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> The appellate court then affirmed the same and even clarified more clearly that it’s completely fine because it primarily is the mechanic Apple gets payment f

by bmitc 3y ago

> The appellate court then affirmed the same and even clarified more clearly that it’s completely fine because it primarily is the mechanic Apple gets payment for the use of their IP and, secondly, their services that encompass more than just payment processing. This completely ignores Apple's market power though. Because what stops Apple from making this 40% or 50%? 30% is a fair price? Look what they did to Spotify with Apple Music. They absolutely abused their ownership of the platform to stifle a competitor. Also, things change when you effectively become a utility. Apple shouldn't be able to hide behind their "aww shucks, we need the 30% to keep the lights on" routine.

graeme 3y ago
> Because what stops Apple from making this 40% or 50%? 30% is a fair price? Competitive pressure. 30% is pretty in line with what other platforms charge. Apple has had the same 30% ever since it launched the App Store, back when it was much less dominant. They presumably picked it as a level that would make revenue but also not deter developers. The App Store hasn’t got a monopoly on computing.
- _heimdall 3y ago
  Collusion is the ugly cousin of monopoly. If you can't get a monopoly, work with your few competitors to set an industry standard fee in which you all make a killing and can claim the plausible deniability of "fair market value".
  - graeme 3y ago
    I was referring to video games consoles as well as android. They’re estimated to take around 30%. There’s no world in which Nintendo and apple are colluding to set rates.
    - _heimdall 3y ago
      > There’s no world in which Nintendo and apple are colluding to set rates. What makes you say that? And short of direct collusion, is it fair game if Apple sets the precedent and Nintendo follows suit without direct coordination? If the agreement is only alluded to without being directly stated, are we okay with the ethical precedent regardless of legal standing?
- desert_rue 3y ago
  Compete with what? What options do iPhone users have but the Apple Store?
  - tomrod 3y ago
    Buying an alternative device at a fraction of the cost and using open source apps?
    - bmitc 3y ago
      Did that work with Microsoft and Internet Explorer?
      - tomrod 3y ago
        Despite the EU ruling, yes! Linux exploded during that time, to the point it is the most run OS on the planet. Apple came to maturity. And so forth.
  - dwaite 3y ago
    The internet?
- lapcat 3y ago
  > Apple has had the same 30% ever since it launched the App Store, back when it was much less dominant. They presumably picked it as a level that would make revenue but also not deter developers. They picked 30% because that was the iTunes Music Store cut. The iOS App Store was a direct clone of the iTunes Music Store in almost every way. It even existed inside iTunes for years. As a developer, I can still see "iTunes Connect" in some obscure areas of App Store Connect. The documents from the Epic trial showed that the App Store was thrown together very quickly. Initially, Steve Jobs didn't even want third-party apps on iPhone and had to be convinced to add them.
  - graeme 3y ago
    That doesn’t seem relevant to the question of whether Apple’s fees are in line with fees on other platforms such as on video game consoles. Plausibly iTunes 30% was chosen because it met the same goal: high enough to earn a good amount, low enough music companies found it compelling.
    - lapcat 3y ago
      > That doesn’t seem relevant to the question of whether Apple’s fees are in line with fees on other platforms such as on video game consoles. I've never understood why video game consoles are the relevant platform. iOS is a general-purpose computing platform more akin to Mac and Windows. Indeed, iOS was based on Mac OS X. As an Apple user, I don't even play video games, on either iPhone or Mac. And as an Apple developer, I don't write video games either. Games are 100% irrelevant to my computing life. > Plausibly iTunes 30% was chosen because it met the same goal: high enough to earn a good amount, low enough music companies found it compelling. The problem is that the iTunes Music Store was based on selling 99 cent songs. 30% of that is just 30 cents. Before the App Store, computer software was almost never in the 99 cent price range.
      - turquoisevar 3y ago
        > I've never understood why video game consoles are the relevant platform. From the courts’ perspective, it isn’t. The relevant market definition, as established by the courts, is digital mobile gaming transactions. I’ve called into the District Court’s hearings almost every day, and many days were spent on determining the relevant market, but the long and short of it is that this definition was chosen because: - The impetus of the case was Fortnite - Epic was unconvincing in establishing their EGS was more than just a gaming storefront, which limited the scope of the case to gaming - the court established that free-to-play games generated the vast majority of the App Store revenue You also have to remember that the court can’t just hand out judgments that affect things beyond the case in front of it. This case was Epic v Apple and not, say, a class action by multiple app developers, so the court's conclusions will be limited to the facts that pertain to those two parties. In other words, other markets might exist, but they might not be relevant to the case at hand. Additionally, civil courts prefer to split the baby; in this case, this seems to be a middle ground between Apple’s proposed relevant market (games in general) and Epic’s (Apple’s App Store). An interesting tidbit is that Nintendo’s Switch made a minor cameo of sorts because you can make transactions on it on the go (i.e., it's mobile). Still, the main competitor, according to the court, was Google, leading the court to conclude that Apple is primarily in a duopoly with Google. Personally, I think video game consoles would be part of the relevant market because of the similarities in market dynamics. The way the payment for IP is structured (commission), the way entry to the market is managed (certifications, similar to app review), the way there’s a single brand market (i.e., monopoly by manufacturers), etc. While the purpose of the devices might be different, the underlying products are the same (software), and the market mechanics are nearly identical. Even the platform limitations are artificially created by the platform holder (i.e., what you can and can’t do on iOS is artificially limited, just like what you can and can’t do on consoles is artificially limited by Sony and Microsoft). Drilling it down further, you’ll find that on Xbox, you have access to non-gaming apps, and plenty of people use their iPads as a game device for their kids. Further blurring these lines of purpose. > As an Apple user, I don't even play video games, on either iPhone or Mac You might not, but it wouldn’t come as a surprise to you that others might. I, for example, play games on my Apple devices, as do others in my household. > And as an Apple developer, I don't write video games either. Same here. I mainly write apps, but I dabble in games and know plenty of other devs who make games. > Games are 100% irrelevant to my computing life. What I’m trying to say is that anecdotal arguments aren’t solid. This is not a dig at you; mine aren’t either. > The problem is that the iTunes Music Store was based on selling 99 cent songs. 30% of that is just 30 cents. I don’t follow this logic. Does it matter if $300,000 is extracted via a million $1 transactions or 10,000 $100 transactions? Ultimately, you end up paying $300,000 in commissions. > Before the App Store, computer software was almost never in the 99 cent price range. There’s a lot to unpack with this simple statement. First is, of course, that the race to the bottom is a pro-competitive symptom. If we, as devs, didn’t have to compete so hard, we wouldn’t have to sell our software at low prices. Ironically, this is good for consumers, but the devaluation of software isn’t so great for us developers. Secondly, this, of course, undermines your iTunes $0.99 argument. Whatever it used to be, it’s now the same as with songs via iTunes. Does this mean you’re ok with the 30% commission or 15%, whichever applies to you? This is why I’m saying I have a hard time following your logic because I guess I don’t know exactly what you’re trying to say. Lastly, before the App Store, the revenue cut developers got was abysmal. I don’t know if you’re old enough to recall any of this. I barely am, but it wasn’t pretty. In brick-and-mortar times, you would have a good deal if 40% made its way to you, but more often than not, it was a 70/30 split, with only 30% making it to you, with outliers as low as 10%. Specifically for “smartphone” software, this continued for a while, with carriers being cutthroat regarding revenue split. In the years before the App Store, things got better with Nokia and BlackBerry, who adopted a revenue split closer to 50/50, and Qualcomm’s BREW actually was “good” at times with an 80/20 split in favor of developers. The problem with those, however, was that the barrier to entry was relatively high and costly. Then Apple came along with their 70/30 split, which, as you said, was a copy-paste from the iTunes Store. Still, because both an all-encompassing commission (payment processing wasn’t a separate charge as was typical before then) and because of the abysmal revenue splits in the decades before while also having a comparatively low barrier of entry, it was received with literal cheers. Although I think people were also happy not to have to deal with carriers anymore, that was a huge pain. Sure, App Review can be a pain for some, but it’s a utopian publishing pipeline compared to the hoops one had to jump through and the negations you’d have to go through every time before the App Store came along. Does that mean that Apple is perfect? By no means, there’s plenty they can improve on, but within the historical context of the time, it was like offering someone a glass of ice water to someone who was stuck in hell (to paraphrase a quote from Jobs on iTunes on Windows that didn’t age well). I couldn’t care less about the commission. I was content with 30%, and I knew what I eagerly signed up for. The 15% discount was a nice bonus, and I think I got, and still get, my money’s worth and then some. While my experience is overwhelmingly positive, I think there are other, more pressing matters for me as a developer that Apple can improve on.
throwaway290 3y ago
> Because what stops Apple from making this 40% or 50%? 30% is a fair price? Market. It's capitalism, you know. They provide users to devs (e.g. in case of Epic most people played Fortnite from iOS) and they provide apps to users. If they jack up the price and devs quit, the deal stops being attractive to users because there's not enough apps so Apple risks losing users unless they make selling apps appealing to devs again. > Look what they did to Spotify with Apple Music. They absolutely abused their ownership of the platform to stifle a competitor. Everyone I know on iPhone is using Spotify except me so for me it is hard to see who is stifled exactly...
- LocalH 3y ago
  >most people play Fortnite from iOS There is no current iOS version of Fortnite. The only way to do it is with Amazon Luna or Xbox Cloud Gaming, which is only "playing Fortnite from iOS" on the very surface.
  - throwaway290 3y ago
    > There is no current iOS version of Fortnite. The only way to do it is with Amazon Luna or Xbox Cloud Gaming, which is only "playing Fortnite from iOS" on the very surface. It's not there anymore but it was there originally. (It'd be amazing if it still were. If you were allowing me to sell my game in your store for a fee, and I stopped paying the fee AND sued you, you'd remove me from the store first thing. First to avoid funding my legal expenses and second because I agreed to your ToS that allow you to do it literally for any reason you like.) After it was removed, Epic found out that people who were casually playing Fortnite on iOS were not about to start buying PCs and gaming consoles. After all there are other games in the store, including tons of buy-once-play-forever games which don't leech money off you or your kids like Fortnite does. > More than 116 million registered users have accessed Fortnite through iOS -- more than through any other platform, Epic said in the filing https://www.bnnbloomberg.ca/fortnite-users-flee-after-getting-caught-in-apple-dispute-1.1490922.amp.html https://www.bnnbloomberg.ca/fortnite-users-flee-after-gettin...
  - fragmede 3y ago
    Thats playing Fortnite! In what ways isn't that playing Fortnite? The GPU is in the cloud, but other than that, it's the full game, not some knock-off lite fake version.
turquoisevar 3y ago
> This completely ignores Apple's market power though. Market power has little to do with the legality of a business model at first blush. Only in very narrow circumstances might it be a relevant factor. In this case, market power doesn’t matter at all, no matter which angle you approach it with. For starters, fundamentally, market power doesn’t preclude a company from extracting payment in exchange for their services and IP. This is what both courts explicitly (re)affirmed. And that makes sense, of course; just because you’re big doesn’t mean you can be forced to give your stuff away for free. From an antitrust angle, market power mainly starts to matter once you abuse that market power. Here, all signs on the commission point the opposite way. Apple introduced the 30% commission and the strict App Store rules around the same time the App Store was launched, at which point they had no relevant market power to speak of, so that was not an antitrust issue. The parties quibbled a bit about at which point Apple gained market dominance because that’s a relevant measuring point to establish antitrust issues. Still, regardless of wherever you place that starting point, it is clear that Apple didn’t use that market power to turn on the screws. They didn’t, say, increase the commission or impose more onerous restrictions. The opposite happened. They first introduced a commission discount of 15% for subscriptions after the first year, and later on, they introduced the small business program that provides a 15% reduction to developers with less than $1M in revenue, which, as I understand it to be, covers about 90% of the developers. These moves, whether for altruistic reasons, goodwill reasons, or fear of regulatory action, are the opposite of abusing one’s market power. I think that Apple is quite aware of this risk, which is why they always introduce things minimally and strictly, because that gives them the option to assess and decide to loosen up things, whereas the opposite isn’t possible; they can’t impose more restrictions due to the potential antitrust issues at their current size. Moreover, courts aren’t eager to retroactively punish just based on success. The way the courts see it, it’s almost self-evident that Apple wasn’t acting in an anti-competitive way with their commission. From their perspective, if Apple was able to enter a market as a nobody (or create it even, if that’s how you want to look at it) with such restrictive rules and with a commission rate that is now considered high (even though it was a significantly lower commission than what was standard at the time) and still managed to capture a good chunk of the market as they did, then there must be pro-competitive forces at play, even when it’s hard to quantify them. Again, the way they see it, if it all were so terrible, then nobody would’ve signed up for it in the first place. So, there had to be a pro-competitive benefit that outweighed all of those negatives. > Because what stops Apple from making this 40% or 50%? 30% is a fair price? Competition in the relevant markets as defined by the court? Antitrust violations? Pick your poison. Courts generally don’t care much for hypotheticals because hypotheticals can’t be remedied, and it doesn’t feel good to dole out punishments for things that could be. Courts tend to limit themselves to what has happened instead of what could happen. That’s not to say they don’t look at it at all. In this specific case, they’ve looked at the competitive effects and what would stop Apple from doing X, Y, and Z in their test to establish how much competitive pressure Apple is under to understand the motivations behind some of Apple’s actions. But ultimately, unless Apple does the thing you fear, they can’t punish it. > Look what they did to Spotify with Apple Music. They absolutely abused their ownership of the platform to stifle a competitor. I’m looking, but I don’t see much. Of course, this is in part because Spotify wasn’t a party in this case, and so their arguments weren’t a part of the considerations, and the Spotify matter hasn’t been adjudicated. Ultimately, what I see is that Apple has some benefits that Spotify doesn’t have. Apple doesn’t have to pay itself a commission (although it might have some internal bookkeeping that accounts for its left hand paying its right hand, like how the Apple entities pay the Irish entity licensing fees for selling Apple products and IP). Apple also has easier access to customers under their vertical integration. Other than that, Spotify has near feature parity (or at least the option to offer feature parity) by the frameworks Apple offers third parties. At face value, this isn’t enough for an antitrust case. Businesses can expand and offer customers services that compete with third-party services and leverage their existing customer relationships to try and sell those services. There is no positive obligation to facilitate competition or even help competition. There is, however, a prohibition to leverage your power to stifle your competition actively; an excellent example of this would be Apple banning Spotify from the App Store once they started Apple Music. But again, the opposite is true; they created frameworks that can offer feature parity with Apple Music. > Also, things change when you effectively become a utility. Apple shouldn't be able to hide behind their "aww shucks, we need the 30% to keep the lights on" routine. Perhaps for you, but not necessarily for the courts. Especially when they haven’t designated your service as a utility. Again, just because you are successful (i.e., widely used, successful at selling your stuff) doesn’t mean you suddenly lose your rights. What’s surprising to me is that everyone always goes, “Oooh, just wait until Apple gets sued and the court gets involved.” Then, when the courts decide differently than the desired outcome, people try to relitigate the matter. Either people have a poor understanding of what matters legally, or people have expectations that don’t match the legal reality of standing law. And it’s not like the 9th Circuit or the District Court for the Northern District of California are known to be “activist courts” or known to be corporate friendly. If anything, they’re known to be pretty strict on SV corporations. You can read plenty of admonishments in the District Court’s judgment, but ultimately, they have to stick to the laws and case law at hand.

by bmitc 3y ago

graeme 3y ago

> Because what stops Apple from making this 40% or 50%? 30% is a fair price? Competitive pressure. 30% is pretty in line with what other platforms charge. Apple has had the same 30% ever since it launched the App Store, back when it was much less dominant. They presumably picked it as a level that would make revenue but also not deter developers. The App Store hasn’t got a monopoly on computing.

_heimdall 3y ago
Collusion is the ugly cousin of monopoly. If you can't get a monopoly, work with your few competitors to set an industry standard fee in which you all make a killing and can claim the plausible deniability of "fair market value".
- graeme 3y ago
  I was referring to video games consoles as well as android. They’re estimated to take around 30%. There’s no world in which Nintendo and apple are colluding to set rates.
  - _heimdall 3y ago
    > There’s no world in which Nintendo and apple are colluding to set rates. What makes you say that? And short of direct collusion, is it fair game if Apple sets the precedent and Nintendo follows suit without direct coordination? If the agreement is only alluded to without being directly stated, are we okay with the ethical precedent regardless of legal standing?
desert_rue 3y ago
Compete with what? What options do iPhone users have but the Apple Store?
- tomrod 3y ago
  Buying an alternative device at a fraction of the cost and using open source apps?
  - bmitc 3y ago
    Did that work with Microsoft and Internet Explorer?
    - tomrod 3y ago
      Despite the EU ruling, yes! Linux exploded during that time, to the point it is the most run OS on the planet. Apple came to maturity. And so forth.
- dwaite 3y ago
  The internet?
lapcat 3y ago
> Apple has had the same 30% ever since it launched the App Store, back when it was much less dominant. They presumably picked it as a level that would make revenue but also not deter developers. They picked 30% because that was the iTunes Music Store cut. The iOS App Store was a direct clone of the iTunes Music Store in almost every way. It even existed inside iTunes for years. As a developer, I can still see "iTunes Connect" in some obscure areas of App Store Connect. The documents from the Epic trial showed that the App Store was thrown together very quickly. Initially, Steve Jobs didn't even want third-party apps on iPhone and had to be convinced to add them.
- graeme 3y ago
  That doesn’t seem relevant to the question of whether Apple’s fees are in line with fees on other platforms such as on video game consoles. Plausibly iTunes 30% was chosen because it met the same goal: high enough to earn a good amount, low enough music companies found it compelling.
  - lapcat 3y ago
    > That doesn’t seem relevant to the question of whether Apple’s fees are in line with fees on other platforms such as on video game consoles. I've never understood why video game consoles are the relevant platform. iOS is a general-purpose computing platform more akin to Mac and Windows. Indeed, iOS was based on Mac OS X. As an Apple user, I don't even play video games, on either iPhone or Mac. And as an Apple developer, I don't write video games either. Games are 100% irrelevant to my computing life. > Plausibly iTunes 30% was chosen because it met the same goal: high enough to earn a good amount, low enough music companies found it compelling. The problem is that the iTunes Music Store was based on selling 99 cent songs. 30% of that is just 30 cents. Before the App Store, computer software was almost never in the 99 cent price range.
    - turquoisevar 3y ago
      > I've never understood why video game consoles are the relevant platform. From the courts’ perspective, it isn’t. The relevant market definition, as established by the courts, is digital mobile gaming transactions. I’ve called into the District Court’s hearings almost every day, and many days were spent on determining the relevant market, but the long and short of it is that this definition was chosen because: - The impetus of the case was Fortnite - Epic was unconvincing in establishing their EGS was more than just a gaming storefront, which limited the scope of the case to gaming - the court established that free-to-play games generated the vast majority of the App Store revenue You also have to remember that the court can’t just hand out judgments that affect things beyond the case in front of it. This case was Epic v Apple and not, say, a class action by multiple app developers, so the court's conclusions will be limited to the facts that pertain to those two parties. In other words, other markets might exist, but they might not be relevant to the case at hand. Additionally, civil courts prefer to split the baby; in this case, this seems to be a middle ground between Apple’s proposed relevant market (games in general) and Epic’s (Apple’s App Store). An interesting tidbit is that Nintendo’s Switch made a minor cameo of sorts because you can make transactions on it on the go (i.e., it's mobile). Still, the main competitor, according to the court, was Google, leading the court to conclude that Apple is primarily in a duopoly with Google. Personally, I think video game consoles would be part of the relevant market because of the similarities in market dynamics. The way the payment for IP is structured (commission), the way entry to the market is managed (certifications, similar to app review), the way there’s a single brand market (i.e., monopoly by manufacturers), etc. While the purpose of the devices might be different, the underlying products are the same (software), and the market mechanics are nearly identical. Even the platform limitations are artificially created by the platform holder (i.e., what you can and can’t do on iOS is artificially limited, just like what you can and can’t do on consoles is artificially limited by Sony and Microsoft). Drilling it down further, you’ll find that on Xbox, you have access to non-gaming apps, and plenty of people use their iPads as a game device for their kids. Further blurring these lines of purpose. > As an Apple user, I don't even play video games, on either iPhone or Mac You might not, but it wouldn’t come as a surprise to you that others might. I, for example, play games on my Apple devices, as do others in my household. > And as an Apple developer, I don't write video games either. Same here. I mainly write apps, but I dabble in games and know plenty of other devs who make games. > Games are 100% irrelevant to my computing life. What I’m trying to say is that anecdotal arguments aren’t solid. This is not a dig at you; mine aren’t either. > The problem is that the iTunes Music Store was based on selling 99 cent songs. 30% of that is just 30 cents. I don’t follow this logic. Does it matter if $300,000 is extracted via a million $1 transactions or 10,000 $100 transactions? Ultimately, you end up paying $300,000 in commissions. > Before the App Store, computer software was almost never in the 99 cent price range. There’s a lot to unpack with this simple statement. First is, of course, that the race to the bottom is a pro-competitive symptom. If we, as devs, didn’t have to compete so hard, we wouldn’t have to sell our software at low prices. Ironically, this is good for consumers, but the devaluation of software isn’t so great for us developers. Secondly, this, of course, undermines your iTunes $0.99 argument. Whatever it used to be, it’s now the same as with songs via iTunes. Does this mean you’re ok with the 30% commission or 15%, whichever applies to you? This is why I’m saying I have a hard time following your logic because I guess I don’t know exactly what you’re trying to say. Lastly, before the App Store, the revenue cut developers got was abysmal. I don’t know if you’re old enough to recall any of this. I barely am, but it wasn’t pretty. In brick-and-mortar times, you would have a good deal if 40% made its way to you, but more often than not, it was a 70/30 split, with only 30% making it to you, with outliers as low as 10%. Specifically for “smartphone” software, this continued for a while, with carriers being cutthroat regarding revenue split. In the years before the App Store, things got better with Nokia and BlackBerry, who adopted a revenue split closer to 50/50, and Qualcomm’s BREW actually was “good” at times with an 80/20 split in favor of developers. The problem with those, however, was that the barrier to entry was relatively high and costly. Then Apple came along with their 70/30 split, which, as you said, was a copy-paste from the iTunes Store. Still, because both an all-encompassing commission (payment processing wasn’t a separate charge as was typical before then) and because of the abysmal revenue splits in the decades before while also having a comparatively low barrier of entry, it was received with literal cheers. Although I think people were also happy not to have to deal with carriers anymore, that was a huge pain. Sure, App Review can be a pain for some, but it’s a utopian publishing pipeline compared to the hoops one had to jump through and the negations you’d have to go through every time before the App Store came along. Does that mean that Apple is perfect? By no means, there’s plenty they can improve on, but within the historical context of the time, it was like offering someone a glass of ice water to someone who was stuck in hell (to paraphrase a quote from Jobs on iTunes on Windows that didn’t age well). I couldn’t care less about the commission. I was content with 30%, and I knew what I eagerly signed up for. The 15% discount was a nice bonus, and I think I got, and still get, my money’s worth and then some. While my experience is overwhelmingly positive, I think there are other, more pressing matters for me as a developer that Apple can improve on.

throwaway290 3y ago

> Because what stops Apple from making this 40% or 50%? 30% is a fair price? Market. It's capitalism, you know. They provide users to devs (e.g. in case of Epic most people played Fortnite from iOS) and they provide apps to users. If they jack up the price and devs quit, the deal stops being attractive to users because there's not enough apps so Apple risks losing users unless they make selling apps appealing to devs again. > Look what they did to Spotify with Apple Music. They absolutely abused their ownership of the platform to stifle a competitor. Everyone I know on iPhone is using Spotify except me so for me it is hard to see who is stifled exactly...

LocalH 3y ago
>most people play Fortnite from iOS There is no current iOS version of Fortnite. The only way to do it is with Amazon Luna or Xbox Cloud Gaming, which is only "playing Fortnite from iOS" on the very surface.
- throwaway290 3y ago
  > There is no current iOS version of Fortnite. The only way to do it is with Amazon Luna or Xbox Cloud Gaming, which is only "playing Fortnite from iOS" on the very surface. It's not there anymore but it was there originally. (It'd be amazing if it still were. If you were allowing me to sell my game in your store for a fee, and I stopped paying the fee AND sued you, you'd remove me from the store first thing. First to avoid funding my legal expenses and second because I agreed to your ToS that allow you to do it literally for any reason you like.) After it was removed, Epic found out that people who were casually playing Fortnite on iOS were not about to start buying PCs and gaming consoles. After all there are other games in the store, including tons of buy-once-play-forever games which don't leech money off you or your kids like Fortnite does. > More than 116 million registered users have accessed Fortnite through iOS -- more than through any other platform, Epic said in the filing https://www.bnnbloomberg.ca/fortnite-users-flee-after-getting-caught-in-apple-dispute-1.1490922.amp.html https://www.bnnbloomberg.ca/fortnite-users-flee-after-gettin...
- fragmede 3y ago
  Thats playing Fortnite! In what ways isn't that playing Fortnite? The GPU is in the cloud, but other than that, it's the full game, not some knock-off lite fake version.

turquoisevar 3y ago

> This completely ignores Apple's market power though. Market power has little to do with the legality of a business model at first blush. Only in very narrow circumstances might it be a relevant factor. In this case, market power doesn’t matter at all, no matter which angle you approach it with. For starters, fundamentally, market power doesn’t preclude a company from extracting payment in exchange for their services and IP. This is what both courts explicitly (re)affirmed. And that makes sense, of course; just because you’re big doesn’t mean you can be forced to give your stuff away for free. From an antitrust angle, market power mainly starts to matter once you abuse that market power. Here, all signs on the commission point the opposite way. Apple introduced the 30% commission and the strict App Store rules around the same time the App Store was launched, at which point they had no relevant market power to speak of, so that was not an antitrust issue. The parties quibbled a bit about at which point Apple gained market dominance because that’s a relevant measuring point to establish antitrust issues. Still, regardless of wherever you place that starting point, it is clear that Apple didn’t use that market power to turn on the screws. They didn’t, say, increase the commission or impose more onerous restrictions. The opposite happened. They first introduced a commission discount of 15% for subscriptions after the first year, and later on, they introduced the small business program that provides a 15% reduction to developers with less than $1M in revenue, which, as I understand it to be, covers about 90% of the developers. These moves, whether for altruistic reasons, goodwill reasons, or fear of regulatory action, are the opposite of abusing one’s market power. I think that Apple is quite aware of this risk, which is why they always introduce things minimally and strictly, because that gives them the option to assess and decide to loosen up things, whereas the opposite isn’t possible; they can’t impose more restrictions due to the potential antitrust issues at their current size. Moreover, courts aren’t eager to retroactively punish just based on success. The way the courts see it, it’s almost self-evident that Apple wasn’t acting in an anti-competitive way with their commission. From their perspective, if Apple was able to enter a market as a nobody (or create it even, if that’s how you want to look at it) with such restrictive rules and with a commission rate that is now considered high (even though it was a significantly lower commission than what was standard at the time) and still managed to capture a good chunk of the market as they did, then there must be pro-competitive forces at play, even when it’s hard to quantify them. Again, the way they see it, if it all were so terrible, then nobody would’ve signed up for it in the first place. So, there had to be a pro-competitive benefit that outweighed all of those negatives. > Because what stops Apple from making this 40% or 50%? 30% is a fair price? Competition in the relevant markets as defined by the court? Antitrust violations? Pick your poison. Courts generally don’t care much for hypotheticals because hypotheticals can’t be remedied, and it doesn’t feel good to dole out punishments for things that could be. Courts tend to limit themselves to what has happened instead of what could happen. That’s not to say they don’t look at it at all. In this specific case, they’ve looked at the competitive effects and what would stop Apple from doing X, Y, and Z in their test to establish how much competitive pressure Apple is under to understand the motivations behind some of Apple’s actions. But ultimately, unless Apple does the thing you fear, they can’t punish it. > Look what they did to Spotify with Apple Music. They absolutely abused their ownership of the platform to stifle a competitor. I’m looking, but I don’t see much. Of course, this is in part because Spotify wasn’t a party in this case, and so their arguments weren’t a part of the considerations, and the Spotify matter hasn’t been adjudicated. Ultimately, what I see is that Apple has some benefits that Spotify doesn’t have. Apple doesn’t have to pay itself a commission (although it might have some internal bookkeeping that accounts for its left hand paying its right hand, like how the Apple entities pay the Irish entity licensing fees for selling Apple products and IP). Apple also has easier access to customers under their vertical integration. Other than that, Spotify has near feature parity (or at least the option to offer feature parity) by the frameworks Apple offers third parties. At face value, this isn’t enough for an antitrust case. Businesses can expand and offer customers services that compete with third-party services and leverage their existing customer relationships to try and sell those services. There is no positive obligation to facilitate competition or even help competition. There is, however, a prohibition to leverage your power to stifle your competition actively; an excellent example of this would be Apple banning Spotify from the App Store once they started Apple Music. But again, the opposite is true; they created frameworks that can offer feature parity with Apple Music. > Also, things change when you effectively become a utility. Apple shouldn't be able to hide behind their "aww shucks, we need the 30% to keep the lights on" routine. Perhaps for you, but not necessarily for the courts. Especially when they haven’t designated your service as a utility. Again, just because you are successful (i.e., widely used, successful at selling your stuff) doesn’t mean you suddenly lose your rights. What’s surprising to me is that everyone always goes, “Oooh, just wait until Apple gets sued and the court gets involved.” Then, when the courts decide differently than the desired outcome, people try to relitigate the matter. Either people have a poor understanding of what matters legally, or people have expectations that don’t match the legal reality of standing law. And it’s not like the 9th Circuit or the District Court for the Northern District of California are known to be “activist courts” or known to be corporate friendly. If anything, they’re known to be pretty strict on SV corporations. You can read plenty of admonishments in the District Court’s judgment, but ultimately, they have to stick to the laws and case law at hand.