Epic Games just won a temporary restraining order against Apple — at least in part. Effective immediately, Apple can’t retaliate against the company by terminating the developer account used to support the company’s Unreal Engine. But in the same ruling, Judge Yvonne Gonzalez Rogers decided that Apple will not be required to bring Fortnite — which it had banned after Epic added an in-app payment system in violation of Apple’s rules — back to the App Store.
I think this is a fair order. Epic willingly and purposefully broke the agreement it entered into with Apple to elicit a response and strengthen their lawsuit case, and Apple is well within its right to remove Fortnite as a result. However, for Apple to then also block and remove everything else related to Epic is clearly retaliatory and petty, and the judge seemed to have seen right through Apple (and Epic’s) nonsense.
Of course, this is technically not part of the actual lawsuit filed by Epic that started all of this – these are the opening salvos in what will be a long, drawn-out fight.
The dreaded 30%…
I understand the value for most cases. If you sell an app for 1 dollar, there is really 30 cents of benefit by Apple (PayPal, for example asks 2.9% + $0.30 for all orders. And that does not include international fees). Even for an expensive purchase the value is mostly there.
They also help users manage all their subscriptions from a single place. You no longer need to run after never ending phone calls to reach customer service, and receive an hour long retention speech. In app purchases are secured in a similar way. If you shaft the customer, they have a right to refund, directly from Apple.
But the situation changes when the second party (Epic here), already had infrastructure to support those cases. They can easily enter an agreement with Apple, and say “we will accept refunds thru your system, and whatnot, but will do the financial processing ourselves. Let’s agree on 10%” or something similar. That would not be a big loss on Apple, and will probably be fair, as long as they demonstrate the ability to hold their promise.
Even Amazon offers “seller fulfilled prime”. You can ship your own packages and get access to Prime users, as long as you agree to the same level of customer service quality.
That would have been more than fair.
The fact is 30% is insanely high. I believe the fee for merchants to take American Express credit cards is only 2.5%, but that fee is high enough for most small businesses to not accept it. The store model is convenient, but saying everyone should use it because it has features is a misdirection that’s beside the point that the thing is being used to enforce an illegal trust and price gouging.
It really depends on the circumstance.
If you have your infrastructure (like Epic does, or Amazon, or Adobe, or any other large storefront), then yes 30% is too much.
But if you depend on Apple for all customer facing services, then it is a steal. How many people can set up their web page, offer app downloads, add very good anti-counterfeiting measures, have APIs for in-app purchases, handle numerous international currencies and payment processors, including many third world ones depending on cell phone payments, offer customer service, and promote their app to billions of users?
When you include all the other things on top of the credit card processing, it really makes sense.
However offering this as a black-and-white selection buying all or nothing is the main issue.
sukru,
Exactly. Clearly many app developers would go with apple even if they aren’t forced to, and that’s fine. But both customers and developers should be able to go to other stores too, It is this process of competition that brings us fair market prices. Having anyone forcefully blocked off from a competing store is anti-competitive as hell and such measures should not be allowed to stand.
Competing via merit tends to become optional for companies at the top that have access to other methods of asserting control over the market. This has been true for a long time with most oligopolies and monopolies resorting to easy profits by exploiting their power and control rather than offering more competitive products and services. This is extremely counter-productive to the free market ethos where we want to see lots of healthy competitors offering the best goods and services they can. Apple is objectively using it’s control to harm app store competitors rather than competing with them on merit. We shouldn’t be looking the other way.
The best thing we can do is vote with our wallets. This is what I’ve done. After over fifteen years of Apple, this was the last straw. I had already been considering moving away from Apple before this given their downward spiral in software quality on both iOS and MacOS. This did it. I’m done. I don’t even play games on my devices, yet I’ve had it with Apple’s crap because I recognize exactly the kind of model they’re going for these days, and I want no part of it. Cook wants control on a level that Jobs could only drool about. Thanks but no thanks.
“But if you depend on Apple for all customer facing services, then it is a steal.”
It can’t be “a steal” when all competitors charge the same amount, and there are only 2 options that even exist. Maybe when 5 or 6 actually start up we’ll compare how much of a “steal” it is. The odds are extremely unlikely.
People act like this 30% is some sneak fee.
No one made Epic put their apps on iOS and iOS is not a monopoly since Androids user base is like 5 times bigger.
Epic chose iOS and went into agreement with Apple and accepted the 30 percent.
Also the 30 percent has not changed since the App Store opened. Google charges the same 30 percent.
It has not increased with inflation or anything.
If you want to develop for iOS, which is the most profitable mobile platform from what I understand, you have no choice but to go “into agreement” with Apple. That’s the problem. And a percentage based take of the revenue would automagically adjust with inflation. Inflation rises, the cost of the software increases, and Apple’s 30% consequently increases.
If you want to go in the nightclub, which is the most popular bar in town from what i understand, you have no choice but to go “into agreement” with the door staff. That’s the problem. And the door staff will refuse you entry if you wear sneakers, and you must pay them a £5 entry fee, until it’s adjusted up for inflation. Inflation rises, the cost of entry increases, and the managers cut consequently increases.
Not a valid comparison. An app presence on the iPhone could be necessary for a small company’s survival. A nightclub is just a nightclub. Now if one company owned a huge number of profitable nightclubs all over the world and took an excessively large cut from all performers tips/wages your comparison would be a little closer.
In fact, wasn’t that Pearl Jam’s same argument against Ticketmaster?
frood,
That whole monopoly is a mess too. They added more and more BS “convenience charges” simply because their monopoly enabled them to and not because they did anything whatsoever to earn it. They are very abusive to customers and they use unfair license agreements to threaten venues/artists that want to offer competing ticket services. Their mafia tactics essentially guaranty sales go through them despite them not being competitive whatsoever.
I don’t go to many shows personally, but there’s certainly a lot of anti-trust abuse and these mega mergers that give them almost complete power hasn’t helped things.
https://variety.com/2019/music/news/live-nation-settlement-dept-of-justice-ticketmaster-1203448994/
https://www.reuters.com/article/us-ticketmaster-livenation-idUSTRE60O4E520100126
Why not ask yourself why iOS is the most profitable mobile platform to develop for? What could the reason be?
There are games that I have paid $4.99 for on iOS are free to play (with ads) on Android. Yet we iOS users are willing to pay. (I have an old Android phone to but do not want to go back there any time soon.)
If you forced Apple to adopt the Android way of allowing sideloading and alternate stores wouldn’t this lower how profitable it is to develop for iOS? That is, iOS would be just as bad as Android suddenly.
Also, is 30% really too much? Is it pretty much standard among digital content distributors (consoles, etc) and way lower than physical retail took. But if it is too much, then what is a reasonable amount? People start throwing around 2-3% like payments processors take (PayPal, VISA, etc). But that is bullshit. Payment processors only transfer money, nothing else. They don’t verify that the product you buy is safe, that it won’t steal information from you, etc. Also, handling the amount of money that they do, if they hold on to the cash just for a day, that is huge sums in interest if placed properly. So that comparison is pure BS. So what is the reasonable amount? And don’t just come up with a number. Show me the breakdown on WHY that number is reasonable. I have heard many numbers being thrown around but no explanation to how they came to that specific rate.
Also, if you company’s survival depend on being on iOS you have a shitty business plan. I would not hinge my survival on a third party, that is lunacy.
I think it is reasonable that if you want to make money on the ecosystem that Apple built and continue to maintain, you pay them. You price your product so that you make money even after Apple have gotten their cut. If you don’t sell enough it is because you priced it too high compared with the demand. Again: shitty business plan.
Android having 5 times the market share is still a _huge_ number of people on iOS. In fact, 1/6 of a potential target audience is a large enough percentage when dealing with stuff like this that were it not for all the hoops you have to jump through to develop for iOS, no sane developer would be skipping out on developing for them (keep in mind that many websites still make an effort to support browsers with only 1-2% market share).
You also seem to be misunderstanding where the monopoly being complained about here is. it’s not in terms of mobile devices, it’s in terms of app distribution. Users cannot side-load apps on iOS, which means that developers who want to support iOS have no choice in how they distribute their application, the only option is to pay Apple the 30% royalty. In contrast, you can not only side-load apps on Android (you only need a computer and a USB cable to do it, don’t even need to root the phone), you can even use third-party app stores (see F-Droid for an example of this), so developers there actually have a choice in how their apps are distributed, and are not required to adhere to the Google Play TOS and thus don’t have to pay a 30% royalty to Google just to support Android at all.
ahferroin7,
I haven’t seen numbers suggesting android has 5X market share of IOS, where did is that from?
In the US, IOS market share is ~50%
(Here it’s shown to be 52%)
https://www.macworld.co.uk/feature/iphone/iphone-vs-android-market-share-3691861/
It doesn’t’ surprise me that in china IOS “only” has 25%. In europe it’s 28%, and I didn’t quite understand why, but Flatland_Spider suggested it may have to do with phone contracts that subsidize the price of phones (ie “why wouldn’t I go with the iphone if it’s included in my package”). The other point to add is that IOS accounts for 2/3s of app revenue, probably because of the wealth gap between IOS and android users, which makes it harder for an app developer to rely just on android for income.
Well, I put up with iOS for a long time, including the restrictions, because it was rock solid. It hardly ever crashed, the battery life was usually amazing, and it integrated well with the rest of my Apple kit. Starting with iOS 11 however, and continuing to this day, that integration doesn’t work as well as it once did and that prised stability simply isn’t there anymore. Apple even admitted this shortly after iOS 13’s release. I held out hope for iOS 14, then came the dispute with Microsoft and Facebook over game streaming apps, and I figured I’d better start looking elseware since game streaming apps and remote desktop apps are remarkably similar in operation. If Apple were to ban those, I’d be sunk. This latest issue, plus the misunderstanding with WordPress and other apps, will keep me away for a long time. I need a device that will do what *I* need, not what someone else thinks I should need at an arbitrary point in time.
Windows Sucks,
A “sneak fee” would make things worse, but it isn’t like a fee can only be abusive and/or anti-competitive if it is a sneak fee.
As a percentage of a developer’s gross income, it already factors in inflation. Consider that sales taxes don’t generally increase as a percentage of a transaction, but you still end up paying more sales taxes every year due to inflation. Apple hasn’t increased the rate from 30%, but it’s not to say that apple’s services don’t cost more with inflation, they do.
Over the weekend, a hot dog vendor was kicked out of the local mall. A few weeks prior, the hot dog guy had asked the mall for special permission to sell hot dogs rent-free and was, as expected, denied. The hot dog vendor then decided to roll into the mall and start selling hot dogs, notifying the mall after the fact
The hot dog guy just rolled his cart in there, plugged in his neon sign, and started selling hot dogs!
After getting booted, he went down the road and tried to do it at the next mall, too. They kicked him out, too. Now, he’s suing both malls for “antitrust violations.”
He filed a lawsuit to force the first mall to let him roll in to sell his hot dogs whenever he wants, regardless of the mall’s retail lease terms, but he – shocker! – lost.
Naturally, he’s now been banned from entering the mall.
Gee, wonder if he’ll win his remaining lawsuits?
Bottom line: Epic Games wants all of the benefits afforded to it by Apple’s App Store for free.
haus,
This sounds like you made it all up, haha. If it’s real though I’d be very interested if you can provide a news article!
I really don’t blame you for trying to find brick and mortar analogies, but unfortunately the example you provided doesn’t fit what apple is doing. I don’t object to apple deciding what to sell in it’s own store and if they don’t want to sell XYZ, then they don’t have to! However…this is not what most of us are crying foul over, the problem is that apple is blocking owners from being able to go to any other app stores regardless of where they’re at. I cannot think of any equivalence to this in the brick and mortar world but if there were it would be like walmart placing concrete roadblocks to prevent consumers from entering it’s competitors stores. Sure, it could be a very effective strategy, but it’d be highly illegal. Apple is doing the same thing, but the difference is that it’s using digital roadblocks rather than physical ones. Digital roadblocks, especially those designed to block competition are clearly profitable to those who control them, and apple has decided to use digital roadblocks to increase it’s profits, but it represents the opposite of a meritocracy.
Do you own apple stock? If you were, at least I’d at least understand your motive for defending apple’s anti-competitive behaviors.
What bothers me, as a prospective developer, more than the 30% (and $99/year fee by the way) is that Apple has essentially arbitrary say over whether your app is allowed or not, and according to their own terms of service, they’re not even required to give you a reason. In past years, when the rules were somewhat understood, I might risk it. Now, though, why would I even bother? I could spend lots of time developing my app, only to have Apple reject it without telling me why. Apple says no, and that’s that. Some of the apps I want to make wouldn’t be allowed anyway, since Apple doesn’t permit direct hardware access. Why not, once permission is given by the user? I’d love to have a portable full-on network analysis tool set, packet capture and all. iOS is capable of this. But… Apple says no, and that’s that!
No company deserves this amount of control over the software market, it’s way too much centralization of power and control over competition. if we allow it then it’s clear as day that we will end up with modern day robber barrons who get to dictate the industry. The cop out answer is “just go to android”, but a duopoly is just slightly less awful than monopoly, it’s still awful.
First one to incorporate an actual tokenized and tradeable blockchain asset into their engine and release on all platforms wins.