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Apple buying Google ads for high-value subscription apps

341 points by jitl 5y ago

Hamuko 5y ago
It never ceases to amaze me how much Apple is willing to trash its reputation just for some pocket money. I can't imagine this or the App Store ads to actually make that much money, and both make Apple look terrible.
- FridayoLeary 5y ago
  Most of Apples' worst excesses seem to be around the management of the app store. Even Tim Cook expressed frustration at the lack of leadership in that department. I don't think this is representative of Apple as a whole. Although the company must accept full responsibility for even their lowest common denominator.
pfortuny 5y ago
> Apple is trying maximize the money they’re making … And that is the problem with our modern companies. The only morals is making money. What a pitiful excuse.
- FridayoLeary 5y ago
  can you explain to me this attitude, which i see a lot? Obviously the entire reason for a companys' existence is to make money why should we expect anything else? Also this is true for every company in history. Of course we must demand companies meet minimum moral standards such as not using slaves (which would be unthinkable today in 2021 cough) but those must be imposed on them by law. This is a genuine question please feel free to enthusiastically disagree with me and explain why i'm wrong. [Edit: I should clarify that i meant that a company needs no other reason to exist, not that a ethical company is impossible]
  - howinteresting 5y ago
    Companies are legal fictions of the state, with privileges like limited liability. Therefore the state can impose requirements on how the same companies behave as well. For example, a company could be made to serve the interests of employees rather than just shareholders. This can be done by, for example, requiring a certain percentage of the board of directors to be employee representatives.
    - pokot0 5y ago
      This! I see so many people who seem to have forgotten that companies exist only to serve the people. When society is run to protect companies over the well being of the people, thay have lost their reason to exist in the first place. On the flip side, I see numerous posts and comments on HN that blame companies for not behaving more ethical. This is complete nonsense to me; you can't expect companies to autoregulate when they are designed to follow only 2 things: laws and market. Since as we know now we have little control over what the market wants, the real control is through regulation. But the US has done a very poor job at selecting their politician leadership for a long time now.... that's where people who wants to do something needs to look at..
      - FridayoLeary 5y ago
        > When society is run to protect companies over the well being of the people, thay have lost their reason to exist in the first place. According to you, seeing as almost every country in history was run exclusively for the benefit of the ruling class, none of them had a reason to exist? > But the US has done a very poor job at selecting their politician leadership for a long time now. Agreed. But i think it's a problem in the system itself. The us have a binary choice between hilary/biden and trump with no middle ground.
        pokot0 5y ago
        > According to you, seeing as almost every country in history was run exclusively for the benefit of the ruling class, none of them had a reason to exist? Hmm... with "reason to exist" I meant the reason why they were "created" in the first place. This is an interesting article that expands on how corporation "rights" have changed since foundation (take the historical data points more than the underlying political bias): https://www.americanbar.org/groups/crsj/publications/human_rights_magazine_home/we-the-people/we-the-people-corporations/ https://www.americanbar.org/groups/crsj/publications/human_r... > Agreed. But i think it's a problem in the system itself. The us have a binary choice between hilary/biden and trump with no middle ground. Indeed! I believe the problem in the system is even deeper. Regardless of your values or your preferred policies, I really feel hilary/biden/trump is a very poor display for the United States. The selection process that brought them there is not working. Smart people avoid going into politics in the first place because of this selection process. People don't want to spend their days arguing with a guy with bogus claim that is only trying to bring them down.
- varispeed 5y ago
  I think the problem is that some big corporations are allowed to avoid paying tax, essentially getting huge competitive advantage over SMEs. The anomalous capital they were able to amass further enables them to corrupt governments to ensure regulatory capture and that any investigations in their tax affairs get dropped.
  - _hyn3 5y ago
    That's one (gigantic) problem, but not necessarily the problem.
- bogwog 5y ago
  That’s capitalism, and it’s not always bad. It only becomes a problem when there’s no regulation, which is exactly what’s happening here. Apple has too much market power, and the government is doing nothing to regulate them. The only way Apple will stop doing evil and harmful things like this is if A) government steps in or B) Apple decides to stop trying to grow. B will never happen (it’s basically impossible for a publicly traded company) The same is true for the other tech giants. Either we need one big action (break them up), or a lot of small actions (force them to change specific business practices)
- amelius 5y ago
  You can't blame these managers really, because what else are they good for? It's like being a software engineer while not allowed to write any code. Dark patterns and raking in money is what these managers do and take pride in. The system we've created made that so.
FridayoLeary 5y ago
This isn't terrible since it's possible that many apps providers can't afford the ads. But i think it's unacceptable unless the app owner is given a choice, and a clear cut choice with obvious opt in and opt out buttons. Also, it wouldn't hurt to make it clear to the consumer that Apple is paying for the ad.
- yunohn 5y ago
  > that many apps providers can't afford the ads The impacted apps are “high value” - they make both sides a lot of money. > Impacted businesses include major brands such as dating apps like Tinder, Plenty of Fish, and Bumble, media giant HBO, education and learning publisher Masterclass, and language learning service Babbel.
- reaperducer 5y ago
  But i think it's unacceptable unless the app owner is given a choice, and a clear cut choice with obvious opt in and opt out buttons Didn't some other tech company do this recently? Something like eBay or Etsy, where the company was promoting the items for sale, and then taking a cut of that sale? I seem to remember it because the sellers were mad that it was opt-out, rather than opt-in.
- Hamuko 5y ago
  How many of the ads Apple buys are for small developers who couldn't afford it and how many are for massive companies that could absolutely afford it?
  - mdoms 5y ago
    This is covered in the article. It's high value apps like Tinder and HBO Max.
- chongli 5y ago
  If the providers can't afford the ads, they can't afford to pay Apple a 30% commission. If, on the other hand, they can afford to pay Apple a 30% commission, then they can afford an ad spend up to 30% to direct potential subscribers to subscribe directly, avoiding the Apple commission. Netflix decided they couldn't afford the 30% commission, so they don't offer subscriptions in-app. It's really as simple as that.
mymllnthaccount 5y ago
How's this different than googling for a Lenovo laptop and seeing ads for Lenovo's website versus Amazon?
- howinteresting 5y ago
  Amazon doesn't get recurring revenue from selling Lenovo laptops.
  - mcphage 5y ago
    Lenovo doesn’t get recurring revenue from selling Lenovo laptops, either.
    - echelon 5y ago
      Oh, but Apple sure does! They get their 30% subscription fee. And they get to control the customer relationship. App publishers have a really shitty deal here. Mobile computing would be so much better for competition if this had become a Microsoft / Google duopoly rather than have Steve Jobs with his perverse app store model. We'd have web downloadable apps and a better mobile web. We now have a cartel for 50+% of American consumers. The cartel is so greedy that it's now placing ads to confuse and ensnare consumers even more.
- paulryanrogers 5y ago
  There is a third party taking a large commission for the sale and any recurring service. It's like if Amazon put out ads for Lenovo but bundling a protection plan and taking a referer cut.
  - judge2020 5y ago
    Are you unaware of Amazon's cut of purchases? Lenovo also uses FBA so Amazon makes even more from those sales.
- mleo 5y ago
  This more akin to Booking.com placing ads for hotels in an area. The hotel gets revenue and Booking.com gets commission, and sometime advertising recovery fees on top. Developers of apps should be allowed to opt out of this, or really should be an opt in feature.
donarb 5y ago
Doesn't look so secret to me. The ad shows the address as apple.com.
- bellyfullofbac 5y ago
  Not secret, but still, they're taking the publisher's money, imagine if it was your service: if the users subscribe through your website, you get 100%, and if they subscribe through Apple, they pocket 30% and you get 70%. Apple is relying on the subscribers' not knowing of this money grab...
- pentae 5y ago
  It would show the app store url, which most would assume to be the developer themselves pushing the app store link and not Apple itself
jpalomaki 5y ago
They key piece is that article claims Apple is doing this so that they can get their 30% transaction fees. If customer pays on the app developers website, Apple is not getting cut. If customer downloads the app and makes payment there, Apple gets their money.
- thrwn_frthr_awy 5y ago
  I see. So to a end-user it may not make much difference whether they sign up via the web site or app, but if Apple can get in-between, they can cleave 30% of the user’s lifetime revenue. Hiding email, credit card info already entered, subscription management,… there are reasons to want to run everything through Apple, but it’s interesting to see this behind the scenes as it can really change Apple’s incentives.
- scottydelta 5y ago
  Yes but the ads placed by Apple points to respective apps on Apple app store. So the logic here is that user will most likely subscribe via the app on iPhone and then Apple gets it 30% cut.
- weird-eye-issue 5y ago
  That is why the ad links to the Apple App Store...
indymike 5y ago
This is monopolistic behavior all the way. Let's leverage our cash to make it more expensive to get customers, and force app publishers to sell their product through our channel. This needs to be stopped. Now.
- ChildOfChaos 5y ago
  How? Apple is spending it’s money to help promote apps on it’s service, i feel like people attack apple whatever they do. But doesn’t this help defend a 30% app fee, when apple is also paying marketing costs to help the app get more customers through it’s service?
  - indymike 5y ago
    > feel like people attack apple whatever they do. I agree. When you have as much economic power as Apple does every move has some side effect. In this case they are actually doing something nefarious and the side effect is simply shifting app company profits to Apple.
  - DutchKevv 5y ago
    Not if it doesn't add another 30% of customers. Not even taking in account the rise of advertising for the app creators self, the loses you have from not being able to redirect to your own website, giving specific incentives that Apple doesn't allow etc etc etc. So no, it's not just bashing, and that's the reason Apple does it secretly
  - mthoms 5y ago
    Apple are bidding on exact (trademarked) product name matches (eg “HBO Max” and “Tinder”). You might have an argument if Apple was bidding on more general keywords like “online dating” to send traffic to the App Store’s Tinder page. Apple are trying to intercept purchases and/or raise ad costs for the mentioned companies.
tyingq 5y ago
The FTC generally cares more about screwing the end buyer than screwing the app developer. So this probably won't end well for Apple, since it sounds like steering buyers to a more expensive option.
Brian_K_White 5y ago
It's actually an interesting question how nefarious or harmful this actually is. We obviously know why Apple is doing it and why the apps in question don't like it. But a couple things occurred to me: You could view this like Amazon giving away your book or android app in a promotion. As I understand it, they still pay the author as if it were a sale, so the author seemingly has nothong to complain about. Even that still seems wrong to me but that's the argument Amazon uses. That is essentially, no, litterally, Amazon advertizing your product for their own purposes. Another argument Apple and Apple devotees and general "invisible hand" worshippers may try to use is: Any sales generated by the ads would not have existed without the ad, and so it's not taking anything from the app developer. I don't really buy either theory, but it does take some thinking to describe a mechanism by which they cause harm and should be considered invalid. They hold enough water to convince a lot of people who want to be convinced, and the arguments against just sound kind of weak and whiny.
- Aulig 5y ago
  >Any sales generated by the ads would not have existed without the ad, and so it's not taking anything from the app developer. This argument is not very convincing in my opinion, as it looks like Apple is purchasing ads for brand keywords. If the ad wasn't there, the customer would go to the brands website, which would be ranked #1 without the ad.
  - quitit 5y ago
    The example shows the brand name being ranked 1st. For this to be a poor result for the brand it would require cannibalisation rates to be high enough to push the 15/30% fee higher than their margin - that’s not realistic because the app store price would never be at a loss to begin with (with many alreadying increasing the app store fee to match the 15/30% cut.) In all likelihood the end result is a net profit for the developer at the expense of their competitors. Also neglected for consideration: the developer doesn’t pay for these ads - and the scarcity isn’t high enough to meaningfully affect bid pricing over regular competition.
    - 5y ago
spzb 5y ago
Surely if 30% fee wipes out your profit margin, you don’t offer in-app subscriptions. Netflix doesn’t.
- threeseed 5y ago
  Would add that it's 15% for App Developers earning < $1 million a year.
  - fzil 5y ago
    yes, but they aren't running these apps for small apps like that. The ads according to TFA, are for giants like Tinder, HBO Max etc. The little guy making < $1M would obviously appreciate the free publicity.
- Tronno 5y ago
  Netflix has special agreements with Apple. Other apps have been rejected for doing the same thing: https://www.theverge.com/2020/6/25/21302931/hey-email-service-public-launch-apple-approves-app-fight-policy-price https://www.theverge.com/2020/6/25/21302931/hey-email-servic...
syspec 5y ago
Speculation
cma 5y ago
Just outbid Apple by paying Google 24% of your gross income, likely >50% of your profit (assuming Apple has 6% payment processing/gift card and bandwidth costs; from the Epic trial we know Google has 6% costs). Apple's cost is probably significantly less here as it is a small app and most of the bandwidth is in the streaming, which Apple doesn't help with.
rkk3 5y ago
Ruthless move by Apple - but brands like HBO should just take Netflix's queue and not allow in-app purchases. I was actually surprised to learn some of the app native brands mentioned (Tinder, Bumble) even had a way to sign-up for a subscription outside of the app. Seems like they would actually benefit from apple placing adds.
- TheJoeMan 5y ago
  Which is why I see this will be a non-issue if on Dec 9th the anti-steering goes away. Then Apple places ad->user downloads->app says “hey it’s cheaper on tinder’s website”->user decides for themselves
  - DutchKevv 5y ago
    Unless the app itself cost money to download, then it's to late. You could create a bootstrap page after first install, bit that makes it feel like unfair cause the app was 'free' on the app store. So once again Apple got it all figured out how to make stuff difficult for creators and make money while doing it
    - alisonkisk 5y ago
      Huh? Subscription apps are free to install.
  - dwaite 5y ago
    That is making the assumption that steering means the developer doesn't have to pay a commission. There was nothing in the court ruling preventing Apple from amending their developer contracts to put such a condition on steering for non-reader apps.
tinus_hn 5y ago
Is this different from a tv store buying ads for specific tvs that link to that store?
- ComodoHacker 5y ago
  I think it's different because a store is competing with other stores, not with tv manufacturer.
  - tinus_hn 5y ago
    If you assume tv manufacturers are not themselves stores that sell tvs. Would you mind people putting up ads for buying an iPhone in their store?
sam0x17 5y ago
Lovely corporate ethics. I posted this in our company slack room as an example of how not to act for bizdev Google benefits too much from this sort of arrangement to have any incentive to stop it, even though these are unauthorized advertisements that are specifically against Google's AdWords TOS (side note, I wonder if there is a legal avenue to follow when a vendor doesn't follow their own TOS? An interesting thought...). This is also a recurring issue with all of Google's advertising revenue -- malicious behavior such as fraudulent clicks, unauthorized ads, etc., are a decent portion of the revenue stream, and Google is financially incentivized to keep these sorts of abuse going until the ruse is up and the accuracy of their system is called into question publicly in a way that scares away advertisers, but with NDAs and corporate secrecy, it is far too easy to keep things unbalanced, and keep abuse like this in the dark. Business models like this demonstrate just how dire the need for regulation is in some areas of the tech world, particularly among FANG.
- threeseed 5y ago
  a) It is not against AdWords TOS provided you have permission to use their trademarked terms. Which Apple has since in the Developer agreement [1] they have been assigned permissions to use logos, trademarked terms etc in marketing material. b) Google is incentivised to tackle abuse within their system. It's ridiculous and baseless to say otherwise. Lack of integrity in an ad marketplace very easily can translate to lost dollars. But unfortunately with spoofing being trivial it's simply hard to detect and manage abuse. c) There is no regulation that will prevent this. App developers have signed a legally binding contract. [1] https://developer.apple.com/support/downloads/terms/apple-developer-program/Apple-Developer-Program-License-Agreement-20210607-English.pdf https://developer.apple.com/support/downloads/terms/apple-de...
  - deleted 5y ago
    [deleted]
  - gpm 5y ago
    a, b) yes c) regulations and laws trump contracts, not the other way around.
andrewstuart 5y ago
Dirty tricks. All the money in the world isn't enough for Apple. I wonder if Google can be said to be colluding with Apple on this.
- threeseed 5y ago
  App developers have signed a contract giving permission for Apple to do this. There is nothing illegal or dirty about this and frankly I fail to see how it is that different to bidding on competitor's search terms.
  - coffeefirst 5y ago
    By "contract" do you mean the ToS that you can't read, can't negotiate, and have no choice but to sign as is in order to appear in the app store?
    - kevinh 5y ago
      You can't read the ToS?
globnomulous 5y ago
Sorry for the mildly off-topic comment, but does anyone else find the writing horrible, almost impenetrable? The first sentence alone seems to have four or five bizarre syntactic and semantic ambiguities. I really have no idea what it's supposed to mean.
haxal 5y ago
Could this be because the volume of searches and people that even open the App Store app daily is so low that now that ATT is in play advertisers aren’t spending as much on marketing for iOS apps?
lordnacho 5y ago
I wonder if this is similar to Uber Eats or Deliveroo getting people to sign up with the help of some particular restaurant's menu, where that restaurant might have its own ordering site. If people get used to using the aggregator the restaurant loses out on the cut.
londons_explore 5y ago
Who wins... Google...
loceng 5y ago
#NoAds needs to start trending.
dagaci 5y ago
It might be legal etc... and app developers and companies seem to have signed away basically control of their app distribution, tradmarks and promotions to Apple the the small letters. But all the same it seems to be a bit sleezy and low for Apple to try and get money by spoofing other companies and brands in fake ads. I get why Google doesnt, care, since Ads is their core business. But does Apple which already makes oceans of cash need to go this low for that little bit of extra $$$
- Lhiw 5y ago
  What's the issue? A marketplace is finding ways to drive traffic to its platform? It's literally their only job. This is like eBay promoting sales of items on their marketplace using advertising. Which they've done for years.
javajosh 5y ago
That Apple would do this is interesting, but more interesting to me is Google's position, and obligation, here. There was a throw-away line in the article about Google "not doing anything about it". What could or should Google do about it? Has Google mediated between competitive ad-buyers in the past? I am not sympathetic to goog in general but it seems like that line puts them in a no-win situation: either they err for not doing anything, or they err for doing something (but not the right thing). Indeed, in this case it would seem the corrective action would better come from Apple than from Google. (Also note this whole play feels like Apple trying to get creative with ways to productively bleed off ridiculously huge capital reserves in a low risk way. It would be ironic for Apple if this blows up into a big thing, but somehow I really doubt it will. )
- webmobdev 5y ago
  Indian laws are quite clear that Google has an obligation not to allow ads on trademarked terms (used as keywords): > Justice V Kameswar Rao also observed that allowing individuals who are not owners of a trademark to choose a keyword which is a trademarked term or use parts of the trademark interspersed with generic words in the Ad-title or Ad-text may constitute an infringement of a trademark or it's passing off. The Court also opined that the use of trademarks as keywords amounts to "use" in the course of trade in terms of the Trademarks Act. ( https://www.livelaw.in/news-updates/google-not-absolve-liability-ensuring-keyword-not-infringement-trademark-delhi-high-court-184905 https://www.livelaw.in/news-updates/google-not-absolve-liabi... : ) Something similar is happening here - it seems clear that Apple is also bidding for the trademarked keyword "HBOMax" to show their ad to mislead the user to their app store. As per the indian courts, this can make Google liable if they don't act on complain from the trademark owner.
  - throwawayamz27 5y ago
    The apple developer program license lets Apple use this trademark anyway, they can advertise any App however they want.
  - tgsovlerkhgsel 5y ago
    My guess would be that the developers gave Apple permission to abuse them in this and other ways when they signed up for the app store.
mmahemoff 5y ago
It's a good thing for those developers. The fact Apple can afford to do this simply reminds us of the fact they can demand a 70-30 split (85-15 after 1 year) and deem themselves the exclusive payment provider. That's the controversial part, which is what this issue reduces to. Whatever the "fair" revenue split is, once you accept it exists, it's a net positive for the developer that Apple is reinvesting to grow the pie. If anyone's hurt by this, it's their smaller competitors who won't get the same love from Apple's ad arbitrage team.
Terretta 5y ago
> When people buy access to a service via a subscription in an iOS app, they are essentially Apple’s customers. For privacy reasons Apple does not provide much information about them to the apps or businesses that run the apps. That means it’s hard to do customer service, address issues, or solve any problems. > “The user experience is much worse,” a marketing executive from one company told me. “When you buy with the developer, they have a relationship with you ... when you buy from Apple: sorry, you’re Apple’s customer, not ours, and if you have a problem with a subscription … we can’t really help them.” Now interview a real user of subscriptions instead of a brand marketing executive and ask them if the user experience is worse. PS. Even when not confronted with such a piece, remember that Forbes is no longer the business journalism folks may have grown up with. For the past decade, it’s a blogging platform for independent contributors: > Each contributor flies solo with his own blog. He is responsible for conceiving and creating the content, ensuring its accuracy and building an engaged, loyal readership. Forbes provides the technology and compensates some of the contributors, but otherwise, like all entrepreneurs, contributors are left to sink or swim on their own. https://www.poynter.org/reporting-editing/2012/what-the-forbes-model-of-contributed-content-means-for-journalism/ https://www.poynter.org/reporting-editing/2012/what-the-forb...
- jsmeaton 5y ago
  There are pros and cons. As one example my son purchased $500 of skins in Fortnite on Nintendo (I had the card saved, my fault since corrected). Trying to get that refunded was a huge drama because I had to go via Nintendo rather than Epic. In this specific scenario I would have preferred a first party resolution.
  - Terretta 5y ago
    Interesting. I’ve had Apple proactively email me about parental controls along with an offer to refund what they seem to have considered excessive in-game currency IAPs. I’d be amazed if the game publisher would have cared at all. No amount of future loyalty to the one game would have offset the cost of the refund. Same is not true for Apple or Nintendo.
- 5y ago
vnchr 5y ago
Free advertising for apps and everyone here can only see it as nefarious?
- jagged-chisel 5y ago
  For the apps, but away from those apps’ websites / alternative means of avoiding the Apple Tax. Yeah, that fits “nefarious” in my book.
kristjansson 5y ago
Key, unchallenged assumptions: the Apple ad purely cannibalizes what would otherwise be a first party brand click or organic click, and targeted clickers are as (or less) likely to eventually convert if they click the Apple ad. If either doesn’t hold, Apple may be able to create an incremental conversion that’s net positive for both developer and Apple.
TruthWillHurt 5y ago
Sleep with dogs, wake up with ticks. Abandon Apple, develop PWA version of your web flow.
jfoster 5y ago
If Apple were to make inclusion in this optional, then it would be viewed in a very different light, and there would still be plenty of developers interested in participating.
nhumrich 5y ago
I am curious how this plays out from an antitrust and insider trading point of view. Apple could potentially use it's massive marketing budgeting to "determine the winner" in a specific market, after buying some stock in said company, (or just having good business arrangement with them).
RedWarrior 5y ago
Apple is irrelevant by now.

341 points by jitl 5y ago

It never ceases to amaze me how much Apple is willing to trash its reputation just for some pocket money. I can't imagine this or the App Store ads to actually make that much money, and both make Apple look terrible.

FridayoLeary 5y ago
Most of Apples' worst excesses seem to be around the management of the app store. Even Tim Cook expressed frustration at the lack of leadership in that department. I don't think this is representative of Apple as a whole. Although the company must accept full responsibility for even their lowest common denominator.

pfortuny 5y ago

> Apple is trying maximize the money they’re making … And that is the problem with our modern companies. The only morals is making money. What a pitiful excuse.

FridayoLeary 5y ago
can you explain to me this attitude, which i see a lot? Obviously the entire reason for a companys' existence is to make money why should we expect anything else? Also this is true for every company in history. Of course we must demand companies meet minimum moral standards such as not using slaves (which would be unthinkable today in 2021 cough) but those must be imposed on them by law. This is a genuine question please feel free to enthusiastically disagree with me and explain why i'm wrong. [Edit: I should clarify that i meant that a company needs no other reason to exist, not that a ethical company is impossible]
- howinteresting 5y ago
  Companies are legal fictions of the state, with privileges like limited liability. Therefore the state can impose requirements on how the same companies behave as well. For example, a company could be made to serve the interests of employees rather than just shareholders. This can be done by, for example, requiring a certain percentage of the board of directors to be employee representatives.
  - pokot0 5y ago
    This! I see so many people who seem to have forgotten that companies exist only to serve the people. When society is run to protect companies over the well being of the people, thay have lost their reason to exist in the first place. On the flip side, I see numerous posts and comments on HN that blame companies for not behaving more ethical. This is complete nonsense to me; you can't expect companies to autoregulate when they are designed to follow only 2 things: laws and market. Since as we know now we have little control over what the market wants, the real control is through regulation. But the US has done a very poor job at selecting their politician leadership for a long time now.... that's where people who wants to do something needs to look at..
    - FridayoLeary 5y ago
      > When society is run to protect companies over the well being of the people, thay have lost their reason to exist in the first place. According to you, seeing as almost every country in history was run exclusively for the benefit of the ruling class, none of them had a reason to exist? > But the US has done a very poor job at selecting their politician leadership for a long time now. Agreed. But i think it's a problem in the system itself. The us have a binary choice between hilary/biden and trump with no middle ground.
      - pokot0 5y ago
        > According to you, seeing as almost every country in history was run exclusively for the benefit of the ruling class, none of them had a reason to exist? Hmm... with "reason to exist" I meant the reason why they were "created" in the first place. This is an interesting article that expands on how corporation "rights" have changed since foundation (take the historical data points more than the underlying political bias): https://www.americanbar.org/groups/crsj/publications/human_rights_magazine_home/we-the-people/we-the-people-corporations/ https://www.americanbar.org/groups/crsj/publications/human_r... > Agreed. But i think it's a problem in the system itself. The us have a binary choice between hilary/biden and trump with no middle ground. Indeed! I believe the problem in the system is even deeper. Regardless of your values or your preferred policies, I really feel hilary/biden/trump is a very poor display for the United States. The selection process that brought them there is not working. Smart people avoid going into politics in the first place because of this selection process. People don't want to spend their days arguing with a guy with bogus claim that is only trying to bring them down.
varispeed 5y ago
I think the problem is that some big corporations are allowed to avoid paying tax, essentially getting huge competitive advantage over SMEs. The anomalous capital they were able to amass further enables them to corrupt governments to ensure regulatory capture and that any investigations in their tax affairs get dropped.
- _hyn3 5y ago
  That's one (gigantic) problem, but not necessarily the problem.
bogwog 5y ago
That’s capitalism, and it’s not always bad. It only becomes a problem when there’s no regulation, which is exactly what’s happening here. Apple has too much market power, and the government is doing nothing to regulate them. The only way Apple will stop doing evil and harmful things like this is if A) government steps in or B) Apple decides to stop trying to grow. B will never happen (it’s basically impossible for a publicly traded company) The same is true for the other tech giants. Either we need one big action (break them up), or a lot of small actions (force them to change specific business practices)
amelius 5y ago
You can't blame these managers really, because what else are they good for? It's like being a software engineer while not allowed to write any code. Dark patterns and raking in money is what these managers do and take pride in. The system we've created made that so.

FridayoLeary 5y ago

This isn't terrible since it's possible that many apps providers can't afford the ads. But i think it's unacceptable unless the app owner is given a choice, and a clear cut choice with obvious opt in and opt out buttons. Also, it wouldn't hurt to make it clear to the consumer that Apple is paying for the ad.

yunohn 5y ago
> that many apps providers can't afford the ads The impacted apps are “high value” - they make both sides a lot of money. > Impacted businesses include major brands such as dating apps like Tinder, Plenty of Fish, and Bumble, media giant HBO, education and learning publisher Masterclass, and language learning service Babbel.
reaperducer 5y ago
But i think it's unacceptable unless the app owner is given a choice, and a clear cut choice with obvious opt in and opt out buttons Didn't some other tech company do this recently? Something like eBay or Etsy, where the company was promoting the items for sale, and then taking a cut of that sale? I seem to remember it because the sellers were mad that it was opt-out, rather than opt-in.
Hamuko 5y ago
How many of the ads Apple buys are for small developers who couldn't afford it and how many are for massive companies that could absolutely afford it?
- mdoms 5y ago
  This is covered in the article. It's high value apps like Tinder and HBO Max.
chongli 5y ago
If the providers can't afford the ads, they can't afford to pay Apple a 30% commission. If, on the other hand, they can afford to pay Apple a 30% commission, then they can afford an ad spend up to 30% to direct potential subscribers to subscribe directly, avoiding the Apple commission. Netflix decided they couldn't afford the 30% commission, so they don't offer subscriptions in-app. It's really as simple as that.

mymllnthaccount 5y ago

How's this different than googling for a Lenovo laptop and seeing ads for Lenovo's website versus Amazon?

howinteresting 5y ago
Amazon doesn't get recurring revenue from selling Lenovo laptops.
- mcphage 5y ago
  Lenovo doesn’t get recurring revenue from selling Lenovo laptops, either.
  - echelon 5y ago
    Oh, but Apple sure does! They get their 30% subscription fee. And they get to control the customer relationship. App publishers have a really shitty deal here. Mobile computing would be so much better for competition if this had become a Microsoft / Google duopoly rather than have Steve Jobs with his perverse app store model. We'd have web downloadable apps and a better mobile web. We now have a cartel for 50+% of American consumers. The cartel is so greedy that it's now placing ads to confuse and ensnare consumers even more.
paulryanrogers 5y ago
There is a third party taking a large commission for the sale and any recurring service. It's like if Amazon put out ads for Lenovo but bundling a protection plan and taking a referer cut.
- judge2020 5y ago
  Are you unaware of Amazon's cut of purchases? Lenovo also uses FBA so Amazon makes even more from those sales.
mleo 5y ago
This more akin to Booking.com placing ads for hotels in an area. The hotel gets revenue and Booking.com gets commission, and sometime advertising recovery fees on top. Developers of apps should be allowed to opt out of this, or really should be an opt in feature.

donarb 5y ago

Doesn't look so secret to me. The ad shows the address as apple.com.

bellyfullofbac 5y ago
Not secret, but still, they're taking the publisher's money, imagine if it was your service: if the users subscribe through your website, you get 100%, and if they subscribe through Apple, they pocket 30% and you get 70%. Apple is relying on the subscribers' not knowing of this money grab...
pentae 5y ago
It would show the app store url, which most would assume to be the developer themselves pushing the app store link and not Apple itself

jpalomaki 5y ago

They key piece is that article claims Apple is doing this so that they can get their 30% transaction fees. If customer pays on the app developers website, Apple is not getting cut. If customer downloads the app and makes payment there, Apple gets their money.

thrwn_frthr_awy 5y ago
I see. So to a end-user it may not make much difference whether they sign up via the web site or app, but if Apple can get in-between, they can cleave 30% of the user’s lifetime revenue. Hiding email, credit card info already entered, subscription management,… there are reasons to want to run everything through Apple, but it’s interesting to see this behind the scenes as it can really change Apple’s incentives.
scottydelta 5y ago
Yes but the ads placed by Apple points to respective apps on Apple app store. So the logic here is that user will most likely subscribe via the app on iPhone and then Apple gets it 30% cut.
weird-eye-issue 5y ago
That is why the ad links to the Apple App Store...

indymike 5y ago

This is monopolistic behavior all the way. Let's leverage our cash to make it more expensive to get customers, and force app publishers to sell their product through our channel. This needs to be stopped. Now.

ChildOfChaos 5y ago
How? Apple is spending it’s money to help promote apps on it’s service, i feel like people attack apple whatever they do. But doesn’t this help defend a 30% app fee, when apple is also paying marketing costs to help the app get more customers through it’s service?
- indymike 5y ago
  > feel like people attack apple whatever they do. I agree. When you have as much economic power as Apple does every move has some side effect. In this case they are actually doing something nefarious and the side effect is simply shifting app company profits to Apple.
- DutchKevv 5y ago
  Not if it doesn't add another 30% of customers. Not even taking in account the rise of advertising for the app creators self, the loses you have from not being able to redirect to your own website, giving specific incentives that Apple doesn't allow etc etc etc. So no, it's not just bashing, and that's the reason Apple does it secretly
- mthoms 5y ago
  Apple are bidding on exact (trademarked) product name matches (eg “HBO Max” and “Tinder”). You might have an argument if Apple was bidding on more general keywords like “online dating” to send traffic to the App Store’s Tinder page. Apple are trying to intercept purchases and/or raise ad costs for the mentioned companies.

tyingq 5y ago

The FTC generally cares more about screwing the end buyer than screwing the app developer. So this probably won't end well for Apple, since it sounds like steering buyers to a more expensive option.

Brian_K_White 5y ago

It's actually an interesting question how nefarious or harmful this actually is. We obviously know why Apple is doing it and why the apps in question don't like it. But a couple things occurred to me: You could view this like Amazon giving away your book or android app in a promotion. As I understand it, they still pay the author as if it were a sale, so the author seemingly has nothong to complain about. Even that still seems wrong to me but that's the argument Amazon uses. That is essentially, no, litterally, Amazon advertizing your product for their own purposes. Another argument Apple and Apple devotees and general "invisible hand" worshippers may try to use is: Any sales generated by the ads would not have existed without the ad, and so it's not taking anything from the app developer. I don't really buy either theory, but it does take some thinking to describe a mechanism by which they cause harm and should be considered invalid. They hold enough water to convince a lot of people who want to be convinced, and the arguments against just sound kind of weak and whiny.

Aulig 5y ago
>Any sales generated by the ads would not have existed without the ad, and so it's not taking anything from the app developer. This argument is not very convincing in my opinion, as it looks like Apple is purchasing ads for brand keywords. If the ad wasn't there, the customer would go to the brands website, which would be ranked #1 without the ad.
- quitit 5y ago
  The example shows the brand name being ranked 1st. For this to be a poor result for the brand it would require cannibalisation rates to be high enough to push the 15/30% fee higher than their margin - that’s not realistic because the app store price would never be at a loss to begin with (with many alreadying increasing the app store fee to match the 15/30% cut.) In all likelihood the end result is a net profit for the developer at the expense of their competitors. Also neglected for consideration: the developer doesn’t pay for these ads - and the scarcity isn’t high enough to meaningfully affect bid pricing over regular competition.
  - 5y ago

spzb 5y ago

Surely if 30% fee wipes out your profit margin, you don’t offer in-app subscriptions. Netflix doesn’t.

threeseed 5y ago
Would add that it's 15% for App Developers earning < $1 million a year.
- fzil 5y ago
  yes, but they aren't running these apps for small apps like that. The ads according to TFA, are for giants like Tinder, HBO Max etc. The little guy making < $1M would obviously appreciate the free publicity.
Tronno 5y ago
Netflix has special agreements with Apple. Other apps have been rejected for doing the same thing: https://www.theverge.com/2020/6/25/21302931/hey-email-service-public-launch-apple-approves-app-fight-policy-price https://www.theverge.com/2020/6/25/21302931/hey-email-servic...

syspec 5y ago

Speculation

cma 5y ago

Just outbid Apple by paying Google 24% of your gross income, likely >50% of your profit (assuming Apple has 6% payment processing/gift card and bandwidth costs; from the Epic trial we know Google has 6% costs). Apple's cost is probably significantly less here as it is a small app and most of the bandwidth is in the streaming, which Apple doesn't help with.

rkk3 5y ago

Ruthless move by Apple - but brands like HBO should just take Netflix's queue and not allow in-app purchases. I was actually surprised to learn some of the app native brands mentioned (Tinder, Bumble) even had a way to sign-up for a subscription outside of the app. Seems like they would actually benefit from apple placing adds.

TheJoeMan 5y ago
Which is why I see this will be a non-issue if on Dec 9th the anti-steering goes away. Then Apple places ad->user downloads->app says “hey it’s cheaper on tinder’s website”->user decides for themselves
- DutchKevv 5y ago
  Unless the app itself cost money to download, then it's to late. You could create a bootstrap page after first install, bit that makes it feel like unfair cause the app was 'free' on the app store. So once again Apple got it all figured out how to make stuff difficult for creators and make money while doing it
  - alisonkisk 5y ago
    Huh? Subscription apps are free to install.
- dwaite 5y ago
  That is making the assumption that steering means the developer doesn't have to pay a commission. There was nothing in the court ruling preventing Apple from amending their developer contracts to put such a condition on steering for non-reader apps.

tinus_hn 5y ago

Is this different from a tv store buying ads for specific tvs that link to that store?

ComodoHacker 5y ago
I think it's different because a store is competing with other stores, not with tv manufacturer.
- tinus_hn 5y ago
  If you assume tv manufacturers are not themselves stores that sell tvs. Would you mind people putting up ads for buying an iPhone in their store?

sam0x17 5y ago

Lovely corporate ethics. I posted this in our company slack room as an example of how not to act for bizdev Google benefits too much from this sort of arrangement to have any incentive to stop it, even though these are unauthorized advertisements that are specifically against Google's AdWords TOS (side note, I wonder if there is a legal avenue to follow when a vendor doesn't follow their own TOS? An interesting thought...). This is also a recurring issue with all of Google's advertising revenue -- malicious behavior such as fraudulent clicks, unauthorized ads, etc., are a decent portion of the revenue stream, and Google is financially incentivized to keep these sorts of abuse going until the ruse is up and the accuracy of their system is called into question publicly in a way that scares away advertisers, but with NDAs and corporate secrecy, it is far too easy to keep things unbalanced, and keep abuse like this in the dark. Business models like this demonstrate just how dire the need for regulation is in some areas of the tech world, particularly among FANG.

threeseed 5y ago
a) It is not against AdWords TOS provided you have permission to use their trademarked terms. Which Apple has since in the Developer agreement [1] they have been assigned permissions to use logos, trademarked terms etc in marketing material. b) Google is incentivised to tackle abuse within their system. It's ridiculous and baseless to say otherwise. Lack of integrity in an ad marketplace very easily can translate to lost dollars. But unfortunately with spoofing being trivial it's simply hard to detect and manage abuse. c) There is no regulation that will prevent this. App developers have signed a legally binding contract. [1] https://developer.apple.com/support/downloads/terms/apple-developer-program/Apple-Developer-Program-License-Agreement-20210607-English.pdf https://developer.apple.com/support/downloads/terms/apple-de...
- deleted 5y ago
  [deleted]
- gpm 5y ago
  a, b) yes c) regulations and laws trump contracts, not the other way around.

andrewstuart 5y ago

Dirty tricks. All the money in the world isn't enough for Apple. I wonder if Google can be said to be colluding with Apple on this.

threeseed 5y ago
App developers have signed a contract giving permission for Apple to do this. There is nothing illegal or dirty about this and frankly I fail to see how it is that different to bidding on competitor's search terms.
- coffeefirst 5y ago
  By "contract" do you mean the ToS that you can't read, can't negotiate, and have no choice but to sign as is in order to appear in the app store?
  - kevinh 5y ago
    You can't read the ToS?

globnomulous 5y ago

Sorry for the mildly off-topic comment, but does anyone else find the writing horrible, almost impenetrable? The first sentence alone seems to have four or five bizarre syntactic and semantic ambiguities. I really have no idea what it's supposed to mean.

haxal 5y ago

Could this be because the volume of searches and people that even open the App Store app daily is so low that now that ATT is in play advertisers aren’t spending as much on marketing for iOS apps?

lordnacho 5y ago

I wonder if this is similar to Uber Eats or Deliveroo getting people to sign up with the help of some particular restaurant's menu, where that restaurant might have its own ordering site. If people get used to using the aggregator the restaurant loses out on the cut.

londons_explore 5y ago

Who wins... Google...

loceng 5y ago

#NoAds needs to start trending.

dagaci 5y ago

It might be legal etc... and app developers and companies seem to have signed away basically control of their app distribution, tradmarks and promotions to Apple the the small letters. But all the same it seems to be a bit sleezy and low for Apple to try and get money by spoofing other companies and brands in fake ads. I get why Google doesnt, care, since Ads is their core business. But does Apple which already makes oceans of cash need to go this low for that little bit of extra $$$

Lhiw 5y ago
What's the issue? A marketplace is finding ways to drive traffic to its platform? It's literally their only job. This is like eBay promoting sales of items on their marketplace using advertising. Which they've done for years.

javajosh 5y ago

That Apple would do this is interesting, but more interesting to me is Google's position, and obligation, here. There was a throw-away line in the article about Google "not doing anything about it". What could or should Google do about it? Has Google mediated between competitive ad-buyers in the past? I am not sympathetic to goog in general but it seems like that line puts them in a no-win situation: either they err for not doing anything, or they err for doing something (but not the right thing). Indeed, in this case it would seem the corrective action would better come from Apple than from Google. (Also note this whole play feels like Apple trying to get creative with ways to productively bleed off ridiculously huge capital reserves in a low risk way. It would be ironic for Apple if this blows up into a big thing, but somehow I really doubt it will. )

webmobdev 5y ago
Indian laws are quite clear that Google has an obligation not to allow ads on trademarked terms (used as keywords): > Justice V Kameswar Rao also observed that allowing individuals who are not owners of a trademark to choose a keyword which is a trademarked term or use parts of the trademark interspersed with generic words in the Ad-title or Ad-text may constitute an infringement of a trademark or it's passing off. The Court also opined that the use of trademarks as keywords amounts to "use" in the course of trade in terms of the Trademarks Act. ( https://www.livelaw.in/news-updates/google-not-absolve-liability-ensuring-keyword-not-infringement-trademark-delhi-high-court-184905 https://www.livelaw.in/news-updates/google-not-absolve-liabi... : ) Something similar is happening here - it seems clear that Apple is also bidding for the trademarked keyword "HBOMax" to show their ad to mislead the user to their app store. As per the indian courts, this can make Google liable if they don't act on complain from the trademark owner.
- throwawayamz27 5y ago
  The apple developer program license lets Apple use this trademark anyway, they can advertise any App however they want.
- tgsovlerkhgsel 5y ago
  My guess would be that the developers gave Apple permission to abuse them in this and other ways when they signed up for the app store.

mmahemoff 5y ago

It's a good thing for those developers. The fact Apple can afford to do this simply reminds us of the fact they can demand a 70-30 split (85-15 after 1 year) and deem themselves the exclusive payment provider. That's the controversial part, which is what this issue reduces to. Whatever the "fair" revenue split is, once you accept it exists, it's a net positive for the developer that Apple is reinvesting to grow the pie. If anyone's hurt by this, it's their smaller competitors who won't get the same love from Apple's ad arbitrage team.

Terretta 5y ago

> When people buy access to a service via a subscription in an iOS app, they are essentially Apple’s customers. For privacy reasons Apple does not provide much information about them to the apps or businesses that run the apps. That means it’s hard to do customer service, address issues, or solve any problems. > “The user experience is much worse,” a marketing executive from one company told me. “When you buy with the developer, they have a relationship with you ... when you buy from Apple: sorry, you’re Apple’s customer, not ours, and if you have a problem with a subscription … we can’t really help them.” Now interview a real user of subscriptions instead of a brand marketing executive and ask them if the user experience is worse. PS. Even when not confronted with such a piece, remember that Forbes is no longer the business journalism folks may have grown up with. For the past decade, it’s a blogging platform for independent contributors: > Each contributor flies solo with his own blog. He is responsible for conceiving and creating the content, ensuring its accuracy and building an engaged, loyal readership. Forbes provides the technology and compensates some of the contributors, but otherwise, like all entrepreneurs, contributors are left to sink or swim on their own. https://www.poynter.org/reporting-editing/2012/what-the-forbes-model-of-contributed-content-means-for-journalism/ https://www.poynter.org/reporting-editing/2012/what-the-forb...

jsmeaton 5y ago
There are pros and cons. As one example my son purchased $500 of skins in Fortnite on Nintendo (I had the card saved, my fault since corrected). Trying to get that refunded was a huge drama because I had to go via Nintendo rather than Epic. In this specific scenario I would have preferred a first party resolution.
- Terretta 5y ago
  Interesting. I’ve had Apple proactively email me about parental controls along with an offer to refund what they seem to have considered excessive in-game currency IAPs. I’d be amazed if the game publisher would have cared at all. No amount of future loyalty to the one game would have offset the cost of the refund. Same is not true for Apple or Nintendo.
5y ago

vnchr 5y ago

Free advertising for apps and everyone here can only see it as nefarious?

jagged-chisel 5y ago
For the apps, but away from those apps’ websites / alternative means of avoiding the Apple Tax. Yeah, that fits “nefarious” in my book.

kristjansson 5y ago

Key, unchallenged assumptions: the Apple ad purely cannibalizes what would otherwise be a first party brand click or organic click, and targeted clickers are as (or less) likely to eventually convert if they click the Apple ad. If either doesn’t hold, Apple may be able to create an incremental conversion that’s net positive for both developer and Apple.

TruthWillHurt 5y ago

Sleep with dogs, wake up with ticks. Abandon Apple, develop PWA version of your web flow.

jfoster 5y ago

If Apple were to make inclusion in this optional, then it would be viewed in a very different light, and there would still be plenty of developers interested in participating.

nhumrich 5y ago

I am curious how this plays out from an antitrust and insider trading point of view. Apple could potentially use it's massive marketing budgeting to "determine the winner" in a specific market, after buying some stock in said company, (or just having good business arrangement with them).

RedWarrior 5y ago

Apple is irrelevant by now.