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The word "tax", when referring to Apple's fees, is a loaded and partial term. The fact that it's clear and understood and factored into the price makes it easy
by vr46 6y ago
The word "tax", when referring to Apple's fees, is a loaded and partial term. The fact that it's clear and understood and factored into the price makes it easy to complain about, but no casual customer to my knowledge has ever seriously asked what proportion of their peppermint tea and scones pays for a café's rent - overheads are overheads and margins are margins. Both companies are invoking consumers and value in their arguments and ripostes, but I only see one of them defending their customers' interests.
Many a company is upset that they have no leverage in a business deal and want to courts to hand it to them.
- paulgb 6y agoIf a company like Spotify sells subscriptions both in the app and on the web, they have to charge 43% more to the in-app purchaser to get the same revenue, even though the user gets exactly the same experience. I would call that a tax (informally; I know it strictly doesn't meet the definition) and as a customer I would like to know about it.
- DangerousPie 6y agoIf a company sells coffee both in a shop and on the street it would have to charge 43% more to the in-shop purchaser to get the same revenue, even though the user gets exactly the same experience. Would you call that a tax or would you call that rent?
- paulgb 6y agoI'd say the difference is that the tax is not uniformly charged by a middleman. If a mall made its profit by charging 43% on every purchase, I would think of it (informally) as a tax.
- vr46 6y agoBut suppose that mall didn't charge for anything else? Electricity, water, security, gravity all came free, and you just paid only if you made a sale? (Ok, there's a $100 developer fee and the cost of a Mac and iOS device.) Maybe Apple should offer two deals to publishers: 1) Pay £1,000,000 up front and keep all the revenue 2) Pay As You Earn.
- turbinerneiter 6y agoAt least you are calling Apple's behavior what it is: rent-seeking.
- vr46 6y agoWell, kind of... Conventionally, rent-seeking is a poor quality activity which doesn’t generate any new wealth, it just transfers it. But that’s not the case here, at least from my perspective, as Apple invests huge amounts in developing their hardware and software and millions of developers around the world (ok, maybe thousands, I don’t know) and their families have benefited from this. It’s not like they’ve inherited a vast real-estate portfolio that was amassed through violence and war (see British aristocracy, est. 1066) and have invested relatively little into it.
- asimpletune 6y agoI’m not sure why this is being downvoted. A huge consideration into whether Apple is truly anti-competitive should be if this has caused harm to consumers.
- DangitBobby 6y agoHow is harm measured, exactly? I feel harmed when a company makes huge margins on me from something.
- webmaven 6y ago> I’m not sure why this is being downvoted. A huge consideration into whether Apple is truly anti-competitive should be if this has caused harm to consumers. Prior to the 1980s, monopolies were considered bad (or at least extremely dangerous and suspicious) by default, and leveraging one to privilege your entry into another market was a huge no-no (though I'm not sure leveraging a monopoly to create a monopolized adjacent market would always have been seen the same way). Robert Bork's theory of "consumer harm" as the guiding light of anti-trust enforcement (and further conceiving of "harm" mostly in the form of higher prices, or at least "value for money") has given corporations too much wiggle room and consequently led to a lot of contorted legal and economic arguments, substantially reducing antitrust scrutiny and enforcement (which was the whole point, AFAICT).
- Okawari 6y agoIf there was only one entity owning all the houses, and to operate a business you needed space, then the terms rent and tax would be practically interchangeable
- simonh 6y agoOne entity doesn’t own all the buildings though. Google, Microsoft, Nintendo, Sony, etc all have their own malls and properties you can go to to get your Fortnite. It’s up to the customer which they go to. If iOS was a monopoly, how is it possible to get Fortnite on all these other platforms? That just doesn’t make any sense. The only monopoly Apple has is on selling and licensing their own products.
- Okawari 6y agoFair Point but I from the viewpoint of someone who has already purchased an iOS device, Apple is the only mall. That is the problem, not the existence of the stores themselves. In the case of Sony, Microsoft and Nintendo they do operate the same kind of platforms which are equally scummy in my opinion, but honestly not on my Radar as I don't really play console games. In the case of Google I would like to disagree, if only for the fact that I have options as where to procure my software and run it in a manner that is intended, but I must concede that it is more cumbersome that I would like. That is the key difference that makes what Apple does so egregious, and why I don't really have much problems with Google at the current time. For me it is not about the fees or the stores, its that Apple in practice forbids anyone in the digital marketplace to do business with any of their consumers unless it goes through them, as they own the app store and for the average user, their devices only run apps that are on the app store. Epic is in no position to reject the proposition of using Apple's payment service or their store entirely and still do business with the million of customers that are playing Fortnite. Apple should be definitely be able to charge for the access to their App store customer base, but Epic should be allowed to reject that price and still be allowed to do business with the iOS user base on their own terms, just like they did on Android with side loading before striking a deal to be on the Google Play store.
- 6y ago
- dogweather 6y agoI don't think that works: The customer gets vastly different experiences because in a shop you're benefitting from the rented space's protection from weather, etc. The same is true in the case of the iPhone vs. Desktop + web experience: it's different. One way that highlights the added benefit of the iOS app store is that it's safer than the open web.
- rieter 6y agoBut you can purchase a Spotify subscription on a different platform (say, Web), and then use your account on iOS, enjoying the same experience as every other iOS user. The only part of the experience that's different is the one time sign-up process, for which Apple wants to charge a permanent 30% fee for the entire duration of the subscription (even if after that you happen to primarily use Spotify on Desktop or Android). This puts Spotify in a weird spot. Their only options are: 1) Charge more to iOS users. This seems unfair to them and of course they will complain and blame Spotify when they find out they've been overcharged since Apple explicitly forbids informing customers about their fees. 2)Charge ~10-20% (depending on the share of iOS subscribers) to users of all platforms to compensate for Apple's fees. Why should I as an Android user pay extra so that someone else can make purchases on an iPhone? 3) Status quo - disable subscriptions on iOS entirely, make customers jump through the hoops to figure out how to purchase a Spotify subscription. I don't have the exact figure, but I imagine that quite a few Spotify customers use their subscriptions on multiple platforms. Apple just wants to take a permanent 30% cut if the the initial subscription was handled through an iOS app. Maybe this isn't such a huge problem for game DLC where there is no fixed unit cost, but companies like Spotify need to pay royalties to music labels, etc.
- vr46 6y agoAs a Spotify subscriber, I don’t really care, because it’s their job to handle their overheads, in the same way that John Lewis on Oxford Street pays different rent to John Lewis in Kingston (probably) but the prices stay the same. Cost of doing business is a thing. Capex and Opex are well-understood by businesses, or should be. If the Spotify web store is more profitable than the Spotify iOS store, because Apple wants ITS CUSTOMERS to get the same deal and Spotify wants those customers, then this is good and fair for customers at the point of purchase.
- AsyncAwait 6y ago> this is good and fair for customers at the point of purchase. I think it is widely accepted in commerce that a deal is only fair if both parties have the relevant information. If customers know they're paying more because of Apple's fees and are comfortable with it because they feel they get adequate benefits in return, that's fair. If they are unaware of this however, am not sure how the deal can be considered fair, since not all parties have the relevant information to make an informed purchase.
- vr46 6y agoThis sounds interesting, but not convinced since we could say that fairness mainly exists in the circumstances and rarely in the courts. At some point there is an upper limit to the relevant information available for any decision. We could test this, I mean, suppose the invoices or even the details at the checkout broke down the total into developer’s fee, apple’s fee, government tax, and so everyone could see that, would that be sufficient to fix the problem? I suspect not, because Epic, in this story, are seeking to pay Apple less, and give themselves more - that’s really their bottom line. Are they really going to all this trouble on my behalf?
- thu2111 6y agoWell, hotel bills do routinely break out not just taxes but individual taxes. And it does matter. I just got back from a hotel where I was rather irritated to find that local taxes for just a 6 day stay added up to the cost of a very nice restaurant meal for two. That's worth knowing next time a politician talks about tax. The hotel could treat such taxes as overheads and incorporate it into the price, but that's not really useful because they can't change it, only the customer can. Most business overheads aren't like that. If only a customer can affect a charge it makes sense to break it out and highlight it.
- imtringued 6y agoIf you don't like it then don't set up payment through Apple. Just set it on the web. Multiplatform subscriptions outside the Apple ecosystem are explicitly allowed. The reality is that users don't get to save money so they don't care.
- Nexxxeh 6y agoI don't think this works in practice. It seems Apple prevents you from embedding the website, linking to the website, directing users to that website from the app, or giving a FAQ that includes information about how the user is expected to pay via the website. Users have to guess, or already know. Watch the struggles LTT have gone through with the Floatplane app.
- dave7 6y agoAnd indeed, that is exactly what Epic did within Fortnite that has led to their current banning.
- amelius 6y agoThis is a bad analogy because there are many cafes and you can even buy tea in a supermarket and make it at home, whereas for apps the market is cornered. Apple regulates this market, and we have to pay them a tax.
- vr46 6y agoBut you can buy Fornite on the Switch, or Windows, or the Mac, or PlayStation, or Xbox.
- intellix 6y agoGoing to another cafe to buy your coffee doesn't include a door charge of €300 just so you can start getting your coffee there. Sure you can get it from those other devices but there's a large cost up front to switching device. I originally started on Android and moved to iOS to check the other side. I find it annoying that I can't really use Kindle like I could before.. Or tell Siri to play something from Spotify. I'm forced to use Apple alternatives and it's the reason I'm moving back to Android when my phone dies.
- vr46 6y agoTrue, the analogy is probably broken. You certainly can ask Siri to play music from Spotify, I don't know who said you can't. That was added last October with iOS 13. I have no idea what's happened with Kindle, but I use Google Play and Kobo books as well as Apple's Books, and everything works fine for reading. If not being able to purchase books on the device bothers you so much, fair enough, it's your choice, but nothing much has stopped me from finding the cheapest source of an ebook in epub format and reading it.
- jjcon 6y agoConversely when I tip someone I like to know that they will actually get the tip (see amazon and doordash) rather than it being directed somewhere else because the point is support that entity. Consistently if I purchase an app I like to know if that money is going to the developer, or when I purchase a service from someone in-app I like to know it is going to the person providing the service and not getting misdirected. I agree that for large companies like spotify it is just a transactional thing they could potentially bake into the price but when interacting with smaller entities it just feels wrong that they have no alternative.
- beaner 6y ago> Many a company is upset that they have no leverage in a business deal and want to courts to hand it to them. I think Epic does actually have a lot of leverage. They have clout. They're a popular, widely respected company and founder. They could easily organize a strike, where large companies frustrated by this exploitative fee all pull their apps and publicly say "move to Android" or something. Probably the fear of such a strike itself would lead to negotiations. It would just be embarrassing. Apple would not want to be the phone without any of the apps that people want. Who would buy that? And it doesn't matter that Android currently has the same fees, because they just copy Apple and would also change after such a strike wins out. It's not just the companies though. I've heard others online say "the company doesn't have to sue, there's probably a free market solution," 90% of the people I know shout BAD TAKE! and assume that it must/should be decided in the courts. The saddest part to me is just the total lack of creativity. There is a way to do it without suing and it would probably even be more impactful, because Apple would know that it is wrong when it loses. Rather than simply feeling that it has to comply with a law, it would know that developers themselves have negotiating power and there is a reasonable point of exploitation that Apple has long since passed. I wish the Epic guy would consider this.
- vr46 6y agoThe tactic is not very good at all. Respect and popularity doesn't get you much further than inside the front door in business, it certainly doesn't get you free money. It is quite sad to see this happen, because they had a great relationship at some point, Infinity Blade was an outstanding series and mutually beneficial. I also can't believe that all of us give s shit about this issue too and we're here discussing it.
- beaner 6y agoI think we're pretty far off on our interpretations here, and you don't explain why you think the tactic isn't good. Epic is not asking for free money. And they wouldn't be asking for free help, either. This is clearly an issue that is impactful to other large companies in the app store, and they would simply be coming together to negotiate rather than stranded on their own. Hacker news is full of developers, that's part of the reason people care about this issue. Epic's problem could be our problem, too. Nobody wants to be exploited.
- amingilani 6y ago> no casual customer to my knowledge has ever seriously asked what proportion of their peppermint tea and scones pays for a café's rent Furthering your café analogy: • How many cafés do you think pay an annual amount + 30% of their revenue to their landlord, and may only use the landlord's payment system comprising of landlord dollaz • Would consumers of a popular café be seriously concerned if their café were suddenly closed because they decided to accept cash directly?
- thomed 6y agoThis does exist - popup malls and experiential shopping does exactly this through mandating landlord managed payment/epos. “Turnover rent options” -> https://www.boxpark.co.uk/enquiries/ https://www.boxpark.co.uk/enquiries/ And... https://rew-online.com/profit-sharing-model-could-save-mom-and-pop-shops-from-covid-closure/ https://rew-online.com/profit-sharing-model-could-save-mom-a...
- vr46 6y agoQuite a lot, sadly, just look at eateries as a concession in an institution like a museum, or as another poster said, pop-up places like Boxpark or even - slightly tangentially, event stalls at places like Kew Gardens or during Festivals.