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Interesting to see the judge bring up the same points that so many have here on HN, myself included. I've read a few articles about this topic, not just this on

Interesting to see the judge bring up the same points that so many have here on HN, myself included. I've read a few articles about this topic, not just this one, but some good points I saw from another article [1]: > Judge Rogers questioned Epic on when, exactly Apple became a monopoly given that its App Store rules have remained unchanged since the App Store launched, which Epic had no solid answer for, responding only that it was a monopoly when Fortnite came to iOS in 2018. She also said that walled gardens have existed for four decades and that what Apple's doing isn't too different. "They created a platform," she said > She also reiterated that Epic Games made a "calculated decision" to defy Apple's App Store rules, and the court doesn't provide injunctions for contractual disputes. Epic was "not forthright," she said. "There are people in the public who consider you guys heroes for what you did, but it's not honest. > Epic Games continued to argue that Apple has an App Store monopoly and charges excessive fees, but the judge pointed out that the 30 percent rate that Apple collects is the "industry rate" collected by PlayStation, Xbox, Nintendo, Amazon, Walmart, Best Buy, Google, and more. "It's all 30 percent and you just want to gloss over it," the judge said to Epic's lawyers. I don't remember where I read this but someone mentioned that the judge asked Apple why they charge 30%, which I found to be a bit of a strange thing to ask (and probably a bit of a softball). Why not 30%? Why not 40%? Why do companies have margins that they set that the market will bear at all? Etc. [1] https://www.macrumors.com/2020/09/28/epic-games-apple-dispute-possible-jury-trial/ https://www.macrumors.com/2020/09/28/epic-games-apple-disput...

actuator 6y ago
> > Epic Games continued to argue that Apple has an App Store monopoly and charges excessive fees, but the judge pointed out that the 30 percent rate that Apple collects is the "industry rate" collected by PlayStation, Xbox, Nintendo, Amazon, Walmart, Best Buy, Google, and more. "It's all 30 percent and you just want to gloss over it," the judge said to Epic's lawyers. She also glossed over the fact that software can be distributed free with its own payment systems in laptop/desktop OSs like Windows, OS X, Ubuntu etc. When I paid for Sublime I didn't go into an App Store to pay for it. Smartphone/tablet OSs are logical successors to the laptop/desktop OSs we have not game consoles. They are general purpose computing platforms.
- JumpCrisscross 6y ago
  Based on existing law, why is the laptop/desktop model inherently superior to the game console model?
  - actuator 6y ago
    > Based on existing law, why is the laptop/desktop model inherently superior to the game console model? Superior for developers because their margins improve. For low margin ones like Spotify that is make or break, especially when you take into account that they are fighting with preinstalled and OS promoted incumbents in both the platforms like Apple Music which are not subjected to the same.
    - Spivak 6y ago
      Your example seems particularly weird to me since Spotify's business is having extremely broad hardware support. They set up shop on everyone's platform. I'm sure desktop/laptop listening is a sizable chunk of their use but it's probably dwarfed by all the cars, phones, smart speakers, TVs.
    - xoa 6y ago
      >Superior for developers because their margins improve. First, this is debatable itself, walled gardens bring their own advantages for developers too. But second, why exactly should developers be the primary concern? There are three parties involved after all: the platform creator/maintainer, the developers, and the users. Why should users not have the choice to essentially collaborate with the platform creator to promote their interests, even at the expense of the developers? I mean, I know this is HN, and a lot of us wear developer hats. But we tend to wear user hats too, and even in many cases family (or business) support hats. Switching to one of those, developers on open platforms are often jackasses and can develop their own power imbalance vs users. Sometimes (often even!) a single particular piece software can become so vital and represent so much investment that it's much harder to substitute than even the platform itself. At that point any single user faces big hurdles vs the developer. The likes of Adobe and others have repeatedly been able to force very user hostile choices on their customer base because their customers couldn't really coordinate collective action. One thing Apple offers is a way to buy into a collective action system against developers. For many people that's not a bug, that's a feature, so complaining about how developers are "hurt" or "make less money" isn't going to sway them one bit, quite the contrary. They're generally glad when Apple tells devs their way or the highway[Android/Linux/Mac/Windows]. Of course, this concentration of power also has negative implications too in terms of censorship, inability to do some very useful creative development and utilities, potential for major harm if/when Apple goes bad, etc. But too many on HN have refused to recognize the strengths and the reasons why it's been popular and to try to find ways to incorporate some or all of those while still allowing power users/misfits/hackers to push the envelope. I think our collective disdain for many regular non-tech users is part of why we've ended up in this mess in the first place.
ece 6y ago
No walled gardens should be beyond reproach IMO. I think Epic has it's work laid out for it, and they would definitely have a shot with a jury trial, and likely at the Supreme Court given Apple vs Pepper.
- shadowgovt 6y ago
  It's sometimes interesting to look at the history of walled gardens and how they came to be. Nintendo's console model, for example, was a direct reaction to previous failed no-walled-gardens models where consumer confidence that they weren't burning money buying a lemon console that only supported crappy games cracked.
  - ece 6y ago
    On phones, Symbian and Blackberry were about as open as Android is currently (though signing apps was partially required IIRC). iOS/iPhones has always been closed except for the web browser. I think there are completely valid cases for having a locked down phone, but it should be up to the user, not the device/OS maker. In this case, I don't think a phone developer can negotiate fair terms until the users have choice. Single purpose locked-down devices are all around us from ereaders to TV streaming boxes to game consoles, and here I think it's important to distinguish by purpose from the more general purpose of a phone.
    - shadowgovt 6y ago
      In the sense that nobody is obligated to buy an iPhone (and can jailbreak one after buying it, for that matter), it is up to the user. For the consumer, they have more choice if Android-style "app store but also side-loading," phones that lack an app store altogether, and iPhone-style walled garden coexist.
      - ece 6y ago
        If you have a company phone you have a different type of walled garden than even what the iPhone provides through some MDM layer. Apple could offer such a separate MDM-based consumer product and also allow side loading. Microsoft was forced to open up browsing/programming/AV APIs, on which future innovation was built. What Epic is asking for is no different IMO. I just don't think the benefits of multiple open platforms can be understated similar to Windows vs. Linux over the last twenty years.
jbverschoor 6y ago
Rogers that, the makers of Fortnite were not Forthright. That's an Epic wordplay of the judge.
crazygringo 6y ago
IIRC, the 30% was chosen so Apple would roughly break even on credit card processing for $1 apps. So Apple effectively only gets revenue from apps $2+, which then subsidizes the costs of reviewing and distributing the plethora of apps that are free. In a way, it's a similar principle to progressive taxation. If your paid app is a hit on the App Store, then it's helping support the existence of all the free ones too.
- addicted 6y ago
  That’s some BS argument people came up with in the beginning g because they saw thst 30% was similar to the credit card processing fees you’d find. Apple isn’t paying 30c + 2.9% i.e. 33c that someone with no experience ever can get on opening a Shopify store.
  - AlphaSite 6y ago
    They do more than payment processing on the App Store. So it’s possible they approximately break even on 99c apps. And every free app is a loss.
jariel 6y ago
"Why not 30%? Why not 40%? " How ridiculous. A) It's not the margins, it's the lock-in. B) Why didn't the Judge ask what kind of 'margin' Apple or MS gets for desktop versions of their apps? Because it's not 30%. C) Asking 'when did Apple become a monopoly because they were not 15 years ago' is irrelevant: when did Standard Oil become a monopoly? AT&T? Certainly not the day they started out. These issues are shades of grey. I'm tired of judges ruling on issues they don't understand, we need more expertise, just as they have in medicine. Perhaps the most fundamental issue here with respect to 'Nintendo' comparisons - is that Gaming Consoles are purchased for Playing Games. That's it. All market participants know the stakes. A mobile phone is an entry point to every line of business imaginable - it's a very broad platform and Apple has tried to take cuts of incidental businesses for all sorts of things. The analogue would be AT&T charging you for 'every kind of business you did over your phone'. Or Verizon charing you 30% for 'any kind of business you do over the internet'. Or the electricity company for 'anything you use electricity for'. Apple is leveraging the broader terms of mobile access: voice, browser, basic apps, which gives them a duopoly over mobile devices with Apple - into a crazy monopoly over their own platform. Many markets are not rational in the way we would like them to be and have to be regulated, this is very common with single points of access: phone, water, electricity, energy, drugs, hospitals. This looks like a prime opportunity for some creative and thoughtful regulatory response.
- qeternity 6y ago
  > A) It's not the margins, it's the lock-in. What lock in? Nobody is forcing Epic to develop for iOS and Fortnight is available on pretty much every other platform. It's literally the antithesis of lock in, no matter how much you dislike Apple or its perceived unjust influence.
- GavinMcG 6y ago
  Standard Oil came into a market and controlled an increasing proportion of it. On Epic's own terms, that's not what Apple did. There never was a market for iOS apps that Apple took over. That means the best argument actually is that they became a monopoly on day one, but you dismiss that for some reason.
rbecker 6y ago
> the judge pointed out that the 30 percent rate that Apple collects is the "industry rate" collected by PlayStation, Xbox, Nintendo, Amazon, Walmart, Best Buy, Google, and more. "It's all 30 percent and you just want to gloss over it," the judge said to Epic's lawyers. Justifying lax antitrust with the fact that other, similar market-power abuses, have also been permitted in the current lax antitrust atmosphere... as close to circular logic as it gets.
- jpttsn 6y ago
  So you think Apple is abusing its extraordinary monopoly power by... charging what everyone else is charging? I think legally it makes a pretty big difference: abusing a monopoly is considered a social bad because and to the extent that it results in higher prices for consumers.
  - Jare 6y ago
    > So you think Apple is abusing its extraordinary monopoly power by... charging what everyone else is charging? By not allowing anyone to charge differently on iDevices.
    - jpttsn 6y ago
      If they had a monopoly, they should do better than 30% though? Chums like Google who don’t have the monopoly charge 30%. Hell, Twitch takes 50%, right? If Apple is the only game in town they should charge like 99%. Developers have no choice, right?
  - rbecker 6y ago
    > charging what everyone else is charging? "Everyone else" being other middle-men with enormous market power? > higher prices for consumers. Monopoly and market power can also kill companies that "should have" prospered, depriving consumers of choice. Like the supermarket that gives preferential treatment to products owned by the same conglomerate, or the search giant that prioritizes its own services [1]. I would consider that a social bad as well. [1] https://news.ycombinator.com/item?id=24633387 https://news.ycombinator.com/item?id=24633387
ekanes 6y ago
It's not illegal to be a monopoly. What's illegal is taking advantage of your monopoly position. Microsoft was a monopoly? That was fine. Microsoft forced people towards Internet Explorer? Trouble.
- Thorentis 6y ago
  Yes but the 30% cut (which is supposedly taking advantage of their monopoly) existed from the very beginning. They didn't eventually become a monopoly and then up prices to extort money from developers. From the very start they charged 30%, and despite of that fee, they still gained a huge market share. I would argue that because they were able to gain a monopoly without changing their fees, that the fees are not taking advantage of monopoly whatsoever.
  - ngcc_hk 6y ago
    It is not a monopoly. You are spinned. The answer is key. Can’t be monopoly like this legally. Otherwise you may be charged of monopoly of selling coffee in your backyard as only you can do it. Not just that, to be honest Apple App do not spill over even. You do not need to run in Apple store unlike in 1990 you basically have to run windows.
  - username90 6y ago
    The people who choose iPhones don't know that they pay almost 50% extra per purchase since Apple doesn't allow apps to show it.
    - leadingthenet 6y ago
      How did you get the 50% figure? And an extra compared to what exactly? The fee is identical on the Play Store.
      - RandomBacon 6y ago
        username90 probably just used math: Example: $2 in other app store, $3 in Apple app store. Subtract 30% from $3 ≈ $2. $3 is 50% more than $2.
Ancapistani 6y ago
> I don't remember where I read this but someone mentioned that the judge asked Apple why they charge 30%, which I found to be a bit of a strange thing to ask (and probably a bit of a softball). Why not 30%? Why not 40%? Why do companies have margins that they set that the market will bear at all? Etc. Presumably, if they’d said “because that’s what Google is/was charging”, it could be pursued as price fixing.
- jkaplowitz 6y ago
  > Presumably, if they’d said “because that’s what Google is/was charging”, it could be pursued as price fixing. That's not price fixing if they make the decision to match Google on their own, rather than in concert with Google.
  - sjwright 6y ago
    If Apple chose to match the existing industry standard percentage but has not fixed any prices, is that price-fixing?
    - jkaplowitz 6y ago
      Not without coordination with other vendors, no.
- pneill 6y ago
  The number probably came from looking at what brick and mortar stores do. Typically stores "mark up" products by 40% from their distributors. And if you think about it, that's effectively what Apple does, but in this case, the distributor (aka app developer) has to "mark-up" the price to cover the cost incurred by selling in the app store. In general this practice is pretty common in retail.
lukebuehler 6y ago
Correct me if I'm wrong, but did not Apple create the first app store and then set it, perhaps somewhat arbitrarily, to 30%? After that, all others simply followed suit and set their cut to 30% too? If so, I would argue that it's high time to revisit the 30% charge. Whatever happened, competition among platforms did not reduce the 30% fee. I'm not sure why, but even if we cannot prove that there was price fixing, the Apple app store and other platforms have become so powerful that individuals and small companies cannot negotiate with any of the stores for a fair price.
- ceejayoz 6y ago
  > Correct me if I'm wrong, but did not Apple create the first app store... Steam, at least, has it beat, in 2005: https://en.wikipedia.org/wiki/Rag_Doll_Kung_Fu https://en.wikipedia.org/wiki/Rag_Doll_Kung_Fu I'm fairly certain there were apps available for purchase on Nokia and other phones well before that, as well. App Store didn't come until 2008.
  - toyg 6y ago
    The revenue model was very different for Nokia software, carriers were involved and revenue distribution was somewhat byzantine, if i remember correctly. One of the reasons developers jumped on the AppStore was that it simplified things pretty dramatically from the previous status-quo: they only had to deal with Apple. One of the reasons Nokia struggled to relaunch was that they couldn’t wiggle themselves out of these relationships with carriers, this albatross around their neck. In that sense, the AppStore was undoubtedly a step forward. That doesn’t mean it’s an eternally-perfect solution. Like in many other issues involving Apple, what looked like a positive change in immediately-pragmatic terms ended up being a faustian bargain in the long run. Maybe we should just discuss this in terms of “10+ years have passed, things have changed, what was good before might be bad today”. Stuff like the single non-negotiable browser engine was a curiosity and a small impediment 13 years ago, but now it’s a real threat to the health of the web ecosystem. Same for the single-appstore model, which effectively enables a rent-seeking cartel (Apple and Google) which any serious antitrust scholar should find abhorrent.
- 6y ago
ponker 6y ago
The fact that there even is an "industry rate" is evidence of price fixing, if not by the legal definition (which may require explicit collusion) then by the layperson's definition.

actuator 6y ago

> > Epic Games continued to argue that Apple has an App Store monopoly and charges excessive fees, but the judge pointed out that the 30 percent rate that Apple collects is the "industry rate" collected by PlayStation, Xbox, Nintendo, Amazon, Walmart, Best Buy, Google, and more. "It's all 30 percent and you just want to gloss over it," the judge said to Epic's lawyers. She also glossed over the fact that software can be distributed free with its own payment systems in laptop/desktop OSs like Windows, OS X, Ubuntu etc. When I paid for Sublime I didn't go into an App Store to pay for it. Smartphone/tablet OSs are logical successors to the laptop/desktop OSs we have not game consoles. They are general purpose computing platforms.

JumpCrisscross 6y ago
Based on existing law, why is the laptop/desktop model inherently superior to the game console model?
- actuator 6y ago
  > Based on existing law, why is the laptop/desktop model inherently superior to the game console model? Superior for developers because their margins improve. For low margin ones like Spotify that is make or break, especially when you take into account that they are fighting with preinstalled and OS promoted incumbents in both the platforms like Apple Music which are not subjected to the same.
  - Spivak 6y ago
    Your example seems particularly weird to me since Spotify's business is having extremely broad hardware support. They set up shop on everyone's platform. I'm sure desktop/laptop listening is a sizable chunk of their use but it's probably dwarfed by all the cars, phones, smart speakers, TVs.
  - xoa 6y ago
    >Superior for developers because their margins improve. First, this is debatable itself, walled gardens bring their own advantages for developers too. But second, why exactly should developers be the primary concern? There are three parties involved after all: the platform creator/maintainer, the developers, and the users. Why should users not have the choice to essentially collaborate with the platform creator to promote their interests, even at the expense of the developers? I mean, I know this is HN, and a lot of us wear developer hats. But we tend to wear user hats too, and even in many cases family (or business) support hats. Switching to one of those, developers on open platforms are often jackasses and can develop their own power imbalance vs users. Sometimes (often even!) a single particular piece software can become so vital and represent so much investment that it's much harder to substitute than even the platform itself. At that point any single user faces big hurdles vs the developer. The likes of Adobe and others have repeatedly been able to force very user hostile choices on their customer base because their customers couldn't really coordinate collective action. One thing Apple offers is a way to buy into a collective action system against developers. For many people that's not a bug, that's a feature, so complaining about how developers are "hurt" or "make less money" isn't going to sway them one bit, quite the contrary. They're generally glad when Apple tells devs their way or the highway[Android/Linux/Mac/Windows]. Of course, this concentration of power also has negative implications too in terms of censorship, inability to do some very useful creative development and utilities, potential for major harm if/when Apple goes bad, etc. But too many on HN have refused to recognize the strengths and the reasons why it's been popular and to try to find ways to incorporate some or all of those while still allowing power users/misfits/hackers to push the envelope. I think our collective disdain for many regular non-tech users is part of why we've ended up in this mess in the first place.

ece 6y ago

No walled gardens should be beyond reproach IMO. I think Epic has it's work laid out for it, and they would definitely have a shot with a jury trial, and likely at the Supreme Court given Apple vs Pepper.

shadowgovt 6y ago
It's sometimes interesting to look at the history of walled gardens and how they came to be. Nintendo's console model, for example, was a direct reaction to previous failed no-walled-gardens models where consumer confidence that they weren't burning money buying a lemon console that only supported crappy games cracked.
- ece 6y ago
  On phones, Symbian and Blackberry were about as open as Android is currently (though signing apps was partially required IIRC). iOS/iPhones has always been closed except for the web browser. I think there are completely valid cases for having a locked down phone, but it should be up to the user, not the device/OS maker. In this case, I don't think a phone developer can negotiate fair terms until the users have choice. Single purpose locked-down devices are all around us from ereaders to TV streaming boxes to game consoles, and here I think it's important to distinguish by purpose from the more general purpose of a phone.
  - shadowgovt 6y ago
    In the sense that nobody is obligated to buy an iPhone (and can jailbreak one after buying it, for that matter), it is up to the user. For the consumer, they have more choice if Android-style "app store but also side-loading," phones that lack an app store altogether, and iPhone-style walled garden coexist.
    - ece 6y ago
      If you have a company phone you have a different type of walled garden than even what the iPhone provides through some MDM layer. Apple could offer such a separate MDM-based consumer product and also allow side loading. Microsoft was forced to open up browsing/programming/AV APIs, on which future innovation was built. What Epic is asking for is no different IMO. I just don't think the benefits of multiple open platforms can be understated similar to Windows vs. Linux over the last twenty years.

jbverschoor 6y ago

Rogers that, the makers of Fortnite were not Forthright. That's an Epic wordplay of the judge.

crazygringo 6y ago

IIRC, the 30% was chosen so Apple would roughly break even on credit card processing for $1 apps. So Apple effectively only gets revenue from apps $2+, which then subsidizes the costs of reviewing and distributing the plethora of apps that are free. In a way, it's a similar principle to progressive taxation. If your paid app is a hit on the App Store, then it's helping support the existence of all the free ones too.

addicted 6y ago
That’s some BS argument people came up with in the beginning g because they saw thst 30% was similar to the credit card processing fees you’d find. Apple isn’t paying 30c + 2.9% i.e. 33c that someone with no experience ever can get on opening a Shopify store.
- AlphaSite 6y ago
  They do more than payment processing on the App Store. So it’s possible they approximately break even on 99c apps. And every free app is a loss.

jariel 6y ago

"Why not 30%? Why not 40%? " How ridiculous. A) It's not the margins, it's the lock-in. B) Why didn't the Judge ask what kind of 'margin' Apple or MS gets for desktop versions of their apps? Because it's not 30%. C) Asking 'when did Apple become a monopoly because they were not 15 years ago' is irrelevant: when did Standard Oil become a monopoly? AT&T? Certainly not the day they started out. These issues are shades of grey. I'm tired of judges ruling on issues they don't understand, we need more expertise, just as they have in medicine. Perhaps the most fundamental issue here with respect to 'Nintendo' comparisons - is that Gaming Consoles are purchased for Playing Games. That's it. All market participants know the stakes. A mobile phone is an entry point to every line of business imaginable - it's a very broad platform and Apple has tried to take cuts of incidental businesses for all sorts of things. The analogue would be AT&T charging you for 'every kind of business you did over your phone'. Or Verizon charing you 30% for 'any kind of business you do over the internet'. Or the electricity company for 'anything you use electricity for'. Apple is leveraging the broader terms of mobile access: voice, browser, basic apps, which gives them a duopoly over mobile devices with Apple - into a crazy monopoly over their own platform. Many markets are not rational in the way we would like them to be and have to be regulated, this is very common with single points of access: phone, water, electricity, energy, drugs, hospitals. This looks like a prime opportunity for some creative and thoughtful regulatory response.

qeternity 6y ago
> A) It's not the margins, it's the lock-in. What lock in? Nobody is forcing Epic to develop for iOS and Fortnight is available on pretty much every other platform. It's literally the antithesis of lock in, no matter how much you dislike Apple or its perceived unjust influence.
GavinMcG 6y ago
Standard Oil came into a market and controlled an increasing proportion of it. On Epic's own terms, that's not what Apple did. There never was a market for iOS apps that Apple took over. That means the best argument actually is that they became a monopoly on day one, but you dismiss that for some reason.

rbecker 6y ago

> the judge pointed out that the 30 percent rate that Apple collects is the "industry rate" collected by PlayStation, Xbox, Nintendo, Amazon, Walmart, Best Buy, Google, and more. "It's all 30 percent and you just want to gloss over it," the judge said to Epic's lawyers. Justifying lax antitrust with the fact that other, similar market-power abuses, have also been permitted in the current lax antitrust atmosphere... as close to circular logic as it gets.

jpttsn 6y ago
So you think Apple is abusing its extraordinary monopoly power by... charging what everyone else is charging? I think legally it makes a pretty big difference: abusing a monopoly is considered a social bad because and to the extent that it results in higher prices for consumers.
- Jare 6y ago
  > So you think Apple is abusing its extraordinary monopoly power by... charging what everyone else is charging? By not allowing anyone to charge differently on iDevices.
  - jpttsn 6y ago
    If they had a monopoly, they should do better than 30% though? Chums like Google who don’t have the monopoly charge 30%. Hell, Twitch takes 50%, right? If Apple is the only game in town they should charge like 99%. Developers have no choice, right?
- rbecker 6y ago
  > charging what everyone else is charging? "Everyone else" being other middle-men with enormous market power? > higher prices for consumers. Monopoly and market power can also kill companies that "should have" prospered, depriving consumers of choice. Like the supermarket that gives preferential treatment to products owned by the same conglomerate, or the search giant that prioritizes its own services [1]. I would consider that a social bad as well. [1] https://news.ycombinator.com/item?id=24633387 https://news.ycombinator.com/item?id=24633387

ekanes 6y ago

It's not illegal to be a monopoly. What's illegal is taking advantage of your monopoly position. Microsoft was a monopoly? That was fine. Microsoft forced people towards Internet Explorer? Trouble.

Thorentis 6y ago
Yes but the 30% cut (which is supposedly taking advantage of their monopoly) existed from the very beginning. They didn't eventually become a monopoly and then up prices to extort money from developers. From the very start they charged 30%, and despite of that fee, they still gained a huge market share. I would argue that because they were able to gain a monopoly without changing their fees, that the fees are not taking advantage of monopoly whatsoever.
- ngcc_hk 6y ago
  It is not a monopoly. You are spinned. The answer is key. Can’t be monopoly like this legally. Otherwise you may be charged of monopoly of selling coffee in your backyard as only you can do it. Not just that, to be honest Apple App do not spill over even. You do not need to run in Apple store unlike in 1990 you basically have to run windows.
- username90 6y ago
  The people who choose iPhones don't know that they pay almost 50% extra per purchase since Apple doesn't allow apps to show it.
  - leadingthenet 6y ago
    How did you get the 50% figure? And an extra compared to what exactly? The fee is identical on the Play Store.
    - RandomBacon 6y ago
      username90 probably just used math: Example: $2 in other app store, $3 in Apple app store. Subtract 30% from $3 ≈ $2. $3 is 50% more than $2.

Ancapistani 6y ago

> I don't remember where I read this but someone mentioned that the judge asked Apple why they charge 30%, which I found to be a bit of a strange thing to ask (and probably a bit of a softball). Why not 30%? Why not 40%? Why do companies have margins that they set that the market will bear at all? Etc. Presumably, if they’d said “because that’s what Google is/was charging”, it could be pursued as price fixing.

jkaplowitz 6y ago
> Presumably, if they’d said “because that’s what Google is/was charging”, it could be pursued as price fixing. That's not price fixing if they make the decision to match Google on their own, rather than in concert with Google.
- sjwright 6y ago
  If Apple chose to match the existing industry standard percentage but has not fixed any prices, is that price-fixing?
  - jkaplowitz 6y ago
    Not without coordination with other vendors, no.
pneill 6y ago
The number probably came from looking at what brick and mortar stores do. Typically stores "mark up" products by 40% from their distributors. And if you think about it, that's effectively what Apple does, but in this case, the distributor (aka app developer) has to "mark-up" the price to cover the cost incurred by selling in the app store. In general this practice is pretty common in retail.

lukebuehler 6y ago

Correct me if I'm wrong, but did not Apple create the first app store and then set it, perhaps somewhat arbitrarily, to 30%? After that, all others simply followed suit and set their cut to 30% too? If so, I would argue that it's high time to revisit the 30% charge. Whatever happened, competition among platforms did not reduce the 30% fee. I'm not sure why, but even if we cannot prove that there was price fixing, the Apple app store and other platforms have become so powerful that individuals and small companies cannot negotiate with any of the stores for a fair price.

ceejayoz 6y ago
> Correct me if I'm wrong, but did not Apple create the first app store... Steam, at least, has it beat, in 2005: https://en.wikipedia.org/wiki/Rag_Doll_Kung_Fu https://en.wikipedia.org/wiki/Rag_Doll_Kung_Fu I'm fairly certain there were apps available for purchase on Nokia and other phones well before that, as well. App Store didn't come until 2008.
- toyg 6y ago
  The revenue model was very different for Nokia software, carriers were involved and revenue distribution was somewhat byzantine, if i remember correctly. One of the reasons developers jumped on the AppStore was that it simplified things pretty dramatically from the previous status-quo: they only had to deal with Apple. One of the reasons Nokia struggled to relaunch was that they couldn’t wiggle themselves out of these relationships with carriers, this albatross around their neck. In that sense, the AppStore was undoubtedly a step forward. That doesn’t mean it’s an eternally-perfect solution. Like in many other issues involving Apple, what looked like a positive change in immediately-pragmatic terms ended up being a faustian bargain in the long run. Maybe we should just discuss this in terms of “10+ years have passed, things have changed, what was good before might be bad today”. Stuff like the single non-negotiable browser engine was a curiosity and a small impediment 13 years ago, but now it’s a real threat to the health of the web ecosystem. Same for the single-appstore model, which effectively enables a rent-seeking cartel (Apple and Google) which any serious antitrust scholar should find abhorrent.
6y ago

ponker 6y ago

The fact that there even is an "industry rate" is evidence of price fixing, if not by the legal definition (which may require explicit collusion) then by the layperson's definition.