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Comment by ogre_codes | Hacker News Reader

> Yet Apple is forcing them to give up 30% of their revenue, because they can.

This is a bit disingenuous. Apple isn’t forcing them to give up 30% of their revenue, they are requiring they give users the option to sign up through the App Store.

If most of their customers come from outside the App Store, this won’t make much difference to them.

If they make less the $1m through the App Store, it will only be 15%.

The second is a bit of a niggle, but if most of their promotion and value comes from outside the App Store, this wouldn’t be a big problem.

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Arguing these fine points is a waste of time because I feel like people defending this are missing the complete insanity of this situation. Try a different perspective:

Let's say Apple wants to sell their devices at "Billy's Electronics", which is a tiny kiosk at a mall with minimal foot traffic. Billy tells Apple that he'll only sell Apple devices at his kiosk if Apple agrees to give him 30% of all revenues Apple makes from all of their services from customers that buy a device at his kiosk. This includes things like iCloud subscriptions, app store sales, etc.

That's batshit right? Like literal insanity if Apple would accept that deal. So obviously, Apple would tell Billy to fuck off and will find somewhere else to sell their devices.

Except they can't, because Billy is the only person with a license to sell electronics in the entire country. He got this by convincing everyone that he wants to "protect" electronics customers from scammers and other bad people who want to exploit them. The fact that this makes Billy a trillionaire is just a nice little coincidence.

"Sure, I'm the richest entity in the entire history of the universe, but that's not why I'm doing this. I'm doing this so innocent people don't download an app only to discover that they need to go to another website to create an account first." ~ Billy

> If they make less the $1m through the App Store, it will only be 15%

That's a deflection tactic, and doesn't justify anything. 15% is still too much as long as there are no alternatives.

But the opposite is true. Android represents a much, much larger part of the smart phone market and there are a wide variety of devices, manufacturers, and sellers.

So the more accurate version of your story is that Apple goes to one of 100 different retailers instead of Billy, which is also what the electronics marketplace is like already.

Except the comparison end there because users can switch shops when they want and it cost them nothing, not the same for a phone.

> 15% is still too much as long as there are no alternatives

1. Most of the apps in the App Store are games. What are the alternative app stores for other handheld gaming systems like the Nintendo Switch and 3DS?

2. I supposed it's a shame that there are no alternatives to iOS/iPhone besides Android which has an 85% market share.

3. https://www.ign.com/articles/2019/10/07/report-steams-30-cut... (updated Jan. 2021.)

Just because Nintendo, Sony, Microsoft are doing the same bad thing Apple is doing doesn't mean it's not a bad thing. Personally, I think game consoles should fall under the same type of scrutiny, but that's a different situation because, historically, game consoles have not been seen as general purpose computing devices. See for example the stupid DMCA jailbreaking rules that allow customers to jailbreak their phones, but not their game consoles. Why? Idk, I'm not a lawyer, but it probably has to do with lobbying.

Android's 85% market share is global, and a lot of those are low budget garbage which makes them less important for a lot of industries (particularly gaming). In the US, Android's market share is more like 50%, and while I obviously can't speak for every developer, I at least consider the US market to be my primary focus. Doing significant business in another country is more complicated than just localizing strings and clicking a checkbox on the developer console (unless your business is relatively simple, like a utility or a game)

And while Android does allow third-party stores to exist, they're at a significant disadvantage competitively. It is practically impossible for any store to compete against Google play with the current systems and barriers Google put in place (as proven by companies that have attempted it over the years). That is also clear "anti-competitive behavior". From the point-of-view of users, the situation is better. But from the perspective of developers, it's the same bullshit. You are not going to escape Google on Android and hope to have a successful business, unless maybe you can manufacture and sell your own hardware.

And regarding Steam, I too think that 30% is too much (especially because Valve are not entirely innocent of anti-competitive practices themselves). However, it's not the same situation because there currently are many realistic alternatives to Steam, both for gamers and for developers. The same can't be said about Android or iOS.

>2. I supposed it's a shame that there are no alternatives to iOS/iPhone besides Android which has an 85% market share.

1. Android doesn't have 85% market share, whether that is inclusive of Google Android or Android without Google.

2. Android doesn't have 85% market share, whether that is in US or Worldwide.

3. Today, the iPhone has 66% market share in the United States, 75% of U.S. App Store revenues, and over 80% of time spent on the mobile internet. And increasing.

4. Apple could have a seperate Game Store and locked in at 30%. I would have been completely fine. I may not like it, but there isn't much to debate.

5. When the whole economy are moving to Online and Digital, while Apple having the dictating power and a near monopoly of 30% cut on Digital Goods. We have a problem. Especially doing so without alternative payment system allowed. I cant have a separate signup link, nor can I advertise it with link to Web.

> Arguing these fine points is a waste of time because I feel like people defending this are missing the complete insanity of this situation

All I’m suggesting is we just discuss what Apple actually does rather than exaggerating it to poorly make a point.

> That's a deflection tactic, and doesn't justify anything. 15% is still too much as long as there are no alternatives.

I wouldn’t have even mentioned this if you hadn’t blown the first more important point out of proportion.

There is an absolutely massive difference between “All their revenue” and “All revenue from in app purchases”.

> There is an absolutely massive difference between “All their revenue” and “All revenue from in app purchases”.

The OP is about Librem Tunnel, an app which is one part of a subscription service called "Librem One".

By forcing this company to add in-app purchases, Apple is taking 30% of all the revenue of the entire Librem One subscription, since Librem doesn't sell VPN access by itself.

I don't see how I'm blowing that out of proportion? The kiosk taking 30% of iCloud subscriptions is pretty much a perfect analogy to what's going on. I haven't exaggerated anything as far as I can tell.

> I don't see how I'm blowing that out of proportion?

Above, you gave (to me at least) the impression that you were referring to all of Librem’s revenue. Not just the revenue which is filtered through the App Store, every penny they earn.

I don’t care for a lot of the way the App Store works, including the point you make here. But your original post was not very clear if this is what you meant to say.

There should be room in the App Stores for businesses which sell services where the App is only part of the offering.

... but this is how actual retail works.

Real-world Billy doesn't hold the "license to sell electronics," but the various mall management companies - of which there aren't very many - do in fact exclusively control the real estate in the shopping malls. They don't charge Apple a percentage of sales, but they charge them some amount of money for simply having the store, regardless of sales, which can be even more: if you look at the latest MacBook in person at the store, go home, and decide you want to buy it from apple.com, the landlord still gets money from Apple.

The various mall management companies make, quite literally, billions of dollars a year. The landlords who own non-mall property for the Apple Store downtown also make piles of money. And they don't need a license, nor do they need to convince anyone that they're protecting anyone. They just own the land.

And Apple also sells products through various other retailers, like cell phone companies, Best Buy, etc., each of which work out deals of various sorts. You generally can't buy an unlocked, no-contract iPhone from a cell phone company. You get an iPhone with a contract that commits you to spending way more money than the cost of the phone.

Arguably, Apple's role is a lot fairer; there's no scarce resource like properly-zoned land in a populated city on which the App Store was built. Anything that happens on the App Store is entirely Apple's doing; anything that happens in a mall or in an existing retail store is partly the owner's doing and partly their good fortune to have put themselves there before someone else did. If someone wants to compete with iOS and the App Store, they are free to build their own version from scratch - nothing Apple did is stopping them. If someone wants to compete with a shopping mall, you can't just plop down a new shopping mall - the land is in use. If we think Apple doesn't deserve to take a cut for use of their platform that they built, the landlords certainly don't deserve rent for use of land that they bought.

(Which is, to be fair, my own personal opinion, but the market doesn't agree with me, and there's very little point in me pouting at the market.)

I think most reasonable people discussing this topic are aware that there are some similar arrangements made between retailers and manufacturers. The one big difference is that there is no retailer monopoly and thus the overhead they charge has been negotiated by the market. I.e. their overhead charges are probably a lot more fair than 30%.

If Apple were to allow alternative app stores, I think we’d see price normalization in this space. The various app stores would then be competing on price based on the costs of hosting their App Store service.

Sure, but I'm disagreeing with the claim that there is no retailer monopoly and that there is an Apple monopoly.

Landlords have exclusive use of land, a limited resource. If I am running a clothing brand and I want to have a store in a particular city, my options are to build a store on empty land very far from the city center, or to negotiate with the person who has the land.n If I want to have a store in a mall, I certainly can't just built on my own, and in many cities, there's probably not even another mall to provide competition.

Apple is charging for use of the Apple App Store platform. They are not charging for the Android Play Store platform. They are not charging for anything happening anywhere else. There is no exclusive resource like land involved, as demonstrated by the fact that Android was able to build the Play Store.

I don't think it makes any sense to say that Apple has a monopoly over use of their own product, since a monopoly is about control of a market. But if we're going to make that claim, we should definitely say that each mall owner has a monopoly over use of that mall! That is at least as sensible as saying that Apple and Android both have monopolies over their respective competing products.

And I think that the concern people have isn't whether the price has been decided by the market - it clearly has, and tons of participants are willing to participate even with the 30% cut - the question is whether the price is fair in a moral sense. I do agree with the answer that it is not. But I think you have to ask the right question to get the right answer.

Apple’s product makes up at least 60% of mobile phone usage in the US[1]. No single landlord owns 60% of retail space in the US. If you want to say landlords have control over their market not unlike apples control, you have to concede that apples control is likely two orders of magnitude more than any single retail landlord.

To access 60% of US mobile phone users, App developers must go through Apple. Apple faces no competitor pressure when deciding on their prices, it is their discretion alone. Landlords face competitor pressure but Apple does not in this space so in that sense, no, the market has not decided apple’s prices.

Aside from the practical issues concerning their control of the market, the argument that Apple should be able to charge whatever they want because it’s their product is normative. These normative claims can be challenged when we consider the practical effects their market dominance has on app developers and users alike.

[1] https://www.phonearena.com/news/apple-iphone-record-sales-us...

Why are you drawing the line at the US? Worldwide, Apple's share is something like 20-25%. And at the level of a single city, it is very common for a single landlord to own over 60%, if not 100%, of mall space in a city.

But anyway - there are something like 1,000 to 2,000 indoor shopping malls in the US, depending on how you count, and there are companies that own hundreds of malls, and they're consolidating. Would it become a problem if one landlord ended up owning 60% of mall retail? Why?

And how are you concluding that Apple faces no competitor pressure? Apple's 30% cut is exactly equal to Google's 30% cut. Is this a massive coincidence, or is this the market doing exactly what you'd expect a market to do and equalizing prices between competitors for similar products? Why hasn't Apple raised their take to even 35%, if it really is their discretion alone?

(Microsoft, as it happens, also takes a 30% cut of Xbox-related sales on their store. They take a 5-15% cut of other apps. https://9to5mac.com/2019/03/06/microsoft-store-revenue-share... This is pretty much exactly with what you'd expect if 30% is what the market will bear for reasonably successful products, and if Microsoft is obligated to compete on price for non-Xbox-related store purchases.)

> Would it become a problem if one landlord ended up owning 60% of mall retail? Why?

The fact that they own 60% is not a problem in itself but it is a problem when you consider the practical effects it’s having on app developers. A growing number of developers who reject their 30% price tag have no alternative to reach that segment of the market.

If we were seeing the same level of dissatisfaction with landlords hoarding real estate and the inability of their potential customers to go elsewhere, I would of course consider their monopoly a problem as well. I don’t think we are seeing the same level of monopoly and its failure modes happening in retail real estate.

I cited US statistics because US-based companies (Epic, Purism, Basecamp) seem to be at the center of this debate. If this discussion turns into proposal for legislation or an anti-trust case, it will likely happen in the US.

> Apple's 30% cut is exactly equal to Google's 30% cut.

Google actually has decreased their fees to 15% for smaller developers [1]. This is also much less of an issue on Android because there exists alternative app installation methods on that platform. Users can install app packages without needing to go through the google play store. So there is an alternative for developers.

[1] https://www.cnbc.com/2021/03/16/google-app-store-fees-cut-fo...

> Why are you drawing the line at the US?

Probably because we live in the US and we will have to depend on our courts to force Apple to open up. Those courts require a certain amount of market power, which a majority market share indicates, to move forward with an antitrust judgement.

> Microsoft, as it happens, also takes a 30% cut of Xbox-related sales on their store.

Game consoles are not nearly as ubiquitous or as important to society as smart phones. We have different laws for things important things like cars than we do for toys like bicycles.

This is why Apple will eventually be forced to allow users to install software from outside the app store.

Yeah that is a great analogy to demonstrate the insanity of the situation. At the least 30% is far too high.

I don't know why you are pointlessly defending this Apple practice of screwing both their customers and developers with this unnecessary "Apple Tax". Here what the article says

> Even though Librem Tunnel is just part of the overall Librem One offering, because it’s part of a subscription service, Apple is requiring us to add the ability to sign up and pay for Librem One subscriptions within the Librem Tunnel app before they will allow updated versions into the App Store.

> Why are they making that requirement even though we already have our own independent payment infrastructure? Because once that app allows in-app purchases, Apple can then automatically take their 30% cut.

You can niggle on the 15% or 30% cut that Apple takes, but they raise a very valid concern -

- why should any developer pay Apple anything at all in the first place?

- Why should they allow themselves to be blackmailed by Apple to use their payment services?

- Why should their customers bear the burden of this extra 15 to 30% that Apple demands for using their payment service?

> they are requiring they give users the option to sign up through the App Store

And why is that ok?

Because as a user — they’re called user stories — I want all the money recurringly leaking out if my pocket accessible and manageable in one place with consistent user-favorable rules.

That’s why my persona exercised free consumer choice to opt into this philosophy instead of the competing camp. Years after last Android died I still had subs I couldn’t cancel unless I did chargebacks.

Stop trying to use regulation to take away my free market choice of ecosystem approach. I want the app appliance I can trust with one experience I can trust.

Honestly I don't think with iOS you're actually getting into any kind of philosophy other than to make money for Apple.

For example, I've had plenty of issues on iOS with refunds. On Android refunds are given automatically if you uninstall the app within 2 hour of purchase. Why isn't Apple doing that?

Ok, then don't use the app that don't offer you Apple pay.

> Stop trying to use regulation to take away my free market choice of ecosystem approach.

Blame Apple for trying to make enemies of the developers who created the app in the first place and added value to the ecosystem you use. Blame Apple for the increased 15 to 30% you will have to pay because Apple thinks it can extort that money from us developers - in effect Apple is only screwing you, the end user.

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