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Apple blocked Facebook's attempt to tell users about 30% App Store 'tax'
- ianlevesque 6y agoIt’s ridiculous that Apple takes 30% of a transaction between two independent third parties, one of which may have no idea their virtual attendees are even using iPhones.
- oneplane 6y agoIt’s ridiculous that people point to Apple when 5 other big platforms are doing the exact same thing and form much longer too. People just like to pile on. If it's a general issue, make it a general quest for a general solution.
- nojokes 6y agoApple started it.
- monkin 6y agoNice joke.
- oneplane 6y agoI don't think Apple had such a model with the Pipin game console, or a successful or global one at that. Microsoft, Sony and Nintendo do as an example. Stating that they are the first is just incorrect. One could perhaps state that they are making the most profit out of it. But unless we take a stance on profit being bad I'm wondering why this needs to be a hot topic at all.
- forrestthewoods 6y agoI think Apple did start the 30% cut? Or at least standardized it. iTunes 0.99 songs is the first place I remember 30% digital cut being a thing. That actually made sense because credit card processing fees were 0.25 + ~3%. So hey, yeah, 30% seems fair as processing fees will be 28 cents. However when digital goods sell for $10 or $60 a 30% tax on top of a 60 cent or $2 processing fee is all of a sudden not so reasonable.
- ratww 6y agoI believe their point is that Game consoles have been doing the same thing for decades, which you might or might not see as being the same thing as the AppStore does. There's also Steam and some other game stores too (although I'm not sure if he's referring to that).
- forrestthewoods 6y agoHis point is wrong. iTunes store came out April 2003. Steam came out September 2003. Xbox launched Nov 2001, but Xbox Live Arcade didn't launch until Nov 2004. Digital sales of game console games didn't become a major thing until after 2010. I shipped a $15 digital-only XBLA game on X360 in 2010. People thought we were crazy to go digital-only. The historical economics of video game physical distribution is very very different. A 30% digital cut was a massive improvement. Physical manufacturing, storage, distribution, brick and mortar middle men, platform fee added up to well over 50%. So a 30% digital cut was much better. Digital is now the majority of sales, but that is a very recent development. Reasonable minds can debate and disagree over what digital cut would be considered "fair". In a healthy, competitive market we wouldn't have to debate "fair". The market would decide. The cost of digital distribution has massively shrunk as technologies have progressed from specialty to commodity. The fact that the digital tax has been the exact same for 20 years is clear evidence that it is not subject to market forces. Whether it should or shouldn't be is yet another question.
- ratww 6y agoSorry, their whole point was not about digital sales or the 30% number, but more about the fact that console manufacturers have been making virtually all their money by charging a markup from game makers since the eighties (remember that consoles themselves normally sell at a loss). Once again, you might see it as being the same or not as what Apple does.
- nojokes 6y agoYou can hate me as much you like but there was nothing there before Apple that created this kind of control over arbitrary applications that you can run on computers. Let this settle.
- oneplane 6y agoSure there was. Remember cartridges for the game consoles? Or the clipper chip? (mostly about data but still a central form of control) Or HDCP. Or CSME which has PAVP. AGESA has a similar thing. Or the ACM validated by the ROM in all Intel CPUs. You can't even load an OS before you get it allowed by them. I think you meant to say: not directly visible by the user at the scale in terms of single-vendor profits. But that's a different thing which needs different treatment. Either antitrust laws or new laws will have something to say about that, because it boils down to 'power' that is currently legal as-is. You can be emotional about it, but that doesn't help the discussion.
- cm2187 6y agoI count only one other big platform (android). What are the other ones?
- jsnell 6y agoAndroid doesn't do this. By the Play Store guidelines. this kind of app would be permitted to use its own payment processing instead of in-app purchases.
- forrestthewoods 6y agoThe fact that every major digital platform just so happens to have the exact same fee and that it hasn’t decreased in 20 years is a clear indicator that this number is not subject to market forces. A general solution would be great. The mobile operating system is the most important platform to discuss this issue. There are only two players in this space. And the anti-trust case against Apple is much much stronger than against Google. Therefore they rightfully get more attention.
- eplanit 6y agoTrue. IMHO, it's ridiculous to have walled garden platforms with vendor-controlled "App Stores" in the first place.
- bad_user 6y agoApp stores, and their restrictions, aren't ridiculous. They are a consequence of an Internet filled with viruses, malware, and spam. The only thing I blame Apple for is not allowing installing apps from third-party sources, after you tick a checkbox in settings, like Android does. I would even accept a loss of warranty on doing that, because I'm a big boy, I understand the consequences, and I want to take that risk. Otherwise let's be honest, people actually love a curated app store, and you're in a tiny minority.
- kd913 6y agoI would put a correction that Apple users specifically like walled gardens the app stores. Things like the windows store, snap store appear to be significantly hated for reasons of taking away control and auto-updating. Same thing I guess with steam, origin, uplay, and epic's equivalent too.
- ratww 6y ago> I would put a correction that Apple users specifically like walled gardens the app stores. I don't disagree with you, but I don't think it's specifically liking walled gardens: it's rather about hating fragmentation. It's the same thing with gamers who complain about Epic exclusives that want their entire game library on Steam, or people who complain about Disney/Hulu/Prime licensing titles that were previously on Netflix. People just don't want to have multiple accounts.
- pineaux 6y agoSee a ove
- pineaux 6y ago
- hammock 6y agoYou're paying it..
- raverbashing 6y agoIt's just absurd that's any transaction For the app? Sure. Hosting, vetoing, version control, etc. (Even if we forget that developers already have to pay $99 a year). I'm fine with that. I would be more than fine if that $99 got more expensive the more app downloads you had. For just processing an IAP? With no volume discounts? It's ridiculous. Sure, they don't want the "free app + unlocking IAP" but they could think this better.
- dathinab 6y agoIt gets even more ridiculous if you consider that there are cases with price bindings (e.g. books) or small not very flexible margins (per song buying of music) and apple is them self competing in this area without this cuts. Similar ridiculous is that they effective prevent apps which just provide the service for existing member without any payment/sign-up services in the apple app. This is a active intrusion on the free marked undermining the fundamental concepts of it (choice and transparency). At least in my opinion.
- vchak1 6y agoEven for the app - if its a cost argument, then allow others to compete on a cost basis. Of course, apple will not let you set up your own app store with the same guarantees that apple provides around privacy security etc. If its a discovery and cost of marketing argument than I dont understand the perpetuity of payments, you can pay a first time purchase fee but subscriptions afterwards should not have any fees tacked on.
- richardwhiuk 6y agoIf they don't do IAPs, then the former charge will just be subverted by "Free App with one time IAP". That's already the case for most games - the game is free but most of the stuff is hidden by IAPs
- raverbashing 6y agoBut you could differentiate one-off IAPs from subscription IAPs and from "added value/purchase" IAPs
- monkin 6y agohttps://news.ycombinator.com/item?id=24301332 https://news.ycombinator.com/item?id=24301332
- oneplane 6y agoWhat's with the obsession of calling everything 'tax'? It's not a government and it's not doing anything else than making money on provided services, and therefore it's not tax. This whole euphemism and emotion thing is just getting in the way of reality and proper discussion.
- bluntfang 6y agoCan you help us understand what the reality and proper discussion is?
- oneplane 6y agoI probably can't. But the title could have been: "Apple didn't want Facebook to bring their 30% margin to the foreground of attention".
- bioinformatics 6y agoNarratives are more important than facts. A lie repeated a million times becomes truth, and a million repetitions happen in a blink of an eye nowadays.
- deleted 6y ago[deleted]
- bluedevil2k 6y ago> A tax is a compulsory financial charge or some other type of levy imposed upon a taxpayer (an individual or legal entity) by a governmental organization Apple pretty much is the government when it comes to the App Store. A single entity, monopoly powers, no competition, makes all the rules and is allowed to enforce them without penalty. “Tax” is a pretty apt term for the 30%.
- FloresHernandez 6y agoYou can opt out of Apple ecosystem simply by changing your phone. You can't not opt out of your government ecosystem (Or at least, it's more complicated). This is like calling Walmart profit margin "tax" ... just buy in another store.
- boopmaster 6y agoFacebook gets zero sympathy from me. I don’t care how they gag unscrupulous and invasive ad tech. Apple can trash FB dev keys too, and the world would be a better place.
- unicornfinder 6y agoI mean, it's possible to dislike both. I dislike Facebook but I still think it's wrong that Apple is preventing them from informing users that that's where the money is going.
- mavsman 6y agoI'd like to say that when big corporations like this fight it seems the outcome will be beneficial for users. Not sure if that will be true but I hope it will be.
- factchecker01 6y agohttps://www.apple.com/ios/app-store/principles-practices/#:~:text=Developers%20earn%2070%25%20of%20sales,Apple%20collects%20a%2030%25%20commission https://www.apple.com/ios/app-store/principles-practices/#:~.... Free These are apps that users pay nothing to download or use. The developer chooses to make them free or has some other business model not generated from app revenue. Apple receives no commission from supporting, hosting, and distributing these apps. Free with advertising These apps are free for users to download and the developer generates revenue from advertisements in the apps. Apple receives no commission from supporting, hosting, and distributing these apps. Free with in-app purchase These apps are free for users to download and users can pay for additional digital features and content in the app with Apple’s In-App Purchase system. Developers earn 70% of sales from in-app purchases and Apple collects a 30% commission. Free with physical goods and services These apps are free for users to download and the developer generates revenue from the sale of physical goods and services, such as purchasing clothing, having food delivered, or ordering a ride from a transportation service. Apple receives no commission from supporting, hosting, and distributing these apps, or from transactions for physical goods and services in the app. Free with subscription These apps are free to download and users can purchase auto-renewing subscriptions inside the app. If developers choose to sell digital subscriptions inside the app, they use Apple’s In-App Subscription system. In that case, developers earn 70% of subscription sales for the first subscription year, and Apple collects a 30% commission. After the first year, the developer earns 85% for all successive years that the user remains a subscriber, and Apple collects a 15% commission. Paid These are apps that customers pay upfront to download from the store — and include free updates. Developers earn 70% of sales from paid apps and Apple collects a 30% commission.
- benologist 6y agoMcDonalds didn't want nutritional information on hamburger wrappers, cigarette companies didn't want health risks mentioned, Apple doesn't want consumers to be conscious of how they pay $150/year to Apple for every $10/week subscription. Transparency is good for consumers, not companies.
- sosborn 6y agoConflating tax with profit margin is a bit muchthough don't you think? If Facebook wants this, they should be willing to indicate how much margin they make on every ad buy they happily take money for.
- dnautics 6y agoTheir reseller margin is 100%, because they are the terminal seller.
- X6S1x6Okd1st 6y agoHow is this conflating tax with profit margin?
- jkaplowitz 6y agoI wonder what would happen if Facebook and the other megacorps currently objecting loudly to Apple's policies on this topic lobbied a government or two to legislate mandatory disclosure of this 'tax' at point of sale, as well as the restriction on mentioning app developers' other points of sale, overriding any contractual agreements or corporate policies to the contrary. For example, requiring language like this on the final confirmation screen before completing each purchase: "Legal notice: Apple will receive 30% of the price you pay to purchase this app or to make purchases within this app. Apple does not allow this app to mention or direct you to any other way of making purchases from this app's developer which does not involve paying Apple 30%." (Naturally the law would be written not to be specific to Apple or to the 30% number, and a given app store's version of the notice could omit the parts which don't apply to that store's policies.)
- Ensorceled 6y agoWould that apply to Visa/Mastercard/Amex? Stripe/Chargify/PayPal? Would the law require a break down of how much goes to Stripe and how much to Visa? How about currency conversion, would that need to be listed? Bank processing fees would need to be in there too ...
- dahfizz 6y agoThe difference is that the examples you give directly facilitate a financial transaction, whereas Apple's situation is much closer to a tax where they charge a high fee just because they have the power to do so.
- richardwhiuk 6y agoApple facilitates the transaction - they provide the store, the user confidence, the marketplace and the users.
- csande17 6y agoIt's like the old saying goes: if you buy Apple, you're not the customer. You're the product, and they'll sell you to Facebook for a 30% commission.
- zeroimpl 6y agoIf I buy a box of cookies from a grocery store for $3, should I expect a note in the box which says I can buy them directly from the manufacturer for only $2?
- hu3 6y agoThe point is Apple forbids developers from letting customers aware of the 30% tax. And if you really want to oversimplify the discussion to a brick and mortar analogy, it's common for grocery stores to make taxes explicit in receipts: https://i.imgur.com/Lp3nwlH.png https://i.imgur.com/Lp3nwlH.png
- zeroimpl 6y agoThat’s not the same thing at all. I’m saying that you bought the product from a grocery store, and the product itself contains information discouraging you from continuing to buy from the grocery store. In the app case, you bought an IAP from Apple (I know it’s Facebook’s app, but that doesn’t change the fact that the transaction was executed by Apple) but somehow think it’s ok for there to be a note saying you can pay less if you buy it on your computer instead.
- Osiris 6y agoFacebook want saying they could pay less. They were saying, if you pay $10, $7 goes to the event, $3 goes to apple. It didn't say "go to this other website and just pay $7". I think it's totally reasonable to disclose the fees, I would even argue that it's the morally correct thing to do.
- onhn 6y agoI think this would be great, yes. The store has no reason to hide the markup if its fair, reflecting the convenience they added.
- untog 6y agoBy the sounds of it Facebook’s note didn’t say “buy from us”, it simply notified users that Apple will take a 30% cut. I’m loathe to care either way here because I don’t think any giant multinational needs me to speak in their favour, but the part that grinds with me is that Apple blocked it under a rule about “irrelevant information”. Given that FB created this feature for community events the fact that 30% wouldn’t be going to the host of the event feels like very relevant information to me. If Apple wants to have a rule that says “we decide what you can and cannot say” then they should just make one rather than hide behind other rules.
- Ensorceled 6y agoPeople get annoyed by Apple doing this but Visa/Mastercard/Amex have been doing this literally for decades ...
- deleted 6y ago[deleted]
- vezycash 6y agoThey take 30%? More like 3% or less.
- Ensorceled 6y agoNo, they block partners from telling about the fees. That’s the subject of this article.
- vezycash 6y agoUnderstood. When the gag order on 3-5% fee, it's business. But on 30%, it's mafia level extortion.
- jacquesm 6y agoIf VISA or MC or AMEX would charge 30% they'd be out of business instantly, on a typical purchase that's all of the profit margin. The only reason Apple gets away with it is because they are virtual goods. The thing you could compare it with is Telco's fees for using their billing mechanism for virtual purchases.
- Ensorceled 6y agoThis article is about Apple blocking Facebook from telling people about the fees, which is what Visa and MC have also been doing for decades.
- jacquesm 6y agoYes, but those fees are 1/10th of what Apple charges (or less).
- dathinab 6y agoThis things are the actual problem with apple. Having a rule which forbids you from anyhow state anything anywhere in the app which might discourage people from buying on apple is a direct restriction of the free marked. And not the only one they have. I still remember that apps had problems stating that they are compatible with the peblle smart watch once apple brought out a smart watch.
- scumbert 6y agoThe free market is your ability to pick up your toys and focus on Android. That's not a commentary on whether Apple is right or wrong, mind you, but there's no questioning it's their platform.
- dathinab 6y agoNo, this is a misconception. There is no real choice except Android and iOs and you can't "carry over" apps (and often content in apps, too) which you have bough. Also Phones are not cheap and you can't switch your phone os between them. This means that there is defacto no free marked between iOs and Android (as you have no real choice and once you choose switching is problematic and expensive). So the only choice we have is to enforce a free marked IN iOs and Android. Or with other words there is a marked for iOs apps and a different marked for Android apps. Treating them as one marked is ignoring how the world works 2020.
- scumbert 6y agoI am talking about developers here, not Joe Schmo who lives his life in one ecosystem or the other.
- salawat 6y agoTrue, but Markets aren't just constrained to specialists, and if by virtue of more people becoming developer-esque, more people are buying into there being an issue with Apple's business model, then there's an issue with Apple's business model. We're just now breaking into more widespread adoption of microelectronics as a fact of life for the public where the newer generations have no concept of there not being these things. What was okay in the early adoption phase isn't once you start getting established.
- Jabbles 6y agoI wonder what the cost of building and running the app store is? Apart from the engineering costs and costs to run the servers, there are reviewers to be paid, marketing, gift cards to be distributed, various tax and legal problems that are hidden from app developers and the like. And of course there's Apple's profit margin, which as capitalists I don't think many people are denying outright. It's very hard to separate this from the costs of the iPhone, but ofc since all financial details are private anyway all we have is speculation. What do people think would be a fair 'tax'?
- fencepost 6y agoFacebook decided to fight it in the court of public opinion rather than go all in like Epic, despite having probably stronger ground to do so. I find it hard to imagine Apple terminating Facebook's developer account over this had they persisted with the notice (or simply put in something saying "event purchases are not allowed on Apple devices due to Apple's mandatory 30% processing charge.")
- dnautics 6y agoBy way of comparison, the uber "tax" is also officiall 30%, last I checked. Though arguably since uber is orchestrating physical things, with living beings inside, their extraction of a bigger "tax" relative to apple would be, in a non-market sense, justifiable on the grounds that, assuming they are playing fair with insurance and such, they must take on greater liability per unit sale.
- systemvoltage 6y agoJust curious - Apple's 30% App fees have been around for over 12 years. Why in last couple of months there is a huge uptick in bashing Apple for this? Literally, every day there is a story about this on HN.
- deleted 6y ago[deleted]
- username90 6y agoThe app store market is still growing exponentially as more and more people forego a normal computer and uses their phone for all their computing needs. A few years ago the market wasn't big enough for big powerful companies to complain about, but apparently it is now.
- brightball 6y agoJust let Facebook put up a banner when you visit the site using Safari, “This site is not accessible using Safari due to Apple’s failure to pay 30% of it’s revenue for you to visit.” Have fun with the wording of course, but a simple protest along these lines to eliminate Safari use would be appropriate civil disobedience and would start dramatically reducing the usefulness of iOS over time. Consider it along the same lines as the old “IE6 No More” banners. Ultimately, it’s the easiest way to hit back.
- stephc_int13 6y agoDo apple pay 30% tax in any country? No they go out of their way not to pay 30%. So why should developers pay 30% to apple?
- Fnoord 6y agoSo, wait. Apple forbids Facebook to be transparent about why something the customer wants to buy costs X. That's akin to saying the government would not allow you to disclose sales tax. Informing the customer with transparency about a sale should never be illegal.
- Simulacra 6y agoWhat percentage of revenue does Apple gain from the app store?