More than 30 states sue Google over 'extravagant' fees in Play store • Hacker News Board

Re: More than 30 states sue Google over 'extravagant' fees in Play store

#101

Post by CubsFan1060 » Thu, Jul 08, 2021, 2:20 PM UTC

simondotau wrote: post #97

CubsFan1060 wrote: post #89

Earlier quoted context omitted.

My prediction is that Apple will lower their fee to 5% at some point. However, using ANY of their IP will cost 25% of your revenue. Want to access Healthkit? ARKit? Etc.. 25% of revenue from both the app and in-app purchases.

Apple won't do that unless they're forced to by regulators. But if the regulators force it, that's certainly an option available to them. (Though there's no way Apple would ever go below 10%. I would eat my hat if Apple could even cover hard costs of running the store at 10%. Even at 15% they'd already be subsidising purchases made using gift cards purchased at retail.)

Well, I think the idea would be that their API's are so necessary that everyone would have to pay the 25% anyway.

Re: More than 30 states sue Google over 'extravagant' fees in Play store

#102

Post by jollybean » Thu, Jul 08, 2021, 3:57 PM UTC

simondotau wrote: post #58

jollybean wrote: post #44

Earlier quoted context omitted.

All in the credit processing and transactional costs and overhead (i.e. charge-backs) will be pushing 5%. If there is remotely any manual intervention for support, or even validating apps, that's going to be real money for any entity, then there's cost there. Then business overhead, marketing support, campaigns etc.. And then profit margins. I suggest a normal markup is going to look something like 8-12% for digital…

Precisely. Epic hasn't even demonstrated that they can run their own digital store profitably with a 12% commission—and the Epic Store isn't exactly the most sophisticated bit of infrastructure. Barely more than a half-baked Windows downloader with DRM. Google and Apple now offer a 15% rate to the overwhelming majority of developers. Whether you call it a response to the market or a cynical ploy to stave off Governme…

They are losing more to Apple than they would in piracy.

Re: More than 30 states sue Google over 'extravagant' fees in Play store

#103

Post by rebelos » Thu, Jul 08, 2021, 4:01 PM UTC

Talanes wrote: post #91

rebelos wrote: post #45

Earlier quoted context omitted.

Who said anything about a requirement? It suffices to make it illegal to prohibit disclosing the fee. Businesses can decide if they want to do so. The point is that this 'invisible rake' model is being exploited to nullify free market forces in service of obscene profit. Many businesses (not just Apple and Google) have realized they can leverage this to make considerably more money than they otherwise might.

>I strongly believe that Nintendo, Sony, & Xbox should also disclose their rake. Sorry, between this line and not realizing you were also the GP commenter, I assumed you were suggesting the markets be forced to disclose the rake pro-actively themselves. Making it illegal to prohibit disclosing the fee is great, and at that point I don't even think you need to make the case that the industry is different than others.…

Ah my bad for the confusing wording on that. And yes agreed.

Re: More than 30 states sue Google over 'extravagant' fees in Play store

#104

Post by pascoej » Thu, Jul 08, 2021, 4:37 PM UTC

banana_giraffe wrote: post #32

SV_BubbleTime wrote: post #26

Earlier quoted context omitted.

First million is at 15% for everyone I figure?

Google does a 15% progressive fee for the first $1mil. Apple sorta does the same, though once you cross the $1mil threshold, you pay a 30% cut next year on all your sales.

Only recently in response to all this anti-trust stuff.

Re: More than 30 states sue Google over 'extravagant' fees in Play store

#105

Post by lostmsu » Thu, Jul 08, 2021, 4:51 PM UTC

simondotau wrote: post #99

lostmsu wrote: post #87

Earlier quoted context omitted.

Unless you can show such a policy, it is reasonable to assume it does not exist. I surely have no way to prove otherwise short of finding complete list of all policies. A good indication is that neither of us heard about it so far.

If we have no evidence, it is not "reasonable to assume" anything. Meanwhile, I'm merely saying that it wouldn't surprise me if such a policy exists, whether formally or informally. The distinct lack of any product on Walmart shelves which has a below-RRP price printed on its packaging is strong circumstantial evidence at the very least.

It is reasonable due to the Occam Razor.

The fact that you mentioned is an extremely weak evidence in the light of very thin margins Walmart has (under 3%), which is more than 10 times less than the old store tax, with probably even smaller incentive to combat.

Re: More than 30 states sue Google over 'extravagant' fees in Play store

#106

Post by xboxnolifes » Thu, Jul 08, 2021, 5:05 PM UTC

rebelos wrote: post #9

I'm really hoping someone wakes up and realizes the problem is not the fees but that consumers don't know about them. Let the consumer be informed about Google and Apple's rake on all their in-app charges. The outrage will take care of the rest. Not sure about Google, but Apple has deliberately prohibited developers from itemizing the 30% fee for consumers. That simple rule is what keeps their money pipe flowing. Mar…

I agree with this a lot, even with other markets. Price transparency doesn't solve all issues, but I fail to see how it would ever hurt the consumer. That, and it feels like a much easier win to fight for than most anti-competition issues.

Re: More than 30 states sue Google over 'extravagant' fees in Play store

#107

Post by jp0d » Thu, Jul 08, 2021, 11:48 PM UTC

duchenne wrote: post #65

jp0d wrote: post #46

An unrelated note. Please feel free to downvote. If the states decided to sue pharmaceutical companies for extravagant profits on life saving medicines, people would benefit a lot more. May be there a political motive behind Google being targeted.

Why not both? This is a false dichotomy.

Because Google and Apple are providing a service to host developer's applications and charging a fee for it. The fee is quite high but they're charging it for the service. Nobody is dying because of their actions.

Re: More than 30 states sue Google over 'extravagant' fees in Play store

#108

Post by simondotau » Fri, Jul 09, 2021, 2:50 AM UTC

jollybean wrote: post #102

simondotau wrote: post #58

Earlier quoted context omitted.

Precisely. Epic hasn't even demonstrated that they can run their own digital store profitably with a 12% commission—and the Epic Store isn't exactly the most sophisticated bit of infrastructure. Barely more than a half-baked Windows downloader with DRM. Google and Apple now offer a 15% rate to the overwhelming majority of developers. Whether you call it a response to the market or a cynical ploy to stave off Governme…

They are losing more to Apple than they would in piracy.

Almost certainly not.

Firstly, you're assuming that app store sales number would have been equally successful if iOS was a fully open platform. Apple did a damn good job of converting iPhone customers into iOS software customers when compared to Android. Without the App Store, rates of conversion wouldn't be as high.

Secondly, you're assuming that Apple would have put nearly as much effort into the iOS platform, developer tools, software support and encouraging its customers to buy apps, if Apple wasn't seeing a revenue stream from it. No revenue stream, no incentive to build that marketplace, fewer sales.

Third, you cannot make assumptions about how prevalent piracy would be on iOS if the platform was open like macOS, and how many sales would have been lost as a result of piracy being widespread. Historically, levels of piracy in PC games have been in the order of 85 and 95 percent.[1] On Android, piracy has been estimated anywhere between 50 and 90 percent.[2] Of course we know that the vast majority of pirates wouldn't have paid if that was the only option. But assuming a piracy rate of 85%, it doesn't take many pirates being turned into paying customers to net more revenue than Apple takes in App Store fees.

Scenario one, "fully open iOS":

  85% Pirated
  15% Purchased

Scenario two, "zero piracy iOS":

  80% Didn't purchase
  20% Purchased

Notice how only 5% of the user base had to shift from being a pirate to a purchaser, yet developer revenues go up by 33%, enough to fully offset the entire "cost" of Apple's margin and then some.

[1] https://www.youtube.com/watch?v=2MIEVvv1QP0

[2] https://www.makeuseof.com/tag/piracy-android-how-bad-is-it-r...

Re: More than 30 states sue Google over 'extravagant' fees in Play store

#109

Post by RandallBrown » Fri, Jul 09, 2021, 5:11 AM UTC

Rebelgecko wrote: post #70

RandallBrown wrote: post #48

Earlier quoted context omitted.

Apple recently changed their fee to 15% for the first million (with some complications for making over a million in subsequent years). This covers like 95% of developers (maybe more?). Looks like Apple just barely squeaked by with the right moves.

I thought the Play Store fees work the exact same way? (Edit- referring to app purchases, IAP and subscriptions, not the cost of having a developer account)

I believe Play Store fees are 30% across the board. https://support.google.com/paymentscenter/answer/7159343?hl=...

Re: More than 30 states sue Google over 'extravagant' fees in Play store

#110

Post by jollybean » Fri, Jul 09, 2021, 10:33 PM UTC

simondotau wrote: post #108

jollybean wrote: post #102

Earlier quoted context omitted.

They are losing more to Apple than they would in piracy.

Almost certainly not. Firstly, you're assuming that app store sales number would have been equally successful if iOS was a fully open platform. Apple did a damn good job of converting iPhone customers into iOS software customers when compared to Android. Without the App Store, rates of conversion wouldn't be as high. Secondly, you're assuming that Apple would have put nearly as much effort into the iOS platform, deve…

So the first premise isn't true because iPhone sales depends on Apps as a 'pillar' of the offer. No great app-platform, no fat iPhone revenue. So a 1/2 decent platform would still exist.

Second, we have Java based, side-loadable Android universe as a reference point to determine rates of piracy. We also have desktop.

While piracy is always some kind of problem, it's generally not a problem that has wiped out companies. Adobe does just fine, in fact, the piracy threshold might be a reasonable 'valve' for people who don't actually have the ability to pay, to use the app. Adobe benefits from this. So long as people are truly 'not going to be customers' then people using the software is mostly good.

30% is nowhere near approaching a reasonable fee to 'defend from piracy'. It's not really even part of the equation frankly.