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Apple's bad faith 27% tax on web purchases

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Re: Apple's bad faith 27% tax on web purchases

#171

Post by arrosenberg »

ericmay wrote: post #132
arrosenberg wrote: post #59

Earlier quoted context omitted.

> Developers are in arms because they don't believe Apple deserves any money for distributing their app on their App Store. Rephrased - Developers are up in arms because the cost of distribution on iOS is artificially high. It's artificially high because the cost is not subject to market forces. It's not subject to market forces because Apple has a vertical monopoly on hardware and software distribution. Vertical int…

How is it not subject to market forces? That doesn't make sense. If Apple's platform doesn't work for their profit margins they are free to sell their software elsewhere, including a plethora of phones from a diverse set of manufacturers. But they don't want to do that because Apple's platform makes them a fuck load of money. They just want more of it. How about this: Apple can charge Epic the same outrageous* 12% th…

> How is it not subject to market forces? That doesn't make sense.

65% of domestic App Store revenue is on iOS, and the Apple app store is the only distribution channel. What market forces affect Apple's pricing power on commissions?

> Can you provide a legal document or explicit law that states "vertical integration is illegal"?

No, because like all things, it's about how you use it. Per the FTC - Exclusive dealing and exclusive distribution arrangements may be anticompetitive, however, if they are used to raise rivals' costs, exclude (or foreclose) competition, or facilitate tacit collusion. Exclusive dealing contracts may raise rivals' costs when the contracts are made with so many retailers, and lock up so much capacity at the retail level, that competing manufacturers are unable to attain minimum efficient scale in either the production or the distribution functions.

Apple is dealing with itself - maybe that argument holds in court (certainly has a shot with the current junta). It would certainly help if Congress would update the law for the 21st century. It's close enough to the line that it can be argued, and they are clearly nervous about it.

> How about this: Apple can charge Epic the same outrageous* 12% that Epic charges game developers. Do you think that would alleviate Epic's concerns?

Be mad at someone else. I don't know or care about Epic and I don't play Fortnite. I just know that private companies should not be able levy a tax or unreasonable tolls in restraint of commerce. It's hard to justify a 30% toll on 65% of a $100B+ market without at least knowing if a third-party marketplace would offer better rates and service.

Re: Apple's bad faith 27% tax on web purchases

#172

Post by Someone »

danbruc wrote: post #130

The economy primarily exists to benefit the consumers, not the producers. With that in mind, I should be able to run any operating system on an iPhone I bought. Apple should not be required to actively support this, put in extra work to document things or whatnot, but they should not be allowed to actively make things harder. If I got an iOS license, I should be able to install and run any application and be able to…

As a hacker, I want those, too, but I’m not 100% sure I want that as a developer or user. It also has disadvantages.

Part of what Apple sell app developers is that piracy is hard on the App Store.

It also benefits developers and users that tweaking apps to cheat in games is as good as impossible.

A cloned or patched iOS that allowed users to install anything could change that by no longer checking app signatures.

Re: Apple's bad faith 27% tax on web purchases

#174

Post by FreeTrade »

A law requiring hardware manufacturers to allow owners to run any software on their device would solve a lot of these Apple problems over time.

Thats the root of the problem. Apple has a monopoly on the social status associated with their devices, and leverages the monopoly in many unscrupulous and toxic ways. I consider Apple the most cynical and toxic of all the tech giants.

Re: Apple's bad faith 27% tax on web purchases

#176

Post by aurareturn »

johnnyanmac wrote: post #166
aurareturn wrote: post #138

Earlier quoted context omitted.

>Epic employs behavioural specialists tasked in making their games addictive and coerce user into spending with micro-transactions. Epic also has their own game store that they will happily charge 30% once they have more marketshare. They also want to be able to put their own game store on iOS.

>that they will happily charge 30% once they have more marketshare. I don't know. They haven't done as much with UE or any other tools, outside of actually charging for non-games (I'm honestly surprised that the Mandelorian was able to be made with no kick back to Epic at all). Historically Epic has been relatively lenient for how it taxes developers. Say what you want about Sweeny and Fortnite and the Games Store, b…

They're developer friendly because they're trying to get marketshare. They're competing with market leader in Steam which charges 30%.

Don't think for a second that they wouldn't charge 30% once they get enough market power. In fact, in the Apple lawsuit, it was revealed that the Epic Game Store was operating on a $300-$400m loss in order to acquire marketshare. Epic has to increase commission fees in order to break even and make a profit eventually. Epic isn't a non-profit.

Here's a preview how they might treat customers of their own app store if they have market power:

  Epic Games, the company responsible for Fortnite, agreed to pay $245 million to settle FTC allegations related to in-game purchases. According to the FTC, the company charged parents and gamers of all ages for unwanted items and locked the accounts of customers who disputed wrongful charges with their credit card companies.
https://www.ftc.gov/enforcement/refunds/fortnite-refunds

Re: Apple's bad faith 27% tax on web purchases

#177

Post by arrosenberg »

Someone wrote: post #106
arrosenberg wrote: post #59

Earlier quoted context omitted.

> Developers are in arms because they don't believe Apple deserves any money for distributing their app on their App Store. Rephrased - Developers are up in arms because the cost of distribution on iOS is artificially high. It's artificially high because the cost is not subject to market forces. It's not subject to market forces because Apple has a vertical monopoly on hardware and software distribution. Vertical int…

> Vertical integration is illegal. Is it? The only related info I could find is https://www.investopedia.com/ask/answers/012615/what-are-leg... , which says it _can_ be illegal (in the USA) if it is achieved through a merger. https://en.wikipedia.org/wiki/Vertical_integration mentions quite a few examples of existing vertically integrated companies, mentions a few court cases, but doesn’t say it’s outright illegal. A…

It can be in certain cases if it is in restraint of trade.

> if vertical integration is illegal in the USA, somebody should tell Musk he should split up Tesla and SpaceX.

How are those companies related in terms of market power? I don't see it. Plus, space is so capital intensive and reliant on government contracts that pursuing it would be pointless.

Re: Apple's bad faith 27% tax on web purchases

#178

Post by arrosenberg »

dkonofalski wrote: post #103
arrosenberg wrote: post #59

Earlier quoted context omitted.

> Developers are in arms because they don't believe Apple deserves any money for distributing their app on their App Store. Rephrased - Developers are up in arms because the cost of distribution on iOS is artificially high. It's artificially high because the cost is not subject to market forces. It's not subject to market forces because Apple has a vertical monopoly on hardware and software distribution. Vertical int…

That's not true in the slightest, though. Sony, Microsoft, Nintendo, and Steam all take 30% for distribution and hosting, same as Apple. It's not artificially high if it's in line with the rest of the tech industry and if you want to try and claim that it's because of some monopoly, vertical or otherwise, then you have to explain why the other storefronts are also monopolies. It's not a monopoly. Other phones and eco…

> Sony, Microsoft, Nintendo, and Steam all take 30% for distribution and hosting, same as Apple.

> It's not a monopoly.

I believe you have accurately described a cartel, however.

Re: Apple's bad faith 27% tax on web purchases

#179

Post by heavyset_go »

grishka wrote: post #123
dkonofalski wrote: post #117

Earlier quoted context omitted.

Yes, you do. You have the choice to put your App on Google Play or host it yourself and make it available for Android.

I'm talking about iOS apps specifically. Don't pretend that not making your app available for the second most popular mobile OS is acceptable.

In the US, iOS has the majority of the market share, so it is the first most popular mobile OS.

Re: Apple's bad faith 27% tax on web purchases

#180

Post by Aaargh20318 »

paulddraper wrote: post #135
danbruc wrote: post #130

The economy primarily exists to benefit the consumers, not the producers. With that in mind, I should be able to run any operating system on an iPhone I bought. Apple should not be required to actively support this, put in extra work to document things or whatnot, but they should not be allowed to actively make things harder. If I got an iOS license, I should be able to install and run any application and be able to…

Is 30% reasonable?

I remember that when it was first announced it was big news they were only charging 30%. I was a mobile app developer at the time and before the App Store the usual way for people to buy games on their phones was by sending an SMS to a shortcode. You would then get a reverse-billing SMS (a.k.a. premium SMS) with the download link. The telco’s would usually take around a 50% commission on that SMS.

50% of your revenue, for delivering up to 140 bytes to a phone. Note that delivering a message was the only thing they did. You had to write the code to handle the incoming SMS message and send the reply. You had to host this service and serve the downloads (meaning you had to also pay for hosting and bandwidth). You also had to set this up for every single country you want to offer it in. None of this was discoverable, so you had to advertise your game/app as well. Also, the development tools were absolute shit (and you had to pay for those as well).

In comes Apple, who lets you keep 70%, provides excellent dev tools (I know it’s trendy to hate on Xcode, but even early versions of Xcode were heaven compared to the absolute shit show we had to deal with before). They host the app, they make it discoverable in their app store, they handle payments and make it all available worldwide.

So yeah, I’d say it was more than reasonable. Is it still reasonable in today’s market? Hard to say.

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