Apple Executive Voiced Concerns Over App Store External Payment Fees (techcrunch.com) 24
Apple Fellow Phil Schiller testified in court Monday that he initially objected to the company's plan to charge a 27% commission on purchases made outside the App Store, court documents showed. Schiller, who oversees the App Store, warned the fee would create an "antagonistic relationship" with developers and transform Apple into "some kind of a collection agency" that might need to audit developers for nonpayment.
"I had great concerns about the collections of funds from developers," Schiller said, worrying about "how all of those things change the relationship between Apple and developers in a way I thought would be detrimental." Despite these objections, a pricing committee including CEO Tim Cook ultimately approved the commission structure. The 27% fee resulted from the 2021 Epic Games ruling that required Apple to allow developers to link to external payment options, slightly lower than the standard 30% in-app purchase commission. Internal documents revealed Apple analyzed how a "less seamless experience" of web-based payments would affect transaction completion rates.
"I had great concerns about the collections of funds from developers," Schiller said, worrying about "how all of those things change the relationship between Apple and developers in a way I thought would be detrimental." Despite these objections, a pricing committee including CEO Tim Cook ultimately approved the commission structure. The 27% fee resulted from the 2021 Epic Games ruling that required Apple to allow developers to link to external payment options, slightly lower than the standard 30% in-app purchase commission. Internal documents revealed Apple analyzed how a "less seamless experience" of web-based payments would affect transaction completion rates.
Why? (Score:2)
Re:Why? (Score:5, Insightful)
Why does anyone even sell anything on the apple store. Ok they have a huge market but only because of the apps
In the rest of the world it's a bit more confusing, but here in the US they have half or more of the portable device app market — it's about half of phones alone. 27% less than your nominal asking price is still more than you would have received without the sale. For digital goods with no additional costs for additional sales (especially when distribution is handled by an app store) it's a no-brainer to take that money from the table.
Re: (Score:2, Troll)
If you were selling via other channels (eg consider traditional retail sales) how much of the sale price would you actually receive?
It's probably a lot less than 73% once you consider distribution costs and retail markup.
Re: (Score:2)
If you were selling via other channels (eg consider traditional retail sales)
Nobody buys software that way any more.
what a ridiculous comparison (Score:2, Insightful)
Comparing Apple's take today to what was taken by retailers 25 years ago is an argument so disingenuous it makes you look stupid for thinking the listener would entertain it for even a moment. Go into Best Buy right now and tell me how much software is on the shelf. Answer, just about zero. My local Best Buy has 42 SKUs: mostly antivirus, some Windows OS, various Adobe products (and a few Adobe competitors like CorelDraw), MS Office, Quicken and TurboTax. Almost all software is sold electronically these day
Re: (Score:2)
So why *exactly* should Epic, and not Apple, be the one making the money and profits from the platform and ecosystem that Apple built?
You lot are all so wrapped up in your same tired old "no wireless, less space than a nomad, lame" narrative that everything Apple does must be wrong simply because they're Apple, that you've never bothered to answer or, I suspect, even consider that question. But there was nothing stopping Tim Sweeny and Epic from putting in the same effort that Steve Jobs and Apple did back
Re: what a ridiculous comparison (Score:2)
So why *exactly* should Epic, and not Apple, be the one making the money and profits from the platform and ecosystem that Apple built?
Nobody said it had to be an either-or thing, Mr. Appletologist.
Besides, it's disingenuous to claim that apple built it. Without the third party developers, apple wouldn't have shit. In fact, both the hardware and the software they build never has been anything remarkable, the so called "empire" you're talking about is really smoke and mirrors that comes in the form of marketing. In other words, they convince people like you that their products are "cool" and "hip", and succeeded in convincing you to give yo
Re: (Score:2)
Because Epic is the one reviewing app submissions, hosting the apps, hosting app reviews, processing payments, recommending apps, curating its store, gathering and providing user metrics to developers, etc.
Re: (Score:2)
Wait, so if an online bookstore wants to sell an ebook through Apple they have to pay 27% but that's a bargain because if you pay someone to cut down trees and build a pulp mill and build a printing press and drive it two thousand miles and put it on a shelf and have a clerk ring it up - you only get 40%?
That's not how the price mechanism works at all.
Why not 10% to the paper book publisher, then? Because all those cogs in the machine are pushing for efficiency and competing on price so the publisher can s
Re: (Score:1)
I had a retail business. My product cost was 50% of my retail cost.
I would have been very happy if my vendors only charged me 27% of my sales prices.
Re: (Score:2)
it's about half of phones alone. 27% less than your nominal asking price is still more than you would have received without the sale. For digital goods with no additional costs for additional sales (especially when distribution is handled by an app store) it's a no-brainer to take that money from the table.
Right, but what I'm saying is if the apps all dried up would they still be able to hold such a market share and with it the power to collect fuck you fees? I don't know if they could because the hardware itself is nothing special and vastly overpriced.
Re: (Score:2)
Right, but what I'm saying is if the apps all dried up would they still be able to hold such a market share and with it the power to collect fuck you fees?
No, of course they couldn't. But if you ignore half of the market, and a competitor doesn't, then they will outgrow you. They will then be able to outspend you on marketing and crush you. The only way to solve this problem is through legislation, and we're not doing that these days. I mean, especially these days, but the truth is we haven't adequately policed antitrust for decades. These terms are abusive to consumers who don't understand them or their impact, which before some libertarian chimes in with so
Re: Why? (Score:3)
So you would be fine with Microsoft just demanding 27% of all PC app sales all of a sudden?
This is what Apple is doing. "That's a nice phone app you have there. We better get our taste or we'll see you in court"
Fuck Apple, and fuck their financial parasitism
Re: Why? (Score:2)
Point to where I said it was good
Re:Why? (Score:5, Insightful)
Why does anyone even sell anything on the apple store. Ok they have a huge market but only because of the apps, its a snake eating it's own tail and bleeding fat piles of cash apple is hovering up with little to no effort on their part. 27% for not even using their shit? Fuck off. Break the cycle.
I can't wrap my head around why Apple collects a fee on purchases *NOT* made through them. What's the service offered to either the developers or the end-users? Because if this flies, what keeps every OS developer in the world from saying they should be paid for every bit of software they allow to run on their OS? It's beyond rent-seeking. It's fee-ception. Fee-pallooza. Fee-fee-fees all the way home.
Re: (Score:2)
Yep, just imagine if, suddenly, Apple started charging this fee for any software run on a Mac. Then we would see what tune the Apple apologists start singing.
Re: (Score:2)
Rent-seeking is the act of growing one's existing wealth by manipulating the social or political environment without creating new wealth. Rent-seeking activities have negative effects on the rest of society. They result in reduced economic efficiency through misallocation of resources, stifled competition, reduced wealth creation
Re: (Score:2)
Nothing is easier to understand than "why".
It's slightly harder to understand why they are permitted to engage in what is obviously "tying", which is a violation of antitrust law, but only if you pretend bribery doesn't exist.
Bite the bullet please (Score:2)
Stop building for Apple. I have avoided Apple products for my entire life because of developer abuse.
Re: (Score:2)
Back in the Apple II and Macintosh days, at least through System 6, Apple seems to have been of about average friendliness to developers. Back then it was common to have to buy a compiler, for example. And of course, they didn't have an app store to charge you fees around. The official compiler cost about an average amount.
Apple still doesn't seem to be too developer-hostile on Mac OS, though they surely are when it comes to iOS. With Mac OS they seem more user-hostile, trying to keep you from doing what yo
"Apple Executive Thinks It's 2004" (Score:3)
Seriously, this guy seems to think something that happened years ago is just now about to happen. Apple is 100% unproductive. At this point they are a simply digital landlords running a collection agency.
A friend of mine helped design one of the best apps in the history of iOS, DarkSky. It was a very simple and very effective weather prediction app. It was wildly successful. Massively successful KickStarter, write-ups in FastCo, Starbucks app pick of the week, etc...This app was doing gangbusters because it was actually great. So what happened? Apple bought it claiming that they would use it to enhance their weather app. Well that never actually happened. Check out this Reddit post about how it actually played out: https://www.reddit.com/r/apple... [reddit.com]
What happened was that they bought it and then shut it down and their weather app didn't actually get any better. Why did this happen? Because the real business model of the app store ain't software distribution, it's monetizing a tournament. Brands pay for online marketing in tons of ways. If one app dominates and simply and efficiently solves a problem and fulfills users demands, then developers in that industry will no longer pay to promote their less effective apps. DarkSky was such an effective app that it broke the "weather app tournament" that Apple was monetizing so they bought them out and shut them down.
Apple has been an unproductive rent-seeker for well over a decade now. This executive and the blogger covering them both seem to be completely unaware of how Apple has been functioning for the last decade. Someone should let them know that Steve Jobs is dead and the company is run by a soulless corporate raider. It might help them understand what they're actually doing.
Re: (Score:2)
Hmmm.. interesting.
But that reddit thread doesn't say much about the history of Apple purchasing DarkSky.
This apple thread claims DarkSky is integrated.
https://support.apple.com/en-u... [apple.com]
Re: (Score:2)
It is very clear that Apple bought it in order to shut it down. They make money when developers fight for dominance by paying them for marketing. Making a default app better can't possibly create as much revenue as a monetized marketplace filled with options.