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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

#261

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…

This is not accurate. Do more research. Steam has a tiered cut they introduced to keep big players on their store, for example. Google and Apple both offer a lower rate for small business. And alternative stores on PC successfully operate with much lower cuts (EGS, GOG, itch, humble). It's not "in line with the rest of the industry", it's "no higher than the other bad ones".

Steam also doesn't collect 30% for distribution (ie developer issued keys for things like bundles)

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

#262
Epic says this is about protecting small developers... which, frankly, is BS.

Epic charges $100 per game in their store, vs. Apple's $99/yr for access to the store, and the latest tools. This is pretty much a wash, unless you're not regularly releasing games.

Epic charges 12% for their game store. For most developers, those earning less than $1M, Apple charges 15%. So again, pretty much a wash.

Epic doesn't take a fee for DLC if games use their own payment system, but presumably takes the same 12% if you use them (it's not at all clear)... but one of the benefits Apple gives customers is that you don't give your payment details to everyone, decreasing the odds it gets mishandled. Again, smaller devs aren't going to have a lot of DLC, or DLC revenue, and would have to pay someone to handle all the transactions.

Epic also uses its market power to direct large customers to use their store. It waives Unreal Engine fees for anyone using Epic as a payment processor, which would normally be 5% if you go over $1M in sales.... for those large customers:

$1M+ Using unreal:

  Apple would be 30%, plus 5% to Epic. + 30% DLC
  PC/Steam would be 30% to steam, plus 5% to Epic. + 30% DLC
  PC/Epic 12% to Epic for Epic store+Unreal. + 12% DLC
$1M+ Not Unreal:

  Apple would be 30%.  + 30% DLC
  PC/Steam would be 30% to steam. + 30% DLC
  PC/Epic 12% to Epic for Epic store. + 12% DLC
The fight, most likely, is over these numbers. Instead of being an extra 3% for a small developer, it's an extra 18-23% for the larger developers. A large enough percent of a large enough pie to fight for.

Does that make Apple evil? Epic would have you think so. But Epic also just needed to layoff a bunch of people, despite Fortnite being a money printing machine, despite their Engine royalties, and despite their own store's fees. Sure, Apple has cash to spare, but should we really be legally forcing Apple to adopt a business model that is failing Epic itself?

I'm not so keen on forcing successful businesses to ruin themselves. Especially when the claimed reasons for doing so don't seem to make any sense, and don't benefit who they claim to benefit. This isn't about helping all the small devs... it's all about Epic wanting a bigger slice from the big devs. They're just trying to get enough small devs riled up that lawmakers think this is a change they need to make.

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

#264

Apple and Google are extracting so much wealth from the people who use and develop smartphone software it is insane. I am continuously shocked at how supportive the HN community is of Apple collecting these tolls.

Maybe its time to leave the community then.

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

#265
post #252

Earlier quoted context omitted.

Just because most consumers outside the US use android instead of apple doesn't mean we shouldn't try to help protect hundreds of millions of users. There is a large enough portion of market along with all the businesses built around catering to this market that are unfairly being taken advantage of.

> we shouldn't try to help protect hundreds of millions of users No need. Market is functioning reasonably well, as Android, PineOS, FirefoxOS, and similar alternatives exist. Just because someone purchased a product doesn't mean they were coerced into the purchase. Apple products still function fine and legally, if not ongoing service isn't exactly ethically run by the company management.

> No need. Market is functioning reasonably well, as Android, PineOS, FirefoxOS, and similar alternatives exist.

I'm not sure I'd like a government (whom at least in theory, exists to protect & provide as much collective good for their constituents as possible) to approach the situation in such a cold strictly economic fashion. Hundreds of millions of people unfairly being taken advantage of to the benefit of a small privileged few is exactly what I think governments ought to be trying to prevent.

>Just because someone purchased a product doesn't mean they were coerced into the purchase.

So what if they weren't coerced? Should government really have to wait until an apple exec points a gun to someone's head while they make a purchase before they can try and help? Isn't it possible a lot (I'd argue most) of these people don't realize all the financial nuances they've unwittingly become party to when choosing a phone. Think about all the grandparents who opted to get iphone because that is the one their grandchildren uses, think of all teenagers who chose IOS because that's what their friend group uses, heck think of all the literal children using IOS because that's what their parents gifted them for Christmas. Should the government really just turn their heads while children, teenagers, elderly, and so on are unwittingly agreeing to participate in a financially abusive arrangement.

I think you and I are running into the classic "is" vs "ought" disagreement. While I agree with you that this is currently legal, I also believe that it ought not to be due to the negative impact it has on hundreds of millions of people.

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

#266

Epic says this is about protecting small developers... which, frankly, is BS. Epic charges $100 per game in their store, vs. Apple's $99/yr for access to the store, and the latest tools. This is pretty much a wash, unless you're not regularly releasing games. Epic charges 12% for their game store. For most developers, those earning less than $1M, Apple charges 15%. So again, pretty much a wash. Epic doesn't take a fe…

Doesn't matter to most people what Epic does. There's a duopoly in ecosystems for the most important general-purpose computing device for most people on the planet, and we should demand that people have more free control over devices they own. On iOS, I think that's ability to sideload apps and run other web engines.

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

#267

Apple's fees are too high, and I also don't find this particularly persuasive. - Apple charges a ~30% fee to publish on their store. It's a high fee! I also understand people make money there (more than on stores with lower fees). - Apple also has a pretty sophisticated set of financial products you can use through your account with them. It makes sense you wouldn't be able to use those in the same with with another…

I am curious how much running the App store costs. According to Statista [0], its gross revenue in 2021 was 85.1B. If this is the right number to use, then Apple gets between ca. 12.5 and 25.33B from it (for a 15% and 30% cut, respectively.)

I know costs and prices are somewhat independent of each other, but even the 12.5B seems like a lot. I wish I knew how much App store's technical infrastructure costs.

0. https://www.statista.com/statistics/296226/annual-apple-app-...

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

#268

Apple and Google are extracting so much wealth from the people who use and develop smartphone software it is insane. I am continuously shocked at how supportive the HN community is of Apple collecting these tolls.

These platforms were created to be tolled. What should be surprising is that developers willingly submit themselves to be tolled. Of course, the web platform is "worse" since it cannot utilize native capabilities until the mobile OS's support it via the browser, but it's toll free. As a user, that would've been my preference, not native apps.

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

#269

Earlier quoted context omitted.

No. They’re allowing alternate payment processing with a link from an an iOS app to a webpage, and reducing their commission to either 12 or 27% representing a 3% discount for not doing the payment processing themselves. They’re basically following the ruling based on some California law being applied nationally that the Supreme Court declined to hear on appeal. The judge said Apple would have to allow links out to a…

I wonder how Apple thinks they're going to measure the transactions that take place. Simply clicking on the link and visiting the third-party-payment site doesn't prove anything, because the user could bail out before paying.

Mainly two ways.

One is by tracking outgoing links via a specific framework that needs to be used, the ruling only provides for Apple having to allow linking out, no restrictions on Apple’s part for requiring a certain way of doing it.

The other is the courts explicitly affirming Apple’s right to audit as a part of them stating that the commission will still be owed regardless.

The latter is important because it allows Apple to claim a legitimate interest in defense if somehow a case is brought specifically about Apple’s requirements on how to link to a URL outside the app.

Think: “Judge you said the commission would still be owed and you stated we can audit, you even lamented on how cumbersome it would be for all parties involved to settle the commission owed to us if third party payment options would be used, us requiring a specific framework to be used to link outside the app alleviates some of that. We have a legitimate interest in imposing these requirements because it helps us measure links to external purchase flows, which in turn helps us automate measuring these external transactions.”

If you read the appellate court’s judgment, the annoyance towards the district court is palpable. Because the district court both stated the unlawfulness of the anti-steering provision under California statutes as well as stating how cumbersome after the fact collection is of the commission as well as stating that the commission is still owed.

All of this is marginally contradictory, but because the district court didn’t err in sufficient ways for the appellate court to step in and all of it ultimately is in line with the law and standing jurisprudence, the appellate court’s hands were tied, because the appellate court isn’t for do-overs, it’s merely there for significant errors that cause harm.

SCOTUS refused to take up the case, so until further notice the law of the land is that a) developers are allowed to steer users away from the the app while b) Apple remains entitled to their commission regardless because c) there's nothing inherently illegal about Apple's commission because d) it primarily is a payment mechanism for usage of Apple's IP by virtue of how it's structured in the developer agreement and e) as such it's legal because Apple can't be forced to give away their IP for free.

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