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Your argument applies equally well to payment processors (Visa, Mastercard, Stripe, etc.) and, as a society, we seem to be okay with them just taking ~2% of Rev

Your argument applies equally well to payment processors (Visa, Mastercard, Stripe, etc.) and, as a society, we seem to be okay with them just taking ~2% of Revenue despite their underlying costs (largely) being a flat fee. I'm not saying it's okay, simply that there's precedent fairly ingrained in our economy.

ocdtrekkie 5y ago
I'd argue that their cost scales to the price paid because credit card processors are taking on the liability for those transactions. Additionally, a 2% fee is nearly inconsequential. If Mastercard and Visa demanded 30%, there would be literal riots.
- dhdhhdd 5y ago
  And yet interchange rates in Europe are capped at around 0.2%. 2% is still a lot of money.
  - ocdtrekkie 5y ago
    It does stack up, but if the cost was too high, many businesses wouldn't work with the credit processors. Amex is an example of this. There's payment options that avoid this retailers could incentivize. And Apple and Google charge 15 times that because there's no way around them.
nolok 5y ago
But that's not a 1:1 comparison because you are not forced to use them, you're free to go to another one, or not take them and use checks or cash or bitcoin or whatever you want. If Apple was not making it mandatory to go through them, it would be another story from my point of view. Note that payment processor fees are massively regulated in the EU as well, with very low limits. So by that precedent the EU coming and saying "30% is way too much" wouldn't be out of nowhere.
- Evan__ 5y ago
  You’re “not forced to use them” in exactly the same way you’re not forced to use Apple.
  - nolok 5y ago
    That will be a crucial point of the ruling to come yes, as the full version is "You're not forced to use them to sell on the market", and it depends on what you define as "the market". If you consider selling apps to ios devices to be its own market, then yes you are forced to use Apple. If you don't consider that to be its own market but only a part of the actual "phones and tablets apps" market then no you are not forced to use Apple. I believe because of the size of their userbase that apps for ios devices are a market on their own, therefore "you are forced to use Apple" applies. Here the EU seems to agree.
  - tolmasky 5y ago
    There's a fairly big difference between a duopoly, which, for the record, major government services rely on (if you want the COVID tracking app its either iOS or Android, if you want an app that your senator will use, you probably have to make it for iOS, etc.), and services that you can actually wholesale replace in your product like a payment processor. Not to mention certain school courses that are taught with iOS, etc. Apple has worked very hard to position themselves as one of the only players in the space, and they've succeeded! There is certainly an argument that the duopoly situation is fine, but it is in absolutely no way the "exact same" as with Apple and the AppStore.
    - paulmd 5y ago
      Consoles are also effectively a duopoly, and yet Microsoft has argued that they should be allowed to keep third-party app stores off the Xbox while also signing on to the lawsuit to try and force Apple to open up their own.
      - tolmasky 5y ago
        I feel like you stopped reading my comment as soon as you hit the word "duopoly". Look at the specific reasons I gave why phone AppStores are different: they are increasingly necessary for everyday life. COVID-tracking, political interaction, school courses, paying for parking, etc. etc. The day XBox becomes one of the few ways to do these things, and not primarily a means to play video games, then it would be appropriate for the calculus to change there too. You can bring up Keurig coffee cups too, but the implications just aren't the same.
hervature 5y ago
Wouldn’t it be nice if banks charged a fixed fee for a loan no matter the size? Visa/MasterCard/etc are not comparable here because they are financing transactions which do have percentage based mechanisms such as % of fraud or % charged back.
- skeptical_dog 5y ago
  The cost to the issuer is proportional to the size of the purchase in the case of credit default or fraud. So a fixed fee does not make sense for loans. This isn't the case for the App Store. BTW, Visa/MasterCard don't manage risk afaik -- the card issuing banks do that. Visa just connects the pos terminal etc to the right bank.
  - hervature 5y ago
    That's exactly what I'm saying. I'm responding to someone who said that we as a society have accepted % of revenue based charging BECAUSE Visa et al. have models like that. I'm pointing it out that they have % of revenue models because their costs are directly tied to revenue. I'm not even going to get into cash back and points and international transactions which are one-to-one relationships with how much is being charged, but do you really think the banks pay for the privilege of being part of Visa? No, Visa has costs at least somewhat proportional to the volume going through that bank.
- xwolfi 5y ago
  Banks and loan are not a good comparison since you ll most likely understand a million euros loan will be harder to produce for the bank than a 1000 one. Taking a percent is fine. Tbh it would be fine if Apple charged per bandwidth usage. But taking 50 or 500 euros in wont change how much it cost them to deliver the app.
  - hervature 5y ago
    That was entirely my point. I was responding to a comment that says we have precedent in accepting % revenue models because Visa has one. I'm pointing out to them that in finance, percentage of dollar amount is normal and orthogonal to the App Store model.
Someone 5y ago
In the USA. The EU forced them to take a smaller cut (https://en.wikipedia.org/wiki/Interchange_fee#European_Union https://en.wikipedia.org/wiki/Interchange_fee#European_Union)
zajio1am 5y ago
EU alredy regulated interchange fees for cards to 0.2% for debit cards and 0.3% for credit cards: https://ec.europa.eu/commission/presscorner/detail/lt/IP_15_4585 https://ec.europa.eu/commission/presscorner/detail/lt/IP_15_...
- Twixes 5y ago
  Yep, its great because I never feel bad about paying for tiny things by card. I remember how before this regulation the card companies were extracting so much profit (with a minimum fee) that it was often expensive for a convenience store to accept cards. Some had lower bounds of what you could pay by card, to keep the fees at a manageable level. Now it's not a problem, contactless payments are everywhere and for everything due to slim fees. The only downside is that credit card rewards are modest compared to the US

ocdtrekkie 5y ago

I'd argue that their cost scales to the price paid because credit card processors are taking on the liability for those transactions. Additionally, a 2% fee is nearly inconsequential. If Mastercard and Visa demanded 30%, there would be literal riots.

dhdhhdd 5y ago
And yet interchange rates in Europe are capped at around 0.2%. 2% is still a lot of money.
- ocdtrekkie 5y ago
  It does stack up, but if the cost was too high, many businesses wouldn't work with the credit processors. Amex is an example of this. There's payment options that avoid this retailers could incentivize. And Apple and Google charge 15 times that because there's no way around them.

nolok 5y ago

But that's not a 1:1 comparison because you are not forced to use them, you're free to go to another one, or not take them and use checks or cash or bitcoin or whatever you want. If Apple was not making it mandatory to go through them, it would be another story from my point of view. Note that payment processor fees are massively regulated in the EU as well, with very low limits. So by that precedent the EU coming and saying "30% is way too much" wouldn't be out of nowhere.

Evan__ 5y ago
You’re “not forced to use them” in exactly the same way you’re not forced to use Apple.
- nolok 5y ago
  That will be a crucial point of the ruling to come yes, as the full version is "You're not forced to use them to sell on the market", and it depends on what you define as "the market". If you consider selling apps to ios devices to be its own market, then yes you are forced to use Apple. If you don't consider that to be its own market but only a part of the actual "phones and tablets apps" market then no you are not forced to use Apple. I believe because of the size of their userbase that apps for ios devices are a market on their own, therefore "you are forced to use Apple" applies. Here the EU seems to agree.
- tolmasky 5y ago
  There's a fairly big difference between a duopoly, which, for the record, major government services rely on (if you want the COVID tracking app its either iOS or Android, if you want an app that your senator will use, you probably have to make it for iOS, etc.), and services that you can actually wholesale replace in your product like a payment processor. Not to mention certain school courses that are taught with iOS, etc. Apple has worked very hard to position themselves as one of the only players in the space, and they've succeeded! There is certainly an argument that the duopoly situation is fine, but it is in absolutely no way the "exact same" as with Apple and the AppStore.
  - paulmd 5y ago
    Consoles are also effectively a duopoly, and yet Microsoft has argued that they should be allowed to keep third-party app stores off the Xbox while also signing on to the lawsuit to try and force Apple to open up their own.
    - tolmasky 5y ago
      I feel like you stopped reading my comment as soon as you hit the word "duopoly". Look at the specific reasons I gave why phone AppStores are different: they are increasingly necessary for everyday life. COVID-tracking, political interaction, school courses, paying for parking, etc. etc. The day XBox becomes one of the few ways to do these things, and not primarily a means to play video games, then it would be appropriate for the calculus to change there too. You can bring up Keurig coffee cups too, but the implications just aren't the same.

hervature 5y ago

Wouldn’t it be nice if banks charged a fixed fee for a loan no matter the size? Visa/MasterCard/etc are not comparable here because they are financing transactions which do have percentage based mechanisms such as % of fraud or % charged back.

skeptical_dog 5y ago
The cost to the issuer is proportional to the size of the purchase in the case of credit default or fraud. So a fixed fee does not make sense for loans. This isn't the case for the App Store. BTW, Visa/MasterCard don't manage risk afaik -- the card issuing banks do that. Visa just connects the pos terminal etc to the right bank.
- hervature 5y ago
  That's exactly what I'm saying. I'm responding to someone who said that we as a society have accepted % of revenue based charging BECAUSE Visa et al. have models like that. I'm pointing it out that they have % of revenue models because their costs are directly tied to revenue. I'm not even going to get into cash back and points and international transactions which are one-to-one relationships with how much is being charged, but do you really think the banks pay for the privilege of being part of Visa? No, Visa has costs at least somewhat proportional to the volume going through that bank.
xwolfi 5y ago
Banks and loan are not a good comparison since you ll most likely understand a million euros loan will be harder to produce for the bank than a 1000 one. Taking a percent is fine. Tbh it would be fine if Apple charged per bandwidth usage. But taking 50 or 500 euros in wont change how much it cost them to deliver the app.
- hervature 5y ago
  That was entirely my point. I was responding to a comment that says we have precedent in accepting % revenue models because Visa has one. I'm pointing out to them that in finance, percentage of dollar amount is normal and orthogonal to the App Store model.

Someone 5y ago

In the USA. The EU forced them to take a smaller cut (https://en.wikipedia.org/wiki/Interchange_fee#European_Union https://en.wikipedia.org/wiki/Interchange_fee#European_Union)

zajio1am 5y ago

EU alredy regulated interchange fees for cards to 0.2% for debit cards and 0.3% for credit cards: https://ec.europa.eu/commission/presscorner/detail/lt/IP_15_4585 https://ec.europa.eu/commission/presscorner/detail/lt/IP_15_...

Twixes 5y ago
Yep, its great because I never feel bad about paying for tiny things by card. I remember how before this regulation the card companies were extracting so much profit (with a minimum fee) that it was often expensive for a convenience store to accept cards. Some had lower bounds of what you could pay by card, to keep the fees at a manageable level. Now it's not a problem, contactless payments are everywhere and for everything due to slim fees. The only downside is that credit card rewards are modest compared to the US