It is astounding to see so many people here argue for the 30% apple tax.
It is like the mafia demanding you pay for the privilege of doing business on your street.
30% is just too much.
My client is selling a service where they are selling a physical product together with something you do with it in the app. Currently the customers buy the service and device in a separate shop and the app is just for the convenience of the user, they could also use a laptop conputer or whatever else. The client wanted to include a link to the shop in the app, but apple wouldn't allow it without their 30% tax. With this 30% cut providing the service for apple users wouldn't make business sense, they would lose money on each sale. Should they have higher prices for iphone users to make up for that?
People are arguing for that tax because they genuinely believe that Apple will somehow respond to this in a way that will cause their own income stream to be affected negatively (for instance: if Apple decides to raise the 30% to make up for the shortfall of companies that go outside of their platform).
It's Stockholm Syndrome.
Apple got away lucky that they weren't ordered to be split up and to run their payment service provider as an independent entity. It could still happen, the EU is pretty aggressive when it comes to monopolies overreaching their legal limits or abusing their position.
The various phone operators here have been smacked down pretty hard time and again on things like roaming, service fees and so on. Apple is no different.
I’m arguing for the tax because it provides a strong incentive for app developers to stick to Apples payment systems, that’s good for me as an end user.
I’m also arguing for the tax because I believe that Apple has the absolute right to collect such a tax, why wouldn’t they? They’re far from being a monopolist.
Stockholm syndrome? Mobile app development sounds like the last thing I’d want to have anything to do with.
> I’m arguing for the tax because it provides a strong incentive for app developers to stick to Apples payment systems, that’s good for me as an end user.
You as an end user are not party to the agreement that Apple has with the developers. You are of course free to choose not to do business with parties that do not support Apples payment system, but the same goes for Stripe, PayPal, Adyen and all the other PSPs.
> I’m also arguing for the tax because I believe that Apple has the absolute right to collect such a tax, why wouldn’t they?
Because they are abusing their position to do so.
> They’re far from being a monopolist.
Your understanding of what constitutes a de-facto monopoly is broken.
> Stockholm syndrome?
> Mobile app development sounds like the last thing I’d want to have anything to do with.
That is your choice and your right, but plenty of high performance and/or low level applications have no choice but to go native.
> You as an end user are not party to the agreement that Apple has with the developers. You are of course free to choose not to do business with...
Under the same logic, you, as the developer is also free to not do business with Apple and build on iOS.
Or you could see it with the angle that Apple is in effect hired by us, the end-users, to negotiate on our behalf to ensure the ecosystem cannot dictate unilateral terms unfavorable to us.
>Or you could see it with the angle that Apple is in effect hired by us, the end-users, to negotiate on our behalf to ensure the ecosystem cannot dictate unilateral terms unfavorable to us.
Then continue to only use Apple App Store and Apple Payments. Free market says if all the end-users truly believe that, all the others will fail from no users. So why is Apple so afraid of a little fair competition?
I don't think your description of "free market" with some arbitrary constraint on singular party, i.e. Apple, is quite self-consistent, but I digress; the argument is not hinged on holding "freeness of the market" as self-evidently good.
> if all the end-users truly believe that, all the others will fail from no users
Not necessarily. There is a possibility that each individual user may not be valuable enough to the developer to negotiate the Terms of Service imposed on them by the developer. Nor does logistics allow for such negotiation. By voting with our wallets, Apple acts on behalf of all of us securing some of our interests, meanwhile pocketing some money for their mediation service, just like a lawyer, non-profit, union, lobby group, co-op, or agent would do.
I mean free market as opposed to a monopoly market.
>By voting with our wallets, Apple acts on behalf of all of us securing some of our interests, meanwhile pocketing some money for their mediation service, just like a lawyer, non-profit, union, lobby group, co-op, or agent would do.
If you vote against the other options, they'll fail is my point. But by preventing me from being able to vote for other options, Apple is being anti-competitive.
Sure you have a choice--most obvious is Android and in fact that is what most people use. I really don't understand how you can call Apple a monopoly unless you call all vertical integration such. You don't have a choice of your own seat manufacturer when you buy a vehicle either. That's not particularly "anticompetitive".
In any case, this is beside my original point. My original comment was addressing a specific argument that suggested users are not a stakeholder in this matter because the agreement is between developers and Apple, which I find to be a ridiculous characterization. I am not holistically evaluating Apple's market positioning here. As one other comment points out, this is ultimately a broad political choice for the society at large, not necessarily one that could be concluded one way or the other by abstract analysis.
[My personal opinion on this matter is pretty much orthogonal to the "payment methods" debate which I find to ultimately be a negotiation between corporate entities on who earns how much. What I do want for the society to regulate is the ability for the end user to run their own software stack should they choose to, on a device they pay for. I am comfortable with the fact that should you choose to run iOS, you get the entire iOS experience.]
>Sure you have a choice--most obvious is Android and in fact that is what most people use. I really don't understand how you can call Apple a monopoly unless you call all vertical integration such
And what's wrong with more choice?
Because it's about defining the market. To me the market is iOS apps. Not Android apps. I can't get Android apps on iOS nor vice versa. The EU has ruled similarly when using anti-trust against Google: "Google's app store dominance is not constrained by Apple's App Store, which is only available on iOS devices." [0] It's about barrier of entry. "Android device users face switching costs when switching to Apple devices, such as losing their apps, data and contacts, and having to learn how to use a new operating system". A monopoly in California wouldn't be considered okay because you can always move to Florida.
And if you wanna bring up that car analogy, no car manufacturer has monopoly power. Using the term the way the FTC uses it: "a firm with significant and durable market power" [1], not an actual monopoly. You can't really say that Apple, the most valuable company in the world, isn't.
US anti-trust has ruled against vertical integration before when it has harmed competition in the "Hollywood Antitrust Case of 1948". Even if you say Apple isn't a monopoly, movie studios were an oligopoly like we have now with Google and Apple.
> You are of course free to choose not to do business with parties that do not support Apples payment system
Take a look at the videogames landscape on PC. There is an ever-growing amount of game launchers because each company refuses to pay that 30% to someone (e.g. Steam).
Having the option to create a store means almost everyone that can WILL create one. Not having that option forces everyone to play by the rules of the existing store.
As a consumer, I like Steam's policies about refunds, I like being able to buy any game with the same in-store credit or the same credit card, I like their client's features like download throttling or scheduling.
I certainly do not like that each half-assed client comes up with a bare bones implementation of the same thing and calls it a day. If Rockstar shits the bed and launches a terrible game, I can refund it on Steam but not on the Rockstar launcher.
Same case for Apple, the minute they allow external stores, half the apps will be pulled from the App Store into their own proprietary store and all the consumer protection would go out the window
>Not having that option forces everyone to play by the rules of the existing store.
So what you want is a convenient monopoly, when there is no such thing (unless it's under heavy government regulation). As a consumer, I like Epic's free games. GoG's policy of DRM-free. Which is why competition is good.
> You as an end user are not party to the agreement that Apple has with the developers
In the end this will be a political decision. I vote.
> Your understanding of what constitutes a de-facto monopoly is broken.
The monopoly argument may work in the US, but not in the EU. Apple may be up to nasty stuff that legislators should act against, but they’re certainly not a monopolist.
Apple can charge 99% if they’d like, but that’ll probably cost them developers and make me an unhappy customer.
So as far as I’m concerned it probably should be left up to Apple to decide how much they charge, if they screw that up I can always switch to Android.
If it were only abusive for the developers, why is EU intervening on behalf of all users, including developers? It’s harmful to competition, and the harm to developers is the cherry on top.
No, people are arguing this because they think the 15% represents good value compared to what you would have to do as an indie developer to support multiple stores and payment methods.
It's a mindset I'll never fully comprehend myself.
Supposedly I did work to earn a profit, but clearly not so much work that I shouldn't thank whatever system I'm subject to for the privilege of... making a transaction that barely involved said system, if at all.
5% or even 10% would be more acceptable. But 30%? lol For what? There's no way the vast majority of that cut is necessary for Apple's financial operations or for them to make a reasonable profit. How some people can't see this as greed is mind blowing. Where do they draw the line?
I'll tell you honestly why. It's because if they charged 5% or 10% it wouldn't be worth Apples time.
If they can't make 30% on the app store they'll go do something else which will make them 30%+ and leave it to rot. Because 5% or 10% is a commodity business and they can do better than that.
If there was something else that they could be making that kind of money for that little work, they'd already be doing it. Apple got lucky with a lock-in ecosystem and they obviously design great hardware, but I don't see them just up and deciding to dominate another market to make similar profits just because they're Apple.
Above something that is probably quite marginal this is basically free money for Apple. What are you comparing 30% to? Profit vs gross income? That's not what the 30% are here. That's 30% of an amount which depends on:
* a market that is so large that in a bunch of area it is basically not limiting - Apple has an influence on that but capturing so much value on 3rd party apps should not be warranted IMO, otherwise it would be warranted for them to also capture a big part on most of software for MacOs sales (esp. since the configuration by default is now quite secure so the argument that the App Store for iPhone is so valuable because it is curated is getting weaker) and for MS to capture a big part on most of software sales for Windows (and maybe give some crumbs to PC hardware manufacturers)
* the success of 3rd party apps, most of which has not much to do with Apple
Well, the Mac software landscape flourished before Apple had an app store. I wouldn't mind if they just gave up and let people distribute software how God intended.
It would be nice if they only charged for customers that discovered the app on the App Store. I would assume that the fraction of users who install apps after discovering them on the app store is miniscule compared to how many people learn of new apps through other channels.
Yours is a mindset that I'll never understand. You appear to believe that the price of a thing should be related to the marginal cost of the seller. Whereas, in reality, it's only a question of what a buyer will pay and what a seller will accept.
When you look at an airline that's about to fly a plane with twenty empty seats, do you say "sheesh, it's totally unreasonable that seat is selling for anything more than zero, it costs the airline nothing to have someone sit in it, the greed is mind-blowing"?
> Whereas, in reality, it's only a question of what a buyer will pay and what a seller will accept.
Which is why you don't have to let a monopoly/oligopoly set the price at will, they need to be regulated. Smartphones are becoming essential tools in many people's lives, and there are only 2 main providers; they need to be regulated. You can argue at the exact regulation but this Apple move has proved beyond doubt that we (as a society) need to impose tough regulations on them; because by themselves, they're not going to be reasonable, they're looking to extract maximum feasible rent.
>Which is why you don't have to let a monopoly/oligopoly set the price at will
Even monopolies are generally allowed to set their own prices; it's only the point at which there's abuse that there's a regulatory concern. The argument that Apple is looking to "extract maximum feasible" rent is undermined a bit by some facts I discuss in one of my comments elsewhere in this thread.
This. And before some libertarian starts rambling about how not to regulate stuff: I'm an libertarian myself and the current tech monopolies are only possible because of the state's intervention in the free market. Without ridiculous copyright and patent laws we wouldn't have those monopolies we see right now.
So yeah, as long as there's state intervention in the free market let the state regulate bad actors. I would be glad if it all went away but reality is that we have to live with this system.
That equivalence is awful. What is the profit margin of airlines vs the app store? There is a real cost to an airline seat, and there is a real cost to publishing an app on an app store (and all that it entails). The difference here is that airlines have tons of competition driving down margins, while no one is allowed to compete with Apple for iOS customers.
The existence of large profit margins is not prima facie indication of a lack of competition. Apple makes a huge profit margin on iPhones but I don't think there's anyone who suggests that the smartphone market is uncompetitive. To that extent, the first part of your point doesn't really hold up.
On your second part: one of the defining qualities of a retail store experience is, in my experience, that no-one is allowed to compete with the owner of the store. No-one would say it is uncompetitive that the owner of a supermarket doesn't allow you to put your own goods on their shelves.
Presumably your point is really that Apple's App Store is such a large fraction of the total smartphone app market that it has, and uses, monopoly pricing power in abusive way. That's a more interesting point.
The fact that's interesting to me is that, as far as I know, since Apple created the App Store, it has always charged 30% (modulo the recent small business program); from the very beginning when the market was practically non-existent, with no guarantee of success, up until today. So despite the fact the market has grown from nothing, Apple hasn't sought to increase their fees.
Also, look at comparison points. If you look at PC video games, those can often be bought in physical form, downloaded direct from their publishers, etc. etc. I mean to say there is no restriction on alternative sales channels. Nonetheless, a huge number of game developers choose to sell on Steam; where, coincidentally, the store cut is also 30%. They complain about it, but they do it.
> Whereas, in reality, it's only a question of what a buyer will pay and what a seller will accept.
I didn't say that's not what determines a price.
> When you look at an airline that's about to fly a plane with twenty empty seats, do you say "sheesh, it's totally unreasonable that seat is selling for anything more than zero, it costs the airline nothing to have someone sit in it, the greed is mind-blowing"?
No. Plane tickets are quite cheap regardless when you consider the amount of force involved in lifting that much weight into the air across the planet. Even when it's more expensive, I'm saving a ton of time compared to if I drove my car across country and back, making even pricier tickets worth it. In fact, the way I look at it, a plane with a bunch of empty seats is a good thing because that allows people to make last-minute travel plans. If one had to reserve a plane ticket months in advance, that'd be pretty lousy.
So perhaps that was just a bad example.
Here's the flaw in your oversimplifying of the argument. The price being as simple as what the buyer is willing to pay for is only adequate when you ignore the seller's level of monopolism and the market incentives that drive the buyer to taking it in the rear. Apple not only dominates a massive percentage of the mobile phone market, but they along with Google have created systems where your digital service is unlikely to be successful unless you play their game... because they are oh so concerned about the safety of the end user. And app that's not found in the App Store is never going to reach widespread use because even Android users don't really want to use apps their friends who have iPhones can't interact with them on. Even if you host binaries on your own site, good luck having iOS users figure out how to side-load the app or even have the courage to do so.
Would you be fine if your bank just ripped off 1/3 of your income? After all, what are you gonna do? Use cash for everything and be closed off from the modern economy? Sure, you can do that. But does that mean that this hypothetical banking system isn't ripping you off regardless of if you choose to pay it? It's a large amount of value that the buyer earned that the seller arguably didn't earn. In the case of Apple, they effectively get a 30% share in every company that hosts an app in the App Store because at any moment Apple can just say "nah" and delete the app.
But sure... let's have a society where everything's a free-for-all and we don't regulate scams and ripoffs because the buyer was willing to pay for it.
EDIT: I now realized what I said was on the snarky side... I changed it but left some of it and hope you're not personally offended or anything.
The profit margins scream lack of competition. In a competitive market you'd have dozens of companies scrambling in the hope of shaving off even 1% of the App store's revenue.
Right, but that doesn’t necessarily equal a good time for consumers. It’s a common gripe among PC gamers that every major vendor wants their own launcher, some of which are borderline spyware.
The choices I have on PC are wonderful. Many games are on multiple launchers or no launcher is necessary- download straight from the web. Lots of overlap between GOG, Steam, and Windows/Xbox Store. I can download and control games I buy DRM free from GOG. It's awesome.
> It is like the mafia demanding you pay for the privilege of doing business on your street
If Apple were to add this tax or raise it long after launch I could perhaps see this argument.
However, this tax is nothing new. AFAIK it has been like this for _years_. App developers must have known (before starting development) that there is a fee if you were to use the platform.
If you knew a certain street has mafia activity (or other similar taxes), would you make the concious choise of moving your store there? Well, if the business opportunuties are good enough, then it might be worth it. If the mafia suddenly showed up, then the equation could be different. This is just like any other business investment analysis.
If 30% is too much all in all, then it is unsustainable to keep the app store as an option.
App developers don't get to choose which platforms their users are on. There's a reason why things like react-native mainly target ios and android - that's where the users are. That is why people compare it to the mafia, you have to do business there, which means you have to pay them. Where are you finding users that aren't on android/ios?
If the mafia built the street, provided you with a shop to sell out of (with all sorts of nice features, got customers to come to your shop, and acted as a first line of customer support for all billing issues, would it be more reasonable that they got 30%?
How much revenue would developers make if Apple hadn't built the iPhone and the App Store and successfully marketed the thing to millions of customers?
What would be a fair price?
The linking stuff is simply because developers have tried time and time again to game the system by linking to outside shops. Hence the blanket ban.
It would be FAIR if you could charge iPhone customers more than Android customers but Apple is not stupid. The small print in your contract forbids just that.
People fall in love with Apple the same way they do a sports team or actor. They begin to cheer for it and want their favorite to win all the games, the best roles, the awards. Unfortunately these fields are all zero-sum, and small companies get pulverized by the hits to their cash flow.
It is like the mafia demanding you pay for the privilege of doing business on your street.
30% is just too much.
My client is selling a service where they are selling a physical product together with something you do with it in the app. Currently the customers buy the service and device in a separate shop and the app is just for the convenience of the user, they could also use a laptop conputer or whatever else. The client wanted to include a link to the shop in the app, but apple wouldn't allow it without their 30% tax. With this 30% cut providing the service for apple users wouldn't make business sense, they would lose money on each sale. Should they have higher prices for iphone users to make up for that?