11 ms·

Epic vs. Apple injunction doesn't allow for alternative in-app payment mechanism

154 points by GeekyBear 5y ago

GeekyBear 5y ago
If you're willing to wade through a very long YouTube video, HoagLaw offers a two and a half hour summary of the 185 page judgement: https://www.youtube.com/watch?v=43CMV8KIs3E https://www.youtube.com/watch?v=43CMV8KIs3E
- simondotau 5y ago
  Fortunately his clear and articulate voice lends well to higher speed playback. A useful tip for YouTube (on a desktop computer) are the keyboard shortcuts shift-period and shift-comma for speeding up and slowing down playback, respectively.
jjcon 5y ago
The author makes quite a few leaps in logic that I am unable to follow. Maybe they are right but their reading of the judgement is contrary to how most in and out of the media are reading it and I’d expect a clearer explanation than this.
- syspec 5y ago
  Most of the media has gotten it wrong, which is why epic is appealing the decision. The judge ruled 9/10 claims in apples favor
  - jjcon 5y ago
    It is that 1/10 that is in question by this article. My point is, if everyone else has it wrong they at least need to explain their reasoning, this article didn’t logically flow at least in my mind.
    - gjsman-1000 5y ago
      Apple is not appealing.
      - RobotCaleb 5y ago
        I agree but I'm not sure which way you meant
        GeekyBear 5y ago
        The only part of the ruling that Apple lost is over a point they had previously conceded to settle the Japanese antitrust investigation. >SAN FRANCISCO/TOKYO, Sept 2 (Reuters) - Apple Inc (AAPL.O) will let some apps like Netflix Inc (NFLX.O) provide links to their websites for user payments, a small concession that would allow app developers to bypass the controversial 30% App Store fee the iPhone maker charges. https://www.reuters.com/technology/apple-says-japan-fair-trade-commission-closes-app-store-investigation-2021-09-02/ https://www.reuters.com/technology/apple-says-japan-fair-tra... They might want to challenge the notion that a California law can be used to force a change in the way you do business in other states, but that's about it.
    - martimarkov 5y ago
      Which part specifically are you not understanding? I had some issues understanding it all as well but by the 3rd time I read through it - I think I got the logic.
- mruszczyk 5y ago
  The media is likely reporting incorrectly here. Apple has come out and stated that they view the judgement as a major win for their side and Epic has come out and said they intend to appeal. The cliff notes I've seen on why are that Apple is legally not a monopoly, does not have to provide an alternative payment processor 'in-app' and may still legally charge a commission fee on each purchase, even if completed through an external payment processor.
  - jjcon 5y ago
    Apple has never been known to admit defeat. One can hardly go by their reactions as a barometer of how the case went.
    - gjsman-1000 5y ago
      Apple has not announced any intent to appeal.
- kelnos 5y ago
  It seems like the media outlets are reporting solely on the one-page injunction, and have ignored the 185-page post-trial order that appears to clearly spell out how wrong the media is here. It's also telling that Apple's official stance on this is that they've won[0], and Epic's is that they're disappointed and will appeal. Apple would not be so happy about this if they had to allow other in-app payment systems and forego their 30% cut. And if they did, Epic would be a lot happier about this ruling, and might even just call it a win right here. [0] The one concession that Apple must make under this injunction -- allowing app developers to link to information about alternative payment methods on other platforms -- is a concession they are already making due to a recent ruling in a Japanese antitrust case[1]. [1] https://www.reuters.com/technology/apple-says-japan-fair-trade-commission-closes-app-store-investigation-2021-09-02/ https://www.reuters.com/technology/apple-says-japan-fair-tra...
  - ec109685 5y ago
    Japanese ruling only affects Reading apps.
xigency 5y ago
And what if the payment is outside of the app through Safari? And then takes the user back to the app?
- stirlo 5y ago
  Or just loads a in app web view on the payment screen that 99% of users don’t even notice
  - Fogest 5y ago
    Isn't that how Epic essentially did it when they server side added their own payment option in the Fortnite app? That is what led to them being removed.
    - IshKebab 5y ago
      That was before this injunction.
  - kelnos 5y ago
    Since the ruling concludes that Apple would still be entitled to a 30% cut in that case (just it's harder for Apple to collect), I imagine Apple could reject that app update on the grounds that the developer hasn't added provisions to track purchases made in that manner so they can later pony up to Apple.
- GeekyBear 5y ago
  The HoagLaw video covers this in the first ten minutes. From the Judge's ruling: >Even in the absence of IAP, Apple could still charge a commission on developers. It would simply be more difficult for Apple to collect that commission. So, Hollywood math could find a new venue?
  - simondotau 5y ago
    Possibly. Though it's basically the same math that game developers have used since forever to calculate Epic's royalties for Unreal Engine. Or to calculate license fees for physical copies of PlayStation video games.
gjsman-1000 5y ago
More crazy, in the actual ruling, the judge states that even if developers use a different payment system than IAP, Apple is still entitled to the 30% commission and can bill the developer later. Not using IAP saves you not a penny.
- jbverschoor 5y ago
  I think Wall Street missed that part
  - gjsman-1000 5y ago
    It was in a footnote in the ruling which is only starting to get attention. Apparently the 30% rule in a different contract than the one that requires IAP. So it still stands. So… you can’t use your own system, and if you link to a website instead, Apple can knock at the door each month and grab what you would have paid. Shallow victory there.
    - arbirk 5y ago
      Found the footnote on page 155: 621 - The Court also notes that in the but-for world where developers could use an alternative processor, Apple would still be contractually entitled to its commission on any purchase made within apps distributed on the App Store.
      - ec109685 5y ago
        within apps distributed on the App Store.
- enos_feedler 5y ago
  This doesn't seem crazy to me. The idea that Apple collects developer fees via the payment flow is merely a convenience vs. direct billing. If developers are using a different payment flow, then Apple has a right to collect those platform fees in a different way. What is crazy to me is that people believe those 15/30% cuts that Apple takes are for usage of the IAP system. IAP is a mere small part of that.
riversflow 5y ago
I thought this was pretty clear? That verge article that was on here the other day (which apparently said the opposite in the title/headline(I ignore those)) had relevant text right at the top. Shortened for brevity, emphasis mine, I'm not a lawyer. "Apple is: 'permanently restrained . . . from prohibiting developers from including in their apps . . . calls to action that direct customers to purchasing mechanisms'" I was kinda baffled by all the talk about APIs for IAPs and what have you. I feel kinda dumb for not realizing the headline was off. Question, is my reading here off? for reference the full quote was: Under the new order, Apple is: "permanently restrained and enjoined from prohibiting developers from including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and communicating with customers through points of contact obtained voluntarily from customers through account registration within the app."
- gjsman-1000 5y ago
  The Verge and the rest of the media was incorrect, because the injunction goes with a 185-page ruling the media didn’t read that explained it in greater detail how to interpret the injunction. You cannot use your own IAP system. You can link to a webpage, but Apple is still entitled to the 30% cut and can bill the developer after the fact each month or so for the commission that would have been paid. And for this reason, Epic owes 30% of their unpaid iOS IAP revenue to Apple (about $4 million) for breach of contract and Apple does not need to let Fortnite back on the store. Epic won almost nothing. 9/10 counts lost, and the remaining count they won still owes 30% but it would be collected through a different method. Super shallow victory that.
  - jjcon 5y ago
    > but Apple is still entitled to the 30% cut and can bill the developer after the fact each month or so for the commission that would have been paid. Even if that were accurate (which it isn’t really), there is no way Apple would be able to actually collect that commission. People can now link to their websites, patreons, Venmo links etc. this pushes the doors wide open. The Judge here was speaking to the use of alternative in-app payment processors (which the parent article is wrong about) which apple would be entitled to cuts of. If people link out to the web no such agreement exists. Here is the actual text, see for yourself: “The Court also notes that in the but-for world where developers could use an alternative processor, Apple would still be contractually entitled to its commission on any purchase made within apps distributed on the App Store”
deleted 5y ago
[deleted]
nodamage 5y ago
It seems the initial media reporting on this decision was way off the mark and the feedback from actual lawyers [1] is that Epic got crushed in court: 1. The judge affirmed Apple's right to terminate Epic's developer accounts for violation of the developer agreement and ban them from the App Store, including all developer accounts related to their Unreal Engine business. 2. The judge fully rejected Epic's entire monopolization claim based on the theory that Apple held a single-brand "monopoly" over the distribution of apps on its own devices, killing any hope they had of running their own app store. 3. The judge repeatedly made it clear that Apple was still entitled to a commission for the use of its intellectual property, even if developers did not use IAP to process payments: > "Under all models, Apple would be entitled to a commission or licensing fee, even if IAP was optional." (page 67) > "Even in the absence of IAP, Apple could still charge a commission on developers. It would simply be more difficult for Apple to collect that commission." (page 150) > "The Court also notes that in the but-for world where developers could use an alternative processor, Apple would still be contractually entitled to its commission on any purchase made within apps distributed on the App Store." (page 155) 4. If, as discussed in the article above, the anti-steering provision only applies to telling users about lower prices on other platforms, this ruling basically changes nothing for developers on the iOS platform itself. [1] The Hoeg Law video linked elsewhere in this thread is good place to start.
- BeefWellington 5y ago
  Yeah the media ran with one narrative but the court decision basically says Apple can't stop you from linking outside your app for payment stuff but that they can still require users be able to use IAP. Very confusing that so many of the media outlets covering this trial got the results wrong. I miss the days of Groklaw.
  - bialpio 5y ago
    I think I'm missing something. Are the developers forced to offer the in-app purchases right now? My understanding was "no" based on how Netflix does not offer purchasing subscription through the app specifically to avoid having to pay the commission. Can Netflix now link (from within the app) to a website where the users can purchase the subscription?
overgard 5y ago
Ugh, if the courts won't fix this I wish that congress would. There's no upside to giving apple this much power.
gpm 5y ago
I wouldn't trust FOSS patents and the author Florian Mueller as far as I could throw him. He has a long history of being a paid shill, lying about it, and being flat out wrong. (Paid by oracle) http://www.groklaw.net/article.php?story=20120419070127103 http://www.groklaw.net/article.php?story=20120419070127103 (Paid by microsoft) http://techrights.org/2012/08/18/vile-lobbyist/ http://techrights.org/2012/08/18/vile-lobbyist/ (Paid by apple? I can't find other/primary sources to back up this claim though it does seem likely.) https://mrpogson.com/2012/08/21/apples-paid-shillconsultant- https://mrpogson.com/2012/08/21/apples-paid-shillconsultant-... (More examples of him being wrong) http://www.groklaw.net/article.php?story=20120820111527257 http://www.groklaw.net/article.php?story=20120820111527257 I think there's a chance he's happens to be on the right side of the law this time (a stopped clock is right twice a day). At the same time he's good at his job at making believable bullshit. I put no faith whatsoever in his analysis and would suggest that reading his posts is more likely to deceive you than inform you.
- GeekyBear 5y ago
  > Paid by apple? I can't find other/primary sources to back up this claim though it does seem likely. He states that he's been rooting for Epic to win in the third paragraph. >I've been rooting for Epic, and I wish everyone were as honest as Epic Games CEO Tim Sweeney after losing a court battle.
  - gpm 5y ago
    Note that 1. It's entirely possible he is lying, it wouldn't be the first time. 2. The date of that accusation is back in 2012, it's entirely possible that his loyalties have shifted in the meantime. 3. The accusation could be false...
- belltaco 5y ago
  And Techrights/BoycottNovell and Groklaw are the epitome of unbiased coverage and analysis? How about we read everything with a grain of salt rather than just ad hominem? Why not just cite what is wrong with the analysis in the article, if anything? I see numerous citations, maybe submit analysis that differs from a different lawyer?
sydthrowaway 5y ago
Clearly the law needs to be code.

154 points by GeekyBear 5y ago

If you're willing to wade through a very long YouTube video, HoagLaw offers a two and a half hour summary of the 185 page judgement: https://www.youtube.com/watch?v=43CMV8KIs3E https://www.youtube.com/watch?v=43CMV8KIs3E

simondotau 5y ago
Fortunately his clear and articulate voice lends well to higher speed playback. A useful tip for YouTube (on a desktop computer) are the keyboard shortcuts shift-period and shift-comma for speeding up and slowing down playback, respectively.

jjcon 5y ago

The author makes quite a few leaps in logic that I am unable to follow. Maybe they are right but their reading of the judgement is contrary to how most in and out of the media are reading it and I’d expect a clearer explanation than this.

syspec 5y ago
Most of the media has gotten it wrong, which is why epic is appealing the decision. The judge ruled 9/10 claims in apples favor
- jjcon 5y ago
  It is that 1/10 that is in question by this article. My point is, if everyone else has it wrong they at least need to explain their reasoning, this article didn’t logically flow at least in my mind.
  - gjsman-1000 5y ago
    Apple is not appealing.
    - RobotCaleb 5y ago
      I agree but I'm not sure which way you meant
      - GeekyBear 5y ago
        The only part of the ruling that Apple lost is over a point they had previously conceded to settle the Japanese antitrust investigation. >SAN FRANCISCO/TOKYO, Sept 2 (Reuters) - Apple Inc (AAPL.O) will let some apps like Netflix Inc (NFLX.O) provide links to their websites for user payments, a small concession that would allow app developers to bypass the controversial 30% App Store fee the iPhone maker charges. https://www.reuters.com/technology/apple-says-japan-fair-trade-commission-closes-app-store-investigation-2021-09-02/ https://www.reuters.com/technology/apple-says-japan-fair-tra... They might want to challenge the notion that a California law can be used to force a change in the way you do business in other states, but that's about it.
  - martimarkov 5y ago
    Which part specifically are you not understanding? I had some issues understanding it all as well but by the 3rd time I read through it - I think I got the logic.
mruszczyk 5y ago
The media is likely reporting incorrectly here. Apple has come out and stated that they view the judgement as a major win for their side and Epic has come out and said they intend to appeal. The cliff notes I've seen on why are that Apple is legally not a monopoly, does not have to provide an alternative payment processor 'in-app' and may still legally charge a commission fee on each purchase, even if completed through an external payment processor.
- jjcon 5y ago
  Apple has never been known to admit defeat. One can hardly go by their reactions as a barometer of how the case went.
  - gjsman-1000 5y ago
    Apple has not announced any intent to appeal.
kelnos 5y ago
It seems like the media outlets are reporting solely on the one-page injunction, and have ignored the 185-page post-trial order that appears to clearly spell out how wrong the media is here. It's also telling that Apple's official stance on this is that they've won[0], and Epic's is that they're disappointed and will appeal. Apple would not be so happy about this if they had to allow other in-app payment systems and forego their 30% cut. And if they did, Epic would be a lot happier about this ruling, and might even just call it a win right here. [0] The one concession that Apple must make under this injunction -- allowing app developers to link to information about alternative payment methods on other platforms -- is a concession they are already making due to a recent ruling in a Japanese antitrust case[1]. [1] https://www.reuters.com/technology/apple-says-japan-fair-trade-commission-closes-app-store-investigation-2021-09-02/ https://www.reuters.com/technology/apple-says-japan-fair-tra...
- ec109685 5y ago
  Japanese ruling only affects Reading apps.

xigency 5y ago

And what if the payment is outside of the app through Safari? And then takes the user back to the app?

stirlo 5y ago
Or just loads a in app web view on the payment screen that 99% of users don’t even notice
- Fogest 5y ago
  Isn't that how Epic essentially did it when they server side added their own payment option in the Fortnite app? That is what led to them being removed.
  - IshKebab 5y ago
    That was before this injunction.
- kelnos 5y ago
  Since the ruling concludes that Apple would still be entitled to a 30% cut in that case (just it's harder for Apple to collect), I imagine Apple could reject that app update on the grounds that the developer hasn't added provisions to track purchases made in that manner so they can later pony up to Apple.
GeekyBear 5y ago
The HoagLaw video covers this in the first ten minutes. From the Judge's ruling: >Even in the absence of IAP, Apple could still charge a commission on developers. It would simply be more difficult for Apple to collect that commission. So, Hollywood math could find a new venue?
- simondotau 5y ago
  Possibly. Though it's basically the same math that game developers have used since forever to calculate Epic's royalties for Unreal Engine. Or to calculate license fees for physical copies of PlayStation video games.

gjsman-1000 5y ago

More crazy, in the actual ruling, the judge states that even if developers use a different payment system than IAP, Apple is still entitled to the 30% commission and can bill the developer later. Not using IAP saves you not a penny.

jbverschoor 5y ago
I think Wall Street missed that part
- gjsman-1000 5y ago
  It was in a footnote in the ruling which is only starting to get attention. Apparently the 30% rule in a different contract than the one that requires IAP. So it still stands. So… you can’t use your own system, and if you link to a website instead, Apple can knock at the door each month and grab what you would have paid. Shallow victory there.
  - arbirk 5y ago
    Found the footnote on page 155: 621 - The Court also notes that in the but-for world where developers could use an alternative processor, Apple would still be contractually entitled to its commission on any purchase made within apps distributed on the App Store.
    - ec109685 5y ago
      within apps distributed on the App Store.
enos_feedler 5y ago
This doesn't seem crazy to me. The idea that Apple collects developer fees via the payment flow is merely a convenience vs. direct billing. If developers are using a different payment flow, then Apple has a right to collect those platform fees in a different way. What is crazy to me is that people believe those 15/30% cuts that Apple takes are for usage of the IAP system. IAP is a mere small part of that.

riversflow 5y ago

I thought this was pretty clear? That verge article that was on here the other day (which apparently said the opposite in the title/headline(I ignore those)) had relevant text right at the top. Shortened for brevity, emphasis mine, I'm not a lawyer. "Apple is: 'permanently restrained . . . from prohibiting developers from including in their apps . . . calls to action that direct customers to purchasing mechanisms'" I was kinda baffled by all the talk about APIs for IAPs and what have you. I feel kinda dumb for not realizing the headline was off. Question, is my reading here off? for reference the full quote was: Under the new order, Apple is: "permanently restrained and enjoined from prohibiting developers from including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and communicating with customers through points of contact obtained voluntarily from customers through account registration within the app."

gjsman-1000 5y ago
The Verge and the rest of the media was incorrect, because the injunction goes with a 185-page ruling the media didn’t read that explained it in greater detail how to interpret the injunction. You cannot use your own IAP system. You can link to a webpage, but Apple is still entitled to the 30% cut and can bill the developer after the fact each month or so for the commission that would have been paid. And for this reason, Epic owes 30% of their unpaid iOS IAP revenue to Apple (about $4 million) for breach of contract and Apple does not need to let Fortnite back on the store. Epic won almost nothing. 9/10 counts lost, and the remaining count they won still owes 30% but it would be collected through a different method. Super shallow victory that.
- jjcon 5y ago
  > but Apple is still entitled to the 30% cut and can bill the developer after the fact each month or so for the commission that would have been paid. Even if that were accurate (which it isn’t really), there is no way Apple would be able to actually collect that commission. People can now link to their websites, patreons, Venmo links etc. this pushes the doors wide open. The Judge here was speaking to the use of alternative in-app payment processors (which the parent article is wrong about) which apple would be entitled to cuts of. If people link out to the web no such agreement exists. Here is the actual text, see for yourself: “The Court also notes that in the but-for world where developers could use an alternative processor, Apple would still be contractually entitled to its commission on any purchase made within apps distributed on the App Store”

deleted 5y ago

[deleted]

nodamage 5y ago

It seems the initial media reporting on this decision was way off the mark and the feedback from actual lawyers [1] is that Epic got crushed in court: 1. The judge affirmed Apple's right to terminate Epic's developer accounts for violation of the developer agreement and ban them from the App Store, including all developer accounts related to their Unreal Engine business. 2. The judge fully rejected Epic's entire monopolization claim based on the theory that Apple held a single-brand "monopoly" over the distribution of apps on its own devices, killing any hope they had of running their own app store. 3. The judge repeatedly made it clear that Apple was still entitled to a commission for the use of its intellectual property, even if developers did not use IAP to process payments: > "Under all models, Apple would be entitled to a commission or licensing fee, even if IAP was optional." (page 67) > "Even in the absence of IAP, Apple could still charge a commission on developers. It would simply be more difficult for Apple to collect that commission." (page 150) > "The Court also notes that in the but-for world where developers could use an alternative processor, Apple would still be contractually entitled to its commission on any purchase made within apps distributed on the App Store." (page 155) 4. If, as discussed in the article above, the anti-steering provision only applies to telling users about lower prices on other platforms, this ruling basically changes nothing for developers on the iOS platform itself. [1] The Hoeg Law video linked elsewhere in this thread is good place to start.

BeefWellington 5y ago
Yeah the media ran with one narrative but the court decision basically says Apple can't stop you from linking outside your app for payment stuff but that they can still require users be able to use IAP. Very confusing that so many of the media outlets covering this trial got the results wrong. I miss the days of Groklaw.
- bialpio 5y ago
  I think I'm missing something. Are the developers forced to offer the in-app purchases right now? My understanding was "no" based on how Netflix does not offer purchasing subscription through the app specifically to avoid having to pay the commission. Can Netflix now link (from within the app) to a website where the users can purchase the subscription?

overgard 5y ago

Ugh, if the courts won't fix this I wish that congress would. There's no upside to giving apple this much power.

gpm 5y ago

I wouldn't trust FOSS patents and the author Florian Mueller as far as I could throw him. He has a long history of being a paid shill, lying about it, and being flat out wrong. (Paid by oracle) http://www.groklaw.net/article.php?story=20120419070127103 http://www.groklaw.net/article.php?story=20120419070127103 (Paid by microsoft) http://techrights.org/2012/08/18/vile-lobbyist/ http://techrights.org/2012/08/18/vile-lobbyist/ (Paid by apple? I can't find other/primary sources to back up this claim though it does seem likely.) https://mrpogson.com/2012/08/21/apples-paid-shillconsultant- https://mrpogson.com/2012/08/21/apples-paid-shillconsultant-... (More examples of him being wrong) http://www.groklaw.net/article.php?story=20120820111527257 http://www.groklaw.net/article.php?story=20120820111527257 I think there's a chance he's happens to be on the right side of the law this time (a stopped clock is right twice a day). At the same time he's good at his job at making believable bullshit. I put no faith whatsoever in his analysis and would suggest that reading his posts is more likely to deceive you than inform you.

GeekyBear 5y ago
> Paid by apple? I can't find other/primary sources to back up this claim though it does seem likely. He states that he's been rooting for Epic to win in the third paragraph. >I've been rooting for Epic, and I wish everyone were as honest as Epic Games CEO Tim Sweeney after losing a court battle.
- gpm 5y ago
  Note that 1. It's entirely possible he is lying, it wouldn't be the first time. 2. The date of that accusation is back in 2012, it's entirely possible that his loyalties have shifted in the meantime. 3. The accusation could be false...
belltaco 5y ago
And Techrights/BoycottNovell and Groklaw are the epitome of unbiased coverage and analysis? How about we read everything with a grain of salt rather than just ad hominem? Why not just cite what is wrong with the analysis in the article, if anything? I see numerous citations, maybe submit analysis that differs from a different lawyer?

sydthrowaway 5y ago

Clearly the law needs to be code.