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> Developers are in arms because they don't believe Apple deserves any money for distributing their app on their App Store. Rephrased - Developers are up in a

> Developers are in arms because they don't believe Apple deserves any money for distributing their app on their App Store. Rephrased - Developers are up in arms because the cost of distribution on iOS is artificially high. It's artificially high because the cost is not subject to market forces. It's not subject to market forces because Apple has a vertical monopoly on hardware and software distribution. Vertical integration is illegal.

robertlagrant 3y ago
The cost is subject to market forces if you believe that other phones exist.
dkonofalski 3y ago
That's not true in the slightest, though. Sony, Microsoft, Nintendo, and Steam all take 30% for distribution and hosting, same as Apple. It's not artificially high if it's in line with the rest of the tech industry and if you want to try and claim that it's because of some monopoly, vertical or otherwise, then you have to explain why the other storefronts are also monopolies. It's not a monopoly. Other phones and ecosystems exist.
- arrosenberg 3y ago
  > Sony, Microsoft, Nintendo, and Steam all take 30% for distribution and hosting, same as Apple. > It's not a monopoly. I believe you have accurately described a cartel, however.
  - s1artibartfast 3y ago
    Cartel =/= same rate. It requires more than just price matching. this is why gas stations and grocery stores aren't cartels either.
    - arrosenberg 3y ago
      There are absolutely antitrust issues with grocery stores - Kroger/Albertsons is being contested right now! It's a major contributor to food deserts. It's not a cartel because the main players aren't acting in concert, but they are attempting to monopolize regionally. Walmart has also concentrated way too much power, but that's the 800 lb gorilla no one wants to touch. That said, gas stations and grocery stores deal in commodity products. The video game companies are much more integrated with many games that will only run on one system, stores will only run on one type of hardware, and games are not transferrable between competitor systems. Competition is extremely restrained because of these exclusive and limited distribution agreements. The fact that they all maintain the same line on prices is a very clear signal of cartel behavior when you take the context into account - they are using control of a distribution chokepoint to control competition and pricing power. That's the essence of why antitrust laws passed in the first place.
      - s1artibartfast 3y ago
        I dont have an opinion on regional monopoly, just the cartel issue, because I almost never hear it used correctly.
  - selectodude 3y ago
    Epic has a game store charging 12 percent and nobody seems to care much about it.
    - etchalon 3y ago
      Because developers go where the users are. That's all that matters. Epic had to pay developers, a lot, to bootstrap the Epic store so that there were games there that mattered. And even now, with a decent selection, most PC gamers still use Steam. Because all their games are on Steam already. And every game they care about is on Steam. So Steam can charge 30% and Epic can charge 12% and nothing really changes.
    - arrosenberg 3y ago
      Probably has to do with market power. For my money, none of these companies should be allowed to own a game marketplace. The distribution channels should be stand alone from the hardware and software producers.
  - ribosometronome 3y ago
    I believe you're arguing in bad faith. Are you just becoming aware of these companies 30% cuts? Why were you calling Apple a monopoly if you think this is a cartel issue? What evidence do you have of cartel behavior other than that people followed suite in setting rates?
    - arrosenberg 3y ago
      You shouldn't make that assumption without significantly more proof. Why can't it be both? In the App space Apple has the dominant position in a duopoly, and in the software distribution space more broadly there is cartel-like behavior occurring regarding commissions because distribution has become a major chokepoint (I'm guessing thanks to DRM, but that's probably oversimplifying).
- kevingadd 3y ago
  This is not accurate. Do more research. Steam has a tiered cut they introduced to keep big players on their store, for example. Google and Apple both offer a lower rate for small business. And alternative stores on PC successfully operate with much lower cuts (EGS, GOG, itch, humble). It's not "in line with the rest of the industry", it's "no higher than the other bad ones". Steam also doesn't collect 30% for distribution (ie developer issued keys for things like bundles)
- freetanga 3y ago
  On consoles I can buy a digital copy, and I believe the 30% does not apply. On Windows I can buy a digital copy on the devs website and MS gets nothing. On Steam, I could buy the game in another storefront (GOG), or Direct, and Valve would get nothing. On Android I could use a separate AppStore and Google would get nothing… In other words, in all those platforms devs can opt in to participate on a centralized store taking 30%, or keeping an alternative channel with higher revenues. On iOS, not so much. Years ago, Apple had a loving relationship with Devs. Now Apple is an over demanding Karen yelling over her alimony payments every end of the month.
  - etchalon 3y ago
    Digital copies on consoles still get 30%, and console agreements may include additional royalties beyond that. There is no way, on any major console, to "opt out" of the fee. Mac has the same options available to developers as Windows. Steam's third-party redemption mechanic is notable, and awesome. On Android, different third-party stores have different fees. Samsung, for instance, charges the same 30% as Google. Epic's store charges 12%.
Someone 3y ago
> Vertical integration is illegal. Is it? The only related info I could find is https://www.investopedia.com/ask/answers/012615/what-are-legal-barriers-vertical-integration.asp https://www.investopedia.com/ask/answers/012615/what-are-leg..., which says it _can_ be illegal (in the USA) if it is achieved through a merger. https://en.wikipedia.org/wiki/Vertical_integration https://en.wikipedia.org/wiki/Vertical_integration mentions quite a few examples of existing vertically integrated companies, mentions a few court cases, but doesn’t say it’s outright illegal. Also, if vertical integration is illegal in the USA, somebody should tell Musk he should split up Tesla and SpaceX.
- arrosenberg 3y ago
  It can be in certain cases if it is in restraint of trade. > if vertical integration is illegal in the USA, somebody should tell Musk he should split up Tesla and SpaceX. How are those companies related in terms of market power? I don't see it. Plus, space is so capital intensive and reliant on government contracts that pursuing it would be pointless.
ericmay 3y ago
How is it not subject to market forces? That doesn't make sense. If Apple's platform doesn't work for their profit margins they are free to sell their software elsewhere, including a plethora of phones from a diverse set of manufacturers. But they don't want to do that because Apple's platform makes them a fuck load of money. They just want more of it. How about this: Apple can charge Epic the same outrageous* 12% that Epic charges game developers. Do you think that would alleviate Epic's concerns? > Vertical integration is illegal. Can you provide a legal document or explicit law that states "vertical integration is illegal"? * It's outrageous because Epic provides even fewer services (SDKs for example), still requires developer fees $100/submission, and has a much smaller user base. They're also not really doing anything. At least Apple makes the iPhone and improves the capabilities of it each year...
- arrosenberg 3y ago
  > How is it not subject to market forces? That doesn't make sense. 65% of domestic App Store revenue is on iOS, and the Apple app store is the only distribution channel. What market forces affect Apple's pricing power on commissions? > Can you provide a legal document or explicit law that states "vertical integration is illegal"? No, because like all things, it's about how you use it. Per the FTC - Exclusive dealing and exclusive distribution arrangements may be anticompetitive, however, if they are used to raise rivals' costs, exclude (or foreclose) competition, or facilitate tacit collusion. Exclusive dealing contracts may raise rivals' costs when the contracts are made with so many retailers, and lock up so much capacity at the retail level, that competing manufacturers are unable to attain minimum efficient scale in either the production or the distribution functions. Apple is dealing with itself - maybe that argument holds in court (certainly has a shot with the current junta). It would certainly help if Congress would update the law for the 21st century. It's close enough to the line that it can be argued, and they are clearly nervous about it. > How about this: Apple can charge Epic the same outrageous* 12% that Epic charges game developers. Do you think that would alleviate Epic's concerns? Be mad at someone else. I don't know or care about Epic and I don't play Fortnite. I just know that private companies should not be able levy a tax or unreasonable tolls in restraint of commerce. It's hard to justify a 30% toll on 65% of a $100B+ market without at least knowing if a third-party marketplace would offer better rates and service.
etchalon 3y ago
Vertical integration is not, in any way, illegal.

robertlagrant 3y ago

The cost is subject to market forces if you believe that other phones exist.

dkonofalski 3y ago

That's not true in the slightest, though. Sony, Microsoft, Nintendo, and Steam all take 30% for distribution and hosting, same as Apple. It's not artificially high if it's in line with the rest of the tech industry and if you want to try and claim that it's because of some monopoly, vertical or otherwise, then you have to explain why the other storefronts are also monopolies. It's not a monopoly. Other phones and ecosystems exist.

arrosenberg 3y ago
> Sony, Microsoft, Nintendo, and Steam all take 30% for distribution and hosting, same as Apple. > It's not a monopoly. I believe you have accurately described a cartel, however.
- s1artibartfast 3y ago
  Cartel =/= same rate. It requires more than just price matching. this is why gas stations and grocery stores aren't cartels either.
  - arrosenberg 3y ago
    There are absolutely antitrust issues with grocery stores - Kroger/Albertsons is being contested right now! It's a major contributor to food deserts. It's not a cartel because the main players aren't acting in concert, but they are attempting to monopolize regionally. Walmart has also concentrated way too much power, but that's the 800 lb gorilla no one wants to touch. That said, gas stations and grocery stores deal in commodity products. The video game companies are much more integrated with many games that will only run on one system, stores will only run on one type of hardware, and games are not transferrable between competitor systems. Competition is extremely restrained because of these exclusive and limited distribution agreements. The fact that they all maintain the same line on prices is a very clear signal of cartel behavior when you take the context into account - they are using control of a distribution chokepoint to control competition and pricing power. That's the essence of why antitrust laws passed in the first place.
    - s1artibartfast 3y ago
      I dont have an opinion on regional monopoly, just the cartel issue, because I almost never hear it used correctly.
- selectodude 3y ago
  Epic has a game store charging 12 percent and nobody seems to care much about it.
  - etchalon 3y ago
    Because developers go where the users are. That's all that matters. Epic had to pay developers, a lot, to bootstrap the Epic store so that there were games there that mattered. And even now, with a decent selection, most PC gamers still use Steam. Because all their games are on Steam already. And every game they care about is on Steam. So Steam can charge 30% and Epic can charge 12% and nothing really changes.
  - arrosenberg 3y ago
    Probably has to do with market power. For my money, none of these companies should be allowed to own a game marketplace. The distribution channels should be stand alone from the hardware and software producers.
- ribosometronome 3y ago
  I believe you're arguing in bad faith. Are you just becoming aware of these companies 30% cuts? Why were you calling Apple a monopoly if you think this is a cartel issue? What evidence do you have of cartel behavior other than that people followed suite in setting rates?
  - arrosenberg 3y ago
    You shouldn't make that assumption without significantly more proof. Why can't it be both? In the App space Apple has the dominant position in a duopoly, and in the software distribution space more broadly there is cartel-like behavior occurring regarding commissions because distribution has become a major chokepoint (I'm guessing thanks to DRM, but that's probably oversimplifying).
kevingadd 3y ago
This is not accurate. Do more research. Steam has a tiered cut they introduced to keep big players on their store, for example. Google and Apple both offer a lower rate for small business. And alternative stores on PC successfully operate with much lower cuts (EGS, GOG, itch, humble). It's not "in line with the rest of the industry", it's "no higher than the other bad ones". Steam also doesn't collect 30% for distribution (ie developer issued keys for things like bundles)
freetanga 3y ago
On consoles I can buy a digital copy, and I believe the 30% does not apply. On Windows I can buy a digital copy on the devs website and MS gets nothing. On Steam, I could buy the game in another storefront (GOG), or Direct, and Valve would get nothing. On Android I could use a separate AppStore and Google would get nothing… In other words, in all those platforms devs can opt in to participate on a centralized store taking 30%, or keeping an alternative channel with higher revenues. On iOS, not so much. Years ago, Apple had a loving relationship with Devs. Now Apple is an over demanding Karen yelling over her alimony payments every end of the month.
- etchalon 3y ago
  Digital copies on consoles still get 30%, and console agreements may include additional royalties beyond that. There is no way, on any major console, to "opt out" of the fee. Mac has the same options available to developers as Windows. Steam's third-party redemption mechanic is notable, and awesome. On Android, different third-party stores have different fees. Samsung, for instance, charges the same 30% as Google. Epic's store charges 12%.

Someone 3y ago

> Vertical integration is illegal. Is it? The only related info I could find is https://www.investopedia.com/ask/answers/012615/what-are-legal-barriers-vertical-integration.asp https://www.investopedia.com/ask/answers/012615/what-are-leg..., which says it _can_ be illegal (in the USA) if it is achieved through a merger. https://en.wikipedia.org/wiki/Vertical_integration https://en.wikipedia.org/wiki/Vertical_integration mentions quite a few examples of existing vertically integrated companies, mentions a few court cases, but doesn’t say it’s outright illegal. Also, if vertical integration is illegal in the USA, somebody should tell Musk he should split up Tesla and SpaceX.

arrosenberg 3y ago
It can be in certain cases if it is in restraint of trade. > if vertical integration is illegal in the USA, somebody should tell Musk he should split up Tesla and SpaceX. How are those companies related in terms of market power? I don't see it. Plus, space is so capital intensive and reliant on government contracts that pursuing it would be pointless.

ericmay 3y ago

How is it not subject to market forces? That doesn't make sense. If Apple's platform doesn't work for their profit margins they are free to sell their software elsewhere, including a plethora of phones from a diverse set of manufacturers. But they don't want to do that because Apple's platform makes them a fuck load of money. They just want more of it. How about this: Apple can charge Epic the same outrageous* 12% that Epic charges game developers. Do you think that would alleviate Epic's concerns? > Vertical integration is illegal. Can you provide a legal document or explicit law that states "vertical integration is illegal"? * It's outrageous because Epic provides even fewer services (SDKs for example), still requires developer fees $100/submission, and has a much smaller user base. They're also not really doing anything. At least Apple makes the iPhone and improves the capabilities of it each year...

arrosenberg 3y ago
> How is it not subject to market forces? That doesn't make sense. 65% of domestic App Store revenue is on iOS, and the Apple app store is the only distribution channel. What market forces affect Apple's pricing power on commissions? > Can you provide a legal document or explicit law that states "vertical integration is illegal"? No, because like all things, it's about how you use it. Per the FTC - Exclusive dealing and exclusive distribution arrangements may be anticompetitive, however, if they are used to raise rivals' costs, exclude (or foreclose) competition, or facilitate tacit collusion. Exclusive dealing contracts may raise rivals' costs when the contracts are made with so many retailers, and lock up so much capacity at the retail level, that competing manufacturers are unable to attain minimum efficient scale in either the production or the distribution functions. Apple is dealing with itself - maybe that argument holds in court (certainly has a shot with the current junta). It would certainly help if Congress would update the law for the 21st century. It's close enough to the line that it can be argued, and they are clearly nervous about it. > How about this: Apple can charge Epic the same outrageous* 12% that Epic charges game developers. Do you think that would alleviate Epic's concerns? Be mad at someone else. I don't know or care about Epic and I don't play Fortnite. I just know that private companies should not be able levy a tax or unreasonable tolls in restraint of commerce. It's hard to justify a 30% toll on 65% of a $100B+ market without at least knowing if a third-party marketplace would offer better rates and service.

etchalon 3y ago

Vertical integration is not, in any way, illegal.