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In some cases, Amazon takes 65% and the author gets 35%. In other cases Amazon keeps 30%. Why is what Apple is doing unreasonable, especially when Amazon actually dominates ebook sales and Apple does not.
A New Wrinkle in the Epic/Apple Battle
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I was referring more specifically to their new model of charging for DMA compliance. But yes we could open that discussion about what’s reasonable and unreasonable and what’s very very unreasonable in general. One recent instance I saw reported where it was entirely unreasonable was Apple taking 30% of tips for teachers/coaches who use an app to teach/run meditation exercises and receive tips. That should be no different from tipping my Lyft driver which Apple doesn’t take a cut of. That sort of thing is why I’m not against the DMA in theory and find plenty to criticize Apple about.
Apple reverses course and says popular meditation app must pay 30% App Store fee on ‘tips’ sent to teachers - 9to5Mac
Apple has reversed course and is now demanding a 30% cut of donations sent to teachers in the popular Insight...
9to5mac.com
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Herdfan
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Probably because all it does is create a PITA for its customers. To load a book on my Kindle app I have to go to the Amazon app and buy it there and Apple gets nothing.
But it creates more hassle for me. I would have been willing to pay a little bit more to be able to purchase it in the app. But not 43% more.
It’s less about Apple’s fees in its own Book app and it’s more that Apple would take another 30% on top of Amazon’s cut in the Kindle app were Amazon to offer in-app purchases which they don’t for precisely this reason.
Indeed and one could also argue that Amazon is acting as the distributor for the digital good, not Apple. It’s on their server, they take the hit for any fraudulent item, etc … I agree that this very different from a game that offers an in-app purchase where the digital good is an intrinsic part of the app that Apple is hosting and is being run on the device. The DMA/Apple solution where Amazon Kindle can theoretically act as its own store front but effectively pay rent to Apple, the reasonableness of that rent to be determined, is why I think that part of the DMA is good. Companies operating full competing App stores is a less ideal use case but one that I still overall support but with additional caveats and it depends on how things actually work out in practice.
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Cool cool. So I assume Amazon will let Apple sell its own books on kindles, so everything is equal and fair, right? No? Didn’t think so.
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I’d be very much down.
That’s one of the weaknesses of the DMA as I see it. What’s good for the goose is good for the gander …Edit: And yes I understood you meant “So I assume Amazon will let Apple sell its…”. To me the “market size” concepts are the weakest part of the DMA. If they want to forcibly partially open walled gardens because that model is prone to abuse then distinguishing between “giant” tech companies and “huge” tech companies where depending on the definition both could serve as both just creates confusion, difficulties, and inconsistencies in regulation and enforcement, especially over time when the original definitions no longer apply.
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I'm going to post here a similar argument to what I posted at the other place:
I think there are several separate concerns:
Concern 1. Should Apple have some form of license fee for iOS SDKs and technologies?
Concern 2. Does Apple deserve a share of all revenue that occurs on iOS?
Concern 3. How should Apple be generate the revenue to cover the costs of running the App Store?
Concern 1
If the answer to 1 is yes then all apps that generate revenue on iOS should pay it, right now there are far too many categories of application that pay nothing, in fact some of the most profitable Apps on the platform pay nothing, putting the lie to the idea that the exceptions are based on some sort of generosity on Apple's part.
Concern 2
If the answer two 2 is yes then there should be no reader app exception and even transactions on the web should be paying a percentage to Apple, after all Apple built the platform on which the mobile transaction is taking place.
Concern 1 and 2
The argument is that the 30-15% fee is what covers these two points, I however think that the inconsistent application and number of exemptions show this line of argumentation to be pure marketing spin.
I think the reason Apple has so many exceptions is because they know how important Apps are to the success of the iPhone and that if they actually had fair policies they risk alienating some of the biggest and most important developers. Hence, they put in place policies that appeal and keep the big names on the platform at the expense of a coherent App Store policy. As others say, these are perfectly rational business decisions, but if, as the EU says, platforms have to operate fairly, these policy choices put apple at risk of fines and further regulatory scrutiny.
I actually think the answer to 1 is yes and to 2 is no.
I think Apple has pushed iOS so much further than macOS because of App Store revenue and I think that some form of CTF applied fairly (with small business exceptions) would make the system much fairer to everyone. If a share of sales is the form that takes then it needs no exceptions, digital goods, physical goods, subscriptions, reader apps, they should all pay that share of revenue. If apps would be driven from the platform with this approach that is likely a sign that the percentage is too high rather than that the fee itself is wrong.
I personally think splitting the commission and CTF into two separate components (like they do for DMA compliance) is a good path forward. The 50 cents per download might be too high and there should probably be exemptions for apps that earn no revenue but generally I think the CTF plus commission if using Apple's payment system is a good compromise.
Concern 3
The answer to 3 could be some sort of hosting and review fee (maybe with carve outs for free apps or first X downloads are free). Again, this should be applied uniformly and fairly to all apps.
Edit:
I want to also add that I think that a fairer and better route to go would be to move away from the high commissions on transactions and have something like the CTF plus low per transaction commissions worldwide (though, as I said above, if it was universal I think that $0.50 per download would likely be too high). I think the way the have given developers the option of continuing the current terms (no CTF but no alternative payment options) is a way of steering devs to use the old terms and is likely going to be a regulatory problem for Apple in the future.
I think there are several separate concerns:
Concern 1. Should Apple have some form of license fee for iOS SDKs and technologies?
Concern 2. Does Apple deserve a share of all revenue that occurs on iOS?
Concern 3. How should Apple be generate the revenue to cover the costs of running the App Store?
Concern 1
If the answer to 1 is yes then all apps that generate revenue on iOS should pay it, right now there are far too many categories of application that pay nothing, in fact some of the most profitable Apps on the platform pay nothing, putting the lie to the idea that the exceptions are based on some sort of generosity on Apple's part.
Concern 2
If the answer two 2 is yes then there should be no reader app exception and even transactions on the web should be paying a percentage to Apple, after all Apple built the platform on which the mobile transaction is taking place.
Concern 1 and 2
The argument is that the 30-15% fee is what covers these two points, I however think that the inconsistent application and number of exemptions show this line of argumentation to be pure marketing spin.
I think the reason Apple has so many exceptions is because they know how important Apps are to the success of the iPhone and that if they actually had fair policies they risk alienating some of the biggest and most important developers. Hence, they put in place policies that appeal and keep the big names on the platform at the expense of a coherent App Store policy. As others say, these are perfectly rational business decisions, but if, as the EU says, platforms have to operate fairly, these policy choices put apple at risk of fines and further regulatory scrutiny.
I actually think the answer to 1 is yes and to 2 is no.
I think Apple has pushed iOS so much further than macOS because of App Store revenue and I think that some form of CTF applied fairly (with small business exceptions) would make the system much fairer to everyone. If a share of sales is the form that takes then it needs no exceptions, digital goods, physical goods, subscriptions, reader apps, they should all pay that share of revenue. If apps would be driven from the platform with this approach that is likely a sign that the percentage is too high rather than that the fee itself is wrong.
I personally think splitting the commission and CTF into two separate components (like they do for DMA compliance) is a good path forward. The 50 cents per download might be too high and there should probably be exemptions for apps that earn no revenue but generally I think the CTF plus commission if using Apple's payment system is a good compromise.
Concern 3
The answer to 3 could be some sort of hosting and review fee (maybe with carve outs for free apps or first X downloads are free). Again, this should be applied uniformly and fairly to all apps.
Edit:
I want to also add that I think that a fairer and better route to go would be to move away from the high commissions on transactions and have something like the CTF plus low per transaction commissions worldwide (though, as I said above, if it was universal I think that $0.50 per download would likely be too high). I think the way the have given developers the option of continuing the current terms (no CTF but no alternative payment options) is a way of steering devs to use the old terms and is likely going to be a regulatory problem for Apple in the future.
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Just because apple is entitled to a fee doesn’t mean it has an obligation to require every developer to pay it. That’s a logical fallacy.
I think they should require every* developer to pay it if they are going to be running a store that operates in a fair and non-discriminatory manner. I think that if the EU is serious about their gatekeeper policies around this topic the CTF will either have to be scrapped or apply to all apps (Apple won't be able to carve out an exception for Apps using the old policy).
*Apps that do not earn revenue should probably continue to be exempt
Edit:
To further clarify, while they are under no obligation (at the moment) to have uniformity for all developer categories I think it is both bad optics and undermines their argument that apps using their tools should have to pay to support API access. The categories they exempt are exempted seem from the outside to purely be chosen due to the fact that their are big businesses in those categories Apple doesn't want to annoy rather than those categories placing less of a burden on Apple's servers or using fewer APIs.
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The ongoing legal battle between Epic Games and Apple takes another turn as Epic files a lawsuit against Apple in the European Union, alleging anticompetitive behavior. This move follows similar actions in the US and Australia. With regulatory scrutiny intensifying globally, the outcome of these cases could have significant implications for the future of app marketplaces and digital ecosystems.
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The problem with that is that, believe it or not, Europe doesn’t get to make laws for the rest of the world. Developers are located all over the world and sell apps all over the world. A european developer can sell apps in germany and china. A chinese developer can sell apps in japan and the U.S. and france. Just because an app is available in france doesn’t mean the developer should not be free to enter into whatever agreement it wants with Apple, a U.S. entity. Perhaps the dopey Europe rules can be made to apply to all sales in Europe, but good luck figuring out the accounting on that one.
diamond.g
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I mean it would be cool to have iBooks on a Kindle Fire. Unless you mean Apple having books in the Kindle Store itself which I'm not sure would be the same thing?
I mean really the only reason why I use Kindle is because they have a web reader for when I am at work, and because of Kindle Unlimited. I'd still be using iBooks if Apple offered either of those things.
With as much bad blood as there is between the two companies, I would be surprised if any major AAA UE5 games actually appeared for fear of macOS support of UE being ripped away with no warning.
They do get to make the laws for Europe though, and if Apple is required to act as a neutral platform in Europe they have to make deals with companies that want to sell into Europe as a neutral gatekeeper. They cannot take arbitrary actions or make rules that apply arbitrarily any more. Companies outside of Europe can do whatever they want in dealing with Apple.
Yup the EU asked “for clarification” and Apple probably decided that it wasn’t worth the fight.
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It’s probably better to wait until epic violates the agreement again, which they will.
Indeed. I’d like to be optimistic that all this will work out … I’d like to be …
Nycturne
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I can see that. I'm not opposed to the "give them enough rope to hang themselves" approach, and I've done it a couple times in my career.
Nycturne
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Gruber pointing out a rather reasonable take on the timing of the approval + revocation of the developer account: https://daringfireball.net/2024/03/once_more_unto_the_apple-epic-european-commission_breach
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Epic is charging developers 12% for its store. https://www.macrumors.com/2024/03/20/epic-games-store-fee/
So here’s a serious question - what is it, exactly, that Epic is providing here that means it should be entitled to 12%, but it’s unfair for Apple, which invented the phone, the OS, the SDKs, etc., to get 12%?
So here’s a serious question - what is it, exactly, that Epic is providing here that means it should be entitled to 12%, but it’s unfair for Apple, which invented the phone, the OS, the SDKs, etc., to get 12%?
