allowed a 5% markup on its costs. Let's see where that takes us."
In the case of Android, it takes us back to when Google previously had a 5% cut. They've done it before they can do it again.