Apple Exec Admits Court-Ordered App Store Changes Fail To Boost Competition (fortune.com) 58
Apple executive Phil Schiller admitted in court on Wednesday that the company's court-mandated changes to its iPhone app store payment system have not significantly increased competition. The ongoing hearings in Oakland, California, are determining whether Apple is properly complying with an antitrust order to allow developers to display links to alternative payment options. Despite Apple's implementation of the changes in January, only a small number of apps have sought approval for external payment links.
U.S. District Judge Yvonne Gonzalez Rogers has expressed frustration with Apple executives, questioning whether they understand the order's intent to increase competition. Schiller defended Apple's response as well-intentioned but acknowledged the need for further action to encourage more apps to utilize external payment options.
U.S. District Judge Yvonne Gonzalez Rogers has expressed frustration with Apple executives, questioning whether they understand the order's intent to increase competition. Schiller defended Apple's response as well-intentioned but acknowledged the need for further action to encourage more apps to utilize external payment options.
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the rules in the new system are so bad that few will want to put in the work to get nothing out of it.
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Both of these things are things that Apple does not want, and so a recognition of the lack of competition by the Apple exec is an admission of an undesirabl
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It's not about guilt, it's about competition. The purpose of the order was to increase competition. If that hasn't happened then it could be because Apple's compliance was poor, as suggested in the summary, and so Apple must be compelled to comply more effectively. Or it could be because that order was not sufficient, and so more orders are necessary.
Spoken like a European.
A key difference between US law and EU law is that the US mandates actions, while the EU can mandate results.
If the required actions did not produce the results you intended... that is not Apple's problem -unless it can be shown that they did not actually comply with the actions ordered by the court.
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With anti-trust there is no criminal act, it's just an attempt by the court to rectify a marketplace with an overly-dominant player. If the court fails in its attempt then the marketplace still needs to be rectified and so the problem is still ongoing. It's not over, and the court's
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That is not how US law works.
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Another option is that changing payment partner is something that takes time and effort. You cannot expect that a significant portion of the apps will implement that change right after it is available, knowing that this is troubled waters and if Apple goes back to normal because the Judge throws the towel you're back to square one with wasted money as well.
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The companies with a serious hardon for alternative payments seem to have done it just fine. They don't at all seem to be any sort of malicious compliance. Mind you in certain categories they were already allowing this to happen and those also seemed just fine.
I will also admit to trusting not a single third party payment system and generally speaking I avoid most apps that charge a monthly fee unless they truly offer some sort of continuous "stuff". (i.e. Netflix and the like.)
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Is Apple supposed to FORCE devs to use?? (Score:5, Insightful)
Despite Apple's implementation of the changes in January, only a small number of apps have sought approval for external payment links.
So how is this Apple's problem? Is Apple now supposed to REQUIRE that devs provide an external payment system?
What the Judge seems to fail to understand is that maybe, just maybe, a lot of devs making apps do not WANT to have to set up or manage a payment system. It's great that Apple totally handles payment taking, updating, and disputes without you having to lift a finger. Even to implement something like Stripe is a lot of additional work (including legal work) and it sucks (the work that is, no shade on Stripe which works well).
That is part of the reason was a lot of smaller devs are perfectly happy with Apple taking 15% and them not having to to any work but point Apple at a bank account it which it tosses money.
Seems to me it's enough that Apple is forced to allow external payment options for apps that really want it, and requiring some quota is just as dumb as not allowing it.
I find it really illuminating that even if anyone can add this, many do not... which shows Apple was silly to ever disallow it since most people would have just used Apple's payment system anyway.
Re:Is Apple supposed to FORCE devs to use?? (Score:4, Informative)
The fact that Apple is charging a 15 percent fee on all transactions outside of their payment system means that there are no savings to be had by the app developer by moving to another payment system. There are no savings by the end user as a result. Malicious compliance is why this is being revisited. Phil wouldn't be answering the court by saying yeah we are surprised our proposed resolution didn't do squat unless he had a compelling reason to cop to this being a failure. Apple looks bad here and Apple fans are rejoicing.
Apple does have costs (Score:1)
The fact that Apple is charging a 15 percent fee on all transactions outside of their payment system
Do you think Apple deserves 0% for having all of the hosting facilities to do app updates, along with maintaining the store the app can be obtained from, along with helping find your app in search results?
Apple obviously deserves something, you think 15% is too high but why? Apple gives your application a HUGE reach it would not have otherwise if all that infrastructure were not in place.
It makes no sense t
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So you think they deserve 15% of anything an app makes for doing the same thing they do for free apps? Sorry, but this is a feature of the store that they FORCE you to use therefore they should be the ones paying for the store itself. If they can offer it to free apps without cost, why do you think pay apps should pay for the same things?
So what is the number then? (Score:1)
So you think they deserve 15% of anything an app makes for doing the same thing they do for free apps?
Given the reach they enable an app maker - absolutely.
I repeat, what number do YOU think is OK? Because if we agree the number is non-zero, now we are just arguing about what percentage is justified.
If they can offer it to free apps without cost
They can only do that because the paid apps subsidize the whole system, obviously.
Which is why an app maker should be OK paying a bit larger of a percentage to keep
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I think the proper price is zero, as that is what they charge free apps. What is the difference between a free app and one that uses another payment system to the Apple store? They are doing the same amount of work for both. And the store is something that Apple has forced people to use. That means, they see it as a benefit to them, so they should be the ones supporting it. If they don't find a benefit, they are free to allow other app stores or even sideloading, but they do not. The idea that apps should h
Re: Apple does have costs (Score:2)
https://developer.apple.com/support/compare-memberships/
They don't deserve to double dip. They advertised and sold a service but feel that for some reason that they need to be paid even more because... Apple? And a percentage of your sales because you as a developer worked hard enough to make a successful app?
If the advertised fee isn't enough, then raise the advertised price. Don't try to add hidden fees and double dip.
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Running your own payment system is a bitch, it's difficult, you have to comply with credit card security standards that are their own pita, your liability increases dramatically and so on.
Your alternative is getting a third party to handle all,that shit but they still take a cut and you still have most of the bullshit to deal with on security. Not quite as much but it still sucks.
Yes, I've done this before for my employer.
Apple taking 15% and dealing with all of it including the liability is an amazingly
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Could it be you confused Google's new developer fees for Apple's? Google's includes "An ongoing services fee of 17% for in-app purchases."
So from reading some developer posts (Score:2)
In this case the judge is looking into some shenanigans going on that were almost inevitable. If you or me had done the kind of crap Apple is done to comply maliciously with a court order we would be dragged into court and if we are very contrite and ver
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If they find Apple's system hard to use then they're fucked trying to run their own payment system. It sucks. It is one of the more painful IT things I've had to deal with in my career. The security standards, the audits, the liability, the monitoring, being a hacker target, and the rest to save a few points? 15% is totally worth it.
If I was a smaller dev I'd happily pay Apple 15% to take on the full burden of the payment system to say nothing of the reach the App Store can give my apps. Only the large
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If they find Apple's system hard to use then they're fucked trying to run their own payment system. It sucks. It is one of the more painful IT things I've had to deal with in my career. The security standards, the audits, the liability, the monitoring, being a hacker target, and the rest to save a few points? 15% is totally worth it.
If I was a smaller dev I'd happily pay Apple 15% to take on the full burden of the payment system to say nothing of the reach the App Store can give my apps. Only the largest/highest revenue devs should consider running their own payments.
I've worked in this space. Yes, it's work, but 15% hard?... no way. Maybe 5% over and above the CC fees. Shopify seems to be satisfied to take this burden from lots of customers for about 3% _including_ the cc fees.
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I'm talking smaller shops that don't specialize in retail and other bulk purchases.
Imagine some dev who makes $100k a year off Apple. They don't have the technical know how on the back end to set this stuff up so they can pay a contractor $20k to set it up and still have to deal with it forever or pay Apple 15k and forget about it.
Now think of even smaller shops that make 10k to 50k. Meh. Just pay.
But sure you're making millions annually off Apple, go ahead and roll your own.
This court is upset Apple has
Its called TRUST (Score:3)
Too many scams, so you stick to what you know and developers know this too.
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If you don’t trust Apple, I’m curious to know which internet company you DO trust. Google? Mmmmfffhehehehe. Faceboo hahahah I couldnt even type that with a straight face.
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If you don’t trust Apple, I’m curious to know which internet company you DO trust. Google? Mmmmfffhehehehe. Faceboo hahahah I couldnt even type that with a straight face.
I don't know about the original poster, but I trust the data that is under my control. My Mac is basically under my control. My iPhone, not so much. So my level of trust for Apple is platform-specific.
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In other words, no one because you only trust local things and these payments are remote for remotely stored downloads, etc, etc.
Which is fine if that's your answer but really only says you don't buy anything online from anyone. I guess....
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In other words, no one because you only trust local things and these payments are remote for remotely stored downloads, etc, etc.
Which is fine if that's your answer but really only says you don't buy anything online from anyone. I guess....
I buy physical things online. I don't buy virtual content as a general rule. If you don't have a physical copy that you can back up, you don't own it. Rentals and non-transferrable "purchases" are "just say no" territory. I'll tolerate some types of DRM protection on software purchases, but only under very limited circumstances.
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Fair enough.
Do you own a game system? Ps5, Xbox? Only buy disks or do digital purchases through their store? If you don't console game, what's your theoretical take on buying digital copies of games that way?
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No, I don't do console gaming, and I think that their digital purchases are kind of questionable, because they can arbitrarily take away your ability to play them at any point, as demonstrated by several companies actually doing so over the years for various reasons.
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True they can. How do you weigh the convenience and (sometimes) lower digital prices vs the ownership of disks? Plus the additional cost of the console itself for the ones that have a media drive vs the cheaper digital only units?
Do you consider the extra $100 for the drive and manually swapping disks from a library worth the cost to avoid the mostly theoretical your games will be stolen back from your digital library?
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True they can. How do you weigh the convenience and (sometimes) lower digital prices vs the ownership of disks? Plus the additional cost of the console itself for the ones that have a media drive vs the cheaper digital only units?
I don't do console gaming, but if I did, I would view that as the cost of ownership.
Do you consider the extra $100 for the drive and manually swapping disks from a library worth the cost to avoid the mostly theoretical your games will be stolen back from your digital library?
Well, I don't do console gaming, but if I did, I'd have serious questions about the trustworthiness of a company that charges an extra $100 for an optical drive that probably costs them only about $10 to $15, wondering what their scam is. I mean, I guess maybe they're avoiding some licensing for Blu-Ray movie player software, so there is sort of a very weak reason for a little bit more of that price difference, but there's
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Thank you for the thoughtful and detailed reply.
When I got a ps5, it was a new thing to me and I had no experience with the Sony digital ecosystem so I spent the extra 100 on the drive. Now that I've had it for a few years, I found physical media to be a nuisance. I've used the drive 3-4 times since I got it.
On the digital side, I subscribe to the lowest end monthly and find that the discounts and freebies more than cover the subscription cost, I don't have to deal with disks, and I can play on any device
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I also do not lease software via subscriptions. There is software I used for years which went the SaaS route, I no longer buy it.
"In App purchases" to me is a warning sign, so I don't look at those Apps either.
Apps that require pay-for-updates to new versions after every OS upgrade get removed.
I also don't "buy" music, games, videos, books etc electronically where my purchace may get revoked because of licensing changes or the phone home serve
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Oddly enough, I DONT Trust Apple,
This, people who trust companies like Apple are the same people who will be naively asking "why did Apple screw me over" not long after.
and I suspect many of the developers out there also do not trust them, so why spend the money to implement another payment method (or in the case of say... Amazon enable the payment method for books) when the odds are that Apple will come up with some way to break it?
Apple are still charging their 15% danegeld even if you use external payment options which is why this case is being revisited... And people wonder why we don't trust them.
What the Apple exec is doing in this case is lying by omission. Sure only a few applications are "taking advantage" of it, but you can bet those applications will be major earners. It doesn't make sens
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It's interesting that you didn't name any one of the "others."
No, I wouldn't trust a *random* other app store. But I might choose to trust an app store created by Mozilla, or Brave, or DuckDuckGo, or some other privacy-focused company. My point is not to say that these names are trustworthy, but that it is possible for a third-party app store to gain my trust.
January? (Score:3)
It was first allowed in January and by May there hasn't been a wholesale change?
Does PayPal, Braintree, et. al. have fully working and supported SDK's developed, tested, and shipping yet?
Then there's the same effort on the app side.
I'm anything but an Apple apologist but, jeeze, give it a year.
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It was first allowed in January and by May there hasn't been a wholesale change?
Does PayPal, Braintree, et. al. have fully working and supported SDK's developed, tested, and shipping yet?
Not only that, but I doubt they are even working on it. Why would any developer want to incorporate an API in which they will end up paying more money than using Apple's payment system?
If Apple were truly allowing people to choose their own payment system without restriction (i.e. you pay PayPal a cut, and the rest, you keep), there would be a huge benefit to implementing a new payment system, because Apple's 15% fee is outright extortionate. So you'd have competition almost instantly.
But instead, Apple d
Do they understand?? (Score:1)
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Other vendors do all that calculation for you, for a lot lower price. Shopify, for example, charges 2.9% + $0.30. They do all that fancy calculation stuff just as well as Apple does.
Wait a sec (Score:2)
That aside, many people here pointed out, back when the App Store started, that payment processing only made up 2% at the very high end and usually not even 1% - so the 3% Apple reduction is obviously too generous already.
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Shouldn't the court admit the changes they ordered didn't do what they intended instead of blaming Apple?
Why? The malicious compliance is entirely on Apple. The court ordered them to allow third-party payments. The details of implementing it were Apple's decisions, not the court's decisions.
Apple chose to create a scheme in which you had to apply for special permission to use third-party payments at all, and by doing so, you agreed to pay a 12% or 27% commission (depending on the developer) to Apple on top of the percentage that your third-party payment provider charges. It isn't financially feasible to co
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It is abundantly clear from those numbers that Apple deliberately designed this new scheme to make competition commercially non-viable.
Not allowing Apple to charge infrastructure fees for delivering apps (and updates) to users makes the App Store commercially non-viable.
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It is abundantly clear from those numbers that Apple deliberately designed this new scheme to make competition commercially non-viable.
Not allowing Apple to charge infrastructure fees for delivering apps (and updates) to users makes the App Store commercially non-viable.
Fine. Then the requirement should be to allow third-party app distribution. With zero royalties to Apple. That's what the EU concluded was the only viable form of competition, and they're not wrong. As long as Apple controls distribution exclusively, they can construct rules that effectively allow them to put their thumb on the scales of competition to an unlawful degree.
And you may, in fact, be right that the cost of the store will make it non-viable (or at least money-losing, albeit not enough to real
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The "not working" part is on the court.
Not really. I would not describe what Apple did as meaningfully allowing third-party payments on the iOS App Store. The limitations and restrictions and additional fees that they elected to charge are specifically designed to make it so that no third party can realistically offer a third-party payment service that would be commercially viable.
It's a bit like when a teacher tells you to stop giving your classmates wedgies, so you tell them that you will agree not to give them wedgies, but only if they cons
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Either way, Apple chose an approach that might arguably comply with the letter of the court order, but flagrantly violates its clear intent, which is contempt. That's the best-case outcome for Apple, IMO.
The clear intent of this is not in any way to spur competition, but to make Apple non-competitive.
Occam's Apple. Apple - a minority player in a field, overwhelmingly controlled by Google, is a monopoly. Android, although it ruins most of the world's phones and pads, is a victim.
It's complicated. A coalition that believes that profit is obscene is in bed with people who have rageboners of Apple hatred, because they simply have to hate something.
Why don't you people just fight to put Apple out of
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Either way, Apple chose an approach that might arguably comply with the letter of the court order, but flagrantly violates its clear intent, which is contempt. That's the best-case outcome for Apple, IMO.
The clear intent of this is not in any way to spur competition, but to make Apple non-competitive.
Tell me you're kidding. Apple earns an incredible amount of money on their hardware. They could literally write off the cost of operating the App Store and you'd barely even see it in the stock price. So how, precisely, would not allowing Apple to charge extortionate fees on in-app purchases "make Apple non-competitive"?
Occam's Apple. Apple - a minority player in a field, overwhelmingly controlled by Google, is a monopoly. Android, although it ruins most of the world's phones and pads, is a victim.
In the United States, where this trial is happening, Apple has 60% of phone sales and I think over 90% of mobile app revenue. They're a minority player only in the heads of people who do
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You poor persecuted blind apple worshippers.
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My thoughts and prayers are with you. Its terrible the atrocities your people have suffered that the hands of my people. You poor persecuted blind apple worshippers.
The much butthurt under your words is showing.
As a user of both Apple and Android, it's obvious to me that the atrocities felt aren't by the Apple users, but those who feel compelled to believe that somehow products they will never buy, products they hate because they have the Ford versus Chevy syndrome, most of us find your antics amusing.
A better use of your time to give thoughts and prayers that I'm flattened by a meteor so that I quit trolling you oh so sensitive Apple haters. Or at least that I c
How about (Score:2)
So unless the courts mandate only a certain number of Macs, Imacs, iPads and MacBooks, and only allow the App store to sell android software, the people that like Apple products are going to buy apple products.
The problem is that those who hate Apple and it's ways have managed to convince the legal system to destroy that sector of the free market, at least the concept.
Never underestimate busybody government (Score:2)
Never underestimate a busybody government's ability to f*ck things up that they had zero understanding of. (Hint: they always have zero understanding)