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> This is either ignorance or delusion. Brick and mortar stores take a lot more of a cut than that This is a completely false equivalence, for two reasons. A)

> This is either ignorance or delusion. Brick and mortar stores take a lot more of a cut than that This is a completely false equivalence, for two reasons. A) stores have very limited shelf space they need to allocate. They also carry the cost of logistics, keeping inventory and the risk of bad sales. The cost to app stores for reviews and distribution in comparison is tiny per unit and easily scalable. The only context where this could apply is highlighting of apps, but that is handled via separate advertisement. B) The high fees do not apply only to app sales but also to in-app transactions. This is where the cost is truly ridiculous and can be called extortion. Credit card companies, for comparison, charge a few percent. The EU has even limited the maximum interbank exchange fees to 0.2% in 2014. Visa and Mastercard seem to be doing just fine with that cut... (there are additional fees, but it still only a mounts to a few percent) The equivalence would be Walmart getting 30% for every in-game transaction for games that were bought at Walmart. On Android you can at least use other payment providers, but on Apple you have to use Apple Pay. > No. For one, Android and the Google Play Store are not a monopoly. Android doesn't even have a majority market share in the US. They are a duopoly. Many concerns that are relevant for monopolies apply to duo or oligopolies as well. The companies split up the market and arrive at a comfortable equilibrium where they can milk the customers. They might squabble for market share, but they also coordinate (directly or indirectly) to not hurt each other too much. This can be seen in the matching of the cut they take. The only reason the stores get away with their pricing is because there is no practical alternative for the average consumer for Android, and no alternative at all for iOS. The Google/Apple situation is indeed a classic economy textbook duopoly. Calling something "ignorance or delusion" is quite a strong statement with such shallow insight.

tzs 5y ago
> Credit card companies, for comparison, charge a few percent. The EU has even limited the maximum interbank exchange fees to 0.2% in 2014. There are fees other than those to processes a credit card payment. Each card brand has its own assorted assessment fees. Some are percentage based and some are pre transaction. Your payment processor also has fees, typically per transaction. For small transaction, such as a $1 app or song purchase, those fixed fees bring the processing cost to a lot more than 0.2%.
Cu3PO42 5y ago
While I largely agree with your points, your comparison to MC/Visa isn't sensible. The EU has limited the interchange fee to 0.2% for debit cards and 0.3% for credit cards, but that goes to the card issuing bank anyway. MC/Visa charge scheme fees which were not capped in such a way.
berkes 5y ago
> This can be seen in the matching of the cut they take. This is crucial: any efficient market would have them compete on price. Google lowers the fee to 25%, developers move over to Google, so Apple has to follow and lower the fee to 20%. untill we reach the price-point that just about matches the costs made. Unless you can argue that this 30% is exactly that lowest price-point: just about covering the hosting, staff and some risk, there is the proof that a monopoly is distorting this efficient market. Proving that the current price is exactly that price-point is probably impossible; we might feel it is far from the actual costs, but we cannot prove it, which is probably one of the reasons this cannot be given as hard proof for a duo/monopoly.

tzs 5y ago

> Credit card companies, for comparison, charge a few percent. The EU has even limited the maximum interbank exchange fees to 0.2% in 2014. There are fees other than those to processes a credit card payment. Each card brand has its own assorted assessment fees. Some are percentage based and some are pre transaction. Your payment processor also has fees, typically per transaction. For small transaction, such as a $1 app or song purchase, those fixed fees bring the processing cost to a lot more than 0.2%.

Cu3PO42 5y ago

While I largely agree with your points, your comparison to MC/Visa isn't sensible. The EU has limited the interchange fee to 0.2% for debit cards and 0.3% for credit cards, but that goes to the card issuing bank anyway. MC/Visa charge scheme fees which were not capped in such a way.

berkes 5y ago

> This can be seen in the matching of the cut they take. This is crucial: any efficient market would have them compete on price. Google lowers the fee to 25%, developers move over to Google, so Apple has to follow and lower the fee to 20%. untill we reach the price-point that just about matches the costs made. Unless you can argue that this 30% is exactly that lowest price-point: just about covering the hosting, staff and some risk, there is the proof that a monopoly is distorting this efficient market. Proving that the current price is exactly that price-point is probably impossible; we might feel it is far from the actual costs, but we cannot prove it, which is probably one of the reasons this cannot be given as hard proof for a duo/monopoly.