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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

#361

Earlier quoted context omitted.

You have to pay because Apple asks for a commission in exchange for you being allowed to sell your product in their store. I think what you're really asking is: Where's the value if I want to (or have to) do my own marketing anyway? The answer is trust. I'm more likely to trust you with my money, with you executing code on my device, if Apple allows you on their store. Even the big brands like Epic get this value, be…

> Apple considers this worth a 30% commission, and 100% of developers on the App store agree, or they wouldn't be on there. This is where you get it wrong. If there were other stores for iOS apps and the difference was only Apple's vetting and developers were still choosing to pay Apple 30% vs. much less for some alternative, then you could say that what they're paying for is trust. But everybody including Apple know…

> customers would switch

Would they though? Side loading exists on Android, but good luck foregoing the Play Store for some third party store or even marketing yourself. It exists, sure, but it does not eliminate Googles similar (but weaker) value proposition.

Would the possibility of side loading put pressure on Apple to be more competitive in terms of fees? Possibly, but Apple users tend to be less adventurous.

For Apple, there are various other reasons not to open up, like the brand image. It is really hard to make a naive user (like a child) completely screw their iPhone. Also, remember when porn videos were all Flash, and the iPhone could not display them? Steve Jobs literally told people to buy an Android phone.

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

#362

Earlier quoted context omitted.

> My point was that as a developer, I'd want to ensure users like the platform they're on enough to buy my app. Android is the number 1 platform in the world. Except in the US, where Apple is manipulating teens using "blue bubbles".

> Apple is manipulating teens using "blue bubbles" LOL WOW

It's not really any more funny than suggesting that Meta and Microsoft manipulate teenagers with dark patterns. But with Apple it's different, so I guess we won't be ready for that discussion until next time.

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

#363

Earlier quoted context omitted.

> Apple considers this worth a 30% commission, and 100% of developers on the App store agree, or they wouldn't be on there. This is where you get it wrong. If there were other stores for iOS apps and the difference was only Apple's vetting and developers were still choosing to pay Apple 30% vs. much less for some alternative, then you could say that what they're paying for is trust. But everybody including Apple know…

> customers would switch Would they though? Side loading exists on Android, but good luck foregoing the Play Store for some third party store or even marketing yourself. It exists, sure, but it does not eliminate Googles similar (but weaker) value proposition. Would the possibility of side loading put pressure on Apple to be more competitive in terms of fees? Possibly, but Apple users tend to be less adventurous. For…

> Side loading exists on Android, but good luck foregoing the Play Store for some third party store or even marketing yourself. It exists, sure, but it does not eliminate Googles similar (but weaker) value proposition.

Google recently lost an antitrust case over this. They allow the alternatives on paper and then suppress them from becoming viable.

In general to make this argument you would need to explain why the platform company would be the only store the users trust. Why Google but not Microsoft or Disney or Samsung or Amazon or Epic or Mozilla and so on?

> It is really hard to make a naive user (like a child) completely screw their iPhone.

This could be straightforwardly solved by allowing the device to be put into a mode where no new stores can be added without a passcode or a factory reset. Then the parent or IT department or what have you chooses a set of stores that they trust and the naive user can't add any, but the owner of the device can.

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

#364

For those who see a perpetual take of 30% of your revenues (pre costs, pre taxes) as a reasonable ask: I cannot wait to see you on the other end of the pointy stick… Imagine in a future not far away that car ownership has been replaced by car subscription, and all remaining 6 car manufactures decide to tell you that since you ride their fabulous IP, you must now pay a 30% surcharge on gasoline you use. What happens w…

Your comment is weird for a number of reasons, but i think the analogies might be the worst I’ve ever seen.

> For those who see a perpetual take of 30% of your revenues (pre costs, pre taxes) as a reasonable ask

I think 30% is barely reasonable, 15% is very reasonable however and if you’ve gained enough success that you pierce through the $1M revenue ceiling, then 30% becomes more reasonable.

> I cannot wait to see you on the other end of the pointy stick…

Let’s examine your pointy stick.

> Imagine in a future not far away that car ownership has been replaced by car subscription

I need clarification on your stick. Am I already paying to use these cars through a subscription?

What kind of subscription is it? Is it a flat fee of $99 a year? Or is it a higher and/or monthly fee?

These things matter for me to understand your pointy stick.

> and all remaining 6 car manufactures decide to tell you that since you ride their fabulous IP, you must now pay a 30% surcharge on gasoline you use

In lieu of that subscription fee? In addition to an annual $99 subscription fee? I need more information.

Also, surely the smaller consumers of this service get a 15% rate, right? It’s only the big corporate users of this car service that pay 30%, no? Otherwise this analogy is already diverting a lot from what it aims to mirror.

As for the gasoline, am I earning a revenue on this gasoline consumption? What exactly is the analogy for the 85% (or 70%) in earnings as a developer?

> What happens when you have low income and cannot afford a car?

You tell me.

The situation you’re trying to capture in this analogy provides for this.

If I have low income as an app developer I pay my 15% over a lower amount, so the absolute amount I owe is also lower. I don’t see a similar mechanic in your analogy.

> Then your ISPs, then your health services, then your grocery stores, etc…

The same questions I asked above come up in those situations as well.

The real answer to your faulty analogy is that people wouldn’t use a service that charges a monthly subscription and a percentage based on consumption without any revenue that is inexplicably tied to said consumption and competitors would be tripping over themselves to offer an alternative to such a ridiculous product offering.

“Aha!” I can hear you say. “But there wouldn’t be a possibility to alternative options and this is simply the status quo as it has developed”. But that’s just fantasy.

Antitrust actions would’ve been triggered long before that, because in those case market power has been explicitly abused to attempt to create such abysmal conditions.

Which makes it entirely different than Apple’s case. The reason why Apple didn’t slapped around with antitrust remedies is because everything that you and others hate about Apple, Apple did before they gained their market power.

When they were a nobody in the relevant markets. They are merely maintaining what they then did, and in some cases even loosening the reigns. So there was no market power to speak of to be abused, which is why it doesn’t rise to the levels of antitrust.

In fact, they rose in market power despite (and in actuality because) of the rules they imposed and commission they charged, which to the courts signifies that the market didn’t actually mind it so much at the time and could withstand those elements.

If tomorrow Apple would introduce draconian measures and insist on taking 30% of every deal made on Apple devices and 30% of every purchase, physical or otherwise, on Apple devices and heck, for good measure, take 30% of everyone user’s paycheck, two things would happen.

1) the courts would rule that to be an antitrust violation because Apple, now that people are dependent on their devices and after they’ve gained market dominance, is imposing these restrictions

2) people would drop their Apple devices in a heartbeat and switch over to Windows and Android

The ramifications of 1 will be directly tied to the possibility of 2

If however Apple did this back in the early 2000s, number 1 would never happen but number 2 would, because Apple wouldn’t have enough market power to warrant #1 and the “natural balance” would be restored by #2

The more #2 is less feasible because of the market power, the more Apple is constrained in taking wild actions like that for fear of #1, but it will never be applied retroactively because the logic is that people wouldn’t have signed up in the first place if the “offender” doesn’t have market power because people would’ve chosen a different option.

> I think the crowd at HN is very smart for some things, but incredibly self-centered and out of touch with the broader reality on many topics. Not everyone makes hundreds on thousands of dollars on Tech jobs, not all devs sell millions of copies, and neither you will make that for the rest of your life.

All of this is completely irrelevant because we’re talking about a commission rate that is directly tied to the revenue of a dev. So if a dev doesn’t make any sales or or only a handful of sales, then they won’t be paying any commission or a minor amount in absolute numbers, especially when you consider that those devs would pay 15% instead of 30%.

You’re talking about this as if people owe 30% over something that isn’t directly correlated to their revenue and you analogy where gasoline usage is the main driver of what is owed, reflects this as well.

> As I said somewhere on the page, Apple owes large part of what it is today to the dev environment (Things,Devonthink, etc) which created attractive products only available on Mac. IOS or MacOs without third party apps is pretty boring.

True, but the inverse is true as well. It’s a symbiotic relationship, literally a rising tide that lifts both developers and Apple. If developers aren’t doing well, Apple isn’t doing well, if Apple isn’t doing well developers aren’t doing well. Which is why it’s a commission that’s tied to revenue. Apple gets more when I get more and Apple gets less when I get less.

I literally couldn’t do my work as a developer if Apple hadn’t provided me with the frameworks and tools I use on a daily basis.

We can argue if the value of what they’ve offered me is worth the 15% I pay or even 30%, but that’s a personal value judgement.

> Apple now has divorced developers and screaming for their share of alimony every month.

Another analogy.

You might overestimate how most developers, especially the small guys you seem so concerned about, care about the commission.

But since you like analogies so much, I think it’s more akin to Apple chartering a plane, providing a pilot, and renting out a hotel for us developers to get to a trade conference hosted by Apple to sell our stuff in exchange for a cut of the proceeds.

Now all of a sudden there are few people on the plane who have been making bank at prior conventions and they want to get off mid flight, because they prefer using their own private jet and mansions and host their own trade show.

All the while the people on the ground a yelling “Yeah! Let all those poor people get off the plane!” and I just want to get where I’m heading.

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

#365

Earlier quoted context omitted.

You're not forced to make apps for iOS or any Apple product. Making your app for the second most popular OS is acceptable because that's what iOS is. I know you tried to make it seem like Android is but, worldwide, Android is far more popular than iOS. The fact that there even is a 2nd most popular mobile OS proves that Apple doesn't have a monopoly.

That doesn't make it any easier for people who have iPhones but can't install your app because your app is incompatible with whatever Apple demands. Trust me, most people who buy iPhones are completely oblivious to the app store rules and review process.

That's irrelevant. Both iPhone users and app developers have options on both sides. Developers can ignore Apple's platform and end-users have lots of options for phones that aren't iPhones.

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

#366

Earlier quoted context omitted.

iOS is not a market segment. Smartphones is the segment and so you do have a choice. The courts have already ruled that Apple doesn't have a monopoly in their segment.

That's not what the courts have been saying lately. iOS app distribution and Android app distribution have both been called relevant markets in recent trails.

I think you're conflating their designation as "markets" because they are marketplaces of apps with the economic term "markets" which has a specific definition for a sector of industry.

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

#367

Earlier quoted context omitted.

> 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.

I believe you're arguing in bad faith. Are you just becoming aware of these companies 30% cuts? Why were you calling Apple a monopoly if you think this is a cartel issue? What evidence do you have of cartel behavior other than that people followed suite in setting rates?

You shouldn't make that assumption without significantly more proof. Why can't it be both? In the App space Apple has the dominant position in a duopoly, and in the software distribution space more broadly there is cartel-like behavior occurring regarding commissions because distribution has become a major chokepoint (I'm guessing thanks to DRM, but that's probably oversimplifying).

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

#368

Earlier quoted context omitted.

> customers would switch Would they though? Side loading exists on Android, but good luck foregoing the Play Store for some third party store or even marketing yourself. It exists, sure, but it does not eliminate Googles similar (but weaker) value proposition. Would the possibility of side loading put pressure on Apple to be more competitive in terms of fees? Possibly, but Apple users tend to be less adventurous. For…

> Side loading exists on Android, but good luck foregoing the Play Store for some third party store or even marketing yourself. It exists, sure, but it does not eliminate Googles similar (but weaker) value proposition. Google recently lost an antitrust case over this. They allow the alternatives on paper and then suppress them from becoming viable. In general to make this argument you would need to explain why the pl…

I never said Apple is the only platform users trust, but that there is value in the trust that the platform brings. Beyond that, there would be value in it being the platform that comes preinstalled, even if side loading was a thing.

> This could be solved if…

It can not. The brand damage comes from the sum of incompetence of all users (not just the diligent ones) multiplied by the capability to do damage. Plus, if you made it a hassle, the anti-competitive argument you raised with Google rears its head.

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

#369

Earlier quoted context omitted.

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 allo…

Thanks for the rundown. What's the basis of the perceived annoyance though? What was the district court supposed to do differently?

Honestly, I’m not entirely sure.

I’ve read enough case law to notice when jabs are made between the lines, but it’s not always clear what the desired alternative is by the writer.

In this case the repeated mentioning by the appellate court that the district court brought up an alternative scenario of… well exactly this, that developers use alternative payment methods and that Apple would have to audit them, only for the district court to brush it aside because it’s too complicated, conveys an annoyance.

These alternative options were brought up by the district court on their own initiative. Normally courts only consider what parties bring up in arguments, but it’s not disallowed or anything for a court to come up with their own suggestions. I think the appellate court didn’t like the fact that the district court brought it up on her own and that it added a bit of complexity as a result.

The real issue or weirdness if you will, is that 99% of the case that is based on federal laws says that everything is kosher on Apple’s side, it’s only the California statute that bans anti-steering and in doing so, creates a bit of a schizophrenic outcome in which anti-steering isn’t allowed (the California part) but commission is still owed because all the rest is fine (federal law).

Here are some quick examples from the appellate judgment of what I’m talking about in terms of the appellate court’s annoyance:

> On its own initiative, the district court floated the idea of Apple permitting multiple in-app payment processors while reserving a right to audit developers to ensure compliance with the 30% commission. But it quickly rejected that as an alternative because it "would seemingly impose both increased monetary and time costs."

> Apart from any argument by Epic, the district court "presume[d]" that Apple could "utilize[e] a contractual right to audit developers... to ensure compliance with its commissions. But the court then rejected such audits as an LRA because they "would seemingly impose both increased monetary and time costs."

Quick translation: LRA = less restrictive alternative.

It’s pretty common terminology in antitrust cases, when one party complains about the other party’s actions but those acts are argued to be legitimate or necessary (e.g., we have App Review for safety reasons) the complaining party tries to counter that by offering up an LRA (e.g., well they can ensure safety by doing X, Y or Z instead and it would be less restrictive to us).

Here the district court recognized that IAP are a legitimate way of collecting the commission that due for using Apple’s IP, but instead of Epic bringing up an LRA to collect the commission, it was the district court that brought it up. I think that annoyed the appellate court because it highlighted the cumbersome outcome.

Here’s their entire judgment by the way if you’re interested in reading it: https://cdn.ca9.uscourts.gov/datastore/opinions/2023/04/24/2...

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

#370

Earlier quoted context omitted.

False equivalency. Most people like living in America and tons of people want to move there, while only religious fanatics would be okay living in a country built and controlled by Al-qaeda

I'm sure any number of Christian lunatics would love to remake America into Y'all-Qaeda.

If you take out Israel-bashing and add a bit of fiscal cuts in, it very much reads like R-party’s agenda.

But that’s just me, being European and grandstanding on the orange website.

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