Meta, Microsoft, X and Match Join Epic Games in Protesting Fees for Non-App Store Purchase Links

[vipergts2207]

You apparently don’t understand that the open web option is there for Netflix to use.

They chose an app on the App Store.

Their business decision — they want it all for $99 per year.

Apple says fine, but no free ads in your app THAT YOU CHOSE TO BUILD.

Status quo for years — now Apple is forced to allow link out for *payment processing*, not to avoid commission.

So fine, you get a link, Apple gets commission. Don’t want to pay commission, don’t link.

Why should Apple allow freeloaders on the platform?

Significant market power limits what you're allowed to do, as Apple is continually finding out in the EU. Let's take it to the extreme, Apple is the only smartphone and mobile OS provider in the world. Should governments allow them to force companies to build a web app if they don't want to pay App Store commissions?

 

[dguisinger]

It’s clear that Netflix and Spotify should contribute more than $99 per year to support the iOS ecosystem — I’m sure that’s Apple’s view 😉

Without a way to do so under the current App Store rules, Apple won’t give an inch to make it easier for them to collect $ on iOS as they have chosen to abandon in app purchase.

And really, why should they?

They do contribute to the iOS ecosystem. Without major popular apps on their platform which exist on other platforms, Apple couldn't sell any phones. If Android had all the popular apps and Apple didn't, how well do you think that would work out for Apple? Its not 2007 where only Microsoft had user installable apps on Windows CE, Phones are now the most used general purpose compute platform.

Just because technology (always connected) allows a company to collect fees on everything that happens on their device, vs when the Mac and Windows were introduced, doesn't mean they should.

Just like because we can lock a farmer out of repairing their tractors with complex software restrictions vs making everything repairable 100 years ago, doesn't mean we should.

 

[BaldiMac]

It absolutely 100 percent is NOT a private company. I'm not sure what made you think this 🙄

Nope. It's a private company that's publicly traded.

 

[dwaite]

And this is entirely the point of the anti-steering ruling. The ruling was that companies should be allowed to communicate links to their customers. Whether Apple can charge for the privilege remains to be seen.

Apple collects a commission and has these restrictions on behaviors so that companies cannot avoid that commission.

They have up to this point collected that commission through requiring their own payment processor.

The court ruled that requiring their payment processor was anticompetitive (to other payment processors).

Apple splits the payment processing out at market rate.

The courts never said "your commission is too high", just that "bundling restricts payment processors".

Apple will most likely relax the ability to link out and advertise promotions as a negotiated compliance. They may put additional burden on companies to prove they are properly collecting/reporting the commission in these cases.

Apple is unlikely to move from 27%/12% of the base commission until someone figures out a new argument for a new court case. And that is going to be _extremely_ hard.

 

[vipergts2207]

Apple collects a commission and has these restrictions to avoid that commission.

They have up to this point collected that commission through requiring their own payment processor.

The court ruled that requiring their payment processor was anticompetitive (to other payment processors).

Apple splits the payment processing out at market rate.

The courts never said "your commission is too high", just that "bundling restricts payment processors".

Apple will most likely relax the ability to link out and advertise promotions as a negotiated compliance. They are unlikely to move from 27%/12% of the base commission until someone figures out a new argument for a new court case.

And we'll see what the outcome is here when the court responds to this brief.

 

[GroovyCatticus]

Significant market power limits what you're allowed to do, as Apple is continually finding out in the EU.

What does the EU mob have to do with Netflix link out?

Did Netflix choose an app over the web or not?

Apple already created a special status for apps like Netflix and Spotify.

Not enough for those companies — they want the FULL FREE RIDE.

Sad.

 

[bcortens]

Apple collects a commission and has these restrictions to avoid that commission.

They have up to this point collected that commission through requiring their own payment processor.

The court ruled that requiring their payment processor was anticompetitive (to other payment processors).

Apple splits the payment processing out at market rate.

The courts never said "your commission is too high", just that "bundling restricts payment processors".

Apple will most likely relax the ability to link out and advertise promotions as a negotiated compliance. They are unlikely to move from 27%/12% of the base commission until someone figures out a new argument for a new court case.

Except Apple has exemptions that let many companies not pay the commission. I think Epic would have a stronger case if they also were able to force Apple to justify in court why they don't charge any fees or commission to thousands of the world's most profitable companies for use of the same IP that Epic is using.

 

[BaldiMac]

Given the rest of the text in the ruling and surrounding justifications it seems to me that Apple should be collecting far more than they are trying to do with just the link out commission. A plain reading of the ruling suggests that Netflix should be paying Apple a commission to Apple regardless of how the user subscribed (whether through link out or just if they had an existing subscription and started using iOS APIs).

(However mea culpa - you are correct in that the ruling does say they can collect commission regardless)

Replace "should" with "could" and this would be more accurate.

Edit: Given the justifications the Judge gave for Apple's right to charge the commission it would imply that Apple should be charging all monetized apps a commission - I don't think carve outs fit into that logic. It is a "may charge a commission" of course, so it is optional for Apple to charge, however the logic of her refutation of Epics claims seems to strongly imply that Apple shouldn't be singling out digital purchases made within apps.

Again, being able to charge for something doesn't mean that you have to charge for it.

 

[bcortens]

Replace "should" with "could" and this would be more accurate.


Again, being able to charge for something doesn't mean that you have to charge for it.

I think given the way the judge interpreted the commission (that it is a charge for API and IP access) it does lend weight to the idea that they should be charging everyone for it. It leaves open the option for Epic and these other companies to point out the fact that all these other companies are using the same tools and IP without paying a penny on the money they make doing so.

 

[GroovyCatticus]

They do contribute to the iOS ecosystem. Without major popular apps on their platform which exist on other platforms, Apple couldn't sell any phones. If Android had all the popular apps and Apple didn't, how well do you think that would work out for Apple? Its not 2007 where only Microsoft had user installable apps on Windows CE, Phones are now the most used general purpose compute platform.

Just because technology (always connected) allows a company to collect fees on everything that happens on their device, vs when the Mac and Windows were introduced, doesn't mean they should.

Just like because we can lock a farmer out of repairing their tractors with complex software restrictions vs making everything repairable 100 years ago, doesn't mean we should.

Aaaand…..they don’t.

 

[ToyoCorollaGR]

Nope. It's a private company that's publicly traded.

No...

"Apple is a public company, meaning its ownership consists of shareholders. According to Macrotrends, Apple had over 16 billion shares outstanding as of March 2022. Apple's largest share quantities are owned by organizations.Jul 27, 2022"

 

[dwaite]

So if I go to Netflix’s website via Safari and sign up for a subscription Apple gets nothing but if I click a link in the app that takes me to their subscription page Apple gets 27%? Why?

Because Apple gets a commission on digital goods and services which you got from having an app in the App Store. Netflix can argue that the presence of Netflix on other platforms and via the browser means that those goods would have been sold with or without the App Store.

This is not a Netflix-specific deal. Fortnight and Spotify did/do not have to pay commission on sales that independently happen via the web, or have to pay commission to Apple for sales that happen on other platforms.

If you use a link from your app to collect payments on the web, Apple now has rules about how long sales and subscriptions made on the web are attributed to Apple after that link is followed (1 week, if I remember correctly). Those sales pay the reduced rate with payment processing broken out of the overall commission.

Spotify is allowed to operate without any digital sales functions from their app, and they never pay Apple anything. The fight is that Spotify sees the value that having paid upgrades integrated into their app provides to convert free users to paid users, but doesn't want to give Apple a commission for those additional subscriptions. IMHO this is also why Netflix removed the ability to subscribe via in-app purchase - it was more popular than they liked.

 

[bcortens]

Because Apple gets a commission on digital goods and services which you got from having an app in the App Store. Netflix can argue that the presence of Netflix on other platforms and via the browser means that those goods would have been sold with or without the App Store.

The problem with this is that you're ignoring that Apple isn't currently getting a commission on sales to people who only use Netflix via an App from the App Store. Today, right now, Netflix has an App on the App Store for which they pay nothing to Apple. If Apple was entitled to a commission based on the revenue earned by Netflix thanks to having this App they should be collecting it from Netflix's website. They aren't, which significantly undermines their argument that they should gain a commission from this link.

This is not a Netflix-specific deal. Fortnight and Spotify did/do not have to pay commission on sales that independently happen via the web, or have to pay commission to Apple for sales that happen on other platforms.

If you use a link from your app to collect payments on the web, Apple now has rules about how long sales and subscriptions made on the web are attributed to Apple after that link is followed (1 week, if I remember correctly). Those sales pay the reduced rate with payment processing broken out of the overall commission.

Spotify is allowed to operate without any digital sales functions from their app, and they never pay Apple anything. The fight is that Spotify sees the value that having paid upgrades integrated into their app provides to convert free users to paid users, but doesn't want to give Apple a commission for those additional subscriptions. IMHO this is also why Netflix removed the ability to subscribe via in-app purchase - it was more popular than they liked.

The fact that these rules aren't going to make any money for Apple or change the fact that Netflix and Spotify won't have any way to sign up for them in the app via a link is why Apple's so called compliance is meaningless.

 

[vipergts2207]

What does the EU mob have to do with Netflix link out?

It was merely an example of how "significant market power limits what you're allowed to do."

Did Netflix choose an app over the web or not?

Apple already created a special status for apps like Netflix and Spotify.

Not enough for those companies — they want the FULL FREE RIDE.

Sad.

I see you were unable to address the rest of the post, so I'll let that fact speak for itself.

 

[GroovyCatticus]

Except Apple has exemptions that let many companies not pay the commission. I think Epic would have a stronger case if they also were able to force Apple to justify in court why they don't charge any fees or commission to thousands of the world's most profitable companies for use of the same IP that Epic is using.

Yes the exemption included the stipulation of no link out to your own payment service.

Yes, iOS benefits from apps like Netflix and Spotify being available.

So it was a *business decision* to carve out an exemption for a reader apps. iOS users get the apps, those companies handle subscription via the web, but Apple isn’t going to let you advertise that in your app.

This seems to work fine, as both Spotify and Netflix aren’t hurting for subscribers. In fact they are dominant.

But I guess it’s not enough for them 🤷🏻‍♂️

 

[blazerunner]

It's a 15% cut for developer making less than $1M/year after year 2 (which is most) and 30% for the ones above.

The one thing that people neglect is the service Apple provides to developers. You can submit your app to virtually every country in the world and across multiple OS. Apple handles all international transactions, taxes, changing laws, billing, subscription cancellation and refunds just to name a few. And I'm not even mentioning all the new tools that they create and provide to app makers every year. There is literally no upfront money you have to put up to create an app, (which is a business).

That's clearly a lot of work.... 90% should be Apple's cut.

Again, Apple deserves to have way more than a 3 trillion dollar worth. It's investors need the money more than you do.

 

[toobravetosave]

if apple doesn’t like it they can go make their own european union

 

[Contact_Feanor]

What compensation does Apple get for macOS apps? Microsoft for Windows apps?

for me that's pretty much irrelevant. The deal has always been, since the launch of the App Store in 2007: you pay 30% commission. hundreds of thousands if not millions of developers clearly thought this was a good deal, otherwise we wouldn't have these millions of apps. Just a couple of billionaires are very vocal about how this is bad for consumers, but that's mostly ********. It's bad for billionaires who want more dollars to give their share holders. For consumers the App Store has been a net good:
• On place to find all apps
• A pretty secure place at that, no viruses, scams that do get through usually get blocked pretty quickly
• easy to ask for a refund (did it twice, as easy as clicking a button and writing why you want a refund)
• One place to see all your subscriptions and in the same place you can easily stop them
• ...
for small developers it's a net good too:
• easy to start, publish and market your app
• barely any piracy

That apple doesn't get compensation for macOS apps has been a historic thing. It's not that suddenly apple realized "iOS is huge, let's close it down!"; it become huge partly because of these restrictions. The App Store is part of the value proposition of the iPhone.

 

[vipergts2207]

for me that's pretty much irrelevant. The deal has always been, since the launch of the App Store in 2007: you pay 30% commission. hundreds of thousands if not millions of developers clearly thought this was a good deal, otherwise we wouldn't have these millions of apps. Just a couple of billionaires are very vocal about how this is bad for consumers, but that's mostly ********. It's bad for billionaires who want more dollars to give their share holders. For consumers the App Store has been a net good:
• On place to find all apps
• A pretty secure place at that, no viruses, scams that do get through usually get blocked pretty quickly
• easy to ask for a refund (did it twice, as easy as clicking a button and writing why you want a refund)
• One place to see all your subscriptions and in the same place you can easily stop them
• ...
for small developers it's a net good too:
• easy to start, publish and market your app
• barely any piracy

That apple doesn't get compensation for macOS apps has been a historic thing. It's not that suddenly apple realized "iOS is huge, let's close it down!"; it become huge partly because of these restrictions. The App Store is part of the value proposition of the iPhone.

That was fine when smartphones/mobile platforms weren't a market of enormous value that touches on large number of disparate markets from tv to music to games to cars to home appliances to banking to social media to e-commerce and almost anything one could think of really. In 2024 essentially everyone in the first-world participates in the smartphone market which was not the case back in 2008 and competition in that market has been whittled down to two very powerful participants who's practices should rightfully be under intense scrutiny considering the mobile OS platforms are run by two of the top five most valuable companies in the world.

 

[BaldiMac]

I think given the way the judge interpreted the commission (that it is a charge for API and IP access) it does lend weight to the idea that they should be charging everyone for it. It leaves open the option for Epic and these other companies to point out the fact that all these other companies are using the same tools and IP without paying a penny on the money they make doing so.

No, it doesn’t. There is no legal basis for that argument.

 

[AppliedMicro]

For the average developer, it’s a steal.

Great - they can continue benefitting from that steal.

But why shouldn't they distribute through Microsoft or Epic for 12% or 15% instead - wouldn't that be an even bigger steal?

 

[AppliedMicro]

Without major popular apps on their platform which exist on other platforms, Apple couldn't sell any phones. If Android had all the popular apps and Apple didn't, how well do you think that would work out for Apple?

Apple just has (had) an upper hand on third-party developers by playing them off against other.

Divide and conquer.

 

[The_Gream]

I love the whole it violates the “spirit of the law”…

Really. That’s a no brainer. But the spirit of the law won’t hold up in court, unless the judge thinks it should but an appeal would happen really quick and trying to argue the spirit won’t get you anything but more debt and richer lawyers.

Most laws written are always so stupid in their wording that what is written isn’t anyway shape or form what the spirit of the law implies.

To make a point: I grew up in a rather religious home. From my studies there is one law - To love (not a romantic type but an unconditional type) GOD and your fellow man. The Old Testament is introduced the 10 Commandments… that shall not do this or that blah blah blah. And then what do we have… the rest of the Old Testament is generally about people who don’t follow the do’s and don’ts.
Don't kill. Don’t covet your neighbor’s wife. But it is perfectly fine to see a lady bathe on her roof and then send her husband off to die so you can marry the now widow.
Murder by proxy and coveting another man’s wife.

If someone can point out a law that is written in such a way that it covers both the letter and the spirit I would gladly pay you on the back.

Humans do one thing and one thing well… they mess everything they touch up.

 

[CarAnalogy]

So if I go to Netflix’s website via Safari and sign up for a subscription Apple gets nothing but if I click a link in the app that takes me to their subscription page Apple gets 27%? Why?

I'd like to read Schiller's whiskey fueled email justifying this one.

 

[macfacts]

who decides what's reasonable? the developers? Apple? the government?

Let there be competition and then the user gets to decide but there's only one iOS app store, aka monopoly.