4 ms·

The heart of Apple's hypocrisy is this: they claim their 30% is necessary to support the developer ecosystem and fund its operations. But of course if that were

The heart of Apple's hypocrisy is this: they claim their 30% is necessary to support the developer ecosystem and fund its operations. But of course if that were true, they could easily charge a high enough platform membership fee directly to developers. Instead they opt for a structural tax to cover what are mostly completely opaque and secret operational costs. They're opaque and secret for obvious reasons: those expenses come nowhere close to the ~$30 billion in App Store commission Apple generates every year.

m3kw9 1y ago
The math of a one time fee is different than a percentage. Not sure what you are getting at by presenting a business model that doesn’t make sense as an argument
ivanmontillam 1y ago
Were they transparent, what would inhibit developers from bargaining against the costs and benefits shown? Sometimes that also outweighs the benefits of transparency. You just can't show anything to anyone without kicking a wasp's nest. I am not defending Apple, if anything, I am pro-Android here, but I understand the pickle they'd be in, were they be transparent with the cost structure.
- cyberax 1y ago
  Well, yeah. It would have shown that their commissions are nothing but rent-seeking.
  - ivanmontillam 1y ago
    Exactly my point! This would kick the wasp's nest of "they (Apple) don't need this much money to operate, they can do well with 10% profit!" Which is very hard to admit, that profit margins are arbitrary when you, indeed, dominate the market. Apple doesn't want (nor need) to give anyone a handle to anyone to make them accountable. It is not a charity. (Again, I'm not defending Apple, but I do defend corporate liberties, in general.)
    - ysavir 1y ago
      Are you defending their corporate liberty to withhold information or to lie about the information being withheld?
    - to11mtm 1y ago
      When a company builds the moat too high (i.e. restrictions on external sub signups) it becomes monopolistic. Apple is honestly worse than Microsoft in so many ways as far as restrictions (nowadays, anyway) and yet it's taken this long even to get here. (To be clear, I am not a fan of Google's actions in the mobile space either...)
      - girvo 1y ago
        Mobile space Ad space Search space And more!
  - deleted 1y ago
    [deleted]
- mystified5016 1y ago
  It isn't about transparency. It is about illegal anticompetitive behavior. Apple didn't charge tax on all app store purchases to protect themselves, it was done out of greed and malice. You're assuming that Apple is acting in good faith. An actual, literal judge has decided the evidence shows that Apple was not acting in good faith, and in fact were behaving illegally. This isn't a "both sides" argument, Apple is definitively in the wrong.
- mvdtnz 1y ago
  > what would inhibit developers from bargaining against the costs and benefits shown? Another word for that is "competing". And yeah, exactly.
elpool2 1y ago
As described in the ruling, Apple hired a consulting group to estimate how much value developers get from the iphone platform, which found that (1) Apple’s platform technology is worth up to 30% of a developer’s revenue. (2) Apple’s developer tools and services are worth approximately 3%–16%. (3) Apple’s distribution services are worth approximately 4%–14%. (4) Apple’s discovery services are worth approximately 5%–14%. Then Apple claimed this study was how they came up with the 27%, but the Judge basically said nah you guys came up with that number before the study, and you even know it would be a non-starter for almost all developers.
- paxys 1y ago
  Hire a consulting firm to tell you exactly what you want to hear, then say "see the experts said it, not us". Classic.
  - thisisit 1y ago
    The CYA industry for you. Something goes wrong, blame the consultants.
- realusername 1y ago
  It made me laugh, if you pretend to be worth 30% of revenue (an insane markup), you better really invest in those developer tools to show it off because the sad state of xcode really isn't showing that. I don't know where this money is going but certainly not in the developer tooling because it's absolutely terrible
  - ethbr1 1y ago
    If Apple were worth 30% of revenue, then they'd have no problem allowing competing app stores on their devices, because they support their rate with their value. The fact that they're deadset against competition should tell the courts all they need to know about how competitively supportable the 30% is.
    - 1y ago
Spooky23 1y ago
They don’t make that claim. That’s the service they are selling and the margin they choose. The royalty is similar to software retailer margins going back a long time. Steam charges a similar rate. It’s pretty trivial to bypass. Just don’t charge for your software, and use the app to access paid resources purchased outside the platform. My company distributes a few dozen apps to thousands of employees, Apple gets $0, because they utilize an existing subscription or license unconnected to Apple.
- saagarjha 1y ago
  Yeah, until Apple asks you "politely" to move your subscription to IAP.
- gausswho 1y ago
  Isn't the point of this case that even free apps can't even advertise their direct payment systems?
- SchemaLoad 1y ago
  The problem is less the actual % itself and the fact that it's bundled in with so many things you can't pick or substitute. You can't avoid the app store and you can't avoid the Apple developer tools because they force you to use both of them. So then charging money for something you don't have an alternative to is the issue. Steam might charge a similar rate but you aren't forced to use them. You can deliver games to PC gamers in a number of ways and many large games opt to not be on Steam.
- troupo 1y ago
  > Just don’t charge for your software, and use the app to access paid resources purchased outside the platform. That introduces insane friction and you lose a ton of customers
- Gareth321 1y ago
  There are many caveats on this. For example, Apple's terms clearly state that developers must use Apple’s in-app purchase (IAP) system for digital goods or services. So you're restricted to only subscription based pricing. No upgrade pricing. No microtransactions. Additionally Apple remains the arbiter of what kind of content and apps may be listed. Until recently they were blocking all emulators and cloud gaming apps. They used to block all crypto apps. They still selectively block gambling apps. They still block torrenting and adult apps. Additionally, Apple is famous for arbitrary and selectively enforced rules. Many developers have their updates rejected for any and no reason after an automated system rejects them for specious reasons. Additionally, developers are blocked from linking out. They can't up-sell, which is a critical component of a SaaS business model. Nothing in the app can tell users where to subscribe or how to upgrade or change their credit card details. This one alone kills most SaaS applications unless they use Apple's IAPs.
m463 1y ago
This made sense for an app that was sold on the store. It didn't make sense to me for media from an external subscription or store account was taxed by apple (like netflix or kindle).

m3kw9 1y ago

The math of a one time fee is different than a percentage. Not sure what you are getting at by presenting a business model that doesn’t make sense as an argument

ivanmontillam 1y ago

Were they transparent, what would inhibit developers from bargaining against the costs and benefits shown? Sometimes that also outweighs the benefits of transparency. You just can't show anything to anyone without kicking a wasp's nest. I am not defending Apple, if anything, I am pro-Android here, but I understand the pickle they'd be in, were they be transparent with the cost structure.

cyberax 1y ago
Well, yeah. It would have shown that their commissions are nothing but rent-seeking.
- ivanmontillam 1y ago
  Exactly my point! This would kick the wasp's nest of "they (Apple) don't need this much money to operate, they can do well with 10% profit!" Which is very hard to admit, that profit margins are arbitrary when you, indeed, dominate the market. Apple doesn't want (nor need) to give anyone a handle to anyone to make them accountable. It is not a charity. (Again, I'm not defending Apple, but I do defend corporate liberties, in general.)
  - ysavir 1y ago
    Are you defending their corporate liberty to withhold information or to lie about the information being withheld?
  - to11mtm 1y ago
    When a company builds the moat too high (i.e. restrictions on external sub signups) it becomes monopolistic. Apple is honestly worse than Microsoft in so many ways as far as restrictions (nowadays, anyway) and yet it's taken this long even to get here. (To be clear, I am not a fan of Google's actions in the mobile space either...)
    - girvo 1y ago
      Mobile space Ad space Search space And more!
- deleted 1y ago
  [deleted]
mystified5016 1y ago
It isn't about transparency. It is about illegal anticompetitive behavior. Apple didn't charge tax on all app store purchases to protect themselves, it was done out of greed and malice. You're assuming that Apple is acting in good faith. An actual, literal judge has decided the evidence shows that Apple was not acting in good faith, and in fact were behaving illegally. This isn't a "both sides" argument, Apple is definitively in the wrong.
mvdtnz 1y ago
> what would inhibit developers from bargaining against the costs and benefits shown? Another word for that is "competing". And yeah, exactly.

elpool2 1y ago

As described in the ruling, Apple hired a consulting group to estimate how much value developers get from the iphone platform, which found that (1) Apple’s platform technology is worth up to 30% of a developer’s revenue. (2) Apple’s developer tools and services are worth approximately 3%–16%. (3) Apple’s distribution services are worth approximately 4%–14%. (4) Apple’s discovery services are worth approximately 5%–14%. Then Apple claimed this study was how they came up with the 27%, but the Judge basically said nah you guys came up with that number before the study, and you even know it would be a non-starter for almost all developers.

paxys 1y ago
Hire a consulting firm to tell you exactly what you want to hear, then say "see the experts said it, not us". Classic.
- thisisit 1y ago
  The CYA industry for you. Something goes wrong, blame the consultants.
realusername 1y ago
It made me laugh, if you pretend to be worth 30% of revenue (an insane markup), you better really invest in those developer tools to show it off because the sad state of xcode really isn't showing that. I don't know where this money is going but certainly not in the developer tooling because it's absolutely terrible
- ethbr1 1y ago
  If Apple were worth 30% of revenue, then they'd have no problem allowing competing app stores on their devices, because they support their rate with their value. The fact that they're deadset against competition should tell the courts all they need to know about how competitively supportable the 30% is.
  - 1y ago

Spooky23 1y ago

They don’t make that claim. That’s the service they are selling and the margin they choose. The royalty is similar to software retailer margins going back a long time. Steam charges a similar rate. It’s pretty trivial to bypass. Just don’t charge for your software, and use the app to access paid resources purchased outside the platform. My company distributes a few dozen apps to thousands of employees, Apple gets $0, because they utilize an existing subscription or license unconnected to Apple.

saagarjha 1y ago
Yeah, until Apple asks you "politely" to move your subscription to IAP.
gausswho 1y ago
Isn't the point of this case that even free apps can't even advertise their direct payment systems?
SchemaLoad 1y ago
The problem is less the actual % itself and the fact that it's bundled in with so many things you can't pick or substitute. You can't avoid the app store and you can't avoid the Apple developer tools because they force you to use both of them. So then charging money for something you don't have an alternative to is the issue. Steam might charge a similar rate but you aren't forced to use them. You can deliver games to PC gamers in a number of ways and many large games opt to not be on Steam.
troupo 1y ago
> Just don’t charge for your software, and use the app to access paid resources purchased outside the platform. That introduces insane friction and you lose a ton of customers
Gareth321 1y ago
There are many caveats on this. For example, Apple's terms clearly state that developers must use Apple’s in-app purchase (IAP) system for digital goods or services. So you're restricted to only subscription based pricing. No upgrade pricing. No microtransactions. Additionally Apple remains the arbiter of what kind of content and apps may be listed. Until recently they were blocking all emulators and cloud gaming apps. They used to block all crypto apps. They still selectively block gambling apps. They still block torrenting and adult apps. Additionally, Apple is famous for arbitrary and selectively enforced rules. Many developers have their updates rejected for any and no reason after an automated system rejects them for specious reasons. Additionally, developers are blocked from linking out. They can't up-sell, which is a critical component of a SaaS business model. Nothing in the app can tell users where to subscribe or how to upgrade or change their credit card details. This one alone kills most SaaS applications unless they use Apple's IAPs.

m463 1y ago

This made sense for an app that was sold on the store. It didn't make sense to me for media from an external subscription or store account was taxed by apple (like netflix or kindle).