Comment by ethbr1
2 years ago
> that apple business practices are building a moat through highly integrated software
To me, this is the crux of modern antitrust, and the EU absolutely got it correct at a high level.
In simplest form -- doing certain things as an almost-monopoly and/or extremely large business should be illegal, while doing them as a smaller company should not be.
The scale of global businesses, in low-competition industries, allows them to engineer moats that are deeply injurious to fair competition, to their own profit and the detriment of everyone else.
> you buy it knowing that.
I think it's debatable whether the average iPhone customer buys it, knowing it allows Apple to heavily tax all AppStore developers.
>I think it's debatable whether the average iPhone customer buys it, knowing it allows Apple to heavily tax all AppStore developers.
I think if you explained it to the average iPhone customer you might be shocked they side with Apple. The concept of a platform where for free you can take advantage of it and just make 100% of the revenue without cutting in the owner of the platform is completely alien to how things work in what they consider the real world.
I can't just walk into Walmart and set up a stand and make money, if I want to sell in Walmart I have to work with them and give them a similar sized cut. If I even set my stall up on the street I have to pay for permits, certification, suppliers.
Not saying I agree with the App Store tax because I actually don't but I think the way they set it up as a "Store" was very clever in making it seem completely normal when it's completely abnormal compared to all personal computing up to that point, which maybe was an anomaly? Hope not.
But even in real life this doesn't hold.
> I can't just walk into Walmart and set up a stand and make money, if I want to sell in Walmart I have to work with them and give them a similar sized cut.
Apple's App Store might be Walmart, but the phone I bought is not Walmart.
Regular people understand the idea of "I bought a thing, and now the greedy company won't let me do what I want with it unless I buy their overpriced add-on", see printers.
Apple is no more entitled to a cut of everything I put on my iPhone anymore than Walmart is entitled to a cut of everything I put on my table simply because they made the table.
> Apple's App Store might be Walmart, but the phone I bought is not Walmart.
I don't know if that's inherently correct in people's eyes. For a counterexample, note that video game consoles are very popular, and I don't see any widespread opposition to the idea that e.g. Nintendo is controlling what you can play on a Switch.
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"Being able to do exactly what you want with a thing you paid for" is a very different angle of argument to "knowing it allows Apple to heavily tax all AppStore developers"
I was tackling why I don't think that argument holds water with the average person.
"now the greedy company won't let me do what I want with it unless I buy their overpriced add-on"
With printers this is very tangible to the customer, with the App Store what you're describing here isn't as tangible because nothing on the App Store is actually expensive, it's either free or relatively cheap and it's more a case that the user pays little or nothing, Apple gets a cut for doing close to nothing and the dev gets screwed, printers is more the customer gets screwed.
As an iPhone user, if I wanted a phone with Samsung, Amazon, Epic and Huawei stores, 3 different preinstalled browsers and my workflows depended on sideloading some obscure app for a website in Turkey, I'd go with Android. Such an option exists for people who are into that.
But I chose iPhone (and I think many other customers do) specifically for it being a walled garden. Now some other corporations like Epic, who want to have a cake and eat it too, are going to ruin one of the platform's key selling points.
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I've been a loyal iPhone user since what? the iPhone 3.
The moment Apple is forced to "open up to the competition", all Meta apps are going to magically move to the Meta Store, where they'll likely be able to shove all sorts of tracking garbage down my throat.
Same for Alphabet, same for Samsung, same for Microsoft.
The experience will turn into a hopeless struggle against EULAs and consents, unless one refuses to install any third-party spyware and do the digital equivalent of moving into a forest cabin. The oddball, while everyone else sheepishly complies.
Evenyone loves to hate Apple, everyone forgets that the first commercial music store to sell unencrypted and hugh fidelity AAC files was Apple's. The rest was "squirting" tunes on Zune or inflicting Realmedia on their paying customers.
Nope.
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Apple users do not understand that. That was the comment's point.
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But this is why the eu case made more sense? It went after Apple for not allowing side loading of app stores vs this one which seems to be going after what Apple does on its own store?
Arguably phones are becoming less like stores and more like a significant part of life. This is especially true as more and more of modern life demands a smart phone and apps.
And the only options are to take the deal -- modifiable at any time by the platform owner -- or burn down your digital life and start over on the only other practical competitor.
This is a framing issue. I think your comment is a great comment and probably does reflect a popular understanding. A farmer can't just set up shop in a supermarket without first paying and submitting to some vetting by the store owner. The problem here is that Apple doesn't just own the store or the platform for publicity and distribution. They also own the platform on which the software is run. It is analagous to Walmart also owning your house and not allowing you to buy home goods from any store except Walmart. I don't believe an average consumer would find that to be an acceptable business practice.
> I think if you explained it to the average iPhone customer you might be shocked they side with Apple. The concept of a platform where for free you can take advantage of it and just make 100% of the revenue without cutting in the owner of the platform is completely alien to how things work in what they consider the real world.
Who is arguing it should be free? Why create a false dichotomy where it's either the status quo (30%) or nothing (0%)?
I'm sure most people would accept a reasonable fee. It's hard to put an exact number on this because it would have emerged organically if Apple actually allowed fair competition in app stores. In the absence of fair competition, the best comparison I can think of is credit card processing which is about 3%
And don't forget that Apple receives enormous benefit from these apps being in their store. If not, consider what would have happened had Apple not allowed any apps in their store. Hint: Android would have eaten the world.
I don’t know where this idea that 30% is an unreasonable monopoly-sustained fee comes from. Stripe’s fee is 2.9% plus 0.30, so it would be way more than 3% on small purchases, which I assume are a lot of App Store transactions. Steams is 30% even though there’s compition (Discord tried to run a store with a 90/10 split and shut it down very quickly). Google Play is the same as Apple’s, and they allow other payment processors (for non-games). On the other hand, Audible has no competition, and they have a 75% fee (as in they keep 75%).
Most App developers aren’t even paying 30%, they’re paying the lower 15%.
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I was actually thinking about that - the number of paid non-game apps on my phone that I actually use? It's zero.
Most apps are free and are things like 2fa, chat apps, kindle, etc.
Would I be sad if the entire App Store shut down? Probably. Would it be enough to move me to Android? Uncertain, probably not.
> Who is arguing it should be free?
I'm not, I'm pointing out for the first 50 years of computing it literally was free.
Why hasn’t Android, with it’s support for alternative app stores and side loading eaten the world anyway?
>> the status quo (30%)
Why is this number so bad? Steam: 30% https://medium.com/@koneteo.stories/how-much-money-does-stea...
>> In the absence of fair competition, the best comparison I can think of is credit card processing which is about 3%
Sure 3%, + a flat fee of .02 to .10 per transaction. that flat portion is going to be HUGE if your charing under $5 for something. You get none of that money back for chargebacks, or refunds. And if your charge backs are high your going to pay more as a % or get dropped so your going to have to hire CS people to answer emails or phones, and say nice things to angry people. You're going to pay someone to pay cc compaines to give money back.
Meanwhile you're small, you have no clue if the person on the other end is a refund scammer. Apple (and Steam) have this habit of telling people to "fuck off" if they refund scam. They have the weight with CC processors to do that. you will not. They also have customer trust, because if your product (game/app) is shitty they give customers money back (See Epic 1/2 billion settlement for being bad about this, and kids).
Is 30 percent high. It is. Is it unreasonable... meh maybe not?
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> I think the way they set it up as a "Store" was very clever in making it seem completely normal
The App Store was not a business innovation by Apple to set expectations, it's how all cell phone software that preceded it worked. Apple's change was to lower the fees and open up access to everyone.
>> Apple's change was to lower the fees and open up access to everyone.
Everyone seems to have forgotten that ring tones cost an arm and a leg, that "apps" were awful (I know I designed one)... You had to pay to get your app on a phone even if it was free.
General computing on a mobile device was never mainstream, or even common, before the iPhone. Smartphones are much closer to laptops than pre-smart phones, IMO.
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An iPhone is less like Walmart and more like a computer. We should run whatever we like on our own hardware.
I think Nintendo would disagree.
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This is a really bizarre viewpoint.
In my view, my phone is MY DEVICE. It is most definitely not "Google/Apple's platform"!
Google is merely manufacturing my phone, and I intend Google to have no rights or control whatsoever regarding my phone, and merely have the obligation (not right, obligation) to manufacture it correctly and provide open-source software for it that works correctly and properly provides Android interfaces (obviously, I don't use an Apple phone since Apple doesn't offer that, while Google does since they provide devices with unlocked bootloaders that run open-source OSes).
It only runs Android because Google with Android happened to win the adoption lottery and it would run PodunkOS by ACME if PodunkOS by ACME had been the one that managed to gain critical mass.
Again it is absolutely not even remotely close to "Google/Apple's platform", and I have no intention for Google to interfere in my use of it and certainly not interfere in any relations I might have with people providing software for my phone like taking a cut of the transaction or deciding how that software should behave.
Normal people don't think that deeply about it or understand even 10% of the terms you just reeled out.
I'm talking about the normal persons perception of the situation, not what is right in terms of how a technically savvy person would look at the situation.
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Or any nintendo or playstation or xbox. I can't just sideload games into any of them either.. or any of my 'smarttvs' etc.
Would this mean that anyone must be able to load any software into any platform that runs on software, or are we just picking on apple because they are popular. And got popular while doing all these things.. if people didn't want it they wouldn't have bought into it in the first place.
> are we just picking on apple because they are popula
Well, yes, antitrust law specifically, by design, focusses more on large market players, not small ones (there are some aspects still relevant to any participant, though.)
That's kind of central to the whole problem it is intended to solve.
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> Or any nintendo or playstation or xbox. I can't just sideload games into any of them either
Homebrew is a thing, and you should be able to use whatever software you want on a device that you paid for. I have no doubt that there are people who own an iphone and wish they could have a different browser, or wish they could use a game streaming app.
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I would love all hardware to have an "open option" that disables all security keys, doesn't let you run signed software, whatever, but lets you "hack" the device.
I'm also fine with Nintendo selling games via their store and physically, and taking whatever cut they can bear of it.
(80% of App Store revenue is "games" anyway, so it's a much closer analogy than people might expect. They may end up opening everything except games and only cost them 20% of revenue.)
Meanwhile you can get full advantage of the iPhone ecosystem "for $100/yr" which is nearly free, including App Store distribution, etc. If anything, Apple should be charged with dumping in those cases.
Apple convinced us that only they could keep us safe. Turns out their argument is specious - they can't keep us safe either. They haven't been able to keep malicious apps off of their App Store.
They are probably not monopolies in the legal sense, since there are three of them with comparable market share and they also compete with the PC, which is open. I suspect there would be more pressure to do something about it if those weren't the case.
Apple sells something like 70% of phones in the USA due to network effects that might not be apparent to users in other countries - social shaming for not using iMessage. The European equivalent is WhatsApp, which the EU is forcing to open up.
> are we just picking on apple because they are popular
"Popularity" is a precondition to running afoul of antitrust law, yes..
> or are we just picking on apple because they are popular
I don't use my Playstation or Switch for banking, ordering taxis, my actual job, so there is a bit of a difference.
Although consoles are another good example of how a locked down platform can make an experience hassle free and how that becomes a selling point.
I've Google TV and it allows sideloading. Yes, it should be allowed for all devices.
Most consumers are not even aware of how restrictive iOS is - for the same reason why they aren't aware game consoles do the same thing but way worse. All they know is where to buy compatible software.
If you told them "you have to pay 30% to the person who invented books every time you write something" they'd scream censorship and call for an armed revolution.
Authors often receive much less than that for each book they sell - the best you can get is self-publishing on Kindle or something where you can net 70%: https://kdp.amazon.com/en_US/help/topic/G200634560
People generally know this, and they generally don't care.
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Walmarts cut is largely based on their costs to stock and sell the item. Appstores costs are not related to the cut they take as they have >80% profit margin.
Is it though? Or is it based on the value the seller gets?
It's both of course, but I think they price based on the value rather than on the cost. (ie: percentage of sales, not per shelfspace)
I don't consider myself an Apple fan, but Apple users definitely buy into the idea that "it just works" compared to Android or Windows, which the highly integrated software is a key component of.
In my opinion, Apple have a choice. They go down the "just works", tight integration and lower the fees for other developers OR they open up for competition and keep the fees.
At the moment they're double dipping. They're saying they have to be the only app store for security and UX AND then charging high fees. If they're really providing a service for end users, they shouldn't be taking such a large cut from developers.
> If they're really providing a service for end users, they shouldn't be taking such a large cut from developers.
Bingo. If they're making an argument that they have to retain so much control because it's good for the users, then why are their margins so big?
I'm not saying companies shouldn't be able to run successful, highly-profitable businesses.
I'm saying they shouldn't be able to (a) have significant market share, (b) have significant size / market cap, (c) have high margins, AND (d) claim "but we're so efficient for our users!" as a defense against anti-trust.
One of those things is bullshit, and 3 out of 4 are facts...
If I'm Apple, I just open the gates. I would be very surprised if they lose much "business" as a result, at least not for a very long time.
I'd suspect most users aren't going to venture outside the garden.
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But doesn't the higher fees on dev help to keep the riff raff out? Sure, it's a nice profitable margin-padding fee but how else do they keep out the bottom feeders? Do Apple users what to pay a premium to get more useless noise?
Note: I'm not defending Apple. But the higher dev fees do serve a purpose other than revenue.
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I’m an Apple user (own iPad, iPhone, Mac Studio, among other devices) since the 90:s and I buy into that. But I _also_ think Apple has grown way too much into a bully and way too much into disallowing third party developers to do things Apple allows themselves to do with competing apps.
The “it just works” should be allowed to extend into the entire ecosystem.
Same, I like Apple hardware and while the OS experience has suffered recently, it’s great as a tool to get things done. But making Music.app and other services part of the ecosystem has not been a great move. Some things should allow for interoperability so that the user can make his choices. I think Apple has been too heavily handed in imposing its services to users.
"It just works" except I have to remember to not pay inside the app to get the cheapest price because the app price is 30% higher to pay the Apple tax. I need to open my laptop to buy a Kindle book instead of continuing to use my phone.
Small, minor, annoying issues as a customer that make me think slightly less of Apple while continuing to be in awe of their hardware.
I imagine that will be the crux of the case - they need to prove consumer harm, and it’s quite clear Apple’s policies result in consumers paying more.
>I need to open my laptop to buy a Kindle book instead of continuing to use my phone
You can buy in iOS Safari and not have to open your laptop.
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It _used_ to just work. Now each release is full of features no one asked for, and there are more and more issues because of this feature bloat.
My M1 MacBook Pro is probably the second worst computer I've ever bought, and might have been the most expensive I've ever purchased.
I'd be happy to trade you something you consider better.
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That hasn't been the case with Safari in a long time, has it? And of course, users can't switch to a browser they believe works better.
I doubt that a regular user has any opinion on whether Safari "just works". Some developers care about Safari vs Chrome vs Firefox browser engine features, but the average end user at most is just going to think some website sucks if it doesn't work. (And, personally, I don't see any problems in day to day usage, so I doubt it comes up much to those less technical than myself.)
To the extent that they care, they seem satisfied by being able to switch to other iOS browsers that under the hood use the WebKit engine, but give them the ecosystem-integration with their desktop browser that they want. Shared Chrome bookmarks and tabs matter 1000x more to a random user than details of browser engines.
Indeed - it's modern day corporate feudalism.
Anyone arguing for Apple's side is akin to saying we should all be serfs for the King, because he takes care of us well and protects his kingdom.
I’m a heavy and loyal Apple user AND an app developer.
I couldn’t care less about alternative App Stores. I don’t want them, I don’t need them.
I am very happy the way it is.
Bear in mind that the article mentions other issues, such as preventing third party banks managing your NFC wallet, degrading interoperability with non-Apple products, etc.
Also, I'm not sure why you favor the App Store. It's not safe. Apple is unable to keep malicious apps off of it, and there is no warranty if you lose money due to a malicious app. People think there is some implied safety in the App Store. There is no such thing.
Safety comes from not giving permissions to apps which don't need them.
Great. The beauty of an open market is that you can continue to solely suck on the teat of Apple if you so choose.
>> I think it's debatable whether the average iPhone customer buys it, knowing it allows Apple to heavily tax all AppStore developers.
> I’m a heavy and loyal Apple user AND an app developer.
Do you really think you're representative of the average iphone customer? A heavy, loyal user AND an app developer? I don't think so. And even if you were, your personal situation isn't a rebuttal
Totally agree.
However, let’s not assume what the majority of iPhone user thinks. To that end, I thought it is interesting to add my very personal perspective.