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Apple

Judge in Epic Suit Says Apple Restrictions Anti-Competitive (theverge.com) 161

A U.S. judge on Friday issued a ruling in "Fortnite" creator Epic Games' antitrust lawsuit against Apple's App Store, labelling Apple's conduct in enforcing anti-steering restrictions as anticompetitive. From a report: The case may determine whether Apple is allowed to retain control over what apps appear on its iPhones and whether it is allowed to charge commissions to developers. The Verge adds: Judge Yvonne Gonzalez-Rogers issued a permanent injunction in the Epic v. Apple case on Friday morning, handing a major setback to Apple's App Store model. Under the new order, Apple is: "permanently restrained and enjoined from prohibiting developers from including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and (ii) communicating with customers through points of contact obtained voluntarily from customers through account registration within the app."
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Judge in Epic Suit Says Apple Restrictions Anti-Competitive

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  • How much $ per hour will apple be in contempt of court? For the time it takes to get back on the app store?

    • by fermion ( 181285 )
      I am more interested if the judge will end Fortniteâ(TM)s contempt of the courts ruling. You can only get original items in the Fortnite game. The market should be open so that anyone can sell original items outside the game. End the monopoly.
    • by Brain-Fu ( 1274756 ) on Friday September 10, 2021 @11:36AM (#61782629) Homepage Journal

      Why does it matter what the judge is wearing?

    • by account_deleted ( 4530225 ) on Friday September 10, 2021 @11:36AM (#61782631)
      Comment removed based on user account deletion
    • First, the judge's ruling doesn't take effect until December, so they won't be in contempt unless they go past that date in the ruling.

      Second, it's sure to go to an appellate court, where they will also ask for a stay on the ruling, so that date only applies if the appellate court declines to take it up, or declines to issue a stay on the injunctive order.

    • by Aighearach ( 97333 ) on Friday September 10, 2021 @01:10PM (#61782929)

      How much $ per hour will apple be in contempt of court? For the time it takes to get back on the app store?

      The thing about contempt of court, you can't just treat it like a cost and choose to pay it.

      Whatever the initial fine is, if it doesn't work to achieve compliance, it will be raised. There is no cap.

    • Nothing since the ruling said that Epic was in breech of contract. This is yet another misleading summary of a ruling in which Apple won on 9 out of 10 counts.
      • by dgatwood ( 11270 )

        There's some fascinatingly bad logic in the judge's decision that I think will probably get overturned in appeal, making Epic's win even more significant. In particular:

        More specifically, Apple’s IAP, as used here, is a secured system which tracks and verifies digital purchases, then determines and collects the appropriate commission on those transactions. In this regard, the system records all digital sales by identifying the customer and their payment methods, tracking and accumulating transactions; and conducts fraud-related checks. IAP simultaneously provides information to consumers so that they can view their purchase history, share subscriptions with family members and across devices, manage spending by implementing parental controls, and challenge and restore purchases.

        ...

        The Court agrees that simple payment processing can occur outside of IAP and plaintiff points to examples of this happening in 2009. 331 However, those examples only concern simple payment processing, not all the functionality outlined in the preceding paragraph, including the functionality to ensure Apple received its commission. Nor do the examples show that Apple was waiving its commission for those developers. Rather, in December 2008, the product was new, so, by definition, in flux.

        Epic Games ignores this other functionality to argue that Apple merely “matches” developers to consumers; a “matching” service.332 This statement is partially true, but Apple has never argued that it levies a commission merely because it matches the developers with the customers. Apple argues that it uses this model to monetize its intellectual property against the entire suite of functions as well as to pay for the 80% of all apps which are free and generate no direct revenue stream from the developers other than the annual $99.00 developer fee.

        Apple's commission is inherent in the transaction. Apple earns that commission in exchange for providing the transaction. Transactions made outside of Apple's payment system don't give Apple a commission, so the notion that a third-party payment system on iOS would somehow have to track how much commission to give Apple is nonsensical.

  • by SuperKendall ( 25149 ) on Friday September 10, 2021 @10:56AM (#61782495)

    I think Apple has been too tight not allowing companies to offer other forms of payment in applications... Apple will find a lot of customers still prefer to use Apple's payments, even if they are higher - it's just easier to pay, and for subscriptions easier to cancel.

    I'd rather pay $15 for a month of HBO through Apple than $10 through HBO because I know how easily I can drop the Apple subscription...

    So if this ruling sticks, it will be better for everyone.

    • by NFN_NLN ( 633283 ) on Friday September 10, 2021 @11:13AM (#61782549)

      > I'd rather pay $15 for a month of HBO through Apple than $10 through HBO because I know how easily I can drop the Apple subscription...

      A 50% convenience premium EVERY MONTH. I guess corporate was right, those rubes really exist.

      • You seem to be assuming the desire for a long term subscription on the part of someone who just said they want ease of cancellation.

      • by MobyDisk ( 75490 ) on Friday September 10, 2021 @12:50PM (#61782863) Homepage

        This is an interesting experiment in "how much will people pay for convenience?"

        Maybe HBO should offer two levels of service: One for $10/month that is hard to cancel, and one that is $15/month that is easy to cancel. Maybe the first one will require you to talk to 5 levels of managers in other countries, then you must fax a notarized hand-written cancellation request letter and wait 6 weeks. The other one lets you cancel online.

        • Maybe HBO should offer two levels of service: One for $10/month that is hard to cancel, and one that is $15/month that is easy to cancel. Maybe the first one will require you to talk to 5 levels of managers in other countries, then you must fax a notarized hand-written cancellation request letter and wait 6 weeks. The other one lets you cancel online.

          I'm sorry, you have exceeded the global evil threshold. Report to your nearest liquidation center.

          Seriously, what the hell? Don't give them any more horrible ideas. It won't be HBO that adopts that scheme. It will be Comcast. Who will then "accidentally" put everyone in the outrageous tier while charging the convenience tier.

      • I pay a lot my of money for convenience on various stuff. 5 bucks is chump change. Whatâ(TM)s your point?

    • Maybe if it's some new company or something that looks shady pay through apple but HBO, Spotify, just about every service people use is easy to cancel and takes 3 clicks once you're on the site. But yeah I agree you're definitely a rube.
    • This wouldn't even be a consideration or issue if the credit card companies allowed you to tell that auto-charges to your bill should be canceled, as you have notified the business of your intent to cancel and they should deny and future charges.

      For some cards I have found this to be EXTREMELY difficult.

    • by AmiMoJo ( 196126 )

      Okay but I was really hoping for a photo of this epic suit the judge was wearing.

    • It's a funny take on the lawsuit ruling. Apple won 9 out of 10 claims Epic needs to pay Apple's legal fees. The judge also ruled Apple does not have a monopoly on the store so they still have a shitload of control over devs

  • Hmm (Score:3, Interesting)

    by Ecuador ( 740021 ) on Friday September 10, 2021 @11:07AM (#61782529) Homepage

    So, Apple is prohibited from banning external payment links. Are they also prohibited from not offering free App Store hosting to whoever wants to use such links to get the all the commission for themselves while using Apple's facilities?
    I mean, as a developer I did think that the 30% cut was kind of steep, but it as a better deal than the 30% of the Google store and the more than 30% of the Kindle store for what you got in return, so it still was the "best deal". They are currently down to 15% which is quite decent - and Google had to follow too.
    Now, Epic themselves, while they are trying hard to compete with Steam, so trying to undercut them in various ways, still get a 12% cut from developers for their Epic store, which, for those who have dealt with it, is quite crappy and offers a small fraction of the functionality of the Apple Store. Why should they get a rather high commission (for what they are offering) and demand others don't? How anti-capitalist of them!
    I dislike Apple, but any sane legal system should throw this Epic suit out. I don't know of many sane legal systems of course, so we'll see how it goes!

    • Re:Hmm (Score:5, Insightful)

      by StormReaver ( 59959 ) on Friday September 10, 2021 @11:27AM (#61782591)

      Are they also prohibited from not offering free App Store hosting to whoever wants to use such links to get the all the commission for themselves while using Apple's facilities?

      My understanding is that Apple charges developers $99/year to be on the app store, even if they don't publish any apps for that year.

      ...so [Apple's app store] still was the "best deal".

      I publish an occasional app to the Play Store. Google requires a one-time fee of $25 to register as a developer. I registered years ago, and haven't paid an additional dime in registration fees. I'm not what you would call a prolific publisher, so the Play Store has been a far, far better deal for me than Apple. Twenty five dollars versus nearly a thousand dollars is a significant difference.

      Epic themselves, while they are trying hard to compete with Steam....

      While Epic is in this for themselves, we all benefit from an Epic win.

      ...any sane legal system should throw this Epic suit out.

      You and I have a very different perspective on what is sane. I am fully on team-Epic (figuratively speaking). Apple's pricing policies are crazy to a part-time developer such as myself. Google will also be subject to this judgement, and we developers will then be able to explore new avenues for monetizing our work. I'd buy that for a dollar.

      • Re:Hmm (Score:5, Interesting)

        by Ecuador ( 740021 ) on Friday September 10, 2021 @11:56AM (#61782677) Homepage

        Sorry, I don't understand your logic as your arguments are a bit antithetic.
        You use the $99/year vs $25 developer fee as an argument, but you seem to be arguing for monetizing the work of developers.
        Well, the $99/year vs $25 argument is only an issue if you DON'T monetize your apps. For completely free apps (unless you are a non-profit of course or an educational institution in which case Apple can waive the fee), that fee will make a small difference. However, if you start monetizing, even in the form of ads, the Apple Store will make you much more income than the Android store, so that fee will be a non issue. How much more income? Well, I can give you an example based on the company I work for which has both an iOS and an Android app to access their service and which sell the same service upgrades (as in-app purchases) on both platforms. Most users are in the UK, where iOS vs Android is about 50/50 and the income share is 2:1 for iOS vs Android. In the US it might be a bigger difference. This is a big sample, as it is a platform that does not even qualify for the Apple under $1 million sales commission discount. Apple has built an App Store that users value more, or a user base that is more inclined to spend on apps, and overall that is worth much more than that $99/year.
        I have been a developer for long enough to remember how things were before Apple.
        I have a hobby app for fun and I submit dozens of updates per year and apple tests and publishes all of them. It actually makes some non-trivial income and it is my idea of fun. Compare that to 15 years ago, if you wanted to submit an app to the Verizon Get It Now store based on the BREW platform, you had to pay $1000 PER DEVICE TYPE as a testing fee in a complicated process. To cover enough devices to have a chance of getting picked by Verizon in the first place you had to invest around $30-$40k just in testing fees. So, yeah, I find the Apple Store a good deal and I definitely not find the pricing policies crazy - they should be allowed to charge as much as they feel their services are worth.
        If you want me to talk about things I don't like about the app store, I have plenty of course! They interpret their TOS any way they want, they can reject your app on a whim of one tester re-interpreting some obscure term. If you try to appeal, they usually double-down even if they are on the wrong. While I did not mind the 30% fee as I had signed up for it, there is a currency exchange fee on top of it. Most of my app's revenue is in $ and I'd love to have it go directly to my dollar account, but as I am in the UK there is no choice but to get them in GBP, with Apple's conversion rate eating something like 5% (my bank would do it for half that). There are many more issues I have with apple products (including their pricing) and apple software (especially the way their desktop OS is going). But how can you someone call their pricing policies as "crazy" when they are amazingly good compared to the then market when they came out, and everybody else just sort of matched them without even offering the same value usually.

        • Compare that to 15 years ago, if you wanted to submit an app to the Verizon Get It Now store based on the BREW platform, you had to pay $1000 PER DEVICE TYPE as a testing fee in a complicated process. To cover enough devices to have a chance of getting picked by Verizon in the first place you had to invest around $30-$40k just in testing fees.

          But how can you someone call their pricing policies as "crazy" when they are amazingly good compared to the then market when they came out, and everybody else just sort of matched them without even offering the same value usually.

          You're using Verizon as your benchmark for acceptable fees? Were you dropped on your head as a child? If you look in the dictionary under "gouging ass motherfuckers" you find the Verizon logo. If you look in the dictionary under "will sell their own grandmother then charge you a convenience fee to take possession of her" you find the Verizon logo. If you look in the dictionary under "Rockefeller and Carnegie were pikers and we prove it every day of the week" you find the Verizon logo.

          When your benchmark

    • Given the fairly broad language it seems like Epic probably violates this order in their own store.
      • I would like to sell Fortnite skins and dances, but Epic prevents that, since they only allow them to be sold on their own Fortnite Store, using their own "V-Buck" currency. How anti-competitive!
      • Given the fairly broad language it seems like Epic probably violates this order in their own store.

        The language isn't broad, you're reading a summary.

        The market was found to be "mobile digital game payments."

        Epic isn't creating a market for "mobile digital game payments." They're not selling items in their store for games from other companies. If they were doing that, you'd have a point. But they're not.

        Take your phone out of your mouth and put your thinking cap on.

    • by mark-t ( 151149 )

      The logical extension of this is that it should be possible to legally compel a retailer to accept whatever payment mechanism the customer wants.

      In this scenario, Apple was effectively acting like the retailer for products that were sold on consignment to the general public.

    • Now, Epic themselves, while they are trying hard to compete with Steam, so trying to undercut them in various ways, still get a 12% cut from developers for their Epic store, which, for those who have dealt with it, is quite crappy and offers a small fraction of the functionality of the Apple Store. Why should they get a rather high commission (for what they are offering) and demand others don't? How anti-capitalist of them!

      I wonder what Epic would say if you gave a game away on their store, and charged a fee on the back end for access to the content to avoid their fee.

    • Before the App Store, you would be lucky to get %10 of the take from publishers.
      You would also be restricted to offer the products to any other publishers.
      If they wanted a version, for example, in Korean, you had to do it for free,
      compensate them for their translation, or forego any profit from the Korean version
      which they would then own. They would also want your source code in escrow.

    • by MobyDisk ( 75490 )

      People keep getting caught-up on the costs, which is not what this trial is about. The complaint isn't that Apple charges too much or offers too little. If that was the complaint then I agree, it should be thrown out.

      The complaint is that Apple is trying to dictate what developers can and cannot do in their apps in an anti-competitive way. Also, Apple does this quite selectively. If I use the New York Times app on my iPhone, I must by my NYT subscription via the Apple Store. But if I use the Amazon app

      • by mark-t ( 151149 )

        The complaint is that Apple is trying to dictate what developers can and cannot do in their apps in an anti-competitive way.

        Therein lies the misunderstanding.

        It's not really just their app. They might hold the copyright, but all apps developed for iOS are treated as enhancements *TO* iOS. and iOS is Apple's property, Developers who do not want to write for Apple in this way should not develop for iOS in the first place.. But I can understand how tempting getting a slice of the iOS market share can be.

        • by MobyDisk ( 75490 )

          but all apps developed for iOS are treated as enhancements *TO* iOS

          That's just dumb.

          • by mark-t ( 151149 )
            Perhaps, but then people are always free to not develop for iOS in the first place and concentrate on the alternative.
    • by ljw1004 ( 764174 )

      Are they also prohibited from not offering free App Store hosting to whoever wants to use such links to get the all the commission for themselves while using Apple's facilities?

      I think if Apple made the costs transparent, maybe itemizing out separately how much hosting costs them, it'd make folks entirely happy.

  • by S_Stout ( 2725099 ) on Friday September 10, 2021 @11:38AM (#61782639)
    This is all the pointless filler till it gets there.
    • It's unlikely it will be heard by the SCOTUS. What is your proposed circuit split?

      They don't hear every case just because one of the parties is a big company. They turn down the vast majority of applications.

      You have to wait until the 9th Circuit Court of Appeals hears the case. If they come up with an odd ruling, maybe it would get to the SCOTUS. But if they make a normal ruling, as is most likely, it won't.

  • Appeal! (Score:4, Insightful)

    by Asynchronously ( 7341348 ) on Friday September 10, 2021 @11:41AM (#61782649)

    This is an extreme government overreach. As the judge stated, Apple is not a monopolist and success is not illegal. Apple's App Store does not operate any differently than most app stores on all other platforms (PlayStation, Xbox, Google, etc).

    You can subscribe to most apps independently from the App Store on their website and then enter our credentials into the app to use it. Apple does not restrict this. What Apple is restricting is the developer advertising other payment options in the App itself that is published through the app store. This would be like forcing Best Buy to allow vendors to post signs next to their items on the show floor that shows the pricing from competing stores such as Amazon.

    The government does not exists to enforce your every little wish and desire on a private company that is not acting unethically or illegally. The only reason to agree with this ruling is Apple Derangement Syndrome.

    • I agree with some of this but....

      This would be like forcing Best Buy to allow vendors to post signs next to their items on the show floor that shows the pricing from competing stores such as Amazon.

      "Best Buy" in this analogy IS the App Store, so this would be more like Apple letting you post competing pricing within the app listing, or within search results. I agree this would be nonsense and shouldn't be regulated by the government.

      But, should Best Buy be able to restrict vendors from putting a flyer INSIDE their packaging (that the customer can't see without opening the box)? That's what Apple is doing here. Downloading an app = walking out of best buy with a prod

    • What government overreach? This was a lawsuit between two companies.
    • Apple's App Store does not operate any differently than most app stores on all other platforms (... Google, etc).

      That's plainly false. The ruling was about the specific part that is different. The parts that are the same they don't have to change.

    • This is an extreme government overreach. As the judge stated, Apple is not a monopolist and success is not illegal. Apple's App Store does not operate any differently than most app stores on all other platforms (PlayStation, Xbox, Google, etc).

      Who the fuck said success is illegal. I am not sure "success" is the label I'd use for strong-arming me into an extremely high commission at a massive, massive profit. But I guess you showed that straw man who's boss!

      The goal of the lawsuit is to reduce unreasonable restrictions. Just because everyone is shitty doesn't mean it's not worth trying to make the market better and healthier. Apple has 75% of the tablet marketshare (I thought it would be higher admittedly) and about 55% of the phone share i

    • This is an extreme government overreach. As the judge stated, Apple is not a monopolist and success is not illegal.

      Though I agree that this is a resounding victory for Apple, you apparently missed the very next paragraph in the ruling:

      Nonetheless, the trial did show that Apple is engaging in anticompetitive conduct under California's competition laws. The Court concludes that Apple’s anti-steering provisions hide critical information from consumers and illegally stifle consumer choice. When coupled with Apple's incipient antitrust violations, these anti-steering provisions are anticompetitive and a nationwide remedy to eliminate those provisions is warranted.

      You don't need to be a monopolist to be engaging in unlawful anticompetitive behavior, which is one of the biggest misunderstandings people have here at Slashdot. That said, this is also a VERY narrow ruling and is almost entirely in Apple's favor: they don't have to change their business model, they don't have to break up the App Store and payments, they don't have to allow Fortnite back

      • This would be like forcing Best Buy to allow vendors to post signs next to their items on the show floor that shows the pricing from competing stores such as Amazon

        No, this would be like forcing Best Buy to stop prohibiting other companies from putting additional information in their own product boxes. I keep hearing this "show floor" analogy trotted out, but it's fundamentally flawed because the correct analog to Best Buy's show floor is clearly Apple's App Store, but no one is asking that Apple be forced to let companies link from there. What devs want is the ability to stuff their app with the digital equivalents of the "register your product here" and "buy replacement printer cartridges directly from us" and "here are some other things we sell" cards that fall out of the packaging for the products you purchase from Best Buy.

        While I agree with the vast majority of what you wrote, I don't think this is quite accurate. Specifically, the analogy wouldn't be to a card in the product package to "buy replacement cartridges directly from us" since those cartridges would be provided directly by the manufacturer... This would be more akin to picking out a Sony television at Best Buy, bringing it to the register, and then having Epic's representative lean in through the front door and shout "hey, you can just walk out with that televisio

        • While I agree with the vast majority of what you wrote, I don't think this is quite accurate. Specifically, the analogy wouldn't be to a card in the product package to "buy replacement cartridges directly from us" since those cartridges would be provided directly by the manufacturer... This would be more akin to picking out a Sony television at Best Buy, bringing it to the register, and then having Epic's representative lean in through the front door and shout "hey, you can just walk out with that television without paying. Instead, pay me, and I'll make sure Sony gets their cut."

          So, I think you may be confused about one of two points:
          1) The reason I went with a printer and ink is because nothing about this ruling affects the initial app purchase/download. Only in-app purchases are affected. Given that this is only about subsequent purchases intended for use with the initial purchase, the analogy to ink subsequently purchased for use with the printer you initially bought from Best Buy makes sense. A TV doesn't really make sense because there are no subsequent purchases to go with it

          • ... nothing about this ruling affects the initial app purchase/download. Only in-app purchases are affected... the user won't see these new links until after they complete their initial [acquisition] of the app, exit the App Store, go to their home screen, and open the app.

            Slight change there, given that this applies to freemiums.

            Well, according to the ruling, it's because Apple's App Store provides significant benefits such that the vast majority of consumers surveyed prefer it. But those benefits all go away if everything goes freemium and Apple's trying to provide that service for just $99 per app per year. Hence my latter point:

            Regardless, I worry that the end result of this may be that every app goes freemium, and that with no paid apps to subsidize the rest, the App Store becomes unprofitable and dies... and we then revert to the wild west of uncurated shovelware from questionable sites.

            • Thanks, Slashdot...

              That "Well, according to the ruling" paragraph was in response to your last paragraph about why the consumer is in Best Buy in the first place.

  • âApple wins on 9 counts out of 10â

    • Yeah, weird people seem to be thinking Apple lost this. I hate Apple as much as an average SlashDweeb hates MS, but the fact is Apple came out fine in this ruling and it doesn't say what people seem to think it says.
      • That's because in their rush to be the first to publish, none of these sites are actually reading the ruling.
  • by neoRUR ( 674398 ) on Friday September 10, 2021 @04:17PM (#61783579)

    Ok, so I want to put my own movie on HBO and I want people to pay for it thru my own site, not HBO's. That will be fine now?

    The google store will open up the same way to let in others now?

    I want to put my app on the Epic store, but I want people to pay thru my own store, that is ok now?

    Amazon? I want to sell my stuff, but I want you to pay for it thru my own web site, not Amazon?

    What if I want to sell my own fruit at Whole foods, but you can buy it thru my app store front?

    • I believe it's more that the store gets the cut of the sale of the app. The store would not get a cut of future in-app purchases. F'rinstance, I buy my car from the dealer, and they get their cut. The dealer will not get a cut of my future gas purchases.

    • Apple's store was the only one which tried to take a 30% cut of in-app payments. If you want to put in-app payments in your Android, Amazon, Steam, Epic, etc. store offering, you can and the money is all yours. The store won't touch it. Only Apple was different.

      The jist of Epic's argument was that they already had a payment processing system in place for in-app purchases. But Apple's policies prohibited them from using it, forcing them to use Apple's payment processing and pay Apple's considerably more e
  • Epic wants to use its own payment system instead of Apple's so they don't have to fork over any fees to Apple. The judge should have said that Epic can't use its own payment system either nor can they have any stake in a third-party payment system if the ruling were to be truly anti-competitive.

  • I hope that when this is resolved, Apple will be required to allow 3rd party app stores but with room for rational requirements

    I expect as soon as 3rd party app stores are permitted, there will be a windfall and publishers will pull their apps from Apples store publish through more economical variants instead.

    When this happens, I want controls in place that make it so app stores and apps installed by them can be easily and legally yanked by Apple when trust is violated.

    I have never been opposed to paying mo

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