Apple gets appeals court win in Epic suit

Cmaier

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Finally some sense... the best case would be to reverse the decision to allow app purchasing links, but yeah.
 
The interesting thing will be the fight over what rate is acceptable to the courts. A 10% patent licensing rate for software-related patents is not uncommon, and portfolio rates can be higher. (you likely can’t write software for iOS without infringing some Apple patent or another). Add in the value of the SDK’s themselves, etc. 27% is apparently too high, but where will we end up?
 
The interesting thing will be the fight over what rate is acceptable to the courts. A 10% patent licensing rate for software-related patents is not uncommon, and portfolio rates can be higher. (you likely can’t write software for iOS without infringing some Apple patent or another). Add in the value of the SDK’s themselves, etc. 27% is apparently too high, but where will we end up?
I'm a little confused. Since when is 27% an onerous licensing fee for Apple's SDK? Why is this just being accepted as fact instead of challenged? Epic demonstrated their company was profitable even having to pay IAP costs.

I'm asking generally, not that you are arguing that
 
I'm a little confused. Since when is 27% an onerous licensing fee for Apple's SDK? Why is this just being accepted as fact instead of challenged? Epic demonstrated their company was profitable even having to pay IAP costs.

I'm asking generally, not that you are arguing that
i was merely referring to the fact that apparently the 9th circuit said 27% is too high (or at least unsupported) and directed that the parties either agree or the district court determine the amount.

Not clear why whatever Epic and Apple agree on should apply to the whole industry, but that’s what would happen. And I’m sure YGR (district court judge) will pick a number lower than Apple wants, and we’ll have yet another appeal.
 
i was merely referring to the fact
I know I'm asking why they just currently accepted epic's word that the fee is too much? Epic isn't a bankrupt company, and while their game is dying, that doesn't mean at the peak of its popularity (which also was at the time using IAP) that they couldn't build a profitable business or that they weren't #1 in gaming. I'm confused lol

If anything, epic becoming #1 in gaming (at the time) and being profitable tends to show IAP fees aren't too much?
 
I know I'm asking why they just currently accepted epic's word that the fee is too much? Epic isn't a bankrupt company, and while their game is dying, that doesn't mean at the peak of its popularity (which also was at the time using IAP) that they couldn't build a profitable business or that they weren't #1 in gaming. I'm confused lol

If anything, epic becoming #1 in gaming (at the time) and being profitable tends to show IAP fees aren't too much?

I believe they looked at it more from the legal framework of “is the 27% designed to be so high that it discourages anybody from offering 3rd party IAP,” and there is probably sufficient evidence in the record to prove that (because it seems true to me :-)

In the end, Apple still has a card to play here. The court can’t make Apple license its IP, and if the rate is too low, Apple will just say “fine, but your IAP better not cause your app to infringe our patents, because we will sue your ass.”. At least that’s my diagnosis based on my understanding of the current state of the law.
 
I believe they looked at it more from the legal framework of “is the 27% designed to be so high that it discourages anybody from offering 3rd party IAP,” and there is probably sufficient evidence in the record to prove that (because it seems true to me :-)

In the end, Apple still has a card to play here. The court can’t make Apple license its IP, and if the rate is too low, Apple will just say “fine, but your IAP better not cause your app to infringe our patents, because we will sue your ass.”. At least that’s my diagnosis based on my understanding of the current state of the law.
Huh?

The IAP structure was built with the App Store being the sole distribution. That's a business choice they made. They could have been more "open" like Google. That's pretty much irrelevant if they don't allow third party stores on their platform, which they haven't.

Apple is in line with other stores, including Steam which charges 30% but doesn't actually do anything for developers like tooling.

Makes zero sense.
 
Huh?

The IAP structure was built with the App Store being the sole distribution. That's a business choice they made. They could have been more "open" like Google. That's pretty much irrelevant if they don't allow third party stores on their platform, which they haven't.

Apple is in line with other stores, including Steam which charges 30% but doesn't actually do anything for developers like tooling.

Makes zero sense.
You have to take it from the point where, like it or not, Apple was found guilty (and lost that appeal). So the remedy that was crafted has to be remedial. And if the remedy is that Apple has to allow 3rd party IAP, but can charge 27%, the 9th Circuit has found that is no remedy to the underlying problem, as it effectively prevents 3rd party IAP. Don’t have to like it - that’s just the legal framework we’re working with here.
 
Huh?

The IAP structure was built with the App Store being the sole distribution. That's a business choice they made. They could have been more "open" like Google. That's pretty much irrelevant if they don't allow third party stores on their platform, which they haven't.

Apple is in line with other stores, including Steam which charges 30% but doesn't actually do anything for developers like tooling.

Makes zero sense.
While I'm partially playing devil's advocate here, the counter argument to bringing up Steam is that because Steam doesn't control distribution, anyone can download a competing app store, an alternative app store can compete with Steam on price (e.g. Epic store). In contrast, once the user decides to purchase an Apple device with a store, then, except for a Mac, they have no choice but purchase through an Apple channel. Thus there is no competition on price possible once a different purchase decision, which device to buy, is made. That's why to me, the better argument is to use game consoles where the console maker gets a cut even buying games through physical retail and there is no digital distribution allowed except through the console maker's store front, same as Apple. This is the walled garden metaphor.

The usual counter argument to that is that console makers typically sell their hardware at a loss and therefore taking a higher percentage of software sales is okay, but 1) no they don't always do so (e.g. consoles at the end of their life cycle and also Nintendo just all the time) and 2) if the argument is that wall-gardens are ultimately bad for developers and creates an unhealthy market then a loss-leader shouldn't suddenly absolve you. Europe side stepped this by claiming console users aren't business users and in order to qualify as gatekeepers you have to have x number of business users (amongst the other qualifications). I ... do not like this argument for so many reasons that would turn this already long post into an essay.

Of course, as Cliff already said while I was typing my long screed, Apple lost those fights in US court, so the above is kind of moot regardless of how I feel about it.

Speaking of how I feel about things: this does not mean that I don't think additional regulations aren't necessary for digital storefronts that reflect their differences with physical ones and if lawmakers want to get rid of walled gardens that conversation could happen, but I'd be pretty against carve outs unless incredibly compelling cases were made that I haven't heard. However, I'm mostly with @Jimmyjames on this that a better starting point would be to focus on a digital consumer bill of rights - it's not that B2B regulations aren't important, they are, but some of the issues particularly around IAPs and subscriptions would be better solved from a consumer standpoint. But that's another long topic.

You have to take it from the point where, like it or not, Apple was found guilty (and lost that appeal). So the remedy that was crafted has to be remedial. And if the remedy is that Apple has to allow 3rd party IAP, but can charge 27%, the 9th Circuit has found that is no remedy to the underlying problem, as it effectively prevents 3rd party IAP. Don’t have to like it - that’s just the legal framework we’re working with here.

That too.
 
You have to take it from the point where, like it or not, Apple was found guilty (and lost that appeal). So the remedy that was crafted has to be remedial. And if the remedy is that Apple has to allow 3rd party IAP, but can charge 27%, the 9th Circuit has found that is no remedy to the underlying problem, as it effectively prevents 3rd party IAP. Don’t have to like it - that’s just the legal framework we’re working with here.
It... doesn't prevent 3rd party IAP... hence my original question of why they're saying that.
 
In contrast, once the user decides to purchase an Apple device
Uh yeah, that's the big conditional part of your statement that makes this moot. Apple does not constitute the gaming market. It is among many players offering app stores and services. A developer isn't required to be on the App Store to have a profitable business. iOS constitutes 30% worldwide marketshare, 55% in US, and that's 1/3 of the major products offered: smartphones, PCs, consoles

Epic isn't required to be on the App Store. Developers aren't required to use IAP to become #1 (ask Spotify)
 
Uh yeah, that's the big conditional part of your statement that makes this moot.
It does and it doesn't. Europe has made the question not moot and the US is inching towards that as well with court rulings like the one that forced Apple to allow links to outside payment systems.

Apple does not constitute the gaming market. It is among many players offering app stores and services. A developer isn't required to be on the App Store to have a profitable business. iOS constitutes 30% worldwide marketshare, 55% in US.

Epic isn't required to be on the App Store.

Again, I'm not actually supportive of how this is being done. If I were made the God of law and economics (a bad idea for lots of reasons not the least of which that I have basically 0 formal training in either), then the system I would craft here would probably be different than what I see going through the US and EU (and individual EU country) legal systems even if I agree that some of the rules surrounding all digital market places (not just Apple!) need to change.
 
It... doesn't prevent 3rd party IAP... hence my original question of why they're saying that.
ah, i see. Well, it’s based on whatever the evidence was in the case (expert reports and such). As for whether it actually does or not, I dunno. But the courts think so.
 
ah, i see. Well, it’s based on whatever the evidence was in the case (expert reports and such). As for whether it actually does or not, I dunno. But the courts think so.
So you're saying they said it was too much and then presented zero reasoning as to why? Or do you just not know what they said at the moment? Or potentially both?
 
It does and it doesn't. Europe has made the question not moot and the US is inching towards that as well with court rulings like the one that forced Apple to allow links to outside payment systems.
There is an argument to be had people can sue the EU government for that.

Again, I'm not actually supportive of how this is being done. If I were made the God of law and economics (a bad idea for lots of reasons not the least of which that I have basically 0 formal training in either), then the system I would craft here would probably be different than what I see going through the US and EU (and individual EU country) legal systems even if I agree that some of the rules surrounding all digital market places (not just Apple!) need to change.

Yeah. Well, I don't think it should change at all. I have many ideas about different things, but let's be honest most of us are not coming up with stuff that actually works better in practice.

Basically equivalent to saying Target or any private store should be forced to put placement of other competing private stores inside their own. Makes literally zero sense.
 
You have to take it from the point where, like it or not, Apple was found guilty (and lost that appeal). So the remedy that was crafted has to be remedial. And if the remedy is that Apple has to allow 3rd party IAP, but can charge 27%, the 9th Circuit has found that is no remedy to the underlying problem, as it effectively prevents 3rd party IAP. Don’t have to like it - that’s just the legal framework we’re working with here.
Also while it isn't the original question I wrote, why exactly is it equal that Epic can package their shit for 30% but Apple can't; moreover why can't Epic sell their apps at 35 or 37% IAP fees?

The alternative is saying Apple can't charge what they want for their IP. That's uh... interesting, given free markets don't work that way, especially when there isn't a monopoly, which there isn't.

Second, it would mean Apple offers their IAP at 30%, meanwhile Epic offers theirs at 20%. They're basically being forced to accommodate their competitors and give THEM the benefit? Lmfao this is so made the fuck up by these people
 
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There is an argument to be had people can sue the EU government for that.
I'm not sure if that's actually possible in this case and regardless most consumer/citizen groups seem intent on suing Apple rather than the EU on this matter. Further, it's not just the EU in Brussels, even individual countries in Europe are doing the same thing in the court systems.

Yeah. Well, I don't think it should change at all. I have many ideas about different things, but let's be honest most of us are not coming up with stuff that actually works better in practice.

Basically equivalent to saying Target or any private store should be forced to put placement of other competing private stores inside their own. Makes literally zero sense.
I understand, but you can also make the argument that Target isn't selling stores and companies whose physical products that you buy and the subsequently pay more money to purchase additional products for don't have to pay Target a cut of all future sales because you bought the original item at Target (unless you buy those future items at Target). So the question is, if I buy an app from a digital store and that app sells me further digital items, am I still in the original digital store? or should apps once purchased be allowed to operated their own store fronts? who owns the app once purchased/licensed? This is why I'm saying a better starting point is defining questions to who owns the digital good once purchased, what rights does the consumer have to that digital good that they purchased, and whose store am I in if that digital good offers their own. Previous legislation tried to deal with this, but only haphazardly and often in the context of combating digital piracy and copyright. But that's very incomplete. It's okay to say that digital and physical stores should have different regulations. The questions one asks are very different and our legal tools were build entirely for one not the other.
 
Target isn't selling stores and companies whose physical products that you buy and the subsequently pay more money to purchase additional products for don't have to pay Target a cut of all future sales
What? Target literally takes a cut of companies products they sell. Not only that, they sell their OWN BRAND right NEXT to them, and not only that, they do so at a lower price, and not only that, they don't pay some fee for shelf space. It's a direct 1:1 comparison besides the fact that Target is physical

That's why I used the private store example
 
What? Target literally takes a cut of companies products they sell. Not only that, they sell their OWN BRAND right NEXT to them, and not only that, they do so at a lower price, and not only that, they don't pay some fee for shelf space. It's a direct 1:1 comparison besides the fact that Target is physical

That's why I used the private store example
I don't think you understood my example - it was about IAP. Let's make this concrete: I go into Target and purchase a magazine. Target gets a cut of that sale. If I then order a product from that magazine, does Target get a cut? Of course not. Another example: I purchase a mop with disposable wipes from Target, Target gets a cut. If I then order more disposable wipes from Amazon or direct from the manufacturer does Target still get a cut? No.

At the same time, does Target offer products for free on its store shelf that then can advertise you additional products from another store thus giving another store free advertising? Also, no.

This is the problem with arguing by analogy and why digital and physical stores should have different regulations. They are selling on different paradigms. Of course there are also similarities but digital and physical goods and stores have very different properties where the former has a bunch of questions that are simply not issues in the latter.
 
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