Remember when eBay charged a commission on the sale price but not shipping? Suddenly $50 items became $1 with $49 shipping -- so eBay had to charge the commission on the shipping too even though it didn't seem "fair".

Same here -- every app would turn free, and charge to unlock features within using their own payment mechanism. Apple's App Store revenue would drop to zero. No developer in their right mind would let Apple take a cut of anything.

As a general rule, app stores simply don't allow third-party payment in apps that don't go through the store, for this exact reason. It's not just Apple with this policy.

But Apple should not take cut on every purchases made through the app. It makes no sense.

AWS does not take a "cut" on every Netflix subscription bought. They just charge for the storage and traffic. This is how App Store should function.

- AWS charge you on bandwidth used, Apple don't charge developers for the number of downloads

- AWS charge you on compute time, Apple don't charge you for ongoing use of their services beyond one initial charge for app submission

- AWS charge you for storage, Apple don't charge you for storing your app

I'm not a fan of Apple's App Store terms any more than the next person, but the GP's comparison to eBay is a hell of a lot more apt than your comparison with AWS.

Yes they do, the fee is yearly, and they make billions in revenue from this. Google charge one-time.

[1] https://techcrunch.com/2018/06/04/app-store-hits-20m-registe...

The figure available was "billions". For ease of calculation, say it was 7b. That means if each developer pays $100 and total revenue was 7b, 1% of the world must be a developer. (1% of 7b * $100 = $7b)

Also, by your own figure, 20 million is already ~0.25% of the world population.

https://9to5mac.com/2021/02/11/app-store-scam-apps-how-to-sp...

Their point is that Apple could charge based on bandwidth used, and that this could be more fair for some developers.

> AWS charge you for storage, Apple don't charge you for storing your app

I would be pretty happy with Apple charging for app storage if it was at S3 rates - it would amount to almost nothing.

We can scope out who those are likely to be: free applications which provide some useful educational service would lose; currently they provide no revenue (beyond the token developer fee). Banking, rewards, credit, etc. applications (applications which interface consumers with their pre-existing accounts for CRUD-style management purposes) would lose. They provide no revenue. Subscription products with very low conversion rates would lose if their free:pay user ratio exceeds, say, 10:1 -- or some other breakeven point with respect to money saved by ditching Apple's payment stuff.

It would also hurt applications like Facebook, Twitter, and Instagram where the product is completely free and monetized by advertising Apple currently doesn't take a cut of.

It's clear the winners are mostly extremely popular multi-billion dollar applications where the app portion is a pretty thin layer and they charge all or most users to subscribe on an ongoing basis. Fortnite doesn't exactly have a subscription, but it relies on fairly frequent impulse purchases and monetization of free users.

I don't think it's straightforward to imagine the world would be better or worse if the basis for billing changed to something like cost basis.

My overwhelming reaction to this trial is that it seems like both sides have fairly good reasons to prefer things the way they prefer things, but it's not clear to me why a court should essentially vacate a particular business model or contract. When courts intervene to strike broad classes of contract provisions (for example, to allow or disallow mandatory arbitration provisions), typically it's because there's an obvious public interest. Here the interests seem private on both sides, and it doesn't seem obvious to me that end consumers will either be harmed or helped by what's being asked for. Which seems like the kind of territory courts traditionally run away from.

Thank god our object isn't to design rules that would pick the winners and losers we want, but to design rules that prevent Apple from using their platform leverage in an anti-competitive way. It's fine if Facebook, Twitter, and Instagram lose, and "extremely popular multi-billion dollar" applications win. Being extremely popular and successful while using few Apple resources should give you some degree of control over your own application.

What equilibrium?

Equilibrium implies multiple forces balancing each other out. This doesn't seem to be the case here, because Apple are effectively dictating terms.

A better term would be "status quo".

I can understand that colloquially it could mean the latter, so I apologize for using a technical term.

It doesn't seem there really are any, other than to leave the app store entirely, which most would consider pretty extreme to the point where it's really hypotehtical. That's why I questioned whether the language of equilibria is appropriate in the first place: it just doesn't seem to be a pretty misleading framing of the situation.

Game order: Apple chooses a policy burden \omega ~ [0, 1] which stands in for the restrictions they place on developers or the cut of purchases they take. Apple takes \omega \beta in profit and incurs no costs.

Let's take you at your word that a developer's only choice is to leave or stay -- Developers choose whether to develop exclusively on Apple [reward (1 - \omega) \beta], on all platforms (1 - \omega) \beta + \theta, or not on Apple [reward \theta]. \beta and \theta are both constrained to be non-negative. Developers pay a cost of development -c where c is constrained to be non-negative. Developers all decide simultaneously.

You could model this as one developer choosing a fraction of effort. You could make costs variable. You could make developers decide sequentially. You could model Google, who is not an actor in this scenario. etc. etc.

Users observe the fraction of developers who opted in ||d||. Each user has a type [0, 1] which determines the threshold amount of developer support it will require for them to choose Apple over another platform. \beta and \theta both update to be higher or lower depending on user choices according to some update function you prefer.

Let each player have either an individual or shared discount parameter \delta.

This is clearly a well-specified game. I am not going to solve it for the equilibriums; it may well be the case for any practice \beta, \theta, c, etc. that Apple's incentive is to choose a very high \omega and developers best response is to choose "develop for Apple anyway". That would still be an equilibrium. Most games have degenerate equilibria.

It seems to me that if you adjust developers to be sequential rather than simultaneous this is very nearly the Chain Store Game; if you make it a single developer this probably gets close to something like divide the dollar; if you want to model the lawsuit, it's a costly signalling game (Epic burning cash to establish type)

All of this is very traditional game theory. I get that your point is that Apple is mean and the government should do something about it, but there's nothing wrong with me describing the current arrangement of winners and losers as an equilibrium, or to describe the shock a lawsuit could induce via policy change as something that will establish a new equilibrium by exogenously changing or constraining parameters. I left all this out because I didn't think anyone would require this effort to accept the use of a very uncontroversial term.

Now imagine your app is free. Yet you have to pay for all these downloads. There wouldn’t be any free apps anymore.

Although lets be honest here, free apps could easily continue to be subsidised by Apple in any future model. We are talking about far less than a dollar per iPhone in terms of hosting/bandwidth costs for all the apps, so this really is something that Apple could easily just swallow.

Let's not forget that the availability, quality and abundance of apps, made by developers, is a key driver of success of the iPhone, and Apple makes plenty money from hardware sales. I won't lose sleep over the thought that they might have to pay for some hosting.

That's including AWS's insane profit margin, though. I have my cloud deployments with Hetzner, where extra traffic costs € 1.19 per TiB, so that 100 MiB app download would not be half cent, it would be 1/100th of a cent. (And that's before we consider that Hetzner gives 20 TiB per month free traffic with every VM.)

That is what the 30% cut is meant to cover (amongst other things too). Like with a high street retail store, the mark up is intended to cover the running costs of the store. Which brings us full circle to why Apple deduct it from transactions.

Sure you "could" have an App Store that calculates the operational costs and then charges it to the developer, but you then potentially destroy the free app market (and contrary to what people often say about the App Store, there are a lot of decent free apps on there).

Having a split payment and billing system also adds complexity to invoicing. Did you know that AWS and other cloud providers don't provide credits and refunds as payments into the customers bank accounts? No, what they do is they offset your costs against your credits and invoice the difference if owed to AWS. If Apple were to adopt that then we'd basically be back at deducting $n from transactions again. And once again we've come full circle.

There is so many arguments about what Apple "could" do but when you start to distil the requirements down to a workable operation you almost always end up right back at the status quo.

Now I'm not saying that Apple aren't taking advantage of developers either. The cost of development on a Apples ecosystem is ridiculously high and Apple are notoriously hostile towards their developers too. But charging a percentage of transactions is a reasonable approach to the problems outlined above and limiting transactions outside of Apple's payment channel does at least solve the problem of developers cheating by funnelling funds in via a side channel (as exampled in an earlier comment which discussed people selling items on eBay for $1 but with a $49 shipping fee before eBay clamped down on exaggerated shipping fees).

Sure, the App Store "could" follow AWS's pricing model, but it makes more sense for it not to given the App Store is more analogous to a shop like eBay or even a physical store like Argos than it is a cloud computing data centre.

This is why I said the AWS/App Store comparison isn't apt.

It'd be like if Apple took all of the developers who testified against Apple, reduced their commission to 0% in perpetuity, and then asked the judge to throw out their testimony because the complaints were moot.

(That being said, I do think there are conditions where stores would/should allow other stores, and I think those conditions could be more permissive than the Roblox example. Apple should, medium term, resolve the GeForce Now/XCloud objections.)

After playing that game, I saw promotions for Assassin's Creed Odyssey on Uplay, and purchased it. I later went on to purchase many other games on Uplay.

In short, Epic allows Ubisoft to sell games on its store, for which they presumably pay a cut - for those sales. But Epic has no problems letting Ubisoft require their store be installed for those games, and if you buy something there - even though the Epic Launcher installed it - they don't get a cut.

This is more akin to the App Store installing Fortnite - which Apple could get a cut out of, but not getting a cut for purchases in the app.

On the Apple side, it's ok for applications to require the user make an account on services like Uplay (I believe several Ubisoft games require this; and Fortnite requires the Epic equivalent). You can then use that account to buy stuff on the stores. It's not an exact parallel because there are no (non-jailbreak) external app stores on the iPhone, but it's a close parallel.

And Valve allows you to sell steam keys on your own website also without paying the cut, so long as you don't undercut the steam store.

https://www.reddit.com/r/pathofexile/comments/1ogbo7/will_mo...

Do you have any sources on how restrictive valve are or have been with that, or is that just speculation? Can developers default to their own payment systems and bypass valve's, or is theirs required to take a secondary, less-accessible option (when it's even allowed)?

From the same thread, the mtx cut taken was a dealbreaker for redfall studios, so it certainly sounds like they didnt get the option for their own mtx transaction service: https://www.reddit.com/r/pathofexile/comments/1ogbo7/will_mo...

If the direct links to comments aren't working, try logging into your reddit account.

But once you buy a phone from them, it's your phone, not theirs. You shouldn't have to use their store exclusively on your phone, but since you do, it should be subject to way stricter rules regarding anticompetitiveness and unfairness than non-exclusive stores that other platforms have.

When someone uses an app downloaded from the App Store, the compute is provided by the device owned and paid for by the user. Apple does not own it or maintain it anymore.

And the compute is either completely provided by the device or is shared by the app vendor.

Apple does not give anything in this scenario. They only take.

Apple keeps you from doing that.

I agree with you that I wish they would allow it. I agree that I should be able to put windows 10 on my iPhone. Thanks for the back and forth, and we may not be able to get past our starting assumptions about the nature of trade/commerce, but I still wouldn’t want to legally force apple to do anything. People should definitely make a big stink about it, though. Thanks for the back and forth, but I’ll leave it there.

That’s the real magic of AWS and is the reason S3 was the mother service. Pre-AWS, colo at scale meant circuits and high friction networking. With the modern cloud providers, there’s less friction, but a tollbooth.

If Apple adopted the same model as AWS, people would still moan.

Of course individual situations can be different, but this is discussion about the "generic situation".

And this is the best app on the store, a less costly and freer competitor hasn't emerged.

And I can't even sideload my own apps.

This is because it's much easier to earn money on the long-tail dedicated fans than the masses. Especially when those masses are likely to hate advertising based models with a passion.

iOS has more paid apps, for one because people that can afford a high end phone are more willing to pay for $99 for an app.

Look at the pricing for the same app on Android vs iOS.

The cost of sending your app through automated processing and serving it to 99 people needed to make back your fee is probably on net less than a penny.

Offering this service to small time developers would still be 99.99% profit so there would be no reason to make up for lost profits.

I don't think there's nothing getting in the way of Apple charging a very high rent for Amazon's app and a very low one for a random vegan recipe app.

If someone buys something, even like a physical good, you do not believe that the person who bought it, actually owns its, and the seller can put whatever restrictions that they want on the thing that was purchased?

For example, if someone sells a book, you think it would be OK for the book writer to prevent someone from reselling it, or reading the book in a way that the writer does not like.

And even more so, it seems like you do not believe in any form of anti trust laws at all. And you think that all anti trust laws are just illegitimate?

This is an odd position to take, because most people support the first sale doctrine, and also support some form of anti-trust law.

Antitrust laws _can_ be good, but like I said elsewhere, we are a country swimming neck deep in regulation and seem to like our particular hammer. It has a cooling effect on innovation, and China in some ways has a freer economy than we do.

I think it odd that many people rush to strongarm companies through law when there is a perfectly good alternative in Android. Even Microsoft and Amazon have been in the phone business and could get back in, offering you a phone with multiple app stores. Epic could even do it. There doesn’t seem to be enough people who care. You apparently do, and actually I agree with you that Apple should allow alternative app stores. But voluntarily because the people demand it or are leaving for Android, not because the hammer came down on them.

There is very little cost in simply preventing Apple from taking so many intentionally anti-competitive actions.

It is not about forcing Apple to write software. Instead it is about preventing them from spending so much effort and trying to remove other people's ability to install other app stores.

Allowing other app stores, really would not be a huge burden on Apple, and it would give people a lot of choice.

> should be able to put whatever OS you want on it

That is not really very possible when Apple spends so much effort engaging in illegal anti-competitive practices, to prevent other app stores from being installed.

Finally, even if it were possible/easy to provide jailbreaking software, I think that Apple would almost certainly make serious efforts to prevent people from doing that.

But sure, I agree that game companies, and major tech companies should absolutely take action to provide people with very easy ways of jailbreaking people's phone.

Perhaps if Fortnite was available through Epic provided jailbreaking software, then that would be enough to kickstart things, and cause a bunch of other companies to move off of Apple's app store, and move to the jailbreak only version.

EX: imagine if fortnite provide incentives, like "free vbucks" to a large number of people, in order to get a large amount of people to jailbreak their phone, and then imagine if other companies, like Facebook, worked together on that, until almost everyone had a jailbroken phone.

That could certainly work. But I doubt Apple would just let that happen.

> Instead it is about preventing them from spending so much effort and trying to remove other people's ability to install other app stores.

I think we are coming at this from 2 separate sets of foundational assumptions. I’m of the camp that companies are free to make devices and we are free to buy or not buy them. If we don’t like how they operate, we buy a competitor who does what we want. Hopefully enough people agree with us that a competitor will cater to us, or we can start our own. I know that some people start from a different set of assumptions that assumes we can just force the seller to sell us what we want. I don’t know that we can bridge that divide easily, but I wish you well. Thanks for the back and forth.

I agree that there are some other "free market solutions" that could work.

The example that I gave, which would absolutely be a free market solution, would be if Fortnite, and other major companies, like facebook, banded together to build easy to use jailbreaking software, and to use their companies to try and convince a large critical mass of people to jailbreak their phone.

That could work. But I am worried about the government intervention, that Apple would try to engage in, to stop this free market solution, via lawsuits that they would inevitably use against this free market answer.

But lots of companies, acting together, to help everyone jailbreak their phone, so that, hopely half, or a large amount of users, now are in a position where they can easily install other app stores, would be a reasonably free market way of solving all of this.

When there is enough critical mass of users doing this, those major companies could then remove/ban their app from the Apple app store, so that basically everyone else has to follow along as well, and then basically everyone is outside of Apple's control.

Because it is much easier to write jailbreaking software, than it is to build an entirely new phone.

> since apple could release a new firmware to block your OS

People have been jailbreaking phones for years. That is always the game of cat and mouse. And people have continue to get around it, even though they don't have large amount of resources, like big companies would.

But, furthermore, if there is a large enough userbase, that is jailbreaking their phone, then it would cause Apple a large amount of economic damage, if they decide to screw over this critical mass of users.

If 30% of Apple's users, would get their phone bricked after an Apple update, then Apple would probably be cautious about doing that.

But I guess it is hypothetically possible that Apple would be willing to brick 30% of their customers phones (if that was the critical mass). That would certainly hurt their customer friendly image though, and it would cause Apple billions of dollars in damages.

> but the market solution would be for people

Putting lots of resources into jailbreaking phones, and convincing a lot of users to do it, such that it would cause Apple a lot of damage, if they stopped it, is also a free market solution.

That is a free market solution that is much easier to do, than building a new phone.

The contract that would be enforced by aggressive government regulation?

Yeah no. I thought you did not like government regulation, and supported people's ability to do what they want with things that they own? And in this case, such a contract, is enforced by government regulation, and we should work to invalidate it, if it prevents people from doing what they want with the phone that they bought.

Thats the point. I support the free market solution here, and apparently you want to use the government, to take away people's ability to do what they want, with their own phone, if you think that such a contract should prevent this.

I want to get rid of Apple's ability to use the government, to stop people from doing what they want with their own phone. The government regulations that prevent people from doing this is the problem.

You make a recommendation for how they run their platform, they can say yes or no. You can go or you can stay.

It’s that simple.

But I think we’ve run this well dry.

If I walk in to Best Buy and get an iPhone, I'm not signing any contract with Apple. All I'm agreeing to is "I give Best Buy money, and Best Buy gives me this physical product." The reason we're upset with Apple is that they're imposing terms on us as if we signed a contract with them, but we didn't.

You may say that you bought the phone and so you can do with it what you want —- ok. Hack/root it to run another OS. It’s your device in that sense. But they are under no obligation (nor should be forced to be) to make it easy.

I agree with you that I wish they would make it easy, but alas. Buy a librephone.

Instead, it is other people, who want to get the government out of our phones, and not have the coercive, government force, under threat of violence, preventing us from doing things with phones that we purchased.

If you want to say that you support the government, using force and coercion, and government intervention, into people's lives, fine. But that is your position. And it is extremely anti-free market.

But, if your position, is that you support this government coercion, then I am not sure why you would get upset about other forms for laws, and government coercion, given that you want the government to forcibly prevent other people from doing things with phones.

Because you absolutely support government coercion, that would be government force on people, who are doing things with phones that they own.

Nobody is preventing you. Who is preventing you? There’s no government action here. You buy the phone or you buy a librephone. Let’s leave the government out altogether.

You’re the one pushing for some kind of regulation against free agents interacting. No need to contact the federals on this.

You were advocating in favor of using the government to "enforce a contract" or whatever, on people doing what they want with the phone that they own.

> You buy the phone or you buy a librephone.

And if someone buys an iPhone they should have the full right to do whatever they want with it, and the government should absolutely not be preventing people from doing so.

> Let’s leave the government out altogether.

Yes, lets ensure that the government never prevents anyone from doing what they want with the phone that they purchased.

So if you take back your previous statements, and instead agree with me that the government should not prevent people from doing what they want with their phone, then cool.

But otherwise, if you disagree, then you would be the one advocating in favor of using government coercion here against people.

That’s one reason why we are regulation drunk in this country. Instead if having a simple rule that says you live up to contracts that you agree to, now we have to have a million rules for exceptions to contracts people sign.

I do t thing we can get anywhere if you don’t agree with contract law.

I am merely commenting on how it sounds like you want to use government coercion to force people to do or not do things with a phone that they own.

You can support government coercion if you want. But that is your position.

Don't go around pretending like you want to get the government out of stuff, when you want the government to come in, and prevent people from doing things with their own property.

> why we are regulation drunk in this country

It seems like you are the person who is pro regulation, as you want the government to come in, and require certain things about a phone that they own.

> I dont thing we can get anywhere

I just want you to stop pretending like you are some anti government regulation and anti coercion person. You support lots of coercion.

You support a pretty darn coercive thing, which is that you government force to be enacted on people, merely because of what they are doing with a phone that they own.

Whatever attack you are making against other people, regarding government coercion, on this issue, you are much worse than those other people, because you are the one who wants to come in, and force people to do things or not do things with their phones.

Whereas, other people, instead want the government to not stop people from doing things with their own phone.

On this specific issue, you are the pro government coercion person, and everyone else, who wants people to control their own phones, are the anti-coercion people.

Well, because it is illegally anti-competitive, and the courts already ruled against microsoft, regarding web browsers.

So thats why. It is because of anti-trust law.

The problem is Apple has greater negotiating power, because they don't need any one developer and it is difficult for all the app developers to organize to negotiate together. But imagine if they did organize, and threatened to remove their apps from the app store unless Apple gave them more favorable terms.

No developer in their right mind would let Apple take a 30% cut of anything.

Most developers would pay Apple a 3% cut in order to use Apple's built in-payment mechanism, and not force their users to leave the app and type their credit card information into a browser.

30% is exploitive, and not at all proportional to the value provided. People pay it because they have to, not because it's fair.

So I think we can agree that a realistic number for Apple is definitely above 3% for the service they provide.

We can argue about 30%, and that’s a good discussion, but 3% is no way comparable.

The minimum purchase price on iOS is $0.99, so at worst you'd be paying basically the same rate (~30%).

But most payment processors offer separate pricing for micro-transactions (e.g. Paypal is 5% + $0.05 IIRC). Which works out at around 10% for a $0.99 transaction.

And actually - Adyen offer much better pricing than the "Stripe rate" of $0.30 + 2.9% in the first place.

Meaning you couldn’t segregate low tickets from high tickets and get the most optimal fee - your whole merchant account was one fee or the other.

‘Twas quite a PITA

If Apple’s cut were 12% and Epic and Microsoft now charged 6%, would you claim “The 12% that Apple charges seems about right IMO”?

Also, Apple will claim they have a better product that warrants higher margins. Data from independent parties shows that they attract more users willing to pay for apps, and developers aren’t leaving en masse for Android.

And this argument is fine in the hardware market because they have competition, it's efficiency monopoly - that's why I said it's not always bad.

However their app store controlls access to 50% of US market (even more by revenue) simply because it comes as the only option and the consumers can't unbundle it. If they had competition on the platform (different stores/distribution methods) - you wouldn't have to say what % is right, the market would decide the value added by their app store/payment methods.

That's an odd way to put it. Approximately 0.001% of developers would complain if instead they were allowed to use the language and IDE they prefer.

To “play” on Xbox or PlayStation, they take a 30% cut.

Steam also takes a 30% cut.

It’s pretty standard, certainly not “exploitative” (at least not on apples part, if not others), though obviously as a game developer I’d prefer it be much less.

For Steam there are many viable alternatives, which allows for user/developer choice and fair competition in the long run. Epic Store is about half as popular now (31.3m vs 62.6m daily active users), but it's growing fast. I don't think what Steam is offering is worth the 30% cut, and I imagine we'll either see them reduce that cut or get overtaken by Epic in another few years.

I don't like what the other stores are doing, but to me it's a smaller concern on game consoles/stores than on every application for general purpose computers and smartphones. I'd fight the fight on the latter first.

I also disagree with the implication that something is "certainly not exploitative" because of it being an industry standard - in fact I'd say that can be a contributing factor to it being exploitative in many cases (price fixing/oligopolies). To me it's exploitative if the only reason they're getting away with charging so much is because they're hindering competition in that particular area (e.g: can't change app store without buying a whole new phone).

1. Steam's cut isn't 30%; it's 30% on keys sold through Steam and 0% on keys generated to be sold elsewhere. Most games sell about 1/3rd of their Steam copies via external keys on sites like Humble, GreenManGaming, Nuuvem, WinGameStore, directly on their websites, etc. Valve's implied cut would be from 15-20% for most of these games. Of course, publishers and developers voluntarily give up some of the cut Valve doesn't take to those intermediaries, which is another knock against the claim that Valve is an exploiter. It seems hard to argue that in a world where a game is sold for $60 and GreenManGaming takes $6, passes on a $12 discount to the consumer, Valve takes $0, and the publisher takes $42, that Valve is the one exploiting the publisher, despite giving the publisher free keys.

Why does Valve do this? To maximize lock-in in their ecosystem and make money on in-app purchases. They have selfish interests at mind, but those manifest through giving away some of their cut on purchases.

2. Valve also has a fee reduction program that's the exact opposite of Apple/Google. Apple/Google charges 15% up to $1 million revenue and then charge you the full amount. Valve charges progressively less after $1 million revenue (down as low as 20%). I think this reflects closed/open systems;

Valve is worried about publishers like EA (who left Steam and then came back hat in hand because their own service was an expensive and technically poor failure), Ubisoft (who left Steam and are currently bilking Epic for upfront cash while pushing their own UPlay service), Bethesda/MS (who flirt with Beth.net/Microsoft Games Store but both ultimately returned to Steam in the end), Activision (have abandoned Steam for Battle.net). So they want to make it easier for big publishers to come back to them. Whereas Apple wants to maximize revenue off big clients and maximize the PR benefits of helping small businesses. But the point is that Apple, Google, and Valve alike actually do have flexibility in the % they take.

3. Finally, I think the Epic active user numbers are really not super useful. The vast majority of those Epic users are simply Fortnite players (and it's actually a little unclear whether Epic is counting non-PC Fortnite players who sign it under Epic accounts). Having acquired Rocket League, they now can use Rocket League players in the same way. Having acquired Fall Guys, they will likely do the same there in the coming years.

The actual number of users of the Epic Games Store are not trivial, it'd definitely be a strong second having overtaken GOG and Itch and other competitors. But they're likely in the single digit millions.

This in part reflects that the Epic Games Store is not very good. The client does not support basic features, nor does the store interface. Their onboarding process is entirely manual, which they characterize as giving them a "curated" game library but actually it means there's just not that much variety on the store and almost nothing at the low end. They have sales where they eat huge losses to give users discounts, but these are not appreciably better than the kinds of sales that occur on Steam and in the broader ecosystem.

Crucially, to your point that Steam might be over "overtaken" by Epic is that it's not clear there's any competition at all. Every game that released on Epic and not Steam did so because Epic signed exclusivity contracts with the game (typically 12 month exclusivity contracts). It's predictable that all of these exclusives, bar one -- World War Z, have released on Steam within a month or so of their exclusivity expiring. Most seem to report doing better on Steam. Most developers that release on Epic and Steam, without a formal exclusivity deal, are developers who signed "free game" deals with Epic where Epic bulk-pays developers upfront in exchange for allowing every Epic user to redeem the game for free. Epic reports a relatively low conversion rate from free game redeemers to buyers.

All of this suggests that the Epic Game Store, while putting up impressive numbers, isn't really peeling off developers or users because of its lowers cut. I could imagine a world where Valve/Steam are materially hurt if Epic greatly extends their exclusivity contracts, losing billions of dollars specifically to destroy Steam. But I don't see Epic organically overtaking Steam.

My main point here is that the complexities of what's being offered and what's being charged here are obscured when we just say "You ate one third of my pizza! But I wanted that pizza!"

Microsoft store on PC is not a closed platform like Xbox is, ergo it is not what I was claiming.

It’s cool that Epic is taking on Steam. But they’re doing so at a large loss right now, we’ll see how it goes.

I mostly mentioned that to make the point about Xbox 12% cut. But you also mentioned Steam, so it doesn't look like you're solely talking about closed platforms.

> I just mean that if we’re penalising one platform it seems fair to penalise the others.

If that's your point then I'd agree. Though it matters less for game consoles, and by "penalize" I'd mostly just want them to stop the active suppression of alternate app stores. It looked more like you were defending the practice as non-exploitative.

So they would sell it to us for $22.50 and set the retail price at $29. So in that sense it was a 22% cut, because we only kept 22% of the sale price.

But in most cases the publisher didn't make the game. They were a middleman who took a game from a studio and sold it to us. I have no idea what their cut was between them and the actual maker of the game, but I'll bet it was more than 8%.

So in that regard, the app store is a really good deal because it lets developers publish directly to consumers without a middleman.

App store, on the other hand, is a digital distributor. Making a digital copy is so cheap it could as well be free. And even then, not all app developers publish on the app store because they want or need its distribution services. There are many developers who would happily arrange the distribution of their apps themselves, with their own infrastructure they already have anyway, but they have to publish on the app store because that's the only way onto millions of iOS devices.

I'll say it again: it should not be legal for a hardware manufacturer to retain any kind of control over hardware after it's been sold.

Every part of application distribution has become cheaper, so you lock down every platform and charge the same percentage.

I was just answering the question about what the cut used to be in the packaged software world.

Users should be given the option of using Apple's system if they want to.

After all, It's Apples' argument that their payment system is light-years better for consumers. If true, then users will naturally gravitate towards Apples' payment system. Right? This would result in a cycle where Apple (and other payment systems) are incentivised to continuously improve. What's wrong with that? Why not let the consumers decide what is best?

Let Apple's payment system compete on its actual merits. Apple says it's a much better system after all. I say - let them prove
it. They should "put up or shut up", so to speak.

For example, I can pay $0.99 to buy a game using Square or Apple, but Apple takes a 30% cut and will give me a full refund if I don't like the game. I chose Apple every time, but not because it's "better", it's just better for me and I'm not the one paying for it.

Actually now that I think about it the difference is the walled garden. I think pretty much the only compromise I can accept is something like Apple and Google must be required to add something like F-Droid that is run at arms length from Apple and Google and accepts third party software repositories.

This way users can download and use any software they like from any repository anywhere. The benefit for Apple and Google is we won't shut them down and really they have inertia behind them so many if not most people will stick to the default stores, and Google can forbid OEMs from adding applications or repositories. A user must do so deliberately and manually.

The benefit for users is applications installed from F-Droid will be able to auto update.

The benefit for independent software vendors is they can publish their stuff outside of app store and play store and not have to adhere to any policy by the app store or play store and not have to pay any money to the default stores.

Anything less and we are basically at status quo.

The Durbin amendment allows merchants to offer lower prices to customers who choose a payment option that incurs lower fees (such as cash or debit card) at the point of sale: https://en.wikipedia.org/wiki/Durbin_amendment

Compare this to Apple, which takes a 30% cut. Developers must raise their prices by 42.9% to compensate for that 30% cut. Apple does not allow developers to offer alternative payment options for most categories of in-app purchases.

For a long time, the standard rate for payment processing for small businesses has been 2.9% + $0.30 for credit cards. Larger businesses with higher transaction volumes are able to negotiate lower rates. If Apple allows developers to offer payment processing options that take smaller cuts, and allows developers to offer lower prices when customers choose those options, I'm certain that most developers and customers would prefer the third-party payment processors.

Are you suggesting other vendors would be unable to compete with that for some reason?

As an aside: I don't think the same pricing among different vendors is necessarily a requirement. If one entity offers more security or other benefits, then their pricing should reflect that.

Apple “puts up or shuts up” with the phone itself. Thats the product and the consumer choice they focus on.

The playing field remains tilted heavily in Apples favor. But they (apparently) wanted even more - extensive compensation for economic activity that happens far from the App Store even when the link to the App Store is secondary.

The economic history of this sort of activity is well documented, and the extent to which it distorts markets well established. It’s plainly an antitrust violation, and both society and the software market would be free-er and more prosperous if our laws were enforced here.

This is trivial to deal with. Apple already has rules on apps, they could go from banning fremium apps, to disallowing apps without a substantial free version to enforcing a reporting API on payments.

What they can't do is use their position in one market to force marketshare in another market (payment processors). That's classic anticompetitive behaviour.

(Aside, freemium apps have a low reputation, and that's why other stores without that rule aren't overrun with such apps)

The inability to install outside the store is what makes disallowing outside payment an issue.

The combination means that you can't sell to a customer without going through apple because they have used their control of the hardware to take the decision of whom to do business with from you in order to stand there with their hand out.

https://arstechnica.com/gadgets/2019/01/facebook-and-google-...

that is the true red-line from a user perspective. go on and have your spat about whether 30% is fair or not, but the app-review process is the keystone on which the permissions system rests, allowing sideloading is tantamount to allowing all major apps full-permissions overnight and essentially making the permissions system meaningless.

the only viable solution I can see that allows third-party app stores would be to require that Apple still review all apps on third-party app stores to enforce the requirements surrounding permissioning (i.e. having a valid reason to request the permissions you're requesting) and they would still need to charge for that.

"third party app stores without any review, but Apple still gets a cut" would be the worst of all possible outcomes.

If Facebook is chomping at the bit to do this on iOS as soon as they can, then why haven't they done it on Android where they already can?

Nobody who doesn't opt in for privacy shredding will have their privacy shredded.

If you don't opt-in to privacy shredding then you will be locked out of being able to use facebook, whatsapp, and other "network effect" things that you more or less don't have a choice about without cutting out communication with large parts of your social network, so this is not really a "free choice" at all.

Right now those companies don't have the leverage to lock out Apple users. This immediately gives them that leverage and they will use it, just like they already have tried (and gotten their hands slapped for).

App store review is the only thing standing between you and Facebook demanding full permissions for everything, and allowing third-party app stores or sideloading is a mortal blow to app store review.

I understand that you don't personally care but the Apple customer base does, a large number of them specifically choose that because Apple is using their leverage in favor of the customer here. You can get the experience you desire on the dominant smartphone platform (with 85% of the global smartphone marketshare), just leave us the freedom to choose this experience as well. You're arguing that we should be explicitly denied this because it's not convenient for Facebook.

We don't need to sacrifice general purpose computing and user freedom on any platform so you can protect your false impression that your privacy is protected while actually giving it away cheap.

I believe Zuckerberg said it wwll years back when he called people who trusted him suckers.

App store policies were not handed down on stone tablets on Mount Sinai. Charges that better track the incremental costs are not a logical contradiction.

If the decision goes against Apple, I'd be surprised if they didn't just 'charge rent' to be on the App Store, just like a retail mall charges stores. Apple would have to take on the additional work of negotiating with each App, which would likely be "take it or leave it" pricing for all except the big ones, but I can't imagine it being illegal.

That doesn't cut to the core claim of lack of competition, though, and that's why the choice of remedy here will be interesting.

Of course, as we all know, rent in a retail mall often includes a percentage cut of monthly revenue, so we would be right back where we started.

The Windows store has plenty of applications despite having fees (5%).

As an aside- to me that seems like an important differentiating factor. Apps must pay a fee to be on these platforms. Who do they pay the fee to? Whoever they pay a fee to shouldn't be allowed to also have apps on there since this is unfair and anti competitive. Fees do not negatively affect Apple but they negatively affect competition.

immoral? Its subjective. I disagree and apple likely don't think its immoral

illegal? isn't that what the trial is for ? to decide whether this is illegal.

Yes, I’m suggesting that people leave if they are unhappy with Apple. Go to Google; or maybe MS or Amazon will see how hated apple is and start a new phone division. That’s how markets work.

Companies that have seemed on top and undefeatable before have fallen due to customer unhappiness, and can fall quite quickly, too.

Not necessarily. Apple would likely be unable to extract the rents it currently does, but if a dev has the choice of paying a 5% fee using an rarely-used payment system, or paying a 15% fee using a payment system that most users already have set up and that has very little friction, the latter is likely more profitable.

Source: https://www.ebay.com/help/selling/shipping-items/labels-pack...

That's fine. Apple have this amazing review system that is really thorough and that is funded by every single developer paying into it. That's the main reason Apple considers their store to be so safe and useful for customers.

This is not a "general rule". I can't think of any examples other than Apple's app store.

https://developer.apple.com/programs/how-it-works/

Think it through: free apps would not be able to afford the rent, so they would need a discount.

Then in the limit all apps would become free, so as to get the discount.

But some apps would be making a killing with external payment methods, while other apps would be making nothing.

Meantime Apple would also be making nothing.

I would think Apple has thought about this.

Not if the AppStore is to offer competitive processing fees.

I’ve been following this case and the only thing I can conclude is that their executives genuinely believe that Apple is responsible for all commerce that happens on an iPhone. It’s bordering on delusion.

Without third party developers the iPhone would be nothing by now.

- Upton Sinclair

A 1% "Apple Platform Safety Fee" on Robinhood wouldn't surprise me....

https://www.fool.com/the-ascent/research/average-credit-card...

Would they? Don't they literally already do this too?

Isn't Apple Card https://www.apple.com/apple-card/ them literally skimming off the top of every financial transaction, despite them doing nothing but provide a branded whitelabeled Goldman Sachs Mastercard? (admittedly, a very pretty fancy card)

I don't think the general population will ever be terribly up in arms with Apple's behaviour anymore, so long as Apple keeps forcing other businesses to hide Apple's taxes/fees/cuts for them.

But they're only standard because the credit cards asserted these fees, we got used to them, and now they seem obvious, right? (I remember plenty of merchants who used not to accept credit cards to avoid the fees, but, whether by bank pressure or just the weight of expectation, there aren't many of those any more.)

It surely won't be too long until these fees are 'standard' too, in the sense that they're totally usual and customary, whether or not they're reasonable.

It's a difference between small merchants and large merchants. Small merchants still feel free to refuse cards or charge higher prices when you use them. Large merchants aren't free to refuse (too much of a customer loss) or to charge (against the credit company terms).

A tax for existence on a platform is just rent seeking and increases prices for everyone but Apple. That's not desirable and likely illegal.

The worst case scenario is Spotify-cation of services where Apple used the App Store to identify popular services, counters with their own, and then charges extortionate fees such that they cannot compete with Apple's native services. I would be concerned if we start seeing an Apple Brokerage.

Apple Pay doesn't have a direct competitor in Venmo since Venmo is about payment processing between people who don't normally deal with credit card processing, and cross platform functionality is the biggest value prop. Apple Pay isnt a threat unless it works on all platforms equally.

If you are a web app developer who wants users to pay you, Apple Pay is awesome in that it takes away a lot of friction.

Edit: The context of my pro-free-market comment is app stores. Of course it's not absolute. You very well know this. Please don't argue in bad faith.

An honest reader would not interpret my pro-free-market comment as being 100% absolute in any and all circumstances. An honest reader would consider the context. You're not arguing in good faith.

Try again?

FWIW, based on my experience, whenever I see Americans arguing pro-free-market, I am going to assume that they genuinely argue in absolutes. ("FWIW" because I can see from your profile that you're Canadian.)

This is exactly the kind of thing that makes me want to participate less and less in online discussion. HN's rules require people to interpret comments charitably but it's still full of stuff like this. It's exhausting.

I just don't have the energy for it anymore and honestly that makes me quite sad.

Yes, but

(a) some, as opposed to all which is the dream of the pro web-app camp.

(b) forbidding custom JS and web engines helps keep this low

(c) even the crappy mobile-webview apps at least have to be wrapped in an app container, be installable and uninstallable the same way, be notarized, use the same payment system with central control, and be tied to the same policies (e.g. regarding privacy, notifications, use of apis) as native mobile apps

iOS Safari already lags behind in features. Apple would just make it even worse if it started to cost them significant amount of money to have a truly great web browser.

Besides, this wouldn't be an issue in the first place if other web rendering engines weren't forbidden on ios. Google / Mozilla could have their own browsers that aren't just safari reskins.

How does that work? It's not like Apple spent money to develop the games or the apps. And they are diverting money from the profitable games to the unprofitable apps. So how, exactly, are the games subsidizing the apps?

It's not slow, it's not broken. It's a great mobile browser. So stick to reality and not bunch of made up "what ifs".

Google's strategy is simple:

1. The web should be able to control everything (i.e. PWA features not normally found in a browser).

2. Google should control the web (they can index it, track, monetize it, but it has to be on the web).

3. Profit.

Do you think Apple users are super excited at the prospect of most apps turning into battery-draining non-native shitty experiences, instead of using the iOS frameworks? No, they're not.

And push notifications on iOS work as a service, to avoid battery drain, they all go through Apple on a single connection. This is free for all native apps. It can't be implemented for web apps both for technical reasons and because web apps can't be curated, so it'll just be abused like there's no tomorrow.

Have you noticed on the desktop that EVERY SITE asks you for push notifications? This is super annoying and bless your soul if you ever clicked "YES" on any of those. They'll spam you until you die, or eventually ask your nephew to reset your permissions.

EVERY single feature not in Safari, has a reason not to be there. And I'm sick of everyone eating up Google's propaganda and becoming their tools in this. I don't mind Google at all, they should fight for their PoV on all this, and they have a right to expand their business.

But not at the expense of Apple or Apple's users. F that.

HN is mostly frequented by developers, and it's so frustrating to see how many of them are outright lazy and don't think about UX but rather about how to get quickest from point A to point B.

Rest assured most phone users are with you all the way. But again, we wouldn't know it reading developer forums.

Sometimes it's politics (I had a colleague leave a job because the new director of development mandated they rewrite their flagship enterprise apps in React Native because he got a song and dance from a React Native trainer/consultant and wouldn't listen to the people who knew what they were talking about).

Sometimes it's different priorities (a meetup buddy of mine some years ago had to write apps in PhoneGap because "We're in the oil bidness, not the app badness").

It isn't always "the best allocation of limited resources", either. Apart from having to do extra work to make the UX close to native (which isn't trivial), using a "cross platform" solution means you've just included a giant third party dependency that you don't control or maintain. Call it FUD if you want to, but in the forty-odd years I've done programming/development that's never been a good bet. If resources are really limited, the best bet is to have a decent design and very clear (reasonable) expectations and pay someone good to execute them.

If the PWA concept had caught on, users on all platforms would have an equally good UX, increasing user choice.

Installation, push notifications, etc... are all optional and can be mixed and matched based on what users actually want.

An example would be individual forums are a great use case for PWAs.

Funny enough I couldn't find a decent native app for HN, so I just placed a link to the site in my folder with social apps. That site is the worst thing in that folder.

I have a workstation that deals with 3D rendering and huge Photoshop files, or compiling sizable projects with no problem, and my CPU is still pegged to 100% when I browse Reddit.

I shudder at the thought of those same people being in charge of my mobile experience. I don't feel like having to replace my phone battery every 3 months, thanks.

Let websites be websites. If you cripple them without a good technical reason then they become exactly the sort of app you're complaining about.

There is no reason why non-native apps should be a shitty experience that drains the battery. That is just a tooling/feature issue.

> Have you noticed on the desktop that EVERY SITE asks you for push notifications? This is super annoying and bless your soul if you ever clicked "YES" on any of those. They'll spam you until you die, or eventually ask your nephew to reset your permissions.

The spam for installing the native app is 10x worse when using a mobile browser.

Have you not noticed that EVERY APP asks for push notifications and uses them as a marketing funnel?

Instead of websites asking to send notifications, they are now nagging us to install useless apps that ask to send notifications and clutter our screens. An honest curator would never even allow these apps into their app store.

This is purely a business decision on Apple's part, nothing to do with user interests at all.

Okay.

These "apps" should never be allowed in the app store. They should be websites that get to ask me exactly once whether I want to receive their notifications. Instead they keep pushing and nagging me to install their apps and Apple's policies are encouraging this behaviour.

In some cases, the notifications are useful, but there is no other reason for them to be apps installed on my device.

And you don't have to install any apps. Use the sites if it's the same for you.

Sure sometimes apps get promotion and featured by the store but for the vast majority of apps, any downloads they get have about as much to do with Apple as the results of your web searches do.

>Are there additional fees to accept Apple Pay?

>No. Apple doesn't charge any additional fees.

They do charge additional fees, just not to customers. Those fees get tacked onto the bank/merchant in the transaction. Apple charges between 0.15% to 0.30% of total transaction, according to Financial Times.

https://www.macrumors.com/2014/09/12/more-apple-pay-details/

iPhones concentrate rich users who buy stuff. There’s nothing delusional about this. Likewise, Epic Game Store giving away games they paid huge advances for also makes those games more money than they ever would directly selling on Steam.

Let us rephrase the question. Does iOS compete with Android in the operating system market.

"Customers don't buy operating systems. They buy devices," Cook said."

True. Operating systems can be had for free. Customers generally do not buy them (as a separate item), but they do choose them, when they are allowed to do so.

What if customers had the option to buy Apple devices without Apple's choice of operating system pre-installed. Apple would never let customers have that choice. A million excuses.

"Tech" companies, as well as Microsoft and Apple, remove choice. Users pay nothing for the OS. Someone else pays (OEMs in the case of Microsoft). The OS is pre-installed. Choice is removed. No different than a "default setting" (e.g., "default search engine" for which Google paid $1B to Apple in 2014). The friction to change a pre-installed OS or default setting is too great for most customers. The companies know this and exploit it.

Cook suggests that if the customer wants another OS, one that allows a wider variety of apps to be installed, then she can buy a different device. How is that for interoperability.

The OS, when controlled by an intermediary such as Apple, is a means of control over users (as well as developers). Any argument that theroretically the most safe, secure and private OS by design is one that the user cannot fully control is unconvincing. If a customer wants privacy against Apple or its business partners, for example, iOS is not designed to offer that.

I would like to see a world where platforms are forcibly opened - it seems like any downside could be easily mitigated with competition or regulation. If Apple wants to be a privacy platform great. But they don’t get to take an arbitrary cut out of every companies bottom line with no recourse because they own the hardware. I think anyone saying the potential bad effects don’t have enough imagination as to how well things can work when everything isn’t owned by one company. You could even argue it’s anti capitalist if you wanted.

They don't — the users bought it, it's theirs now. It should be illegal to restrict hardware like this.

Developers have been so steeped in propaganda about "payment processing" that they have no idea what the 30% commission is for.

A court or regulator could force Apple to allow third-party payment processing, side-loading, and third-party app stores, and Apple could change their business model to directly charge for the tools and the SDKs that every developer uses to make native apps. The only way to avoid those costs is the way that already exists today: make a web app.

Right now the payment processing costs have been integrated into the commission, but they could charge whatever the market could bear to license their IP for a royalty, so in effect developers could end up paying more.

There's nothing in law that says Apple can't charge money for their software. That the use of developer tools and SDKs were free on other platforms like the Mac doesn't mean that it's legally required that it be given away for free.

They can't charge a cut of revenue unless they monopolize payment processing, so if as you say they start charging for developer tools, if they charge too much of a flat rate for those, many developers will rightfully walk away, so no, they can't make obscene profits like they're doing now without controlling all payments in iOS apps.

There's a bunch of reasons why it'd be a PITA for everyone involved if they were forced to do this, but no matter what happens the revenue sharing is never going to go away as long as Apple wants to keep that business model. All the frictional costs (more lawyers and accountants) to verify they collect the right royalties is exactly why courts are ultimately going to side with Apple, because the current system is the ideal one for all parties.

They aren't that different but I'm not sure this has been challenged yet. So perhaps that's the difference- nobody has yet challenged Microsoft's monopoly on the Xbox or Sony's monopoly on the Playstation.

I would love these platforms to be opened up as well. The fact consoles are closed walled gardens too doesn't excuse Apple's App Store monopoly.

Edit: From what I can gather there isn't anywhere near a billion total consoles in use worldwide however there is over a billion active iPhones in use right now:

> Apple says there are now over 1 billion active iPhones, with 1.65 billion Apple devices in use overall.

https://www.theverge.com/2021/1/27/22253162/iphone-users-tot...

On the comparison between Apple and Sony, — objectively there is no difference except that they work in different markets and the devices they sell have slightly different purposes. If as a result of all of this Apple is forced to make their devices more general-purpose-like, it would be easier to insist that Sony should do the same.

Game consoles are specific-purpose computing devices: they play video games with a secondary use of running other entertainment apps (netflix).

Phones are general purpose computing devices: they are use to do practically anything that a computer can do; check email, look up navigation, buy things online, check bank balance, create and edit photos/videos.

There is an entire universe of apps that don't make sense on an Xbox. Why would your bank create an Xbox app, or why would Adobe port over a version of Photoshop for the Xbox? They wouldn't. And that's the difference between the two.

"General-purpose" is an artificial distinction. The idea of "general-purpose" devices do not exist in any legal sense.

>Game consoles are specific-purpose computing devices: they play video games with a secondary use of running other entertainment apps (netflix).

This is a circular argument. Game consoles are "specific-purpose" because they've been made to be "specific-purpose". The Xbox could be a perfectly adequate gaming PC had Microsoft not decided to artificially lock it down. There's no technical reasons why I shouldn't be able to plug an Xbox into a monitor and get real productivity done on the same machine I play games (like any gaming PC).

An even better distinction: the Nintendo Switch. The Switch could easily function as a tablet PC had Nintendo not locked down the system.

>There is an entire universe of apps that don't make sense on an Xbox. Why would your bank create an Xbox app, or why would Adobe port over a version of Photoshop for the Xbox? They wouldn't. And that's the difference between the two.

And why is this where the line is drawn? I wouldn't put Xcode on my iPhone. Nor would I put Blender or Final Cut Pro. You certainly wouldn't run a web server on an iPhone. These are all things "general-purpose" computers are capable of. You've just drawn the line where it happens to be convenient for this argument.

Edit: We should also consider the dangers of this argument too. If we codified what a "general-purpose" device is, the response from manufacturers would be to simply restrict the capabilities of their devices to not be "general-purpose". If banking apps and Photoshop are what makes a computer "general-purpose", then we'll see banking apps and Photoshop banned from platforms.

The law, as you said, makes no distinction between these devices because they are all computers, and all computers are theoretically capable of running code from anywhere unless effort is taken to restrict that. Nor, in my opinion, should the law try to make a distinction because that would quickly become arbitrary or very messy as companies tried to qualify as non-general-purpose.

As I mentioned somewhere else in this thread, the App Store situation is unique. Existing anti-trust doesn't really fit, and it's also not completely good or bad for consumers. I think Apple is taking a big risk here continuing to push the more heavy handed aspects, and all but inviting government (usually heavy handed) regulation.

That's basically the entire purpose of court decisions: to draw a line in the sand regarding what behavior is allowed. This is free speech; that is not. This is an illegal search; that is not. This is cruel & unusual punishment; that is not. This is tortuous negligence; that is not. So yes, I am drawing a line exactly where I think it should be.

The alternative is that there is no legal distinction between computing devices. So software in a car, laundry machine, POS terminal, phone, laptop, smart light, etc all share the same rules. So if a Windows laptop must be able to install arbitrary software, then Toyota needs allow for the same in their cars. And if Apple can lock down installation of software on their devices, then Dell is allowed to do the same (and if that's the case, can Intel do the same and only run certain code?).

A legal classification here is, IMHO, the preferred outcome of this case. Whatever the decision made here is, it will have very far reaching implications on technology. Though, if the case were to say that all computing systems are the same, I'd prefer Apple to lose and all computer systems be forced open, than allowed to be closed. Since having cheap video game consoles is not really worth the cost to society of allowing for locked down computer systems.

> If banking apps and Photoshop are what makes a computer "general-purpose", then we'll see banking apps and Photoshop banned from platforms.

Also, my argument is whether or not these types of apps "make sense," as in, a customer base exists for such apps on said platform that there is the market pressure to create one. Not whether not such apps are "allowed." It's certainly allowable to make such apps for the Xbox, there's just not a market to do so; it doesn't jibe with customers perceived uses of said devices. Customers want to check their bank account on their iPhones; they have no desire to do so on their Xbox.

Now one could argue the intent is they not be general purpose devices, but so could the intent of anyone not wanting competing stores. I'm not sure the intent of how manufacturers want users to use it factors in as such.

One argument that comes up often related to this set is consoles are sold at a loss (and iPhones are not) on the assumption profitability (not increased profits) will be made through purchases on the platform. This is more of an bona fide difference between phones and consoles but has it's own debate as well (which I'm not going to get into here as this is already veering pretty far off the article topic).

Sure, the path consoles are heading down will look like the current Apple situation very soon. And I think the same criticisms apply then, too.

Console games sold in stores pay a licensing fee to the console maker, so the maker still gets their 30%.

> I can choose which console I buy to consume these games on.

Not really? You can't play the new Demons' Souls on an Xbox, no matter how much you want to. You also can't get Gamepass on a PS. Console sales are driven by exclusives.

To suggest they should be treated the same is downright laughable.

Yes, the underlying technology is similar, but their importance and impact on society is orders of magnitude different.

From the law's perspective, the iPhone is on the same legal grounds as a PlayStation or Nintendo Switch. Frankly, I don't think the law should try to separate devices. Either this lock-in is legally permitted, for any manufacturer, or it's not permitted and all manufacturers must be open.

Consider that different classes of vehicles are regulated differently, even though they all rely on the same underlying technology.

The law should serve the people, not some rigid doctrine.

I agree completely, which is why hopefully Apple prevails. Their ecosystem is the best for Apple customers and the free market.

Can I ask, how does letting me have the option of occasionally purchasing songs, books, movies and character skins direct from vendors hurt your ability to enjoy the benefits of purchasing everything direct from Apple?

I just don't understand how that would ruin the system for you. If anything, wouldn't it force Apple to improve their store in order to be more competitive? Would that not be a benefit to you?

Yea I’m kind of the opposite. I don’t really see the difference. An Xbox has many of the same apps, a web browser, etc.

> I just don't understand how that would ruin the system for you. If anything, wouldn't it force Apple to improve their store in order to be more competitive? Would that not be a benefit to you?

The App Store on iOS and how Apple manages it is effectively a collective bargaining agreement that individual users wouldn’t be all that effective in enforcing. Items like mandating what’s being tracked and how, allowing for anonymous sign-ins, and others are possible because Apple can bargain for users via their control of the App Store.

If you take away the App Store, it’s possible (idk how likely or not though I view it as extremely likely) that Apple I as the user lose that ability to collectively bargain. Companies like Facebook will migrate their apps to third party App Stores where Apple’s beneficial (in my view) rules and terms won’t be enforced. The network effect of apps moving to third party app stores will overwhelm the iOS App Store, and the benefits I enjoy will be largely unenforceable. There won’t be anybody who is even somewhat on my side. There won’t be some sort of competition between a privacy-first Facebook and data harvesting one. So we can’t really tell what users prefer.

Apple also creates a great user experience. One way to pay, a single App Store where everything is, and via their collective bargaining position I can mostly trust that they are trying to enforce rules around privacy, not let junk or scam apps in, etc. I know these rules are not always properly enforced, but they’re there.

So I view third-party app stores as not only not beneficial but hostile to the user experience I enjoy with the iPhone. I’m vehemently against those changes. I’d rather the App Store lose support from major Apps than Apple change how they’re doing things.

And this is kind of how things work on all platforms, stores, etc. There are more strong and loose rules, but I can’t just sell skins on the Epic game store for Fortnite, they don’t allow third-party integrations. I can’t sell apples I grow in my backyard at Wal-Mart either - they have a problem with that. For some reason since Apple makes the best phone and makes the most money people think they should be treated differently, and I don’t.

If users really value these things they’ll buy Android phones or jailbreak iPhones or demand Apple open up things. So far they aren’t. It’s a vocal minority - an absolutely tiny one, and the market seems to pretty clearly say that they prefer things how they are by buying iPhone.

I still strongly disagree that consoles and smart phones should be treated the same way by society just because the underlying hardware is more or less the same. I think we should start with a human-centric view. As in: if consoles disappeared tomorrow how much would the world change? Now what if smartphones did? How would that change the world?

If smartphones disappeared then the world would be entirely different. We are dependant on them for everything from personal and collective security, business and personal communication, to banking, to commerce, and access to knowledge.

Maybe I'm biased because I'm in my 40's and remember a time before smart phones existed, and before game consoles were commonplace. There is no comparison. None. Equating the two because the underlying electronics are the same entirely misses the forest for the trees. Though it's not entirely surprising that HN users would think this way - we tend to think of the underlying tech first and foremost.

Let me use a metaphor - Facebook and Google should be treated differently than a niche message board even though the underlying technology is the same. Right? They are both servers running compiled or interpreted code. They both connect to databases. They both allow users to communicate and share content.

The main difference is the impact they have on society.

Smartphones have become indispensable infrastructure for much of the world. Consoles are a luxury item.

It's a suit of convenience for everyone involved, nobody is making a principled stand for user freedoms here, they just want to pry open Apple's bank vault, and they don't care if user privacy (permissioning/app review, etc) gets shredded in the process.

That the software freedom argument just happens to resonate with a lot of people who will sympathetically argue along with Microsoft and others as they continue to deny user freedoms is merely a bonus.

Can't I agree with Microsoft on some things but disagree on other things?

> they don't care if user privacy (permissioning/app review, etc) gets shredded in the process.

I don't think there actually has to be a tradeoff between privacy and freedom, but if there were, I'd pick freedom every time.

Like, literally, you're trying to use the force of law to blot out an alternate user experience that you don't like, so that you can make a point about "user freedom". It's a pretty awful thing you're trying to do.

Again, you already have the choice for your user-freedom oriented experience on the dominant market platform with 85% global smartphone marketshare. Stop arguing to deny us the choice for this user experience.

But for you it's not enough to merely choose the experience you desire, you have to force it on me too.

And there's no reason that fixing this problem would allow bypassing permissioning systems. On Android, apps installed from third-party sources still need to have a list of permissions and request them the same way apps from the Play Store do.

> major apps will explicitly use sideloading/third party app stores to bypass the app review process and permissioning systems, just as they have already attempted.

And if this were true, then why do so many apps still use the Play Store on Android? Why haven't they all switched exclusively to third-party stores?

50/50 still means you have a major choice that implements the user-freedom model that you desire, while you're arguing to extinguish the user-privacy model.

> And if this were true, then why do so many apps still use the Play Store on Android? Why haven't they all switched exclusively to third-party stores?

Play Store doesn't have an app review process, and yes, permissioning is a major problem there, the "flashlight app that wants network access and your contacts list" was a very real thing (until Android finally implemented a flashlight app) and continues to be a thing for other types of applications.

https://www.extremetech.com/mobile/298363-why-do-android-fla...

That's the thing app store review prevents on iOS, and the changes you're suggesting fundamentally undermine that process. When facebook removes themselves from the app store and creates their own so they can demand full permissions, the choice will become "give the permissions or stop using facebook" and that's a degradation of the iOS user experience, all for a nebulous argument that the app store cut is too much.

https://arstechnica.com/gadgets/2019/01/facebook-and-google-...

The facts don't care about your feelings here - facebook and others have already attempted to exploit the limited mechanisms of sideloading available to violate user privacy, and they will do so again if given broader permissions.

You are directly arguing for the removal of the mechanism that was used to slap their hand.

As I've previously shown, Play Store is rife with apps requesting far too many permissions, I've no idea what Facebook specifically asks for.

... not sure how that's supposed to be reassuring for user privacy concerns.

Again, on Android, you've got even things like flashlight apps asking for far too many permissions, let alone Facebook.

If apple started selling iphones at negative margins maybe they would have a better moral stand in charging a tax.

Didn’t Sony lose a class-action for doing that?

https://www.filfre.net/2016/04/generation-nintendo/

This was back in March 1991, mind you. The US courts decided that for some categories of things which compute, the manufacturer gets to control 100% of what runs on them. That makes them quite specific in my eyes.

I don't know the exact legal term, but that's what a walled garden amounts to. Yeah, you take a general computing architecture, and you lock it down by law. It doesn't need to be non-Turing complete or what have you to be "specific".

https://www.ftc.gov/tips-advice/competition-guidance/guide-a...

How would a developer build an iOS app without using any system calls or OS frameworks? Xcode?

“Infrastructure” is a blurry concept in such a deeply integrated system.

The real point is if Apple wants (or should have the right) to collect taxes on their infrastructure and act like a Government - think about VAT - or they are only selling consumer devices instead.

If I buy a tractor from John Deere and make money out of the products I can grow using that tractor I don't have to pay a fee to John Deere, even thought without the JD my fields would probably be much less profitable or plainly unprofitable.

So the question is: has Apple built a digital Nation? And in that case, should they be the only monopolistic option?

However, historically, this was almost always because the monopoly did something like change the rules to benefit themselves after they became a monopoly. From the law's perspective, Apple didn't do anything like that. Apple didn't raise the commission to, say, 50%. Apple hasn't changed the rules since, like, 2009 before they had the theoretical "monopoly" status. This makes proving an illegal monopoly case against Apple (because monopolies are not intrinsically illegal) more difficult.

Apple's push into payment processing here smacks very heavily of illegal tying to me, especially given how broadly Apple interprets competitor payment processing methods. In effect, the specific sin that got Fortnite kicked off was charging a lower price for using a company-specific gift card instead of using Apple's payment method. I don't see how that's not abusive tying.

If you are following Apple vs Epic, even Epic admits this and says they can't pinpoint when Apple became a supposed monopoly, and argues that the tying is illegal because Apple is so large, not that it was illegal to begin with (because Epic admits that it would not have been illegal when Apple started). This is also why many legal experts say Epic has an uphill battle, because antitrust really only addresses abuses in monopoly power, not so much on what got you to that monopoly power.

This couldn't be further from the truth. They have carved out many exceptions to the 30% commission over the years - often as part of sweetheart deals to attract larger entities that have negotiating leverage, such as Netflix and Amazon.

However, that relies on the idea that Apple is even a monopoly to begin with, and that really depends on what you define "the market" as. Is the product an iPhone and the whole cohesive experience with it (IAP and App Store included) in which case it's a duopoly at best, or are these separate markets that it is possible to have a monopoly in?

Once again you're wrong and you should really stop commenting on business law. There are a wide range of legal precedents that have bearing here and these specific dealings could absolutely be ruled as anticompetitive in court.

I have a question: in USA could Tesla force Tesla Powerwall owners to only buy electricity from Tesla approved suppliers and when they sell their product through Tesla store, Tesla gets a 30% cut?

And notably, Android seems to do fine both a) letting devs use the Android ecosystem for free, and b) allowing sideloading apps outside the Play Store.

https://9to5mac.com/2021/05/21/live-blog-apple-ceo-tim-cook-...

> “We would also have to come up with an alternate way of collecting our commission,” Cook says. “We would then have to figure out how to track what’s going on and invoice it and then chase the developers down. It seems like a process that doesn’t need to exist.”

Companies that make tools and libraries should be forced to give them away for free. Like Unreal Engine. Completely free, no exceptions.

I guess you mean not being able to? Normally I wouldn't bring it up but I spent a several read throughs trying to make sense of that sentence, and still not sure if I'm right?

So developers get in the shortterm to avoid the 30% cut. But what happens next?

The payment process becomes much more cumbersome and much less safe for users. So they start avoiding any payments on iPhone.

Apple loses basically all funding to maintain and curate the store.

And in the long-term developers lose the entire platform, because it's based on the goodwill of the users.

Who wins?

Try to cancel an in-app subscription without Googling how to do it. Good luck.

Also, if you try using the store, you’ll see it’s not curated in any meaningful way. It’s full of garbage and fake reviews. Someone properly incentivized to improve it could do a much better job.

There are huge numbers of dark pattern companies who thrive on the ability to thwart subscription cancellation and the Apple method can at least be googled.

I have not seen any platform which has resolved the fake review problem through incentives and many that are far worse.

Here, for one: https://www.pandasecurity.com/en/mediacenter/mobile-security....

And in the general open web, for another, where online fraud is a multi-billion business...

And with Apple's system, are there any studies that shoes it makes a material difference in this fraud level? Even if it did, I'm not sure it's worth giving up all this freedom when we already have a system that works.

Well, Android is open to sideloading and less "walled" and ends up with 50 times more malware than IOS. That's what "that article" is about.

If someone connects the dots, they'll see that (a) opening up iOS similarly will lead to similar levels of malware, (b) letting developers have their own payment systems in such an environment would just lead to tons of that malware getting people's credit card details, charging for BS, and so on.

Obviously any reasonable Apple's cut will satisfy this requirement.

It’s a complex problem because applications like BonziBuddy mean you can’t actually trust users to detect issues. That’s not to say Apple ensures quality, just that minimum standards have actual value.

On the other hand it’s reasonable for large companies to disagree with subsidizing lone developers. As such a substantial fee to submit apps would likely be required.

Managing payment outside of a closed system makes so much more sense.

Apple losing all funding to operate the app store is the least of all issues. They can shutdown the store and thirdparty stores would take over. If they can't afford the app they probably won't sell many phones. Perhaps taking some of the phone profits to fund the app store would make business sense.

There are times this is appropriate - there are times this is not.

This is no different from a lot of other platforms. And quite frankly, I’m happy about that, if you compare with incompatible, unupdated, and malicious software on android

Google will and is already following Apple with this

How would this have an effect on free speech?

Ownership is so pre-cloud. Now everything is cloud tethered so nothing belongs to anyone except whoever runs it’s cloud.

What Apple are trying to do is to make back the CapEx of developing the OS frameworks developers are relying upon. Those frameworks often make up a non-negligible fraction of an app's USP, i.e. they're partly why the developer is making money.

Apple see whatever slice of market value their OS frameworks added to the developer's product, as morally being their money. Whether there's a legal/contractual framework in place to grab that money or not, they feel like they should be pursuing it.

Compare and contrast: music producers sampling some other IP-holder's work. You'd expect, as a producer, that if half of your song was just sampled from another particular song, then 50% of the revenue of your song would be morally owed to the IP-holder of the other song.

And also, if you had a contract with the IP-holder that paid less than 50% out to them, that'd certainly be legal, but you'd also likely feel that it'd be you getting one up on them — you'd be coming away with more margin than you "deserve", and them with less than they "deserve", given the amount of work each of you put into the final product.

Apple thinks that they "deserve" 10–30% of the value App Store apps capture, because they do 10–30% of the work in making every App Store app (in advance, by building frameworks.) It's not about how the app wants to capture that value, any more than income taxes are about how you make money. They're both about the fact that you did make the money, and the 'infrastructural substrate' that 'invested' in you to help you make that money, wants what it sees as its implicit preferred-shareholder-dividend for that 'investment'.

It's amazing how far people will go to justify a monopoly squeezing everyone it deals with just because they have a good brand and make nice products.

The first iPhone didn't run third-party apps. Also, the average number of apps paid for per smart-device is < 1. Most people just use free apps.

Those free apps — and their users — are essentially free riders on the CapEx of OS framework development, since Apple can't put a tax on income an app doesn't have. So the remaining apps need to be taxed at a higher rate to compensate.

> Those frameworks aren't optional frills for the sake for developers' benefit, they're basic functionality that end users already paid hundreds or thousands of dollars for.

There are basic OS frameworks that are just table-stakes for having a mobile OS, yes. But there are also some incredibly-specialized frameworks — things that differentiate iOS development from Android development. Reasons devs choose to build an iOS-exclusive app.

Apple has, for example, a 3D AR framework, with specialized (neural-network; depth-sensing) hardware in every device put there just to enable the 3D AR framework. No first-party apps really use it for anything. It's just there for third-party devs.

That's not "basic functionality." That's an extremely-specialized tool that only a few apps will take advantage of, and for those apps, it's a large part of what makes the app a distinctive experience that can't be had on Android.

If not for the fact of requiring special hardware that only Apple can add to the phone, it wouldn't be an OS feature; it'd be a fancy standalone SDK that Apple recoups costs on by selling to developers. Same as they sold e.g. WebObjects, back when.

Think of it like this: a city will build most roads "for free", with no increase to your taxes. Those roads are table-stakes to running city infrastructure. They take them out of the budget by reallocating funding away from other things, because citizens would riot if their taxes went up with every road built.

But some very-capital-intensive roads that not everybody in the city needs equal access to — e.g. bridges — are built by the city to be toll roads. The business model for these roads is different: rather than the costs of building them coming from the treasury, they're passed on directly to the people who are most advantaged by the road being built: exactly those who will still use the road even with a toll, meaning exactly those who are economically gaining from travelling the road.

More often than not, that's businesses (e.g. freight/logistics services.) The 18-wheeler delivering your groceries is paying to use the more-efficient route over the bridge, because that route saves it money, and so increases its profits; and the trade still makes sense even when a part of those increased profits go to the city.

> It's amazing how far people will go to justify a monopoly squeezing everyone it deals with just because they have a good brand and make nice products.

I'm just trying to explain here why Apple think they're owed 10% of devs' money. I'm not saying they're right in that perception. Just that it's clearly a tempting chain of logic from their perspective.

Also, it's a chain of logic that I believe is correct when applied to small businesses (like the aforementioned small music artist getting deeply sampled by a song that makes a lot of money.) I don't see any difference in applying it to a monopoly.

Apple's App Store monopoly enables the extraction of "what they think they're owed" on a scale not possible with regular market players, and I'd say that that's definitely bad — but the answer isn't to reject the whole chain of logic of "your profitable thing is 90% my copyrighted IP, so I want royalties" being a valid business model. It just means that Apple should have the power that enables that extraction taken away.

In my opinion, Apple needs to acknowledge that, rather than acting like developers owe them the shirt off their backs.

Developers need to ally with each other, then they can force Apple’s hands.

What’s funny is that developers are practically in the best job to do that. Their jobs allow them tons of time to communicate with each other, they’re highly educated and able to communicate, and they have the know how to operate the mechanisms allowing them to communicate (forums, email, chat groups).

So what is stopping developers? I can only assume they’re not yet being taken advantage of by Apple sufficiently to warrant the efforts of banding together.

Which would contradict the claim that developers are having to pay outsize fees compared to their relevance to Apple’s business.

For the record, I think transparency (in general) is always good, and so any terms and conditions that restrict price transparency are inherently bad for society.

And the position is just like employees - one leaves, and mgt says "so what"? Many leave and mgt is screwed.

Maybe developers could even create a fund to help themselves survive a 'strike', and/or to help fund alternatives such as versions on Android.

Enough leave en masse, and Apple will have no choice but to listen.

Until then, Apple divides & conquers.

You seem to also be bizarrely comparing the app store and the apps hosted to the plight of workers and union action. Apps are in 99% of cases produced by business. Developers are but a single part of a business workforce, which could include HR, support, accounting, management and any number of other personal needed to keep a business running. Businesses don’t just go ‘on strike’.

That is exactly what businesses do, and workers bargaining for wages is also “business”. If you do not like the terms of a deal, you walk away. Like Costco walking away from American Express, for example.

Another example is healthcare in the US. Payers (governments and managed care organizations), hospitals groups, doctor groups, and nurse unions have to band together to negotiate with each other.

Another example is when cable/satellite TV operators drop channels from their service if they do not like the terms being offered by the content owner.

The first parallel is that if one developer quits Apple, Apple won't even notice, but if enough do take the same action en masse, they have real power.

The second parallel is that if the the developers (not individual workers) want to seize this power, could form a consortium (analogous, but not equal to, a union). This consortium would pay into a collective fund via dues (not random donations). Yes, this costs part of the business' income, just as union dues cost part of workers' wages.

When they collectively decide to wield their power and attempt to force changes upon Apple, they could then use the savings to bridge the chasm of no income while negotiations proceed. They could also use the fund to support alternative platform development so the consortium members would be better able to sustain any 'strike' by having alternate platform revenue streams.

Apple is very much in the position of an exploitative employer. Apple and the employer both own key elements of the means of production, but are pretty much nowhere without the developers or the workers. Until developers band together to take some kind of collective action like this, Apple will continue to exploit them and extract every last possible fee. You might say "Apple will go too far and no one will develop for them", but at the point where they start losing developers, they just reduce the fees by a marginal amount.

It really is a no-win game for developers until they work together. (And when they do, it'll also be a bit the reverse if they go too far.).

EDIT: The alternative route is for most of them to suffer and hope one developer can spend the funds to take Apple to court and force changes that way, which is what is now happening, but that may also apply only country-by-country.

An IPhone is pretty useful right out of the box. Not to mention that most of the apps that people actually use could be web pages. And if they really wanted to, apple could always dip into their cash reserves and start making more of their own apps.

It was good enough for the first year before the App Store existed, and it sold well enough to prove it.

Even now, it's plenty capable right out of the box without installing anything.

A device in 2007 that had first-party apps for email, web browsing, YouTube, weather, calendar, clock, address book, phone, calculator and music player, that also synced with your main personal computer was perfectly fine for many people.

Just look at Windows Phone, the biggest sticking point of every single device was that the app support just wasn’t there. While it’s hard to say with certainty, it seems that’s what ultimately stopped the platform gaining any traction.

https://www.bbc.com/news/technology-18996377

The closest analogy to Apple is the game console industry. Even then it's a different scale.

IMO, the App Store situation is an entirely new class of problem unlikely to be solved in this case. It doesn't easily fall under existing monopoly regulation, and does have some advantages for consumers along with disadvantages. Unfortunately, I think Apple is being short sighted here. By not addressing the most egregious issues (30% for example), they are setting themselves up to be regulated which will probably end up being worse for everyone. A sledgehammer will end being used where a scalpel was needed.

I presume this was what the word "imagine" meant?