EU fails to recognize that most iPhone users want Apple to be the gate keepers of what can run on our phones. It’s the very reason that the ecosystem isn’t riddled with malware, as other platforms tend to be.
How did you come to that conclusion? Why do they fail to recognize something potentially absolutely unrelated to anti-competitive behaviour investigation?
Um, Apple's App Store and Apple Pay were wholly created by and paid for by Apple. These are not public utilities paid for by taxpayers money. These are also not the only shows in town for app stores or payment systems. What's the beef?
Yeah yeah, yeah I know how this works. It's the same reason robbers rob banks - that's where the money is. Governments and bureaucrats who survive by sucking on the financial gains of others are always on the hunt for new money cows to latch on to. Apple just happens to be one of the biggest and juiciest money cows on the planet so there'e no keeping the parasites at bay. Apple is their beef. Big tasty beef.
Pretending that this is about "competition" is a farce. They don't even know what competition is, because, unlike Apple, nobody is competing with them and trying to eat their lunch and crush them in the marketplace. They can totally suck at their job, or miserably fail their obligations to their customers/constituents, and they'll still get paid and collect a pension. They just want a cut of Apple's action, plain and simple.
There aren't any free rides. Spotify should make their own phone and invest billions in the ecosystem and then give it away for free and let every other business/developer/anyone use it for free without getting any return on that investment. No data, no ads, nothing. Just FREE!!! They just need to maintain the servers and continue to invest in the platform while everyone else benefits from it. Open it up to anyone who wants in. Make it the wild wild west.
I'm with Spotify and others about this. You just can't create some in-app credit charging mechanism without being loosing draconian 30%. What maintenance costs Apple has with that? - near nothing. I would require such apps to be paid, so Apple can take 30% off an app purchase one time, while in-app purchases free of the cut. And free apps unable to have any in-app purchases.. it's the most popular model in AppStore and I dislike it.
If it’s legit for retailers, pharmacies, and grocers to have their own rent-free in-house brands, or even entire bakeries and coffee shops, how is it not legit for Apple to offer their own in-house services, also rent-free?
I'm with Spotify and others about this. You just can't create some in-app credit charging mechanism without being loosing draconian 30%. What maintenance costs Apple has with that? - near nothing. I would require such apps to be paid, so Apple can take 30% off an app purchase one time, while in-app purchases free of the cut. And free apps unable to have any in-app purchases.. it's the most popular model in AppStore and I dislike it.
While are you at it - dictating how Apple should specify their prices - please remember to ask Spotify lower their draconian prices for premium subscription by at least 90-95%.
———
And if you want some reasonable discussion then let’s look at some next points, because it seems your comment doesn’t provide enough information.
1. App Store costs Apple near nothing when providing the always state of the art infrastructure for in app purchases? What is your source for that estimation? 2. Optional: Shouldn’t a company (any company, including Apple) make a profit on the services or product it is selling in the market? 3. A) How would you organize a pricing system where apps with subscriptions pay Apple 30% of an app purchase?
Are you suggesting Spotify should have costed me something to just download?
C) How much should this amount be which you want me to pay for currently free listening experiences with Spotify?
Why should a company which provides integrated solutions be forced to disintegrate them by law? Especially when the ‘open’ model was never the norm? I think the public should gatecrash the commissioners private parties to show how forced openness feels.
No one has reached any conclusions yet. The investigation has just been formalised.
However, I can see how this might not go Apple's way or maybe it will. They are looking at two different areas and the devil may well be in the details.
If there is something here that currently doesn't comply with EU law, that will be laid out. If changes to current legislation are proposed as a result of this investigation, that will be laid out too.
Habitually, legislation trails technology, so adjustments are often required to shore up consumer protections and keep the playing field level.
I'm with Spotify and others about this. You just can't create some in-app credit charging mechanism without being loosing draconian 30%. What maintenance costs Apple has with that? - near nothing. I would require such apps to be paid, so Apple can take 30% off an app purchase one time, while in-app purchases free of the cut. And free apps unable to have any in-app purchases.. it's the most popular model in AppStore and I dislike it.
It’s 30% in the first year. Thereafter it is 15%. Aren’t too many businesses that can run on 15% revenue to cover costs. The problem for Spotify is that being charged anything at all is inconvenient to its business model.
, kinda
Personally we are in excess of 43% net, but I have customers owning other businesses who wish they'd have a 15% return so they could make a bit for themselves. Many of them just churn the money.
IMO Most app developers would be considered "startups" where giving up 30% of their revenues just to walk in the door before paying for promotion costs too is a recipe to fail. According to investment professionals "A good margin will vary considerably by industry, but as a general rule of thumb, a 10% net profit margin is considered average, a 20% margin is considered high (or “good”), and a 5% margin is low." Apple is the only party guaranteed to profit. Immensely. In $Bilions.
Not at all saying that Apple is not allowed to do that, IMO they are even if the EU might disagree, but failing to understand why developers (who in general are very small business owners) might find it problematic is plain blindness. Big companies already avoid the Apple app tax because they're well known enough. (example Google, Netflix, Disney?). Fortnite only recently discovered they aren't big enough to avoid paying Google a percentage. FWIW if Apple has to modify the cut, so will Google (voluntarily, kinda) and so will Microsoft. The same opinions will apply.
As an aside, I don't believe any person should bother at all with a standalone app for the US intending to profit from the app alone. The chances are next to zero today IMO. So much saturation that no one will even know you are there. A handful of big players will take the overwhelming majority with only a relatively few dollars a year left for the rest, so some might break even, pay for a few dinners out this year. Most app owners will take a loss and that's a BIG most.
I'm with Spotify and others about this. You just can't create some in-app credit charging mechanism without being loosing draconian 30%. What maintenance costs Apple has with that? - near nothing. I would require such apps to be paid, so Apple can take 30% off an app purchase one time, while in-app purchases free of the cut. And free apps unable to have any in-app purchases.. it's the most popular model in AppStore and I dislike it.
While are you at it - dictating how Apple should specify their prices - please remember to ask Spotify lower their draconian prices for premium subscription by at least 90-95%.
———
And if you want some reasonable discussion then let’s look at some next points, because it seems your comment doesn’t provide enough information.
1. App Store costs Apple near nothing when providing the always state of the art infrastructure for in app purchases? What is your source for that estimation? 2. Optional: Shouldn’t a company (any company, including Apple) make a profit on the services or product it is selling in the market? 3. A) How would you organize a pricing system where apps with subscriptions pay Apple 30% of an app purchase?
Are you suggesting Spotify should have costed me something to just download?
C) How much should this amount be which you want me to pay for currently free listening experiences with Spotify?
I'm not trying to dictate anything. I said "I would", not that Apple should. When it comes to draconian prices, as long as they hand over most of the sum to the artists, I'm okay with it. But Apples revenue split (that's how they call it) -in this case- is revenue AND royalty split (more the royalty). I believe that Spotify simply can't afford to use in-app purchase of the service.
Now to your points: 1) You are thinking rather quantitatively. It indeed cost Apple millions, but out of $1 it's tiny friction, and out of $10 it's the very same friction of cost to maintain transaction. Not ten times more. 2) Be it, if Spotify app would cost a hundred dollars to get, then Apple makes thirty dollars profit on it and my thumbs are up. I wish Apple nothing but success! 3) A) Apple may allow such services to have in-app subscription payment (almost) free of charge, in exchange of the app itself being paid hard to get (that wishful I am). This way we're not cutting out of royalties. I would see fair to charge subscription in-app payment as an ApplePay transaction (some $0.00X ? but no way the percentile!). My point is that subscription payment is just moving money from A to B. Should Apple cut 30% off our ApplePay transactions due to their state of the art infrastructure? : ) Better yes, and $10 in-app subscription for premium, like it is. Because the real maintenance for Apple are the servers hosting the app (not Spotify streaming servers), and legion of app reviewers, looking up each updated version to keep us safe from malicious code. Plus R&D, etc... C) I have no idea. What Spotify is selling us, are their algorhytms, collections, information on pieces, their servers bandwith, and the App.. it's UI and functionality. But not the content, they just provide it and have to pay authors for it.
Actually, Apple should simply: (1) Create an ApplePay app for use in Android devices; (2) Insist, however, that it is premised on being able to implement its needed security protocols, which includes the requirement of lack of data-sharing and of hardware features that Android must build into its devices from the get-go; (3) If Android makers fail to provide those security protocols, Apple should bring an EU antitrust complaint against Google (yeah, and not its proxies) and Android.
You know that Android users -- especially post-COVID where no one wants to touch a frikkin' POS device -- would FLOCK to ApplePay, and Apple would collect a couple of pennies on every transaction, i.e., many billions of dollars.
Personally we are in excess of 43% net, but I have customers owning other businesses who wish they'd have a 15% return so they could make a bit for themselves. Many of them just churn the money.
Quite so. Revenue is not net, GG, and it is amazing how many people confuse revenue with profit. I doubt Apple is making much overall because of all those little guys, but I guess a few of the big guys like Spotify make up for the losses on the little guys.
anyway, 30% in the first year is probably a vastly better cost for a little start up to pay rather than try and do it themselves.
What a bunch of idiots. What the heck is anti-competitive about Apple Pay?
That's what the official investigation is for. Perhaps nothing.
It sounds like what they want is for Apple to open the back end systems that keep ApplePay secure so that others can profit from Apple's hard work -- at the expense of our security.
I adopted ApplePay immediately and stopped shopping where it wasn't accepted simply because of the security it offered. Now others want a piece of the pie.
Based on Libertarian, Free Market principles, if that's all one is looking at, then yes, Apple's practices are anti-competitive.
But, if one looks at the whole picture then, like any and every government, Apple sets rules. And those Rules & Restrictions are designed to protect both the brand and the consumers who buy that brand. One simply can't separate the two.
Perhaps a good analogy is to look at AT&T: various private enterprise groups wanted to start their own telephone companies, so they used anti-competitive rulings to take down one of America's premier companies. The result: AT&T was destroyed, the start-ups failed and America and Americans lost. (Interesting side note: Without AT&T we may not have ever had an Apple as hacking into its systems with their blue box was Steve & Woz's first taste producing a marketable product together)
Personally, I welcome the security and peace of mind ApplePay gives me and do not want that interfered with. Likewise, I wish that Apple would increase and improve its policing of 3rd party apps on the App Store.
... One of the reasons I favor Apple is its stability, security and privacy protections. Opening up to third parties would make it more Microsoft like.
....... Perhaps that emphasis on security & privacy stems from the founders initial efforts as entrepreneurs by hacking one of America's most prestigious organzations?
But, with lots of money sloshing around, there will always be people and organizations looking for a slice of that pie -- and (mis)using government to get it.
I doubt the EU can be viewed as market libertarians. But on a wide range of subjects they often express a genuine concern for a "level playing field". I think they are going to investigate this under that lens. We'll see what comes out. The perceived problem with the technology sector is that in many areas it is often winner-takes-all. The argument against curtailing the leader is that it slows down progress to force competition. Maybe there is a balance to be found once the innovator's position is extremely well established, and I doubt the innovator would ever do it without a bit of prodding.
Out of interest, do you see allowing other payment systems threatening interference with the security and peace that ApplePay gives you? I'm not seeing it.
My sense is that, like the AT&T debacle, this is being triggered not by government watch dogs, but by private enterprise who want to take advantage of the secure and efficient systems Apple created for us, their customers. That is, they're using government to break into a business that is walled off to them. But, if and when government ever comes down on them, they'll start screaming Libertarian curses about government interference.
Why should a company which provides integrated solutions be forced to disintegrate them by law? Especially when the ‘open’ model was never the norm? I think the public should gatecrash the commissioners private parties to show how forced openness feels.
So that other companies -- who are likely triggering this -- can profit from Apple's hard work and reputation.
I sincerely doubt that some government watch dog sitting in his office thought this up. It's private enterprise using government to gain access to a system that is walled off to them
Based on Libertarian, Free Market principles, if that's all one is looking at, then yes, Apple's practices are anti-competitive.
And just like that, Adam Smith, John Stuart Mill, and Frederich Hayek leapt up in unison to exclaim “excuse me?”
What’s going on with regard to Spotify et al is simply explained in a little tale that used to be taught in schools. It’s called The Little Red Hen.
No, it is "Adam Smith, John Stuart Mill, and Frederich Hayek" who are being called up from the grave by Libertarian profiteers (mis)using government to achieve something they could not otherwise do on their own.
Comments
Yeah yeah, yeah I know how this works. It's the same reason robbers rob banks - that's where the money is. Governments and bureaucrats who survive by sucking on the financial gains of others are always on the hunt for new money cows to latch on to. Apple just happens to be one of the biggest and juiciest money cows on the planet so there'e no keeping the parasites at bay. Apple is their beef. Big tasty beef.
Pretending that this is about "competition" is a farce. They don't even know what competition is, because, unlike Apple, nobody is competing with them and trying to eat their lunch and crush them in the marketplace. They can totally suck at their job, or miserably fail their obligations to their customers/constituents, and they'll still get paid and collect a pension. They just want a cut of Apple's action, plain and simple.
There aren't any free rides. Spotify should make their own phone and invest billions in the ecosystem and then give it away for free and let every other business/developer/anyone use it for free without getting any return on that investment. No data, no ads, nothing. Just FREE!!! They just need to maintain the servers and continue to invest in the platform while everyone else benefits from it. Open it up to anyone who wants in. Make it the wild wild west.
And if you want some reasonable discussion then let’s look at some next points, because it seems your comment doesn’t provide enough information.
2. Optional: Shouldn’t a company (any company, including Apple) make a profit on the services or product it is selling in the market?
3. A) How would you organize a pricing system where apps with subscriptions pay Apple 30% of an app purchase?
However, I can see how this might not go Apple's way or maybe it will. They are looking at two different areas and the devil may well be in the details.
If there is something here that currently doesn't comply with EU law, that will be laid out. If changes to current legislation are proposed as a result of this investigation, that will be laid out too.
Habitually, legislation trails technology, so adjustments are often required to shore up consumer protections and keep the playing field level.
IMO Most app developers would be considered "startups" where giving up 30% of their revenues just to walk in the door before paying for promotion costs too is a recipe to fail. According to investment professionals "A good margin will vary considerably by industry, but as a general rule of thumb, a 10% net profit margin is considered average, a 20% margin is considered high (or “good”), and a 5% margin is low."
Apple is the only party guaranteed to profit. Immensely. In $Bilions.
Not at all saying that Apple is not allowed to do that, IMO they are even if the EU might disagree, but failing to understand why developers (who in general are very small business owners) might find it problematic is plain blindness. Big companies already avoid the Apple app tax because they're well known enough. (example Google, Netflix, Disney?). Fortnite only recently discovered they aren't big enough to avoid paying Google a percentage. FWIW if Apple has to modify the cut, so will Google (voluntarily, kinda) and so will Microsoft. The same opinions will apply.
As an aside, I don't believe any person should bother at all with a standalone app for the US intending to profit from the app alone. The chances are next to zero today IMO. So much saturation that no one will even know you are there. A handful of big players will take the overwhelming majority with only a relatively few dollars a year left for the rest, so some might break even, pay for a few dinners out this year. Most app owners will take a loss and that's a BIG most.
Now to your points:
1) You are thinking rather quantitatively. It indeed cost Apple millions, but out of $1 it's tiny friction, and out of $10 it's the very same friction of cost to maintain transaction. Not ten times more.
2) Be it, if Spotify app would cost a hundred dollars to get, then Apple makes thirty dollars profit on it and my thumbs are up. I wish Apple nothing but success!
3) A) Apple may allow such services to have in-app subscription payment (almost) free of charge, in exchange of the app itself being paid hard to get (that wishful I am). This way we're not cutting out of royalties. I would see fair to charge subscription in-app payment as an ApplePay transaction (some $0.00X ? but no way the percentile!).
My point is that subscription payment is just moving money from A to B. Should Apple cut 30% off our ApplePay transactions due to their state of the art infrastructure? : )
C) I have no idea. What Spotify is selling us, are their algorhytms, collections, information on pieces, their servers bandwith, and the App.. it's UI and functionality. But not the content, they just provide it and have to pay authors for it.
You know that Android users -- especially post-COVID where no one wants to touch a frikkin' POS device -- would FLOCK to ApplePay, and Apple would collect a couple of pennies on every transaction, i.e., many billions of dollars.
Let's see how long these stupid complaints last.
This, in response to a poster who was speaking about "malware" concerns. As many of us hundreds of millions of us are.
To which bunch do YOU belong: pro-malware or anti-?
anyway, 30% in the first year is probably a vastly better cost for a little start up to pay rather than try and do it themselves.
My sense is that, like the AT&T debacle, this is being triggered not by government watch dogs, but by private enterprise who want to take advantage of the secure and efficient systems Apple created for us, their customers. That is, they're using government to break into a business that is walled off to them. But, if and when government ever comes down on them, they'll start screaming Libertarian curses about government interference.