This is exactly how regulators should respond to the market abuse of these technology monopolies.
If they wanted to head this off all they had to do was pay a reasonable amount of tax in the country where the revenue was generated and offer a reasonable (single percentage) fee for facilitating payments.
What regulators should mostly do is provide rulings in 2 weeks. Monopoly lawsuits have been threatening for 5 years and are still in limbo, our entire West is in threadlock: Slow justice, slow regulators, slow administrations, fast market grabs…
Slow justice and slow regulation are a feature, not a bug. Premature either is more dangerous than delayed action.
In hindsight, the correct time for regulation was probably 2008 for Google (DoubleClick purchase and Android shipping with "Android Market") and Apple (App Store).
It should have been a clear line from hardware control -> distribution control. And if regulators hadn't seen it, then Congress should have drawn it for them in updated laws.
Unfortunately, the world had a bit more going on that year.
Android was effectively launched in 2008, per Wikipedia: "It was unveiled in November 2007, with the first commercial Android device, the HTC Dream, being launched in September 2008."
In this case, I'm not sure how to square new innovation (smart phones first launching in 2008) with slow regulation.
It's going to be a hell for the users and the smaller developers.
Devs will have to support multiple platforms, different API and options. Also different legal arrangements would be needed as each country has different laws and processes. Remember the agreements and forms we fill for different countries when we want to sell paid apps/features on App Store? I also can't wait to pay account fees for many app stores and modify my apps to fit specific app store rules.
The %30 cut, for me covers this boring complexity. I'm sceptical that the potentially lower commissions will offset the added development and administrative costs.
As for the users, people will start forgetting where they paid what. They will get frustrated, blame devs etc. It would become tiresome and many will be turned off the moment a payment is requested simply because they don't want to go through the same stuff multiple times.
I despise platform fragmentations. Instead of telling companies what they must do, I think the regulators should intervene for market fairness, i.e. Apple&Google getting heavily fined when enforce different rules on different developers differently or compel them to accept an app in the App Store if they can't clearly indicate which rule is being broken.
I would like to remind you all the troubles we need to go through to support just platforms: AppStore and Play Store. I am NOT looking forward to start paying fees and do development/Marketing work/Adjustments for Epic, Microsoft, Oracle, T-Mobile, Vodafone etc. just to reach the exact same users as of today.
Edit:
I, as a developer, don't want to deal with multiple platforms and their management and fees. Please tell me if you are mobile developer or is your opinion ideological. The Arguments so far look like coming from people who have no real experience with getting an app into the AppStore.
How do you plan to sell Apps in the UK, France, Turkey, charge VAT and pay it to the respective governments for example. How do you plan to file your export paperwork in the US? How do you plan to deal with compliance?
Seriously, are there any indie developers here with hands on experience? How do you handle international trade and taxation outside of platforms like AppleStore?
Sure, you can do dev work for Windows Phone Store. That doesn't mean that it's as rewarding as doing work for Apple AppStore.
The fragmentation will not open the floodgate for all the users out there who were holding off because they didn't want to use App Store or Play Store. It's going to be the exact same userbase but there will be more gatekeepers to deal with.
> but there will be more gatekeepers to deal with.
They’re not mandating support for alternative payment providers merely saying Apple and Google cannot prevent you as a developer offering an alternative to your users. Whether you decide to support alternatives is up to you but when you can use stripe for a 2% fee or Apple/Google with 30% how can you be worse off?
Apple and Google effectively prevent you from doing that without being in their stores. The fact that "technically" you can install apps on android and "technically" users can get an apple dev certificate / or sometimes jailbreak their device are nothing more than a single atom layer thick fig leaf.
These two companies effectively have a duopoly on the mobile phone market and act accordingly.
Edit: Corrected to not attack the parent commenter.
No body is preventing me from doing anything, please stop speaking for me.
Please read carefully: I do have Apps in the AppStore, I am happy with the business relationship with Apple and I am not looking forward to be forced into establishing new business relationships to reach the exact same user base.
I clarified that I did not intend to speak for you. Sorry for that.
You'll be in luck then because you will still be able to use apples services without anything changing. This or similar laws do not obligate you to offer options.
I'm not sure how you think you will have to do anything different or be forced into something? your app can stay the same, has the same presence. But, under this law, you could choose to have micro transactions or subscriptions where , if you choose to, you could use stripe, or some other payment provider where you pay a much lower fee, if you choose to.
You need to bifurcate the payment % from the selling of the app itself and the in-app purchase.
For iOS, the AppStore is essentially mandated to download and sign an iOS app. No one is saying that you shouldn't have some cost associated with getting that distribution (since Apple is providing value there), it's more about the cut they take for every additional fees once the app is already downloaded.
Sure, You can't have platform fragmentation costs if you don't support platforms.
You only support them if you want to reach the customers. That's exactly the same as not supporting Android or
iOS or not getting into App Development in first place.
So, for example, if the bulk of the customers in Korea might be using Samsung Pay, you might just want to keep integrating with that instead of also having to provide Apple mechanisms, and maybe restructure your price since Apple imposes its tax?
1) I need to learn and integrate Samsung's API or I need to hire someone to do that for me. I need to maintain a version of the app that works the way Samsung thinks it should(how do you deliver and restore purchases might differ from Apple).
2) Then I need to go through paperwork and payments that will enable me to sell Korea software from UK. I haven't look at the trade agreements between UK and Korea, I guess the easiest way is to pay a specialist that knows it.
That's something that I would rather don't go through. Probably it's not possible unless I make significant money from it anyway.
Well, Korean government is likely to prioritize their local developers. And their darling, Samsung. UK and US have to jump through some hoops, sorry not sorry.
There's a Goldilocks zone in which something mostly resembling free market can exist. Beyond that zone, there's some old boys network running the show, where who's married to whom, who plays <leisure sport for rich dudes> with whom, and who's chums with whom are the things that matter.
So the small developers are the old boys network? That's funny.
Let me tell you what will happen if that becomes the case, there would be publishers that you pay so that they release your apps in Korea and there would be large companies with enough departments to handle the hops.
The idea that this will benefit anyone but the large companies is ridiculous. Don't you find suspicious that there are no crowds of indie developers but giants like Epic who make the noise about it? Do you believe that Epic is an altruistic organisation?
> If someone else doesn't want to pay 30% to Apple, then they should have that right
That right? Are you saying developers should have the right to all of Apple's stuff for free, no matter what? Is Apple not allowed to distribute their tools and libraries under a license of their choosing?
Should we ignore licenses altogether? Perhaps I don't want to pay the "cost" associated with use of a GPL-licensed library in my proprietary application. Should I have the right to just ignore the GPL license?
Apologies if I wasn't clear. I'm talking about the relationship between Apple and developers who are building applications using Apple's proprietary software libraries.
I completely agree that consumers should have very wide rights to the device they purchased.
Should I pay Apple for the right to build a Mac app, or Windows for using their desktop apis? Maybe I should have to pay mozilla and google every time someone visiting my website and I use a piece of javascript that executes in their browsers?
Apple is under no legal obligation to license their material at FRAND rates, nor are they under any legal obligation to make you happy. So let's table that.
What does the App Store fee cover?
• Credit card transactions (~3%)
• Gift card transactions (10–30%)
• Absorbing the costs of credit card fraud
• Running the App Store, bandwidth etc
• Performing app review[1]
• A license fee for use of Apple libraries and APIs
• Having your App receiving the residual goodwill of being available in a store where customers know that Apple is constantly breathing down the neck of developers to do the right thing[2] and pushing the envelope of policies such as not allowing third party tracking by Facebook.
• Having your App for sale in a store where customers feel comfortable generally need to fear credit card fraud, malicious code, where scams are less common (and can generally be refunded), etc etc.
Let's imagine that Apple said "okay, you can have an open market" and replaces their App Store fees with a license fee of 15 percent of gross revenues, similar to how Epic charges developers for use of Unreal Engine. Now you can have an open market for apps. Let's see how alternatives compete for the costs of running and marketing their stores.
[1] Just because something is imperfect, doesn't mean it's useless.
First, you are talking about the rights of an end user to use an app. That's different. I'm talking about the rights of a developer to distribute an app built against these libraries and APIs. The FSF says that if you did this with GPL libraries and APIs, this would require your app to also be available under a GPL compatible license.
Furthermore, whether you paid for a thing is not relevant. What matters is whether the license conditions are satisfied. You can pay for a boxed copy of Red Hat Linux, but that doesn't absolve you of the responsibilities under the GPL.
And finally, licensed Apple intellectual property is absolutely contained within the binary of your iOS application.
Historically, people had to buy developer tools like compilers and assemblers for hundreds if not thousands of dollars either directly from the company or through retail channels if they wanted access to the inner workings of their computer. Apple included. So the pay-to-build model isn't new. As far as what "should" happen is concerned, that'll be a matter of debate and contract law if/when Apple changes its terms and if/when you agree to them.
Indeed. And Apple does have the benefit of prior art in the case of games consoles which have—for the past 30 years at least—required developers to accept some kind of revenue share for the right to distribute software to customers.
It would be evidence in antitrust proceedings to demonstrate that Apple is not aligning itself with the game console market but with the personal computer market.
You can (I guess to an extent). But, you cannot use iOS however you see fit - it's probably in that wall of text you agree to every time it updates.
I get all these laws etc, but they are all at the behest of other big business who wants to take the ecosystem apple made and profit MORE off of it.
This whole thing does not help small devs, or consumers. I would argue apples PR stance that it actively basically harms consumers is 100% spot on.
The problem may be that people in ios have grown to not be looking over their shoulders for scams, but all of this will just bring about that exact thing.
The grift as soon as ios/app store opens up will be insane. You can't stop it in an open platform, and again, the average tech user is not at all savvy about tech.
There are probably good solutions to this, but so far nothing out in public is anything but self-serving of already monied interests.
Apple doesn't do that. The restrictions Apple impose are on distribution(i.e. you can't use Apple's distribution services to distribute your app to the users of that service if Apple don't let you), you can do whatever you like to your own device and Apple can't do anything about it. That's why it's perfectly legal to jailbreak your phone.
That's splitting hairs. They do do that, exactly by imposing restrictions on distribution.
Your argument is: "You're free to write an app for yourself, but Apple isn't restricting you from using private APIs, they're restricting you from distributing it using their resources, oh and they're blocking any alternative distribution methods, too."
What does “fully paid” mean? Would that allow Apple to sell hardware where they control API usage at a cheaper price than a device where they do not control API?
I'm not talking about restrictions placed upon the end user, but rather on the developer who is distributing an application which uses these libraries. If they're not willing to accept the license terms for those libraries, that is a license violation.
Do you know who would agree with that? The FSF. They will argue that an application built against an API licensed under the GPL is a derivative work and therefore falls under the terms of the GPL.
This was the case back when Qt was quite infamously licensed under the GPL rather than the LGPL.
Would forcing Apple to make everything required to run linux on Apple hardware available to all devs be fine then? Just to keep things fair and allow for competitors and such. Maybe force all hardware manufacturers to allow OS selection when doing a factory reset?
Libraries? I'm allowed to use them without selling/distributing as long as they are critical to run the hardware that I paid for(as long as they are only used for said device). Copyrighting/blocking people from reverse engineering any piece of code that is needed for hardware to function should be illegal in the first place.
Well we can't make laws that target Apple specifically, so let's table that for now. Requiring all computer devices sold to have a mechanism for running Linux? That sounds fine in theory, though I don't know that a law could compel a company to assist developers in understanding their hardware.
We need to re-define what 'rights' mean in a digital age. The ideas of property rights from the 1800's are vaguely applicable in digital contexts.
Ultimately, we are the creators of the society we live in, so if we don't think laws are working for everyone, we should change them. We have tons of laws against price gouging, preventing businesses from fleecing customers, etc. Apple grabbing 30% of sales of a company is not something I support.
>They have that right they can choose to not develop on Apples platform.
This is the EXACT same choice you or Apple/Google the company not to use electricity, nobody comes with guns and forces you to connect your stuff to the electric grid. I can be a business but not make a mobile app for iOS and Google Store because I think this companies are evil, I am "forced" similarly on how I have to use electricity.
I think it's going to be better for users and developers.
On the ios store it will be possible to add a link to a website, tell the user that an external registration is necessary for apps that are companion app of a web service.
For the case above, it should also be possible for customers with one user account only to use ios apps.
What I just say above might seems to make no sense, but that's the current user experience that Apple enforces us to provide.
From a dev experience, I can only see thinga getting better. If we can get to the point when an app store allows to publish apps that can be built on something else than a mac and with a good CI and CD, that could be a dev dream come true.
From a business point of view, it can only be positive, having ways out of the random death sentenced decided randomly by Apple and Google using their store obscure rules and review process to kill apps.
On android it's already fragmented in a way (Huawei has its own store now that their phones doesn't ship with the google layer). So it can just push more devs to take this into consideration.
It is fair to point out that "platform fragmentation" occurs because of the policies of Apple and Google, not because of regulation.
If they had some altruistic care for user/dev experience, the platforms would be open and frictionless to begin with. Their aim is to insert friction at all points of interoperability, and remove friction inside of their own platform.
Smaller developers now have more payment processing options in South Korea. In addition to Apple's and Google's own systems, they can also choose from a wide variety of third-party systems that charge ~3% instead of 15%/30%. I don't see how this would be anything but a benefit for smaller developers.
I do, and your arguments in this thread don't convince me at all. Is there something incorrect in my comment? Developers went from having one payment processor that charges 15%/30% to many payment processors that can charge as little as under 3%. Revenue-wise, there is no downside to having these additional options.
I don't know if your money works differently from mine but for me I get to own the difference between Cost and Revenue. Revenue increase is not good if the cost increase is higher. I doubt that the revenue will increase, the costs will certainly.
The costs consist of my time and the payments I make to build and distribute my stuff. This will reduce the costs that I pay to Apple but will increase the development and legal burden.
> Devs will have to support multiple platforms, different API and options. Also different legal arrangements would be needed as each country has different laws and processes. Remember the agreements and forms we fill for different countries when we want to sell paid apps/features on App Store? I also can't wait to pay account fees for many app stores and modify my apps to fit specific app store rules.
The ruling force platforms to allow developers to use different payment processors. It doesn't force developers to use these processors.
Digital payments predate app stores by a decade. It's mostly a solved issue.
> As for the users, people will start forgetting where they paid what.
It's just a charge on your bank account in the end. I'm not sure the where is really significant.
> I think the regulators should intervene for market fairness
You must be happy then because that's exactly what they are doing.
I think what will happen is that most developers will offer in-app payments with a discount if you don’t pay through Google or Apple, to reflect the lower cut that alternative payment services would take. This should put pressure on Google and Apple to compete with those payment services, which is a good thing, IMO.
It may reduce the revenue Google and Apple receive, but honestly I think that could be a good thing. They both do much more than maintain their OS. Both companies have suites of apps that they develop in-house and offer for free.
Your app might only be targeted at a single country or a single market with "easy" taxation rules across borders like the EU.
Companies do that all the time and if they see the value of being available globally by paying apple 30% that's fine as well.
However right now we don't know whether such a service is in fact worth 30% percent because Google and Apple effectively prevent a competitor from offering lower prices
> Suddenly, creating and distributing apps can get prohibitive for smaller developers.
That's not true, because the law does not prohibit developers from using Apple's or Google's current payment systems. It enables more payment processing options (with lower fees) without removing existing ones. Developers can also choose different payment processors for different regions.
It means that if those payment processors gain market share from Apple I will need to support them to reach the exact same userbase because if the users adopt using the alternatives it is very likely that they will stop bothering to upkeep their Apple payment methods. It happens all the time and there's even API for it to offer the users a grace period until they fix their payment.
If your customers prefer to use a payment processor that costs you 3% instead of Apple's 15%/30%, then why wouldn't you support that payment processor? You gain more revenue and honor your customers' preferences at the same time.
Because supporting payment processors is extra work(which is requires technical and non technical skills) that can go into development, that's why. It is something that I would prefer to delegate, pay the due and forget about it.
What's so hard to understand that? Have you ever created a product and made money from it?
By migrating from Apple's 30% fee to a payment processor that charges only 3%, your revenue would increase by 38.6%. The only way that additional revenue would not make up for your development cost is if your revenue were low in the first place. There are plenty of developers who would gladly integrate another payment API for the additional revenue.
My revenue wouldn't necessarily increase(unless maybe price reduction drives the sales enough), my costs due to Apple's commission will decrees and my development and legal costs will increase.
My landlord doesn't care. From his perspective, all that matters is that if I make enough money to pay the rent. He is not interested if my revenue after Apple's cut has increased.
If my net income decreases(because my costs increase more that the revenue after Apple's cut increase), I am screwed.
> I am pointing out the burden this puts on smaller developers.
This already existed. You're saying that the 30% was to cover this burden, but what other people are pointing out is that this 30% isn't necessarily a true market cost of doing business since there was never another option. There is nothing stopping another entity (Stripe or otherwise) from providing a service that covers this burden similar to Apple. If it happens to cost 30% then so be it, but we don't truly know the cost because its effectively a monopolistic economic arrangement provided by Apple.
> Suddenly, creating and distributing apps can get prohibitive for smaller developers.
How so? It's not effected distribution. Apple will still provide an option for a 30% cut. If more devs go to another option then Apple may compete and this 30% may even go down. This is a good thing for the consumer and the developer.
Users definitely want to have third party app stores. One of the most obvious use cases for a smartphone imo, running a GBA emulator, isn't even possible in Apple's ecosystem because of the stringent app store regulations. How crazy is it that my $1200 phone can't play pokemon red but a $80 linux handheld (or any android device if you know what you're doing) can. Simply pathetic. 9-year-old 90s me is laughing at these pathetic devices of the future.
Side note if Nintendo had played their cards right they could have made the entire library of GBA games available in a Nintendo smart phone app, like 10 years ago...
I think we can all agree that transfer pricing and the Double Irish Dutch sandwich were not intended to be used in the way they have been by modern multinationals.
The problem is the EU's process which requires all countries to vote unanimous on this. Ireland is vetoing any change to keep being allowed to set their own tax rates and underbid anybody else while still keeping access to the EU market. In that regard The Netherlands aren't any better by the way.
They do that to pay proportionally less (not zero) and the countries they are paying proportionally less to are interested in being the fiscal hosts of those multinationals.
The issue is that the governments offering tax evasion to corporations are smaller countries that use their evasion schemes as a competitive advantage against larger countries.
The incentive for a big country like the US is to make these companies pay their domestically accrued taxes, but the incentive for a small country like Ireland is to attract these companies to come open offices and do business locally at all.
These companies have tricks to avoid paying taxes, such as creating a parent company in Ireland that owns all of the intellectual property, then making the actual Apple or Google in the USA rent the intellectual property from that Irish parent for the cost of all of their revenue. Thus to the US company, they paid 100% of their revenue as the cost of doing business and have 0 tax. Then to the Irish company, they can essentially launder this revenue into being almost completely tax-free.
For the record, the "Double Dutch Irish" has been closed, but there will always be another Caribbean country or looked-over European country willing to offer major benefits to a multinational in exchange for an office and some local hires. After all, why should a small country care if a multinational isn't paying taxes to another country far away?
It's a problem when small companies have to pay company tax, and large multinational companies do not, merely because the latter has the legal know-how and the funds to achieve it. As an analogy, it'd be like a road worker paying 30 percent tax on a $70k income and a company CEO paying 0-5 percent tax on a $10m income.
The necessary solution is obviously systemic change rather than asking large companies to pay above what they're required to, the latter would actually be a breach of their agency duty and anyone who thinks companies should do that are foolish.
I don't know what the solution is. Perhaps abolishing company tax, which is my favorite proposal. Perhaps a worldwide company tax as Biden is pushing for (which concerns me for other reasons, even though I do admit it would solve this specific problem).
> It's a problem when small companies have to pay company tax, and large multinational companies do not, merely because the latter has the legal know-how and the funds to achieve it.
Hence the question of why are countries not changing the rules so the large multinational companies cannot achieve it.
> As an analogy, it'd be like a road worker paying 30 percent tax on a $100k income and a company CEO paying 0-5 percent tax on a $10m income.
This seems unrelated to my question, but is there anywhere that this is true? All the examples of this I am familiar with in the US involve ignoring the fact that the CEO is not getting $10m of cash income, otherwise they would be paying a lot more tax than someone with $100k cash income. Which is stupid and invalidates any point trying to be made.
If the argument is that society needs to start collecting tax on wealth and forcing sales of assets, then so be it, but it should be stated as such.
"Hence the question of why are countries not changing the rules so the large multinational companies cannot achieve it."
I don't know. Probably some combination of cronyism, status quo bias, and the problem being very difficult to solve? Also it wasn't really front of mind in a big way in people's day to day political thinking in the US until about 5 years ago.
"but is there anywhere that this is true?"
It was a hypothetical, I was trying to provide a what-if analogy. I don't know if it is true or not true in itself.
"If the argument is that society needs to start collecting tax on wealth and forcing sales of assets, then so be it, but it should be stated as such."
That's some people's argument, but not mine. My only observation is that the company tax as it is currently implemented is extremely regressive. I'm not against regressive tax per se, but it's too regressive in this case. If large and small companies paid the same flat rate, I'd be pretty happy. How to achieve it, I don't know.
Think of it like an invasive and experimental medical treatment. You know the disease is there, but a lot of the changes you could make would damage good tissue as well as the bad.
Want to bet that the end of this included a hidden grace period to allow large corporations using them to:
A) find another similar system
B) put their internal bureaucracies at work to switch the entire corporation to the new system?
It's like stock market news, by the time it's in the newspaper it's much too late, all the insiders have finished their trades and you're the chump buying overpriced stuff.
We'll probably find out the 2021 latest scheme in 2031, when it gets banned.
> one of the first regulations that make sense: more free market
State regulations dictating conditions to market participants cannot make something more “free market”. They can favor more competition by artificially limiting the advantage of the most successful competitors, but that's not “free market”, which is the absence of market distortion by state regulation, not the presence of only those market distortions that you prefer.
> I like free competition.
No, clearly, you like competition with the leaders artificially handicapped by the State, not free competition. Which may be a valid preference, but don't pretend its a free market with free competition.
Well, depends on your definition of free market. Wiki says:
> In a free market, the laws and forces of supply and demand are free from any intervention by a government or other authority, and from all forms of economic privilege, monopolies and artificial scarcities.
So while your remark about state regulations isn't wrong, the (grand)parent comment is clearly talking about the second part of this definition.
Whose freedom is the "free" bit about? Is it about Apple being free to do whatever they want with their platform or is it about me being free to buy iPhone apps from anyone?
I prefer what you state actually: 100% free competition. I just said that they were basically doing what to me seems like a cartel unfavoring competition.
Anyway, with more freee market this maybe would not happen though I cannot be 100% sure since the investment it takes to do an OS ecosystem is not at the reach of everyone, making fewer competitors viable.
I very much agree that this app stores market abuse thing needs to end, and I am also really glad to see that at least one country is responding like this.
> a reasonable (single percentage) fee for facilitating payments.
I want to point out, though, that the service Apple provides is not merely payment processing. They offer total customer management. Which, when integrated with their entire developer offering (TestFlight, App Store, etc) is pretty neat. I’ve integrated my app with Apple for iOS and then had to do it all over again with Braintree of web. You might say that entire exercise speaks to the inanity of the App Store monopoly, but the experience illustrated for me how much more Apple provides than just mere payment processing. You won’t find the words “chargeback” or “dispute” in Apple’s docs, because they take care of all that for you. With Apple, you don’t have to program UIs for changing subscription tiers or viewing transaction histories. And many other things.
Is it worth 30%? No. 15%? I don’t think so. Should I have to maintain and juggle different integrations for every app store? Definitely not. But Apple’s offering is decent and comprehensive. It would be made much better if it wasn’t a racket that held developers hostage. Think App Store competing with Play Store on Android devices. And vice versa. Now that would be cool!
I really hope similar legislation is passed in the United States and EU.
I agree that Apple's system adds a lot of value. And that's why I believe it can and should compete with other systems. There should be no problem with informing users about other payment options both in- and outside of an app. But Apple chose to forbid this. And that's not ok.
Sure but the point is that developers should have the option of rolling out their own solution if they don't need all the features Apple provides or agree with the fee. This in turn creates competition which may reduce rates all around.
The common argument against that is that the 30% also goes to actually developing iOS - you could envision the margin Apple makes on every iPhone as one that goes towards the R&D costs of developing the hardware, while the post-sale revenue goes towards the post-sale costs of developing iOS (and all the updates they test/push out for 5+ years after the device is released).
Nothing like a business exposing its alleged cost structure to try and justify passing on costs. It’s the worst argument. It’s not even an argument. It induces me to somehow be part of their business, when I’m not an employee, board member or even a shareholder. It’s TMI.
Apple admitted this wasn't true in a lawsuit. There were actual internal convos about how they didn't need as much money...
> Separately, the documents show that in 2011, Schiller suggested that Apple could "ratchet down from 70/30 to 75/25 or even 80/20 if we can maintain a $1B a year run rate," in terms of App Store commissions, since the 30 percent commission rate would "not last forever."
It’s not that they don’t need more money, it’s that, in my opinion, they also shouldn’t be forced to operate on razor-thin margins. What is an acceptable profit margin? There’s no clear answer so you’d be reliant on a judge or congress to determine that.
An acceptable profit margin would be based on actual costs, not a static 30% which means paid apps are subsidizing free apps or apps like Netflix and Amazon that do not take payment on iOS. Charge based on bandwidth/downloads, not on who is using their payment processor.
> Charge based on bandwidth/downloads, not on who is using their payment processor.
This obviously doesn't tell the whole story either. Some apps provide utility to the end user but don't monetize well. Those apps are valuable to have as a way to drive people to use app store, and keep developers educated.
Some “features” are seen only by customers, e.g., managing all your subscriptions in one place. I can think of some services that would LOVE making cancelling a subscription more difficult.
I don’t care about apple’s cut. Allowing sideloading instead would have been a win win for everyone
I wonder if raising fees in the developer program would recoup some of the cost of doing at least some of these things. 99 dollars for an individual and 299 for a business if I recall correctly, that’s peanuts and hasn’t been raised in a very long time. I don’t think asking for more is bad, since it’s a yearly fixed cost
Asking for more will start to limit the number of developers who develop for their platform. Probably not the Microsoft's of the world, but tons of smaller ones.
For instance, if you raised the individual's fee to $500, then a bunch of people would opt out, either not developing iOS apps, or just make a web app. Neither of those are good solutions from Apple's point of view.
If the app/play stores allowed alternative payment mechanisms, then third parties would have an incentive to build out an end-to-end flow as well, possibly even better than Apple or Google do (eg upgrade pricing, better cross-platform support).
Apple very pointedly does _not_ offer total customer management. As an iOS developer, I don’t know who my customers are; I can’t contact them; I can’t offer them a refund, demo, or promo code; I can’t have any kind of relationship with them whatsoever. It’s infuriatingly archaic and useless. Whatever that system is, it certainly isn’t “total customer management”.
I suppose it’s customer management in the sense that they are not your customers, they are Apple’s customers. Apple is providing you access to sell your app to Apple’s customers through Apple’s store.
It's pretty clearly "Total customer control" not management.
Apple has pulled off a really nifty trick of convincing (cough abusively forcing... cough) companies to concede full control of the customer/business relationship to Apple.
From my point of view, you're not really selling anything on the Apple App store - you're giving Apple the right to resell your digital products.
In exchange they keep all analytics data. They keep full control of customer contact and communication. They dictate the terms of the sale, including place and payment method. They control everything.
Your customer is Apple, and they are just as abusive to their "vendors" (app developers) as Walmart is.
Calling it a "Marketplace" is a sham - The core definition of a "Marketplace" is
---
arena of competitive or commercial dealings
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And the Apple store is no more a "marketplace" than Walmart.
> From my point of view, you're not really selling anything on the Apple App store - you're giving Apple the right to resell your digital products.
In my understanding that that’s the contractual relationship the developer and user enter into with Apple.
Personally I think this isn’t all bad considering it provides a uniform experience for the user, which lowers cognitive load for the user and might makes the user more willing to purchase. Once they know what app purchasing is like, they can confidently purchase more apps. And they know that no matter who develops an app, in the event of a dispute they will deal directly with Apple.
That sounds like a problem, but as a customer, I see that as a feature. I do not want to be mailbombed by everyone who has ever written an app I used for some time in the past.
And there are other features that I’d like as a customer that Apple will not let developers offer. More payment options, for example. Why not have the choice of multiple app stores and let the market sort them out? We’ll see the best ideas adopted by all.
The other side of the coin is the app can’t refund from their side, nor stop your subscription or fire you as a client either. They need to wait for you to do it, which can brew complicated situations.
This is true. I should have used the term “billing management.” The opaqueness you mention I like to think of as a firewall between the developer and the user in terms of billing. I can truly say to the user: “I’m sorry, but I can’t help you with that.” Many times that’s bad, many times that’s good, and not because I don’t want to deal with users but because I like when users have uniform, familiar experiences that they understand. The clearly divided responsibilities (developer
provides software, Apple provides billing) helps maintain focus on product.
Apple's offerings may have been good when the alternative was software sold on physical CD's in a store, but compared to the alternatives today there is no way 30% is by any means fair or reasonable. The 30% commission is essentially monopoly rents.
You don't need both Billing and Invoicing. Invoicing is for one-time payments (typically after a service has been delivered), and Billing is for recurring payments.
All in all, we're looking at $0.30 + 3.4% (or 3.3%). This is clearly lower than 30%, except for very inexpensive apps (~$1.29 or less).
Or, a bold red message in the AppStore description saying "WARNING: This app accepts payment through a scary, untrusted payment system! You're likely going to be scammed! Are you sure you want to download this potentially fraudulent app?"
Any action may have a hundred different potential results. Simply calling out one of them (devoid of any context, I might add) is not useful conversation.
That would trigger a wave of countries who would like to imitate that by creating local competitors. If they fail so badly in korea, every country will want to replicate that.
And they would've gotten away with it, too, if it wasn't for those meddling kids!
Seriously, though, I can't believe both Apple and Google thought they'd get away with this. Of course it makes zero sense from a consumer point of view to only allow one payment system.
How long do we have to wait for all those disaster scenarios Apple and Google have been promising us to become true? I want to mark a date on my calendar.
At a glance, this law doesn't necessarily trigger any of the disaster scenarios. This doesn't mandate any changes to the security model and Apple could still adjust their terms to require a revenue share even if they aren't the ones executing the transaction—as a license fee for use of their software libraries.
I wonder if this would lead to an increased number of company formations in S. Korea. My first impulsive reaction was to search about their local formation and tax laws.
The text mentions developers, not just users... I assume (by understanding the published text) they'd (Korean officials) want to target any users of apps published by Korean developers, no matter the location.
Korean law cannot reach into sales performed in another country—at least not without some fairly tenuous moves.
Apple's phone market share in South Korea is a moderately healthy 22% given the presence of strong domestic and regional brands, but I've no doubt Apple would sooner give up on South Korea altogether than have a weird law tying their hands globally.
They can't but the korean developer has a relationship with Google or Apple that the government can reach.
If Google forbade a korean dev from making an international app with external payment provider, then SK could very much punish Google SK for it. Doesn't matter if the target users are in Europe. Read the GDPR, same principle.
> Doesn't matter if the target users are in Europe. Read the GDPR, same principle.
Actually this is not true. It only applies to companies that are providing services to people physically in the EU. If you're an EU citizen but you're in America, it does not apply.
> When the regulation does not apply.
Your company is service provider based outside the EU. It provides services to customers outside the EU. Its clients can use its services when they travel to other countries, including within the EU. Provided your company doesn't specifically target its services at individuals in the EU, it is not subject to the rules of the GDPR.
That's not what I meant though? The GDPR, as you clearly laid out, applies to you if you do business on EU territory, regardless of where you are. The Korean Regulation can similarly apply if you're physically operating in Korea or not as long as you offer service to Korean developers.
Is there a better source and the text of the law ? Payment systems are a proxy for the fee since there isn't an explicit publishing fee. It would be quite straightforward for both Apple and Google to charge a publishing fee, which may end up close to the current rent. The larger issue is that there aren't alternative app stores. Apple doesn't allow them at all, and Google severely restricts them at the technical and business level.
A publishing fee would also be regressive compared to the payment tax. Right now, people don't pay until they are successful, at which point they may pay a LOT. But it keeps the app marketplace much more of a free marketplace.
It’s not exactly a publishing fee, but today you have to pay Apple $99/year to distribute software into Apple’s ecosystem; otherwise they’ll hide your application behind a non-obvious ctrl+click+run flow. To my knowledge, this fee is collected regardless of your distribution channel.
The $99/year gives you additional developer tools and access to the App Store storefront. It's up to Apple what constitutes a sufficient license fee for the commercial use of Apple's proprietary software libraries.
Apple's libraries are licensed to developers under whatever license Apple chooses. They could require a certain revenue share regardless of which payment gateway is used. Heck, they could license it under the GPL and require all developers who build programs against their libraries to release their source code. It's their code, it's up to them.
Similarly, Epic Games can decide when developers might have to pay Epic for software they distribute with Unreal Engine. Whether it's a flat fee, a revenue share, a profit share, if there are discounts or incentives—all of that is entirely for Epic to decide.
Are you suggesting that regulators can force Apple to give away their stuff for free if they want to participate in that market? That doesn't sound right to me.
Why yes, regulators can force Apple to do what they want in their country. And they can very easily dictate how much Apple is allowed to charge for licensing. Fair licensing agreements already exist in the patent space.
I am genuinely confused what your point is. Are you saying that "the difference between random people using the GPL and Apple is" nobody is making billions of dollars from GPL code? That it's an anti-trust violation which is ignored because nobody is making any money?
The thought that a government could force your favorite, richest, international megacorporation might feel not right to you, but that is actually how the world works. Apple does not get to dictate how its products are available, no matter how much they would like to.
They are free, however to not come sell in places it feels the rules are unfair towards it.
You seem to be making a weird argument. Obviously Apple isn't allowed to sell a smartphone that contains a large chunk of plutonium, or that is fake and doesn't actually contain any electronics. There are limits to what corporations can do.
But they are free to choose the price. They can sell the next iPhone for $10,000 if they really wanted. Perfectly legal.
They are free to choose under which terms they license their intellectual property to third parties, so long as those terms are lawful.
No no no no. I'm making the argument that if the people of Ohgodplsnoistan pass a law that forbids Apple to sell their phone for anything above $200, that is legal. And that Apple can either cry and sell to my population of two people, or exit this market. In the same way, the government of Plsnoistan decides what is a legal license and what is not. Hell, I can pass a law that requires Apple to give out a free cookie to anyone buying one of their phones.
The point of all this is, Apple has absolutely no say in any of this. They are free to set the terms of their sales according to the law in the country, and that is it. It doesn't get anything more.
> The $99/year is predominantly for access to the App Store. It's up to Apple what constitutes a license fee for developers to have commercial use of Apple's proprietary software libraries.
Interestingly, the $99/year fee is to access the app store, but there's a a $299/year fee to bypass the appstore.
It is hypothesised that the main reason Apple persists with the $99/year fee is as a glorified CAPTCHA, to stop developers from mechanically creating account after account in order to upload scummy app after scummy app. If that's the reason, I wouldn't entirely blame them.
The $299 enterprise program probably costs Apple substantially more than $299 per customer/enterprise in order to run. While I have no idea about the numbers, I wouldn't be surprised that it is a substantial loss-maker for Apple, justified only because it's necessary to keep the iPhone/iPad relevant in some enterprises.
I’m not sure I agree. In order to distribute my Electron app to Mac users via a direct download from my website, I must pay Apple $99. Otherwise Apple will present my users with a scare dialogue that gives the impression the software can’t be run.
According to the FSF, the distribution of a binary computer program which substantially relies upon GPL libraries is considered a derivative work and would require you to abide by the terms of the GPL license.
Similarly, an iOS app which substantially relies upon (and must be compiled with) Apple's libraries in order to work is subject to whatever the terms Apple includes in their software license. Of course Apple isn't requiring code to be open source like the GPL. Apple could choose whatever terms they want. It would be perfectly within Apple's right to require a revenue share for use of those libraries—say, the Metal graphics APIs—just as Epic Games does for the use of Unreal Engine libraries.
Therefore it's entirely reasonable to imagine that if third party payment gateways are permitted, Apple could still organise things so that they are legally entitled to a percentage cut of app sales. Again, just like Unreal Engine.
To the people down-voting this, I realise that my post espouses a controversial opinion for Hacker News. But could you please explain what you disagree with?
> which substantially relies upon GPL libraries is considered a derivative work and would be a GPL violation if it's distributed without source code.
I didn't vote either way, but I'm not sure that this is the way the GPL works. As I understand it, you can distribute only binaries as long as you supply _on request_ the source code. FWIW the link to the GPL reads as quite tenuous and what I would guess the downvotes were for.
> Similarly, an iOS app which substantially relies upon Apple's libraries in order to work is subject to whatever the terms Apple includes in their software license
Yes, they are free to do what they want, barring regulation. Which is what this is. Deliberately loopholing around the legislation is an option, but a risky manoeuvre that might just invite more legislation.
Thank you, I did err in how I described the GPL. I have edited my post to correct this.
> FWIW the link to the GPL reads as quite tenuous
The link is that any developer—whether they're Linus Torvalds or Apple Inc—should be allowed to choose the terms in which they release their copyrightable works into the public.
• One developer could choose the GPL.
• Another developer could choose a license which requires a flat, one-off fee.
• Yet another developer could chose a license that is free up front but mandates a revenue share under certain conditions, such as Epic Games does with Unreal Engine.
In all instances, it is copyright law which enforces these license terms. So if you like the fact that Linus can distribute Linux under the GPL, you must also accept that some other company will have the right to distribute their software under their license.
> To the people down-voting this, I realise that my post espouses a controversial opinion for Hacker News. But could you please explain what you disagree with?
The issue is not that your argument is controversial. It's that it falls flat because it's based on an incorrect assumption.
> Apple could choose whatever terms they want. It would be perfectly within Apple's right to require a revenue share for use of those libraries
No they can't.
There are a broad set of laws restricting how companies can or can not do business. These laws severely limit the terms Apple can set. Laws restricting anticompetitve behaviors would be part of this set, same for the new regulations in South Korea we are currently discussing.
My apologies, when I said "whatever terms they want" I was being somewhat hyperbolic, even if I do think the spirit of the sentence is clear when read in context. Obviously terms of any such license cannot violate law.
Are you suggesting that Apple charging developers a percentage-based license fee for use of their work is unlawful anywhere, under any law current or proposed?
> Are you suggesting that Apple charging developers a percentage-based license fee for use of their work is unlawful anywhere, under any law current or proposed?
The crux of the discussion generally focus on the parts of the contract preventing developers from using competing works in addition to the fees. That seems to fall squarly into your "whatever terms they want". And yes, I do personaly think there is a case to be made that Apple licensing terms are anti-competitive, an opinion which seems shared by the EU’s competition chief.
Your opinion seems to be that Apple could just stop charging a fee for using the App Store and charge it for the use of a different but similarly unavoidable part of the system instead. But that's merely a technicality. It doesn't fundamentaly change the question.
Microsoft Visual Studio was not free in the past. And even now free version is limited. I don’t see it different from hypothetical paid Apple library as long as there are other ways to write software for the given platform.
Is your argument that anyone who builds a device which runs software is required to ensure that an entirely free way to develop software for it exists? That makes no sense.
Tell that to Nintendo. Sony. Microsoft. Canon. Nikon. Garmin. Alpine. Pioneer. LG. Samsung. Volkswagen. Hyundai. The list goes on. Software is all around us. The traditional general purpose computer platforms are the exception, not the rule.
I can see the argument by analogy to GPL, but I don't think this is about software licensing in practice.
It's about control. Apple control how and which apps get to users, and use this control to impose terms, license or otherwise, that maximize their revenue and other goals.
Perhaps you are right that Apple could reengineer the business model to charge software licensing fees rather than payment service fees. They could also make the 30% a publishing fee. There are probably other options too. You can do a lot when you have the power that they have.
That said, practicalities matter. If you want to take a cut of a large number of apps' revenue... the place to do it is point-of-sale. Take your cut before app devs get theirs. If payments go to app developers via some other payment system, Apple now needs to chase down a revenue linked licensing fees from 2m apps... that's messy and impractical. They don't know how much they are owed, for one thing.
Apple and Google won't know what developers using outside payment systems for purchases such as subscriptions or "in-app" stuff are making. So they'd have a problem deciding what a publishing fee should be. Monikers such as popularity can be bad estimators. They might end up charging developers a lot less or a lot more - the latter of which might ruin some developers or hike prices for customers even more.
I am not against a publishing fee instead of what there is now, but it should be fair and transparent. Not that the current system is fair and transparent...
>Then again, why should Apple and Google charge fees for something they have no hand in?
Same reason as now: because they can and are in the money making business.
I'm not saying this is right, just that it is what it is. Google and Apple will not just forgo millions if not billions of "easy" dollars. My guess is that especially the big players, who make Google and Apple the most money, will switch to different payment processors with better terms for them as soon as that option becomes available to them.
There are plenty of alternative app stores for Android. Google restricts them, but not severely. Android 12 will lift some important restrictions from alternative app stores.
I'm not trying to portrait Google as innocent, there's still work to be done. But they are absolutely in different leagues with Apple when it comes to user freedom.
Google allegedly forced Android OEMs to not ship devices with a pre-installed Fortnite / Epic Games Store launcher.
Also forcing users through multiple warning screens and settings until you have finally installed an app might look trivial if you know what you are doing but for everyone else might not be as easy. There are many, many articles about how you should simplify your websites onboarding process to increase the amount of customers so the Android flow is pretty much the anti-thesis to that.
While true, they wouldn't be so generous if they were making it on the backend via search. They don't care that much what store the user uses as long as they search on Google. Do they offer any "user freedom" there?
Google does make more money from other revenue sources, but I don't think this is the best example. Chrome (on all platforms) allows the user to set any custom search engine as the default. On the other hand, Safari limits users to four choices: Google, Yahoo, Bing, and DuckDuckGo.
No it is not the same issue. Airbnb doesn't have a say if I make arrangements of my own with the host. We lose the benefits and security provided by airbnb if we think that airbnb's cut is unjustified.
I only wish we (users and devs) could do that on Ios.
That's ok. Airbnb is free not to do business with me. But I am free to do whatever I want with my property as owner. That is not the case when dealing with Apple. They block usage of my own hardware.
Actually, Airbnb does have strict anti-steering rules just like Apple and Google do. Several lines from their off-platform policy:
> In order to protect our community and business, the following behaviors are prohibited:
> Taking people off of the Airbnb platform for new, partial, or future bookings
> Contacting potential guests prior to booking on Airbnb to move the booking off of Airbnb (ex: offering discounts to book off of Airbnb)
> Asking guests for contact information prior to booking; all guest communications prior to booking must be on Airbnb
> Asking for or using guests’ contact information to settle additional payments outside of Airbnb’s platform; all payments related to a guest’s stay, including extensions of a stay (and besides exceptions identified below), must go through Airbnb (ex: using the Resolution Center)
Airbnb can ban you from their platform. This is more of a problem for hosts (since Airbnb dominates the "home-sharing" market) than for guests (who have plenty of hotel and vacation rental options).
As a host, even if airbnb bans me, I can still do whatever I want with my own property. That is not true when it comes to iPhone. I am out of luck as a user and also as a dev, my phone becomes a paperweight unless I abide by apple's rules.
One research firm says that Airbnb and Expedia (which owns Vrbo, Expedia.com, Hotels.com, and 5 other sites) control 93% of the online travel agency market. That looks like a duopoly to me.
IIRC, one guy in the jury had lost his business in a previous court fight with Samsung. How was that not discovered during the jury selection process??
So, everything else that has happened up to now, could be described as minor losses, for Apple and Google.
This is not such a case though. This is a major loss for them.
For all the hacker new commenters, who have been commenting on this topic, for the year that the drama has been going on, and were convinced that Apple and Google were going to win this fight.... well you need to re-evaluate what made you think that.
Because, the writing has been on the wall, for quite a while now, for their iron grip on their app store payments.
If it wasn't going to be the epic lawsuit, it was going to be a different lawsuit in the US, or another country. Or if all that didn't work, it was going to be laws such as this, that blow the doors wide open, and spell doom for these closed systems.
I agree but I'm curious about how it will play out in practice. Apple charges $99/year just to publish apps on the store and then takes 30% of the payments. If forced, will they leave just the $99 payment or will they change it to, say, "pay more if you want your payment processor" or "you can use your payment processor but you still owe us 15%"?
Many platforms require fees to sell on them. eBay for example has asked for a percentage for years, even if it did not handle payments at all.
Are Apple and Google going to be forced to offer the service (the App Store) for free because of their duopoly?
They wouldn't be forced to offer their services for free.
However laws can and do regulate what constitutes a "fair" price for a certain service.
In some countries the quasi/effective/total monopoly ISP is forced to rent their last mile phone cables to competitors for a regulated price.
A similar thing could happen to Apple and Google with a government agency deciding what they are allowed to charge for their services of providing the app store and the OS.
Or they could be forced to allow competing app stores with the same privileges as their own (beyond what is "technically" possible on Android).
Either way it looks like they'll loose their iron grip over on customers phones (in some countries at least). That's the price of effectively monopolizing a market and getting very rich doing it.
> For all the hacker new commenters, who have been commenting on this topic, for the year that the drama has been going on, and were convinced that Apple and Google were going to win this fight.... well you need to re-evaluate what made you think that.
Or perhaps you need to go re-read the comments? I don't recall people writing "Apple and Google are in the right and deserve to win" as much as I recall people writing "Apple and Google are wrong and deserve to lose" and "30% is unfair os they deserve to lose", and people pointing out that the current system does have benefits.
I recall people saying that they don't think their behaviour is outright illegal, or doesn't qualify as antitrust in the US. Obviously regulation supersedes this.
In fact, making regulatory laws to force changes in the way they are behaving, implies that it's not illegal now, so seems to vindicate the people saying that?
> For all the hacker new commenters, who have been commenting on this topic, for the year that the drama has been going on, and were convinced that Apple and Google were going to win this fight.... well you need to re-evaluate what made you think that.
To the extent that I've seen this point on HN, it has always been in the context that there is no law in the US which prohibits what Apple or Google are doing, and hence it would be difficult for regulators to win without new laws or rules in place. I'm not American, so I can't say whether those people were right or not, but I think it would've been pretty ridiculous if anyone said there would never be laws against it.
I really hope they implement this somehow that allows the same processes to exist.
e.g., manage all subscriptions from one location, cancel subscriptions without losing time remaining (hello Creative Cloud!), and the entire parental control process.
Managing all subscriptions from one location is great, but Apple already exempts themselves from cancelling subscriptions without losing time remaining. I expect most of these to go away as processors compete for app business.
The concessions Apple & Google made to "stave off regulation" are informative in themselves:
It also agreed to let developers inform their users about payment options outside the App Store, using the email addresses that users gave them. Google said that it would only take 15 percent of developers' first million dollars instead of 30 percent.
Combined with "competition for monopoly" elements like paying Telcoms not to develop their own app stores or support 3rd party ones, the whole thing stinks to high heavens.
Once upon a time, "net neutrality" had wide support, and there was understanding that it required constant vigilance. Google, ironically, was a big defender of net neutrality... even as they established their own dam immediately downstream of ISPs.
Net Neutrality just meant that Google got to shovel YouTube streams onto ISP networks without having to pay. Let's not pretend there were ever any noble intentions behind it.
You think it’s okay for ISPs to double dip on charging their customers for access and then charging their customers’ most popular services (who are frequently competitors of the ISPs) for the privilege of accessing their customers? Why should any ISP think they can charge the source of my bits when I am already paying them for the bandwidth?
Net Neutrality is not just about “shoveling YouTube streams without having to pay.” In one case, an ISP was deliberately dropping packets for a popular online game (which, if you didn’t know, online games are known for requiring very little bandwidth), and extorting the game developer with the loss of ISP’s customers if they did not pay up.
ISPs are monopoly-abusing extortionists. They deserve every bit of ire they receive.
I think the post you're responding to is saying that Google's incentives for supporting net neutrality were self-serving, not noble. They weren't saying that ISP behavior was fine.
This. Google has amazingly helpful peering bilats with most major ISP's globally, they don't have to pay for transit nearly as much as the rest of us. they were a staunch defender of net neutrality because it let them avoid millions of $$ in transit.
Peering is a one-to-one relationship, not "Internet access" like you're thinking. If you peered with Comcast, for example, you'd only be able to reach Comcast customers over that connection. A more "Internet access" type of connection would be transit, which is definitely not free.
There is no exchange of value between the parties, but there is definitely a cost to peering. You need to physically get your data to the meet-me room, and that isn't free.
A good regulatory trend. This is what governments are supposed to do to support what I would call “safe and efficient capitalism.”
That said, Apple did cut in half the fee for almost all developers and I installed Netflix, HBO, Prime, and Hulu apps that work fine with my existing streaming media plans that are direct to the providers. I forget, did Google also recently reduce developer fees? It may be as simple as both companies seeing the writing in the wall and are trying to get in front of this.
Unless I misread the article, it doesn't seem to break the monopoly on app stores, just on payments. I actually asked the question on another thread if anyone knows.
I'm wondering how this will eventually play out if most companies start requiring Apple/Google to allow third-party apps to use their own payment system.
The commission fee that Apple charges, 30% is partially to cover operating/marketing etc. Obviously, Apple makes a good profit off the App Store these days, even though Jobs said he'd be happy if it was break even at best.
Here's an analogy I've been thinking on about this whole thing. The iPhone (or whatever phone you want) is the equivalent of a Walmart store. If you want your product to be sold in Walmart, you have to send it to their distribution center (ie App Store) and Walmart will handle sending that product out, etc. Walmart will handle the credit card transactions, etc and pay you the negotiated rate for your product (Yes, odds are Walmart buys your product first, then sells it, but with credit lines, etc it's almost the same thing).
Does Walmart allow you to go in, put your product in the store and sit there with a square device and sell your stuff? Amazon is more analogous of physical to app in the sense that Amazon is the transaction point but may or may not actually maintain control of the product.
So what's the end game? I suspect if Apple/Google has to allow developers to collect their own fees, Apple will start charging paid apps to be in the App store.
They will continue to allow free apps to be shown, but if you want to charge for your App either one time or subscription, you'll have to pay an upfront fee to be listed.
And that charge may depend on the number of downloads.
No one is forcing you to go through Walmart. The problem with IOS is that you are forced to go through Apple. A user cannot pay, download and install the app directly from a developers website.
We can go up the whole chain and in the end the root platform are nations. If you want access to citizens in a country you got to go through that nations laws, and nobody is forcing apple to sell iOS in Korea.
It works precisely because there is an alternative with less onerous rules. It works even better because the alternative provider is BY FAR the larger player.
Why do you think Apply reduced their fees for small developers and now allow developers to let their customers know that cheaper payment options are available, they know they are abusing that position so to stave off regulations they did that.
Walt Disney looked at Disneyworld/land as ideally break even. Sad how they both lost the battle for vision to the accountants. Disney parks now feels like a nightmare game with IAP at every turn. You grind through ride lines or can pay to skip them. Food, toys, etc that you see everyone else enjoying and feel a nearly irresistible pull to buy.
> The iPhone (or whatever phone you want) is the equivalent of a Walmart store.
The major difference here is that while I don't own the Walmart store, I do own my phone. What is allowed to be sold in the store is determined by Walmart, just as what's installed on my phone should be determined by me, the owner.
Ownership is a valid point. I'm not arguing either course, I'd like to see the ability to be able to install Apps myself just as I do on a Mac or PC mostly because I'm tired of the forced puritism of companies these days.
> The commission fee that Apple charges, 30% is partially to cover operating/marketing etc.
Then by all means, please charge me separately for these things. Because I don’t need them. Apple doesn’t do marketing for me, never promoted my app. People find my app through my own marketing channels.
Charge me roughly 2 % for In App Purchases just like Stripe and PayPal.
Charge me a traffic fee for whatever download traffic I cause. This way, I at least benefit from my app being only like 5 MB in size.
If I want to be featured on the App Store, charge me.
The rest like App Store listing? Covered by my $100 developer fee.
> Then by all means, please charge me separately for these things. Because I don’t need them. Apple doesn’t do marketing for me, never promoted my app. People find my app through my own marketing channels.
This, maybe it was different in the early days but they do literally nothing to help you market your app until you've already driven enough traffic to it yourself for them to take notice.
If you do get featured you get an email indicating that you might get featured and need to design and submit app store banner artwork with a whole list of things that you're not allowed to display.
> Charge me roughly 2 % for In App Purchases just like Stripe and PayPal.
This is so disingenuous and I'm so tired of seeing Apple's fee pegged at 30% (even though it 15% for the VAST majority of developers) and then turn around and pretend Stripe/PP offer anything close to 2%.
Paypal is 3.5% + $0.49
Stripe is 2.9% + $0.30
At low price points (you know, the price points that almost all IAP/Paid App are at save for longer, like annual, subscriptions) your fee is still substantial.
If you are lucky Apple will create a special provision for 3rd party payment providers that will provide subscription/cancellation/refund/etc infrastructure. If they don't do that then you can expect the above rates to be even higher. 2% is only obtainable with a more bare-bones payment processor so you will have to build quite a bit up and any company providing full "app payment services" is going to charge more than Stripe/PayPal. Heck, even the prices I listed for Stripe are the lowest they go (unless you are doing over 1.5M annually and qualify for bulk/volume pricing) and if you want things like fraud protection that's extra. Oh you want to calculate tax? Extra .5%. Fraud protections? $.05 or $.07/per transaction extra. Chargeback protection? Extra .4%, and the list goes on.
- 15% is a rather new development. Most devs paid 30% for many years. I paid 30% for over 10 years.
- Stripe is cheaper in the EU for EU cards. 1.4% plus €0.25
- Apple didn’t even notify me about individual refunds for what? 10 years? And it’s still unreliable and annoying so that I don’t even bother, because I get like 3 refunds per month. You could actually get a refund and still keep the app for a long time.
- People complain to me if they want a refund, but Apple gives me no control. I have to redirect them to Apple customer support. I am perceived as the bad person and this costs me money in terms of customer support and I can’t even help people, because Apple wants to own the relationship between app devs and customers.
There are so many silly things about the App Store that your quotation of 15% as a generous service is laughable.
Edit: but yes, Stripe and PayPal are more than 2% in reality, but far from 15% or even 30%, except for micro transactions.
I wonder if Samsung (HQ in Korea) had influence on this requirement.
EDIT: why the downvotes? If you don’t think Samsung had influence, wouldn’t it be more productive to reply and say so - that way there can be a healthy dialogue on the topic.
Oh, I absolutely think they had influence. LG already pulled out of making Android phones as the hardware has become a loss leader, no money in it for them. Samsung at least had the benefit of almost totally complete vertical integration.
You would have to be a fool to think Samsung doesn't want a cut of app sales on their devices and as the most powerful company in Korea with large influence over government, they'll get their way. This was never about developers and it isn't a watershed moment to be excited about (unless I guess you live in Korea).
You are being downvoted because you went against the populist grain of the thread, that's it. Accept that a lot of HN voting is just 'sided' and if you're on the wrong side of the flow ... that's it.
Just take a moment to reflect on your comments, if they are reasonable and you're getting downvoted, and nobody is bothering to respond, it's probably populism. It it was it is, it's too bad, but don't fret about it.
The breaking of control of these companies has to go much further.
Businesses build on the platform and can be killed in an instant by some arbitrary automated decision to kick the developer off the platform with no recourse.
That’s completely unacceptable.
Also, they must be made to pay tax. Why do you and I pay for military education, government services education etc but they pay zero?
These big companies are thief kingdoms and parasites on society.
Apple and google have had it good for too long. Something must be done.
It’s not usual for news on my country to be on top of HN. Very unexpected.
I’m guessing though that the South Korean market is be significant enough for Apple and Google to not just pull out it’s business from South Korea and call it a day. I guess this is, in some kind, a victory against the huge companies.
But… personally I do find sad that this would be detrimental to South Korean app UX. Stripe isn’t a thing here, and most of the home-grown web-based payment systems have… like super shitty UX that require (on the desktop) native plugins running a server on some bespoke port. It did come a long way since from when we were the country that required IE6 for web banking, but the UX is still not really there.
I’m hoping that Apple will provide APIs for showing payment screens and Apple will still control the ability to show all subscriptions, cancel them in one single place, etc… but I don’t think Apple will ever do that. Unfortunate…
Apple Pay is already available as an API, you can even use it on the web.
Indeed would be nice to centralize all subscriptions, we have yet to see how they would interface with 3rd party payment options. But on the whole this should be a win - if anything, those competitors will have a strong incentive to improve their UX.
> I’m guessing though that the South Korean market is be significant enough for Apple and Google to not just pull out it’s business from South Korea and call it a day.
I think that's right. The next step would be for a large enough market to have a similar law, and then they'll just have that as their policy globally. That probably means EU or US.
Traction brings improvement over time. SV companies enjoy enormous first mover advantage and megaphone that pushes their products to the masses early to capture them, and then iterate on UX.
Companies pull out of countries all the time when changes in the socio, political, economic and most importantly regularly environment make their business untenable.
Case in point: China or post-Brexit UK.
You use this hyperbolic rhetoric to describe the situation but it really is an every day occurence.
> are we saying we would rather kneecap our democratic institutions, right or wrong, than live without iPhones?
No, it's just that this is the choice these companies have. They can completely stop doing business in a country (or countries) if they don't want to obey the relevant laws/court rulings of that country. The only thing SK could do then is sanction Apple products so it becomes illegal to import them (reminder that a sizable portion of SK's economy is directly attributed to Samsung/LG).
They already do that on the Web.. I'd be surprised if, when available (eg. an iOS visitor using Safari on a Shopify site), people chose manually entering their payment info more than Apple Pay.
> I’m hoping that Apple will provide APIs for showing payment screens and Apple will still control the ability to show all subscriptions, cancel them in one single place, etc… but I don’t think Apple will ever do that. Unfortunate…
I'm not sure that Apple can do it without being an intermediary in the process - managing the billing. And... well... that's what Apple Pay is.
In order for Apple to be the one to show and cancel subscriptions, they need to be the ones billing you and then processing that transaction (possibly batching it up with others to reduce processing fees).
Likewise, if there's a dispute - for example a child made a few hundred dollars of in app purchase and the parents would like to refund that... Apple can reverse those transactions ( https://support.apple.com/en-gb/HT204084 ). If you're dealing with a 3rd party payment system... you're going to have to deal with the 3rd party payment system on your own.
Another "it can be gotten around" when you leave the App Store and payment processor is the in app purchase constraints ( https://support.apple.com/en-us/HT204396 ) in that a developer wouldn't have to honor that check at all.
---
The future of 3rd party payment processors that developers ask for really means taking Apple and its APIs out of the process. Entering in the credit card information (making sure that developers aren't trying to bypass access constraints on the wallet) and sending that out themselves.
For example, PayPal charges 4.99% plus a fixed fee that's about $0.10 per transaction ( https://www.paypal.com/us/webapps/mpp/merchant-fees ). This is comparable to what a developer would have to pay to Visa or any other payment processor for doing micro transactions of their own. Having Apple do it means that Apple would really like to charge at least 5% + $0.10/transaction which for a $0.99 is $0.15 and that's 15%... which is the amount that a small developer shop would have to pay for doing it through Apple.
---
And so, I return back to the question - how would you see Apple opening up the APIs for doing payment processing without doing the payment processing themselves (and insuring extra expenses)?
This is not true. Apple can absolutely (but probably won't, as unfortunate as that is - and I hope I'm wrong on this) build APIs for hooking into the views used in the current system, while the actual transactions happen outside of it. They can't guarantee that the data shown is what is actually being charged though, which is why they probably won't do that.
Excellent. I am in favor of governmental intervention to push open standards, inter-operability, and public options for monopolistic platforms (not social media, but, for instance, Zelle or Venmo).
627 comments
[ 3.1 ms ] story [ 468 ms ] threadThis is exactly how regulators should respond to the market abuse of these technology monopolies.
If they wanted to head this off all they had to do was pay a reasonable amount of tax in the country where the revenue was generated and offer a reasonable (single percentage) fee for facilitating payments.
They chose not to so they reap what they sow
In hindsight, the correct time for regulation was probably 2008 for Google (DoubleClick purchase and Android shipping with "Android Market") and Apple (App Store).
It should have been a clear line from hardware control -> distribution control. And if regulators hadn't seen it, then Congress should have drawn it for them in updated laws.
Unfortunately, the world had a bit more going on that year.
In this case, I'm not sure how to square new innovation (smart phones first launching in 2008) with slow regulation.
Devs will have to support multiple platforms, different API and options. Also different legal arrangements would be needed as each country has different laws and processes. Remember the agreements and forms we fill for different countries when we want to sell paid apps/features on App Store? I also can't wait to pay account fees for many app stores and modify my apps to fit specific app store rules.
The %30 cut, for me covers this boring complexity. I'm sceptical that the potentially lower commissions will offset the added development and administrative costs.
As for the users, people will start forgetting where they paid what. They will get frustrated, blame devs etc. It would become tiresome and many will be turned off the moment a payment is requested simply because they don't want to go through the same stuff multiple times.
I despise platform fragmentations. Instead of telling companies what they must do, I think the regulators should intervene for market fairness, i.e. Apple&Google getting heavily fined when enforce different rules on different developers differently or compel them to accept an app in the App Store if they can't clearly indicate which rule is being broken.
I would like to remind you all the troubles we need to go through to support just platforms: AppStore and Play Store. I am NOT looking forward to start paying fees and do development/Marketing work/Adjustments for Epic, Microsoft, Oracle, T-Mobile, Vodafone etc. just to reach the exact same users as of today.
Edit:
I, as a developer, don't want to deal with multiple platforms and their management and fees. Please tell me if you are mobile developer or is your opinion ideological. The Arguments so far look like coming from people who have no real experience with getting an app into the AppStore.
How do you plan to sell Apps in the UK, France, Turkey, charge VAT and pay it to the respective governments for example. How do you plan to file your export paperwork in the US? How do you plan to deal with compliance?
Seriously, are there any indie developers here with hands on experience? How do you handle international trade and taxation outside of platforms like AppleStore?
The fragmentation will not open the floodgate for all the users out there who were holding off because they didn't want to use App Store or Play Store. It's going to be the exact same userbase but there will be more gatekeepers to deal with.
They’re not mandating support for alternative payment providers merely saying Apple and Google cannot prevent you as a developer offering an alternative to your users. Whether you decide to support alternatives is up to you but when you can use stripe for a 2% fee or Apple/Google with 30% how can you be worse off?
Apple and Google effectively prevent you from doing that without being in their stores. The fact that "technically" you can install apps on android and "technically" users can get an apple dev certificate / or sometimes jailbreak their device are nothing more than a single atom layer thick fig leaf.
These two companies effectively have a duopoly on the mobile phone market and act accordingly.
Edit: Corrected to not attack the parent commenter.
Please read carefully: I do have Apps in the AppStore, I am happy with the business relationship with Apple and I am not looking forward to be forced into establishing new business relationships to reach the exact same user base.
You'll be in luck then because you will still be able to use apples services without anything changing. This or similar laws do not obligate you to offer options.
> require in-app purchases
You need to bifurcate the payment % from the selling of the app itself and the in-app purchase.
For iOS, the AppStore is essentially mandated to download and sign an iOS app. No one is saying that you shouldn't have some cost associated with getting that distribution (since Apple is providing value there), it's more about the cut they take for every additional fees once the app is already downloaded.
You only support them if you want to reach the customers. That's exactly the same as not supporting Android or iOS or not getting into App Development in first place.
1) I need to learn and integrate Samsung's API or I need to hire someone to do that for me. I need to maintain a version of the app that works the way Samsung thinks it should(how do you deliver and restore purchases might differ from Apple).
2) Then I need to go through paperwork and payments that will enable me to sell Korea software from UK. I haven't look at the trade agreements between UK and Korea, I guess the easiest way is to pay a specialist that knows it.
That's something that I would rather don't go through. Probably it's not possible unless I make significant money from it anyway.
Let me tell you what will happen if that becomes the case, there would be publishers that you pay so that they release your apps in Korea and there would be large companies with enough departments to handle the hops.
The idea that this will benefit anyone but the large companies is ridiculous. Don't you find suspicious that there are no crowds of indie developers but giants like Epic who make the noise about it? Do you believe that Epic is an altruistic organisation?
If you want to pay 30% to Apple to take care of that for you, then you should be able to.
If someone else doesn't want to pay 30% to Apple, then they should have that right too.
I've lived through both fragmented platforms and unified platforms, and I'll take the former any day.
They're messy, but fair and dynamic. And critically, they evolve and allow new competition to emerge.
That right? Are you saying developers should have the right to all of Apple's stuff for free, no matter what? Is Apple not allowed to distribute their tools and libraries under a license of their choosing?
Should we ignore licenses altogether? Perhaps I don't want to pay the "cost" associated with use of a GPL-licensed library in my proprietary application. Should I have the right to just ignore the GPL license?
I completely agree that consumers should have very wide rights to the device they purchased.
But pretending the current cut isn't supported only because of their platform control is crazy.
Form an open market for app distribution, and then see what the market sets competitive rates at.
What does the App Store fee cover?
• Credit card transactions (~3%)
• Gift card transactions (10–30%)
• Absorbing the costs of credit card fraud
• Running the App Store, bandwidth etc
• Performing app review[1]
• A license fee for use of Apple libraries and APIs
• Having your App receiving the residual goodwill of being available in a store where customers know that Apple is constantly breathing down the neck of developers to do the right thing[2] and pushing the envelope of policies such as not allowing third party tracking by Facebook.
• Having your App for sale in a store where customers feel comfortable generally need to fear credit card fraud, malicious code, where scams are less common (and can generally be refunded), etc etc.
Let's imagine that Apple said "okay, you can have an open market" and replaces their App Store fees with a license fee of 15 percent of gross revenues, similar to how Epic charges developers for use of Unreal Engine. Now you can have an open market for apps. Let's see how alternatives compete for the costs of running and marketing their stores.
[1] Just because something is imperfect, doesn't mean it's useless.
[2] This alone is worth 30% to me personally.
Furthermore, whether you paid for a thing is not relevant. What matters is whether the license conditions are satisfied. You can pay for a boxed copy of Red Hat Linux, but that doesn't absolve you of the responsibilities under the GPL.
And finally, licensed Apple intellectual property is absolutely contained within the binary of your iOS application.
And everyone using virtualization should be paying IBM for having practically invented virtualization.
Repeat ad nauseam.
Whereas Sony and Nintendo did choose that model for their games consoles.
When I search for iPhone on Google, the top result is a link to Apple with the text "Explore iPhone, the world's most powerful personal device."
I get all these laws etc, but they are all at the behest of other big business who wants to take the ecosystem apple made and profit MORE off of it.
This whole thing does not help small devs, or consumers. I would argue apples PR stance that it actively basically harms consumers is 100% spot on.
The problem may be that people in ios have grown to not be looking over their shoulders for scams, but all of this will just bring about that exact thing.
The grift as soon as ios/app store opens up will be insane. You can't stop it in an open platform, and again, the average tech user is not at all savvy about tech.
There are probably good solutions to this, but so far nothing out in public is anything but self-serving of already monied interests.
Your argument is: "You're free to write an app for yourself, but Apple isn't restricting you from using private APIs, they're restricting you from distributing it using their resources, oh and they're blocking any alternative distribution methods, too."
Do you know who would agree with that? The FSF. They will argue that an application built against an API licensed under the GPL is a derivative work and therefore falls under the terms of the GPL.
This was the case back when Qt was quite infamously licensed under the GPL rather than the LGPL.
Edit: A few typos and such.
Ultimately, we are the creators of the society we live in, so if we don't think laws are working for everyone, we should change them. We have tons of laws against price gouging, preventing businesses from fleecing customers, etc. Apple grabbing 30% of sales of a company is not something I support.
They have that right they can choose to not develop on Apples platform.
The same argument also applies to Korea. Apple has the choice of allowing other payment systems, or they can choose not to sell in Korea.
This is the EXACT same choice you or Apple/Google the company not to use electricity, nobody comes with guns and forces you to connect your stuff to the electric grid. I can be a business but not make a mobile app for iOS and Google Store because I think this companies are evil, I am "forced" similarly on how I have to use electricity.
For the case above, it should also be possible for customers with one user account only to use ios apps. What I just say above might seems to make no sense, but that's the current user experience that Apple enforces us to provide.
From a dev experience, I can only see thinga getting better. If we can get to the point when an app store allows to publish apps that can be built on something else than a mac and with a good CI and CD, that could be a dev dream come true.
From a business point of view, it can only be positive, having ways out of the random death sentenced decided randomly by Apple and Google using their store obscure rules and review process to kill apps.
On android it's already fragmented in a way (Huawei has its own store now that their phones doesn't ship with the google layer). So it can just push more devs to take this into consideration.
It is fair to point out that "platform fragmentation" occurs because of the policies of Apple and Google, not because of regulation.
If they had some altruistic care for user/dev experience, the platforms would be open and frictionless to begin with. Their aim is to insert friction at all points of interoperability, and remove friction inside of their own platform.
"We wouldn't need to spend money on cleaning staff if everyone clean their door front."
Yeah, sure.
I don't know if your money works differently from mine but for me I get to own the difference between Cost and Revenue. Revenue increase is not good if the cost increase is higher. I doubt that the revenue will increase, the costs will certainly.
The costs consist of my time and the payments I make to build and distribute my stuff. This will reduce the costs that I pay to Apple but will increase the development and legal burden.
The ruling force platforms to allow developers to use different payment processors. It doesn't force developers to use these processors.
Digital payments predate app stores by a decade. It's mostly a solved issue.
> As for the users, people will start forgetting where they paid what.
It's just a charge on your bank account in the end. I'm not sure the where is really significant.
> I think the regulators should intervene for market fairness
You must be happy then because that's exactly what they are doing.
It may reduce the revenue Google and Apple receive, but honestly I think that could be a good thing. They both do much more than maintain their OS. Both companies have suites of apps that they develop in-house and offer for free.
And instead of being charged 30%, you get charged a transaction fee, plus ~3%.
Essentially, you need to register with the authorities of all the markets you would like to support.
Different trade agreements with each country, different documents, different language.
So you pay %3 instead %30 and then give the rest to the lawyers and accountants.
Good luck with that.
Companies do that all the time and if they see the value of being available globally by paying apple 30% that's fine as well.
However right now we don't know whether such a service is in fact worth 30% percent because Google and Apple effectively prevent a competitor from offering lower prices
Suddenly, creating and distributing apps can get prohibitive for smaller developers.
That's not true, because the law does not prohibit developers from using Apple's or Google's current payment systems. It enables more payment processing options (with lower fees) without removing existing ones. Developers can also choose different payment processors for different regions.
What's so hard to understand that? Have you ever created a product and made money from it?
If my net income decreases(because my costs increase more that the revenue after Apple's cut increase), I am screwed.
This already existed. You're saying that the 30% was to cover this burden, but what other people are pointing out is that this 30% isn't necessarily a true market cost of doing business since there was never another option. There is nothing stopping another entity (Stripe or otherwise) from providing a service that covers this burden similar to Apple. If it happens to cost 30% then so be it, but we don't truly know the cost because its effectively a monopolistic economic arrangement provided by Apple.
> Suddenly, creating and distributing apps can get prohibitive for smaller developers.
How so? It's not effected distribution. Apple will still provide an option for a 30% cut. If more devs go to another option then Apple may compete and this 30% may even go down. This is a good thing for the consumer and the developer.
Side note if Nintendo had played their cards right they could have made the entire library of GBA games available in a Nintendo smart phone app, like 10 years ago...
Like a donation? Or are these companies evading tax laws?
I do not understand the concept of expecting an entity to pay taxes they are not liable for paying.
The incentive for a big country like the US is to make these companies pay their domestically accrued taxes, but the incentive for a small country like Ireland is to attract these companies to come open offices and do business locally at all.
These companies have tricks to avoid paying taxes, such as creating a parent company in Ireland that owns all of the intellectual property, then making the actual Apple or Google in the USA rent the intellectual property from that Irish parent for the cost of all of their revenue. Thus to the US company, they paid 100% of their revenue as the cost of doing business and have 0 tax. Then to the Irish company, they can essentially launder this revenue into being almost completely tax-free.
For the record, the "Double Dutch Irish" has been closed, but there will always be another Caribbean country or looked-over European country willing to offer major benefits to a multinational in exchange for an office and some local hires. After all, why should a small country care if a multinational isn't paying taxes to another country far away?
Why is the country that wants taxes not able to change their rules to collect something similar to an excise tax?
The necessary solution is obviously systemic change rather than asking large companies to pay above what they're required to, the latter would actually be a breach of their agency duty and anyone who thinks companies should do that are foolish.
I don't know what the solution is. Perhaps abolishing company tax, which is my favorite proposal. Perhaps a worldwide company tax as Biden is pushing for (which concerns me for other reasons, even though I do admit it would solve this specific problem).
Hence the question of why are countries not changing the rules so the large multinational companies cannot achieve it.
> As an analogy, it'd be like a road worker paying 30 percent tax on a $100k income and a company CEO paying 0-5 percent tax on a $10m income.
This seems unrelated to my question, but is there anywhere that this is true? All the examples of this I am familiar with in the US involve ignoring the fact that the CEO is not getting $10m of cash income, otherwise they would be paying a lot more tax than someone with $100k cash income. Which is stupid and invalidates any point trying to be made.
If the argument is that society needs to start collecting tax on wealth and forcing sales of assets, then so be it, but it should be stated as such.
Reinvesting earnings is a strategy available to all corporations, large and small.
Corporate income tax is not in any way shape or form regressive.
Crazily innumerate reporting on taxes paid by big corporations leads people to believe straight up false things about taxation.
A) find another similar system
B) put their internal bureaucracies at work to switch the entire corporation to the new system?
It's like stock market news, by the time it's in the newspaper it's much too late, all the insiders have finished their trades and you're the chump buying overpriced stuff.
We'll probably find out the 2021 latest scheme in 2031, when it gets banned.
As long as there are regulators with a lot of power there will be incentive to corruption anyway.
I like free competition. Something that Google and Apple were trying to prevent.
But putting all in the hands of an ever-increasing state is not the way to go either. Though I gree with the decision.
2. Information asymmetry.
3. Barriers to entry.
Purely free markets only apply to toiler paper rolls, and not even that.
State regulations dictating conditions to market participants cannot make something more “free market”. They can favor more competition by artificially limiting the advantage of the most successful competitors, but that's not “free market”, which is the absence of market distortion by state regulation, not the presence of only those market distortions that you prefer.
> I like free competition.
No, clearly, you like competition with the leaders artificially handicapped by the State, not free competition. Which may be a valid preference, but don't pretend its a free market with free competition.
> In a free market, the laws and forces of supply and demand are free from any intervention by a government or other authority, and from all forms of economic privilege, monopolies and artificial scarcities.
So while your remark about state regulations isn't wrong, the (grand)parent comment is clearly talking about the second part of this definition.
Whose freedom is the "free" bit about? Is it about Apple being free to do whatever they want with their platform or is it about me being free to buy iPhone apps from anyone?
Anyway, with more freee market this maybe would not happen though I cannot be 100% sure since the investment it takes to do an OS ecosystem is not at the reach of everyone, making fewer competitors viable.
> a reasonable (single percentage) fee for facilitating payments.
I want to point out, though, that the service Apple provides is not merely payment processing. They offer total customer management. Which, when integrated with their entire developer offering (TestFlight, App Store, etc) is pretty neat. I’ve integrated my app with Apple for iOS and then had to do it all over again with Braintree of web. You might say that entire exercise speaks to the inanity of the App Store monopoly, but the experience illustrated for me how much more Apple provides than just mere payment processing. You won’t find the words “chargeback” or “dispute” in Apple’s docs, because they take care of all that for you. With Apple, you don’t have to program UIs for changing subscription tiers or viewing transaction histories. And many other things.
Is it worth 30%? No. 15%? I don’t think so. Should I have to maintain and juggle different integrations for every app store? Definitely not. But Apple’s offering is decent and comprehensive. It would be made much better if it wasn’t a racket that held developers hostage. Think App Store competing with Play Store on Android devices. And vice versa. Now that would be cool!
I really hope similar legislation is passed in the United States and EU.
This is just them wanting more money, and according to latest earnings they already make a lot.
How were operating systems funded before vendors could take a cut of every transaction?
https://www.howtogeek.com/269331/how-to-disable-all-of-windo...
Also don't forget that there is a ridiculous amount of user behaviour telemetry and metadata that Microsoft has permission to use for any reason.
> Separately, the documents show that in 2011, Schiller suggested that Apple could "ratchet down from 70/30 to 75/25 or even 80/20 if we can maintain a $1B a year run rate," in terms of App Store commissions, since the 30 percent commission rate would "not last forever."
https://www.macrumors.com/2021/08/20/apple-sideloading-plans...
This obviously doesn't tell the whole story either. Some apps provide utility to the end user but don't monetize well. Those apps are valuable to have as a way to drive people to use app store, and keep developers educated.
Some “features” are seen only by customers, e.g., managing all your subscriptions in one place. I can think of some services that would LOVE making cancelling a subscription more difficult.
I don’t care about apple’s cut. Allowing sideloading instead would have been a win win for everyone
For instance, if you raised the individual's fee to $500, then a bunch of people would opt out, either not developing iOS apps, or just make a web app. Neither of those are good solutions from Apple's point of view.
Apple has pulled off a really nifty trick of convincing (cough abusively forcing... cough) companies to concede full control of the customer/business relationship to Apple.
From my point of view, you're not really selling anything on the Apple App store - you're giving Apple the right to resell your digital products.
In exchange they keep all analytics data. They keep full control of customer contact and communication. They dictate the terms of the sale, including place and payment method. They control everything.
Your customer is Apple, and they are just as abusive to their "vendors" (app developers) as Walmart is.
Calling it a "Marketplace" is a sham - The core definition of a "Marketplace" is --- arena of competitive or commercial dealings --- And the Apple store is no more a "marketplace" than Walmart.
In my understanding that that’s the contractual relationship the developer and user enter into with Apple.
Personally I think this isn’t all bad considering it provides a uniform experience for the user, which lowers cognitive load for the user and might makes the user more willing to purchase. Once they know what app purchasing is like, they can confidently purchase more apps. And they know that no matter who develops an app, in the event of a dispute they will deal directly with Apple.
Apple's offerings may have been good when the alternative was software sold on physical CD's in a store, but compared to the alternatives today there is no way 30% is by any means fair or reasonable. The 30% commission is essentially monopoly rents.
1. https://stripe.com/billing
Stripe Payments [1]: 2.9% + $0.30
Stripe Billing [2]: 0.5%
Stripe Invoicing [3]: 0.4%
[1] https://stripe.com/pricing
[2] https://stripe.com/billing/pricing
[3] https://stripe.com/invoicing/pricing
All in all, we're looking at $0.30 + 3.4% (or 3.3%). This is clearly lower than 30%, except for very inexpensive apps (~$1.29 or less).
you mean end-to-end locked-in ownership of your customers
You can offer total customer and management and compete on its merits and price point, not by forced monopoly.
No, they FORCE total customer management.
A somewhat faster response would have been nice though.
I struggle to understand acting as if those things were some incredibly important stuff just like water, internet, computers,
or something that nobody would risk losing e.g via standing to fight against its vendor
Maybe losing those will result in creating new, more open and less vendor locking alternatives
If anything is going to shake up law enforcement and regulators it's these megacorps holding things hostage because they don't want to comply.
Seriously, though, I can't believe both Apple and Google thought they'd get away with this. Of course it makes zero sense from a consumer point of view to only allow one payment system.
Apple's phone market share in South Korea is a moderately healthy 22% given the presence of strong domestic and regional brands, but I've no doubt Apple would sooner give up on South Korea altogether than have a weird law tying their hands globally.
If Google forbade a korean dev from making an international app with external payment provider, then SK could very much punish Google SK for it. Doesn't matter if the target users are in Europe. Read the GDPR, same principle.
Actually this is not true. It only applies to companies that are providing services to people physically in the EU. If you're an EU citizen but you're in America, it does not apply.
> When the regulation does not apply. Your company is service provider based outside the EU. It provides services to customers outside the EU. Its clients can use its services when they travel to other countries, including within the EU. Provided your company doesn't specifically target its services at individuals in the EU, it is not subject to the rules of the GDPR.
https://ec.europa.eu/info/law/law-topic/data-protection/refo...
https://www.dyspatch.io/blog/gdpr-location-or-citizenship/
I wouldn’t call $99/year “not paying.”
Apple's libraries are licensed to developers under whatever license Apple chooses. They could require a certain revenue share regardless of which payment gateway is used. Heck, they could license it under the GPL and require all developers who build programs against their libraries to release their source code. It's their code, it's up to them.
Similarly, Epic Games can decide when developers might have to pay Epic for software they distribute with Unreal Engine. Whether it's a flat fee, a revenue share, a profit share, if there are discounts or incentives—all of that is entirely for Epic to decide.
Well, until the regulators step in (again).
The difference between random people using the GPL and Apple is that Apple is worth a trillion dollars. That matters quite a bit.
They are free, however to not come sell in places it feels the rules are unfair towards it.
But they are free to choose the price. They can sell the next iPhone for $10,000 if they really wanted. Perfectly legal.
They are free to choose under which terms they license their intellectual property to third parties, so long as those terms are lawful.
The point of all this is, Apple has absolutely no say in any of this. They are free to set the terms of their sales according to the law in the country, and that is it. It doesn't get anything more.
> > > Are you suggesting that regulators can force Apple to give away their stuff for free if they want to participate in that market?
It seems your answer is yes.
Interestingly, the $99/year fee is to access the app store, but there's a a $299/year fee to bypass the appstore.
https://developer.apple.com/support/enrollment/ notes: The Apple Developer Program annual fee is 99 USD and the Apple Developer Enterprise Program annual fee is 299 USD
The $299 enterprise program probably costs Apple substantially more than $299 per customer/enterprise in order to run. While I have no idea about the numbers, I wouldn't be surprised that it is a substantial loss-maker for Apple, justified only because it's necessary to keep the iPhone/iPad relevant in some enterprises.
Similarly, an iOS app which substantially relies upon (and must be compiled with) Apple's libraries in order to work is subject to whatever the terms Apple includes in their software license. Of course Apple isn't requiring code to be open source like the GPL. Apple could choose whatever terms they want. It would be perfectly within Apple's right to require a revenue share for use of those libraries—say, the Metal graphics APIs—just as Epic Games does for the use of Unreal Engine libraries.
Therefore it's entirely reasonable to imagine that if third party payment gateways are permitted, Apple could still organise things so that they are legally entitled to a percentage cut of app sales. Again, just like Unreal Engine.
I didn't vote either way, but I'm not sure that this is the way the GPL works. As I understand it, you can distribute only binaries as long as you supply _on request_ the source code. FWIW the link to the GPL reads as quite tenuous and what I would guess the downvotes were for.
> Similarly, an iOS app which substantially relies upon Apple's libraries in order to work is subject to whatever the terms Apple includes in their software license
Yes, they are free to do what they want, barring regulation. Which is what this is. Deliberately loopholing around the legislation is an option, but a risky manoeuvre that might just invite more legislation.
> FWIW the link to the GPL reads as quite tenuous
The link is that any developer—whether they're Linus Torvalds or Apple Inc—should be allowed to choose the terms in which they release their copyrightable works into the public.
• One developer could choose the GPL.
• Another developer could choose a license which requires a flat, one-off fee.
• Yet another developer could chose a license that is free up front but mandates a revenue share under certain conditions, such as Epic Games does with Unreal Engine.
In all instances, it is copyright law which enforces these license terms. So if you like the fact that Linus can distribute Linux under the GPL, you must also accept that some other company will have the right to distribute their software under their license.
The issue is not that your argument is controversial. It's that it falls flat because it's based on an incorrect assumption.
> Apple could choose whatever terms they want. It would be perfectly within Apple's right to require a revenue share for use of those libraries
No they can't.
There are a broad set of laws restricting how companies can or can not do business. These laws severely limit the terms Apple can set. Laws restricting anticompetitve behaviors would be part of this set, same for the new regulations in South Korea we are currently discussing.
Are you suggesting that Apple charging developers a percentage-based license fee for use of their work is unlawful anywhere, under any law current or proposed?
The crux of the discussion generally focus on the parts of the contract preventing developers from using competing works in addition to the fees. That seems to fall squarly into your "whatever terms they want". And yes, I do personaly think there is a case to be made that Apple licensing terms are anti-competitive, an opinion which seems shared by the EU’s competition chief.
Your opinion seems to be that Apple could just stop charging a fee for using the App Store and charge it for the use of a different but similarly unavoidable part of the system instead. But that's merely a technicality. It doesn't fundamentaly change the question.
Tell that to Nintendo. Sony. Microsoft. Canon. Nikon. Garmin. Alpine. Pioneer. LG. Samsung. Volkswagen. Hyundai. The list goes on. Software is all around us. The traditional general purpose computer platforms are the exception, not the rule.
It's about control. Apple control how and which apps get to users, and use this control to impose terms, license or otherwise, that maximize their revenue and other goals.
Perhaps you are right that Apple could reengineer the business model to charge software licensing fees rather than payment service fees. They could also make the 30% a publishing fee. There are probably other options too. You can do a lot when you have the power that they have.
That said, practicalities matter. If you want to take a cut of a large number of apps' revenue... the place to do it is point-of-sale. Take your cut before app devs get theirs. If payments go to app developers via some other payment system, Apple now needs to chase down a revenue linked licensing fees from 2m apps... that's messy and impractical. They don't know how much they are owed, for one thing.
I am not against a publishing fee instead of what there is now, but it should be fair and transparent. Not that the current system is fair and transparent...
Then again, why should Apple and Google charge fees for something they have no hand in?
If they want to charge fees for distribution, they should just do that.
Same reason as now: because they can and are in the money making business.
I'm not saying this is right, just that it is what it is. Google and Apple will not just forgo millions if not billions of "easy" dollars. My guess is that especially the big players, who make Google and Apple the most money, will switch to different payment processors with better terms for them as soon as that option becomes available to them.
I'm not trying to portrait Google as innocent, there's still work to be done. But they are absolutely in different leagues with Apple when it comes to user freedom.
Google has enormous power over phone suppliers and can force them to preinstall their apps and store and nothing else.
Also forcing users through multiple warning screens and settings until you have finally installed an app might look trivial if you know what you are doing but for everyone else might not be as easy. There are many, many articles about how you should simplify your websites onboarding process to increase the amount of customers so the Android flow is pretty much the anti-thesis to that.
I remember paying $25 or so to open a google play developer account. For Apple, you pay $99 yearly.
Imagine a government forcing AirBnb to let people pay hand to hand to the owner of the apartment. It's the same issue, right?
I only wish we (users and devs) could do that on Ios.
> In order to protect our community and business, the following behaviors are prohibited:
> Taking people off of the Airbnb platform for new, partial, or future bookings
> Contacting potential guests prior to booking on Airbnb to move the booking off of Airbnb (ex: offering discounts to book off of Airbnb)
> Asking guests for contact information prior to booking; all guest communications prior to booking must be on Airbnb
> Asking for or using guests’ contact information to settle additional payments outside of Airbnb’s platform; all payments related to a guest’s stay, including extensions of a stay (and besides exceptions identified below), must go through Airbnb (ex: using the Resolution Center)
https://www.airbnb.com/help/article/2799/airbnbs-offplatform...
These rules are just as anti-competitive as the anti-steering rules in the Apple and Google app stores, and entrench Airbnb's market position.
I don't lose out on reaching ~100% of customers, because Apple and Google control access to effectively 100% of customers and act like a duopoly.
Android OR iOS is an exact duopoly.
https://www.earnestresearch.com/airbnb-1-among-otas-hotels/
IIRC, one guy in the jury had lost his business in a previous court fight with Samsung. How was that not discovered during the jury selection process??
Edit: this was not a popular comment..
This is not such a case though. This is a major loss for them.
For all the hacker new commenters, who have been commenting on this topic, for the year that the drama has been going on, and were convinced that Apple and Google were going to win this fight.... well you need to re-evaluate what made you think that.
Because, the writing has been on the wall, for quite a while now, for their iron grip on their app store payments.
If it wasn't going to be the epic lawsuit, it was going to be a different lawsuit in the US, or another country. Or if all that didn't work, it was going to be laws such as this, that blow the doors wide open, and spell doom for these closed systems.
Many platforms require fees to sell on them. eBay for example has asked for a percentage for years, even if it did not handle payments at all.
Are Apple and Google going to be forced to offer the service (the App Store) for free because of their duopoly?
However laws can and do regulate what constitutes a "fair" price for a certain service.
In some countries the quasi/effective/total monopoly ISP is forced to rent their last mile phone cables to competitors for a regulated price.
A similar thing could happen to Apple and Google with a government agency deciding what they are allowed to charge for their services of providing the app store and the OS.
Or they could be forced to allow competing app stores with the same privileges as their own (beyond what is "technically" possible on Android).
Either way it looks like they'll loose their iron grip over on customers phones (in some countries at least). That's the price of effectively monopolizing a market and getting very rich doing it.
Or perhaps you need to go re-read the comments? I don't recall people writing "Apple and Google are in the right and deserve to win" as much as I recall people writing "Apple and Google are wrong and deserve to lose" and "30% is unfair os they deserve to lose", and people pointing out that the current system does have benefits.
I recall people saying that they don't think their behaviour is outright illegal, or doesn't qualify as antitrust in the US. Obviously regulation supersedes this.
In fact, making regulatory laws to force changes in the way they are behaving, implies that it's not illegal now, so seems to vindicate the people saying that?
To the extent that I've seen this point on HN, it has always been in the context that there is no law in the US which prohibits what Apple or Google are doing, and hence it would be difficult for regulators to win without new laws or rules in place. I'm not American, so I can't say whether those people were right or not, but I think it would've been pretty ridiculous if anyone said there would never be laws against it.
e.g., manage all subscriptions from one location, cancel subscriptions without losing time remaining (hello Creative Cloud!), and the entire parental control process.
That hasn’t been my experience - do you have a cite for that?
It also agreed to let developers inform their users about payment options outside the App Store, using the email addresses that users gave them. Google said that it would only take 15 percent of developers' first million dollars instead of 30 percent.
Combined with "competition for monopoly" elements like paying Telcoms not to develop their own app stores or support 3rd party ones, the whole thing stinks to high heavens.
Once upon a time, "net neutrality" had wide support, and there was understanding that it required constant vigilance. Google, ironically, was a big defender of net neutrality... even as they established their own dam immediately downstream of ISPs.
https://www.theversed.com/2754/riot-games-seek-court-justice...
Net Neutrality is not just about “shoveling YouTube streams without having to pay.” In one case, an ISP was deliberately dropping packets for a popular online game (which, if you didn’t know, online games are known for requiring very little bandwidth), and extorting the game developer with the loss of ISP’s customers if they did not pay up.
ISPs are monopoly-abusing extortionists. They deserve every bit of ire they receive.
Once upon a time, flip phones had 'app stores' also maintained by a solo telecom.
That said, Apple did cut in half the fee for almost all developers and I installed Netflix, HBO, Prime, and Hulu apps that work fine with my existing streaming media plans that are direct to the providers. I forget, did Google also recently reduce developer fees? It may be as simple as both companies seeing the writing in the wall and are trying to get in front of this.
The commission fee that Apple charges, 30% is partially to cover operating/marketing etc. Obviously, Apple makes a good profit off the App Store these days, even though Jobs said he'd be happy if it was break even at best.
Here's an analogy I've been thinking on about this whole thing. The iPhone (or whatever phone you want) is the equivalent of a Walmart store. If you want your product to be sold in Walmart, you have to send it to their distribution center (ie App Store) and Walmart will handle sending that product out, etc. Walmart will handle the credit card transactions, etc and pay you the negotiated rate for your product (Yes, odds are Walmart buys your product first, then sells it, but with credit lines, etc it's almost the same thing).
Does Walmart allow you to go in, put your product in the store and sit there with a square device and sell your stuff? Amazon is more analogous of physical to app in the sense that Amazon is the transaction point but may or may not actually maintain control of the product.
So what's the end game? I suspect if Apple/Google has to allow developers to collect their own fees, Apple will start charging paid apps to be in the App store.
They will continue to allow free apps to be shown, but if you want to charge for your App either one time or subscription, you'll have to pay an upfront fee to be listed.
And that charge may depend on the number of downloads.
No one is forcing you to go through Walmart. The problem with IOS is that you are forced to go through Apple. A user cannot pay, download and install the app directly from a developers website.
Apple is a minority player in mobile.
The major difference here is that while I don't own the Walmart store, I do own my phone. What is allowed to be sold in the store is determined by Walmart, just as what's installed on my phone should be determined by me, the owner.
Then by all means, please charge me separately for these things. Because I don’t need them. Apple doesn’t do marketing for me, never promoted my app. People find my app through my own marketing channels.
Charge me roughly 2 % for In App Purchases just like Stripe and PayPal.
Charge me a traffic fee for whatever download traffic I cause. This way, I at least benefit from my app being only like 5 MB in size.
If I want to be featured on the App Store, charge me.
The rest like App Store listing? Covered by my $100 developer fee.
This, maybe it was different in the early days but they do literally nothing to help you market your app until you've already driven enough traffic to it yourself for them to take notice.
If you do get featured you get an email indicating that you might get featured and need to design and submit app store banner artwork with a whole list of things that you're not allowed to display.
This is so disingenuous and I'm so tired of seeing Apple's fee pegged at 30% (even though it 15% for the VAST majority of developers) and then turn around and pretend Stripe/PP offer anything close to 2%.
Paypal is 3.5% + $0.49
Stripe is 2.9% + $0.30
At low price points (you know, the price points that almost all IAP/Paid App are at save for longer, like annual, subscriptions) your fee is still substantial.
If you are lucky Apple will create a special provision for 3rd party payment providers that will provide subscription/cancellation/refund/etc infrastructure. If they don't do that then you can expect the above rates to be even higher. 2% is only obtainable with a more bare-bones payment processor so you will have to build quite a bit up and any company providing full "app payment services" is going to charge more than Stripe/PayPal. Heck, even the prices I listed for Stripe are the lowest they go (unless you are doing over 1.5M annually and qualify for bulk/volume pricing) and if you want things like fraud protection that's extra. Oh you want to calculate tax? Extra .5%. Fraud protections? $.05 or $.07/per transaction extra. Chargeback protection? Extra .4%, and the list goes on.
- Stripe is cheaper in the EU for EU cards. 1.4% plus €0.25
- Apple didn’t even notify me about individual refunds for what? 10 years? And it’s still unreliable and annoying so that I don’t even bother, because I get like 3 refunds per month. You could actually get a refund and still keep the app for a long time.
- People complain to me if they want a refund, but Apple gives me no control. I have to redirect them to Apple customer support. I am perceived as the bad person and this costs me money in terms of customer support and I can’t even help people, because Apple wants to own the relationship between app devs and customers.
There are so many silly things about the App Store that your quotation of 15% as a generous service is laughable.
Edit: but yes, Stripe and PayPal are more than 2% in reality, but far from 15% or even 30%, except for micro transactions.
EDIT: why the downvotes? If you don’t think Samsung had influence, wouldn’t it be more productive to reply and say so - that way there can be a healthy dialogue on the topic.
You would have to be a fool to think Samsung doesn't want a cut of app sales on their devices and as the most powerful company in Korea with large influence over government, they'll get their way. This was never about developers and it isn't a watershed moment to be excited about (unless I guess you live in Korea).
Just take a moment to reflect on your comments, if they are reasonable and you're getting downvoted, and nobody is bothering to respond, it's probably populism. It it was it is, it's too bad, but don't fret about it.
Businesses build on the platform and can be killed in an instant by some arbitrary automated decision to kick the developer off the platform with no recourse.
That’s completely unacceptable.
Also, they must be made to pay tax. Why do you and I pay for military education, government services education etc but they pay zero?
These big companies are thief kingdoms and parasites on society.
Apple and google have had it good for too long. Something must be done.
I’m guessing though that the South Korean market is be significant enough for Apple and Google to not just pull out it’s business from South Korea and call it a day. I guess this is, in some kind, a victory against the huge companies.
But… personally I do find sad that this would be detrimental to South Korean app UX. Stripe isn’t a thing here, and most of the home-grown web-based payment systems have… like super shitty UX that require (on the desktop) native plugins running a server on some bespoke port. It did come a long way since from when we were the country that required IE6 for web banking, but the UX is still not really there.
I’m hoping that Apple will provide APIs for showing payment screens and Apple will still control the ability to show all subscriptions, cancel them in one single place, etc… but I don’t think Apple will ever do that. Unfortunate…
Indeed would be nice to centralize all subscriptions, we have yet to see how they would interface with 3rd party payment options. But on the whole this should be a win - if anything, those competitors will have a strong incentive to improve their UX.
I think that's right. The next step would be for a large enough market to have a similar law, and then they'll just have that as their policy globally. That probably means EU or US.
Or the UK, which has a larger economy than South Korea. Although going after big tech is not, as far as I know, on the radar of the UK government.
Wait for the Brexit dust to settle and IndyRef2 to happen.
I always found this line of argument disingenious and disturbing.
Disingenious because it doesn't happen historically, so it sounds like a tired threat
Disturbing - are we saying we would rather kneecap our democratic institutions, right or wrong, than live without iPhones?
We'd die to defend our lands and laws from demands of foreign governments, but fold to demands of foreign megacorps?
Case in point: China or post-Brexit UK.
You use this hyperbolic rhetoric to describe the situation but it really is an every day occurence.
How many companies have pulled out of China or post-Brexit UK? I can't think of many.
No, it's just that this is the choice these companies have. They can completely stop doing business in a country (or countries) if they don't want to obey the relevant laws/court rulings of that country. The only thing SK could do then is sanction Apple products so it becomes illegal to import them (reminder that a sizable portion of SK's economy is directly attributed to Samsung/LG).
Hasn't this happened several times with Google-news?
They now have a reason to make it better, since they can now actually compete with Apple Pay and Google Pay.
I'm not sure that Apple can do it without being an intermediary in the process - managing the billing. And... well... that's what Apple Pay is.
In order for Apple to be the one to show and cancel subscriptions, they need to be the ones billing you and then processing that transaction (possibly batching it up with others to reduce processing fees).
Likewise, if there's a dispute - for example a child made a few hundred dollars of in app purchase and the parents would like to refund that... Apple can reverse those transactions ( https://support.apple.com/en-gb/HT204084 ). If you're dealing with a 3rd party payment system... you're going to have to deal with the 3rd party payment system on your own.
Another "it can be gotten around" when you leave the App Store and payment processor is the in app purchase constraints ( https://support.apple.com/en-us/HT204396 ) in that a developer wouldn't have to honor that check at all.
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The future of 3rd party payment processors that developers ask for really means taking Apple and its APIs out of the process. Entering in the credit card information (making sure that developers aren't trying to bypass access constraints on the wallet) and sending that out themselves.
For example, PayPal charges 4.99% plus a fixed fee that's about $0.10 per transaction ( https://www.paypal.com/us/webapps/mpp/merchant-fees ). This is comparable to what a developer would have to pay to Visa or any other payment processor for doing micro transactions of their own. Having Apple do it means that Apple would really like to charge at least 5% + $0.10/transaction which for a $0.99 is $0.15 and that's 15%... which is the amount that a small developer shop would have to pay for doing it through Apple.
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And so, I return back to the question - how would you see Apple opening up the APIs for doing payment processing without doing the payment processing themselves (and insuring extra expenses)?
Next do iMessage.