US developers can offer non-app store purchasing, Apple still collect commission

> Apple is already pretty clear in its developer agreement [0] that the 30% commission is for "its services as Your agent and/or commissionaire" (Schedule 2 3.4), not for its services as a payment processor. They are contractually allowed to take the 30% fee out of payments collected, but merely using a different payment processor doesn't remove the obligation to pay them for their other "services as Your agent and/or commissionaire".

0: https://developer.apple.com/support/terms/apple-developer-pr...

In addition, from the original ruling:

> Yvonne-Gonzalez was skeptical of the 30% fee during the trial, and in the ruling she was suspicious about Apple's justification of the commission, writing that "the 30% is not tied to anything in particular and can be changed," but did not order Apple to do so.

They did back when they were part of the developer program. If they can make their case that it is bad faith compliance as part of their original case before the Court goes “c’ya, we’re done here”, they might have something, but Apple revoked Epic’s membership for violating their terms in the developer program worldwide and at the conclusion of this lawsuit, Apple has not been ordered to reinstate it. So Epic can’t really argue that they have or will have suffered a harm under these new terms since they’re still in a position where Apple isn’t doing business with them and their lawsuit under which they did have standing is basically at its conclusion.

How are they even going to attempt to enforce compliance. Is every store required to integrate with their payments API?

If they’re taking payments from the platform and it does turn out to be a scam, now their hands are dirty as well.

It's the weakest objection you can have, and typically would only be sufficient to get relief in very, very specific circumstances where the unfairness could be proven (as intended). But this case involves broad policies for millions of developers, and it's perfectly compliant with permitting other payment processors.

So: there's almost no chance it would be "shot down" on those grounds.

If we’re talking about the details of the implementation, maybe.

If it’s about the commission that still needs to be paid, then no. That’s directly mentioned in the original ruling by the district court, a commission is due regardless.

The main thing that feels icky to me is the hurdles to getting approved to link to alternative payment methods, but even if those are walked back that doesn't solve the main issue, which is that alternative payment providers were never a sensible solution to Apple's tax.

Apple has always argued that the commission is for the App Store, not for payment processing, and it is only collected through their payment processor as a matter of convenience. The policy announced here is essentially the same that they announced two years ago in the Netherlands in response to a similar ruling [0]. I'm surprised that anyone here is surprised that they're doing the same thing in the US.

[0] https://news.ycombinator.com/item?id=30204604

The court didn't rule against the Apple Tax, just on the monopoly for payment provider. I understand that many people misunderstand this point, but that does not change it.

> it ruins value-chain and makes it uneconomical

This is empirically not true. If the value-chain is so 'ruined' and 'uneconomical'. Why are there so many iOS devs? Lots of people are participating in the system and lots of people are getting rich.

Examples of truly uneconomical ecosystems are Windows Phone and Blackberry - which is why all the devs left and those platforms are dead.

The problem with modelling this as a tax is that... it's not a tax in a pure sense. Apple has partly built the product that you're selling. You're building on their hardware with their libraries and their APIs and their servers and their quality control. They want compensation for that.

Now you can argue what level of compensation is fair, and as you point out, its a free market and you even have an option to use a different technology to build you product. The alternative is that Apple doesn't collect this cut of the profits and you have to actually engage in what that means.

Why would they build APIs for you? Why would they distribute your app at all. What happens for example if we pass a law tomorrow saying "Sorry Apple, you can only collect enough for credit card fees".

Well one option is Apple just closes the store, hires a couple hundred high quality developers and builds out their own library of Apps, take 100% of the revenue. No tax in that situation! But I'm not sure it's a better outcome for developers.

That's exactly why the apps succeeding financially on the play store and app store are casino-like games.

Epic charges 5% for Unreal Engine.

Apple offers developers significantly more than just a games engine.

iPhone users don't carry a second Android phone, and their purchasing decision has committed them to only buying on the App Store for at least a few years at a time. And the crazy part is they are paying the Apple Tax even for services like Spotify that they might primarily consume on other devices. You can't make a store that ships to Apple users - only Apple can.

Now that they're trying to capitalize on it they're becoming worse as a store and I can't remember last time I used them (in NL).

If you buy an iphone there is no one to compete, Apple does not have to play the low margins game because there is no other game in town. Amazon does not take 9% if you sell somewhere else and does not care if you sell cheaper elsewhere, Apple does.

e.g. Spotify, Twitch, Patreon etc. Most of the funds go to the creator. Completely breaks the model when Apple forces a 30% cut of gross.

That being said, i'd also argue Apple's app store is a complete monopoly on iPhones. Iphones and app stores are such an essential part of life, they deserve to be neutral a la internet neutrality. Not sure how we all become pro internet neutrality but somehow suffer Apple's 30% tax.

Apple will lower their cut to 15% if you earn less than $1 million USD/year across your app businesses, or if you sell subscriptions and your subscribers persist for longer than 1 year (so 2nd - Nth year of subscriptions are split at 85/15)

Not defending the size of their commission, but in practice it does vary from the 30% that is commonly quoted

I've been burned by too many places to just start arbitrarily buying from someone I've never purchased from before directly. I've had companies just not respond, accuse me of stealing, tell me missing packages aren't their problem, charge enormous restocking fees, and in more than one case call me an idiot that doesn't know what I'm talking about. None of that with Amazon.

Maybe after establishing a relationship of being a reputable brand I could be swayed over, but even then there's no benefit to me unless the price is cheaper.

But genuinely, your comments enrich this sort of thing. I love your input.

The fact that they have a browser and allow “3p browsers” is only because the web was already established and customers wouldn’t have bought in without it.

iPhones and iPads are not general purpose computing devices. Not by tech, but by policy.

I kind of figured this already when there's no way to filter apps by "doesn't have in-app purchases".

No Apple's argument is that this is a fee for everything e.g. SDKs.

As well as being a highly lucrative distribution channel.

Do you get upset at business class in airlines? Or cinema food being so expensive? Isn’t this the point of capitalism?

Dark/light mode switching does not work

Wake Lock API does not work

These features work in browser.

You can side-load on Android, and the Play Store's commissions are on par with Apple's.

The mistake here is believing that either Store is competing for developers. They are not. The stores compete for users, and they charge developers a fee for access to those users. Most users prefer the safety and convience of Play, or Steam, or Apple's iOS store.

So long as user's are primarily using Apple's store, either through defaults, habits or choice, Apple won't have to change much.

Google allows third-party stores and side-loading, but they're still able to charge a 30% cut on the Play Store.

I personally make use of third-party stores and side-loading on Android, but I don't personally know anyone else who does.

What? Tim Cook has done a great job of keeping up the Apple philosophy. What significantly has changed?

It's literally the same problem that led to antitrust in 1890.

[0] https://twitter.com/TimSweeneyEpic/status/174728054136210228...

I would love for Progressive Web Apps to be normalized, and PWAs can do a lot, and you can also get a button for a PWA on your home screen, but the process to do so is odd/cumbersome, requires explanation for inexperienced users, which is not something that most companies that want a well-positioned mobile app are willing to tolerate.

And while PWAs on iOS can access some sensors, the API support is limited[0] and in some cases not supported at all. Not being able to capture links to properly direct users into installed PWAs, not being able to provide install prompts, background sync, etc. are considered serious limitations to people who are used to those luxuries available to actual iOS apps.

[0] https://firt.dev/notes/pwa-ios/

It doesn’t matter how you distribute the money on your end. While you can definitely reflect the exact amounts involved to your customers, it might be wise to convert incoming money to something else, perhaps simply “credits.”

There's no firsthand knowledge because this is the first time Apple's actually had to chase companies for the fee. In fact, their whole argument against Epic was that banning steering made it easier on both parties to attribute revenue.

Apple doesn’t see their cut as “payment processing and hosting”. They see it as the cost of selling for their platform.

They're indeed making quite a joke out of antitrust at this point.

Having locked in the richest consumers of the world, they get to say what goes and what doesn't, worldly courts and laws be damned.

It's both hilarious and gruesome at the same time, because we're supposed to be equal under consumer laws or whatever, but there you go!

I’m not sure why the audit requirement is getting called out. That seems pretty standard for this type of revenue sharing agreement to me.

> Apple’s commission will be 27% on proceeds you earn from sales (“transactions“) to the user for digital goods or services on your website after a link out (i.e., they tap “Continue” on the system disclosure sheet), provided that the sale was initiated within seven days and the digital goods or services can be used in an app.

As any F2P gamer knows, “whales” don’t just spend up front - they make microtransactions on a regular basis for months or years as new rewards become available. This is incredibly meaningful for game publishers who depend on long-term customer engagement.

The more correct metaphor is: Walmart sells you a coloring book. In the back of that coloring book there's a mail-in coupon: send it in, $5 for a second coloring book. Walmart now not only expects to make a cut on that initial coloring book sale; they expect to make a cut on that mail-in sale.

One might say: Wait a second, if I'm going to buy that second coloring book, its probably because the first one was so good. If I'm going to buy a book from Kindle, its probably because that book was surfaced to me in the Kindle app. Walmart and Apple didn't exactly have a large hand in making that second sale happen; my product clearly had a much larger hand in it. Apple would, of course, disagree; because they have a god complex.

You the consumer can go to a different store any time on a whim. You can shop anywhere online with a click.

Not the App Store, which controls what and how over half of Americans can access, and the barrier to switching OS-es is fucking huge. How is this remotely the same

  > Developers are required to provide a periodic accounting of qualifying out-of-app purchases, and Apple has a right to audit developers' accounting to ensure compliance with their commission obligations and to charge interest and offset payments.

Depending on the payment method used, they might just make a profit on this (e.g. some cards charge more than 3% of interchange alone, and there's other fees on top).

Apple is demonstrably more closed (which IMO makes them worse) than Google on this axis. What they've both said about their platforms is irrelevant to me.

There's nothing "honest" about deceiving your customers and hiding a 30% fee with NDAs.

The main rules were:

1) A user making a payment that has any effect on app functionality (this is very broad) from inside your app must go through Apple IAP (paying 30% commission). There were some exceptions, but mainly think buying physical goods - Apple isn't forcing the use of IAP for EBay or Amazon retail.

2) You may not link to, or even mention other payment methods.

Really it comes down to: if there is any difference in what the app will do for a user before and after they pay money then that money paying must go through Apple and then Apple will give it to you (minus 30%). So what a lot of apps did is just open to a login screen. No sign up button, no link to your homepage, heck, no links anywhere. The downside is that users have to know about your app from at least one more channel than searching on the App Store, but that's not a very high bar. Probably less common if you're B2B, but for B2C a lot of them would pay their subscription through Apple if possible, the experience is great: one central place in system settings showing all your subscriptions with easy cancellation buttons and enforced standard refund/proration semantics.

>make a few people who already have everything even richer.

I do wonder what percentage of Apple stock is owned by pension funds and the like, i.e. The Regular Person, once you unwind the levels of indirection (mutual funds, index funds, ETFs, etc). It is surely a double digit percentage, but high, low? No idea.

True.

> All they do is steal 30% from society that could be used for more productive purposes than make a few people who already have everything even richer.

I'm old enough to have developed software before the App Store existed, and remember that everyone was very excited both buy it finally being introduced to iOS, and by the relatively low fees of only 30%.

You're free to argue that 30% is too high, or even that the 15% for small developers is too high, that this is rent-seeking by Apple and only made sense when they were also a small company… but I think this is also true for the businesses trying to convince everyone that it matters, and I think they would like to charge the same sticker price while collecting the difference for themselves.

> All they do is steal 30% from society that could be used for more productive purposes than make a few people who already have everything even richer.

Kind of an odd take. They take a cut because they provide a service. They are not stealing. I guess lump me in with the defending apple crowd if you want to but to think they would or should charge nothing for their service feels... silly.

None of what you said matters. It does not matter how much money a company makes or if you personally think they're charging too much for a service. They're allowed to. The open question is if they're in a position where there's no reasonable alternative for developers and/or consumers which you can make a strong case for. That line of argument would not be affected at all by how much money Apple makes, their cut or if they're spending their money in a socially productive way.

The fact that this is the second highest upvoted comment is a rather sad datapoint on issues related to internet based conversation where opinions consistently trump fact or reason.

If the EU DMA does eventually force them to open the platform to competing stores it’s going to be very hard to defend the different policies in different markets, especially as I assume Epic will push aggressively to have Fortnite and the Epic Games store on iOS in those markets as early as possible to force the conversation.

However...

> All they do is steal 30% from society that could be used for more productive purposes than make a few people who already have everything even richer.

If you're gonna argue that, you have to inspect the edges of this position. Are you willing to let go of your own shares? Or the interest on your pension (or equivalent), which comes via the roughly the same route you're arguing against. If you own your own company, do you share most/all profits with your staff (rather than pay a wage), or your shareholders? This is all wrapped up together.

IMO, To make such a claim, you need really to argue against the system these "rich people" operate in as much, if not more than, the individual cases.

It is no surprise that people will come to the defense of this giant when you stop to consider this. Apple doesn't have to care about them, it already has.

I am of the opinion that there should be some sort of disclosure of financial interest.

I beg to differ. As a blind user relying on accessibility, Apple was actually the first company that decided that accessibility should be an inherent part of the OS, not just an expensive add-on. Since the iPhone, blind users can just buy the product and turn speech output on, without having to install expensive extra software as was the case with Windows, for instance.

So keep your generic accusations for yourself, they are far from correct.

It's incredible to me that people arguing against apple here don't realise that they're arguing to allow another billion dollar company to do what they want, and that their own opinion is the only one that could possibly be valid

If you want an open ecosystem with alternative app stores, head on over to Android. The value of iOS to me is the app store and related ecosystem.

The line of thinking you're expressing here is what leads to questioning free speech and privacy absolutism.

Steal? What you want the App store to be free and become the Android Play Store which is utter garbage and hostile against small and mid developers?

(I agree that the 30% is probably bad for society though)

Of course they care about you. They hope you are healthy and in a good shape so you can work more to earn more money and give them their share.

I think it’s also kinda weird to label Apple as a monopoly unless you mean a monopoly on revenues. They seem to actively swerve away from getting over 50% share of anything.

They should build it and you should just get it for free.

Is 30% reasonable? Should there be some taper once your app is in maintenance mode? No, and yes.

I don’t see any reason from either side of this argument frankly. They’ve built a wonderful think that provides immense value, and we all benefit.

They should be more flexible in their pricing model, and you should understand that actual people spent hundreds of thousands of hours of their lives to deliver it to you, and charging for that isn’t stealing.

We should put out an open letter to Apple that we will collectively ignore that product until it contains more favourable terms.

"a few people" being everyone with a retirement plan, 401k or any equivalent around the world, i.e. the vast majority of people in developed countries

if anything, taking from smaller companies to give to megacorps is a net benefit for "the common man", since the former will generally belong to founders/VCs/private equity in which they have no stake, and the latter are owned by everyone with exposure to the MSCI World :)

I don’t like what apple is doing here, and am not inclined to defend it.

However, I am inclined to complain about this type of rhetoric. If invalid criticism are being made, it is appropriate to correct those criticisms, even if the criticisms being made are criticisms of some vile person or organization.

Apple stock is the most widely held stock by American 401k's and forms the basis of retirement investments for middle class Americans more than any other stock

This is how all businesses work. If there was no way to make profit then businesses would not exist. Apple spent billions of dollars creating an app platform with a clear monetization model that did not get in the way of them accumulating a lot of valuable apps and users. Developers are not forced to make apps for the platform nor are users forced to use the app platform. Other app platforms can impose lower fees and developers are free to release exclusively on those platforms if they wish. Apple hopes that the developers willing to tolerate the 15/30% fee for what the developer gets in return will be good enough to make their app platform competitive to users compared to others.

It's not just defending a trillion dollar company, it is defending the right to set your own prices.

In capitalism 101, Apple created a market and a shop, so they can set the rules. If they demanded too much, developers would move away, their venture would collapse, iPhones would become less popular, etc.

I think you’ll find that selling ice cream at Disney theme parks similarly is expensive for ice cream vendors. They’ll either demand a cut on revenues or charge a lot for the right to sell stuff, and be picky about who can sell what at their venues.

Large retail companies such as Walmart won’t technically take a cut if you want them to sell your product, but they’ll negotiate lower prices from you, require you to take back any unsold inventory, etc.

In summary: ‘we’ currently allow all kinds of huge companies to play by different rules than small companies and individuals.

For me, the main issue is whether iOS needs special handling because of its success, and if so, what special handling.

The first, for me, is “yes”; smartphones are different enough from theme parks, Xbox and Walmart to handle them differently. The second I’m less sure about.

For example, yes, I’d like to have the option to side-load stuff, but also think Apple should have control over what their iPhone product stands for.

They currently ban apps selling drugs, for example. Requiring them to support third party stores that may have such apps might harm the image of their iPhone product. Because of that, I think we should allow them (but not necessarily be happy with) to put up a firm warning whenever you try to install a third party app store, even though that would put them on unequal footing with Apple’s store.

Maybe, the best solution would be to make Apple’s App Store a non-profit with a monopoly on selling iOS apps, with Apple keeping the right to specify what can and cannot be sold there (keeping that a true non-profit would be hard, though. Some non-profits manage to hoard lots of money over time, their CEO’s ‘deserve’ large salaries, etc)

It amazes me that people would rather force apple to open up through dubious court cases than simply buy a different device.

I'd like to quote a passage from Reamde by Neal Stephenson: "So what are you going to do?" Yuxia asked. "Maybe tag along. Like escorting a drunk president home after a long night in the bar." "Didn't you say you had to make a phone call?" "I have been trained by the United States government," Seamus said, "to do more than one thing at a time."

Every single platform out there is a dumpster fire of fraudulent and abusive software and products aggressively pushed by deception with every trick or vulnerability they can find exploited.

The App Store works just fine for me as a user as is. I don’t care at all what software you want to install on my phone or what access you feel entitled to.

And this is the point that should be made more often IMO — App Stores (and Apple bing one of the first ones) have democratized software development by making the barrier of entry extremely low. Anyone with some talent or idea can go and write an app, without any additional financial risk. App Store is based around sharing your success. The relatively few successful devs carry the costs to keep that barrier of entry low to everyone. And I really don't want that to change.

On a serious notes, what are the alternatives? What exactly is your argument? That Apple should be charging nothing? Ok, then they also shouldn't be providing any services. You want to do distribution or payment processing? Take care of it yourself. Epic would love this of course, Joe the indie developer instead is dead in the water. Or are you arguing that Apple is charging too much? Well, there are solutions to that as well. They could charge for services individually for example, but that again hurts the small developer, because trying out things starts costing them money.

Frankly, my idea would be to split the App Store into a separate commercial entity and make it nonprofit. I am sympathetic to the argument that the Store itself is not a product but is used to support and create value for Apple's ecosystem. I do think that the devs should pay for running the store, and I like the current success-based model and it's low barrier of entry for new devs, so basing the fees on actual operating costs seems like a good compromise. Of course, similar considerations should apply to other stores as well.

I don’t need them to be my friend or to care about me but as a share holder I want them to succeed. So far their R&D has proven valuable to me as both a consumer and share holder.

I don’t care if a few people who already have everything get richer. Since I believe the company is doing great things and I think it still has a bright future ahead I get to share in that upside too. And so can you if you want to.

Apple argued from the very beginning that the 30% was its fee for running the App Store, marketing the apps, and storing and delivering the app bundles. The in-app payment system was a convenient way for Apple to collect its commission and a way for Apple to create a unified payment experience for its customers, but it was never the Achilles heel for Apple's business model.

The best case scenario here is that Apple is forced to walk back some of the more onerous requirements they've imposed for whether and how links may be shown. Them putting a price on the payment processor portion of the fee and discounting developers for that portion was inevitable and isn't even malicious compliance, the judge explicitly called this out as a likely outcome in the original ruling:

> First, and most significant, as discussed in the findings of facts, IAP is the method by which Apple collects its licensing fee from developers for the use of Apple’s intellectual property. Even in the absence of IAP, Apple could still charge a commission on developers. It would simply be more difficult for Apple to collect that commission.

> In such a hypothetical world, developers could potentially avoid the commission while benefitting from Apple's innovation and intellectual property free of charge. The Court presumes that in such circumstances that Apple may rely on imposing and utilizing a contractual right to audit developers annual accounting to ensure compliance with its commissions, among other methods. Of course, any alternatives to IAP (including the foregoing) would seemingly impose both increased monetary and time costs to both Apple and the developers.

https://casetext.com/case/epic-games-inc-v-apple-inc-2

this is what happens when the company controls their platform. In the technical sense, it's not monopoly, but surely if you squint a bit, it looks like it.

This is why i am only ever going to produce web based apps. I will not buy into a platform - even android has the same issue, albeit less severe (only because google does not completely control the android ecosystem).

And grocery stores are not even considered a monopoly!

Edit: which is not say that there should be an "is" vs. "ought" conflation. Just that it's unlikely that this situation is going to be changed through courts. Other routes: legislation and regulation to establish a new social norm, or as Jacquesm has been advocating here, collective bargaining. But as an App Store consumer, and a developer of other sorts of tools, I don't really care at all about the developer-Apple split and am not the least bit excited by whatever might happen should that switch to, say, 99% going to the developer. Even if developers dropped prices 30%, I would have a hard time caring!

Add to that that the link can only be displayed on a single page (not a modal or popup) and cannot be part of a purchase flow (where else would it go?). Certainly a huge slap in the face to all developers and the court's intent.

They also say that using parameters in the URL is a privacy concern, when the real reason is they don't want you to use some kind of one-time-link to log the user in. They want the user to have to log in again, making it as painful (and least likely to convert) as possible.

I know plenty of people who sell something for $20, and spend $30 on Google Ads to get that user to their site.

Heh, there are still folks who actually grasp nuance… I have an iPhone, despise Apple in general, but consider their business disputes on a case-by-case basis. So for example, Apple is right to ignore Facebook’s plea to be allowed to track users, and simultaneously wrong in its App Store monopolistic money-grabbing.

That part of this outcome was inevitable, and I don't think any court will rule against it. It was even anticipated in the original ruling:

> First, and most significant, as discussed in the findings of facts, IAP is the method by which Apple collects its licensing fee from developers for the use of Apple’s intellectual property. Even in the absence of IAP, Apple could still charge a commission on developers. It would simply be more difficult for Apple to collect that commission.

Define greed. Seriously, I'm asking for an objective definition, not just ipse dixit.

They're charging what the market will bear for a _vastly_ better product (iOS vs. Android).

You’re also not the customer in this situation — you’re talking not as a developer but as an end-user without any mention of a subscription service that you pay more for because you’re on iOS, or mention of an app you want to side load.

And, you might switch back to iOS after experiencing Android. Your comment says basically nothing, except that you got rattled by reading the news. It doesn’t have to do with “conformity of thought”.

Also, editing to complain about downvoting is just asking to get more downvotes.

If you want to compare it to desktop computers, great! Compare it to the macOS App Store which… takes a 30% commission.

Whether or not you personally agree that 30% is a reasonable fee, you can't simply deny that operating the app store costs money and resources. Further, it isn't unreasonable for them to try to recoup those costs or even to make some profit off of providing the service.

On desktop you have similar stores like Steam. The store takes a 30% cut from all sales on the platform and they require apps on the platform to use their payment processing so that they can take that cut.

The difference between Windows and iOS here is that third party stores can be installed without being limited to PWAs or requiring hacky workarounds like AltStore.

Why does Apple have the sole app store on the device? Well it's because it ensures they have a closed platform that they fully control. They made this app platform so it's up to them to decide how open it should be from a range of first party only to fully open to any app from the internet. It's up to Apple to decide what kind of openness will allow them to provide the most value to users. Apple designs their app platform from the hardware all the way up to the operating system and libraries for developers to use. Apple has created a great app platform that brings value to a lot of users.

Are the input devices the same? The screens sizes? The situations you use them? The means of network connectivity? The social conventions around them?

There are tremendous differences between phones and desktop computers. Really the only way that they’re not different is that they’re both Von Neumann machines. But that describes so many things around us these days that it’s a distinction without a difference. By the same virtue a modern television is no different.

One platforms norms developed before the internet and one developed after.

Off the top of my head...

- Bandwidth

- Running the App Store for users

- Marketing the App Store

- App review

- Security efforts to keep malware off the store

- Making App Store optimisation tools for developers

There's a lot of moving parts to this. You could argue that none of this is necessary if you sideload, but distribution is worth a lot in general to businesses, and I think it's clear that the App Store is a good distribution channel in many ways – easy to use for sellers (vs via traditional publishers, or physical retail), and easy to use for buyers.