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1. I think they should support the ecosystem by selling phones. That would result in far fewer perverse incentives and market distortions compared to their appr

1. I think they should support the ecosystem by selling phones. That would result in far fewer perverse incentives and market distortions compared to their approach of taxing developers. 2. I don't think Google actually needs a 30%/15% cut to "support the Android ecosystem". I think they're charging way more than necessary, just because they can. (Same arguments for Apple.)

joshuamorton 6y ago
I won't argue with 2 (I don't think either of us can really say with certainty, and then there's the second layer of arguments about what is "necessary" in a profit situation) But for 1, this has some significant downsides to consumers. As it stands assuming most of the support comes from the android platform (ads and fees), you get price discrimination. The people who just want a phone to use the internet or stay connected or whatever don't have to subsidize people who do more. I generally think having power users subsidize non power users is an ethical form of price discrimination. Thoughts?
- kentonv 6y ago
  > I won't argue with 2 (I don't think either of us can really say with certainty, and then there's the second layer of arguments about what is "necessary" in a profit situation) Both Google and Apple have been stockpiling money for some time. Each company has over $100B of cash sitting in a bank account doing nothing, and the number increases every year. This suggests a market failure has taken place. In a competitive market, they would either be cutting prices or reinvesting profits into their product. In Google's case, Android is not their main business so it's admittedly a little harder to say whether Android specifically "needs" to take a 30% cut of app sales to sustain itself. But I don't believe for a second that Google chose that number based on any notion of "need", I believe they chose it because that's what Apple had already set as the standard. And when it comes to Apple, the iPhone is their core business, it is wildly profitable, and the evidence seems clear that they are not doing anything useful with the money (see above). So yeah, I do actually believe there's pretty clear evidence that these fees are just greed and not needed to subsidize anything about the platform. Whether or not such subsidization is ethical is a moot point.

joshuamorton 6y ago

I won't argue with 2 (I don't think either of us can really say with certainty, and then there's the second layer of arguments about what is "necessary" in a profit situation) But for 1, this has some significant downsides to consumers. As it stands assuming most of the support comes from the android platform (ads and fees), you get price discrimination. The people who just want a phone to use the internet or stay connected or whatever don't have to subsidize people who do more. I generally think having power users subsidize non power users is an ethical form of price discrimination. Thoughts?

kentonv 6y ago
> I won't argue with 2 (I don't think either of us can really say with certainty, and then there's the second layer of arguments about what is "necessary" in a profit situation) Both Google and Apple have been stockpiling money for some time. Each company has over $100B of cash sitting in a bank account doing nothing, and the number increases every year. This suggests a market failure has taken place. In a competitive market, they would either be cutting prices or reinvesting profits into their product. In Google's case, Android is not their main business so it's admittedly a little harder to say whether Android specifically "needs" to take a 30% cut of app sales to sustain itself. But I don't believe for a second that Google chose that number based on any notion of "need", I believe they chose it because that's what Apple had already set as the standard. And when it comes to Apple, the iPhone is their core business, it is wildly profitable, and the evidence seems clear that they are not doing anything useful with the money (see above). So yeah, I do actually believe there's pretty clear evidence that these fees are just greed and not needed to subsidize anything about the platform. Whether or not such subsidization is ethical is a moot point.