Judge questions Apple's commitment to App Store payment alternatives

Posted:
in General Discussion

A federal judge has raised concerns about whether Apple has overly complex barriers that could deter the usage of alternative payment methods in iPhone apps.

Ornate wooden courtroom with judge's bench, American flag, and two people in background.
Judge questions Apple's commitment to App Store payment alternatives



Judge Yvonne Gonzalez Rogers' injunction requires Apple to allow app developers to embed links to alternate payment systems. Its goal is to diminish the company's stronghold over app transactions, where commissions range from 15% to 30%.

The commission structure is a significant revenue stream for Apple and a focal point of contention regarding market fairness and consumer choice. The company's defense pivots on the grounds of security and maintaining a quality standard within its ecosystem, according to to a report from The Associated Press.

During a four-hour hearing, Judge Gonzalez Rogers frequently expressed frustration and skepticism while questioning Matthew Fischer, the Apple executive responsible for the iPhone app store. Her questions conveyed concerns that Apple's compliance efforts were more focused on protecting its profits than facilitating more accessible access to alternative in-app payment options, as her order intended.

She specifically pressed Fischer on whether Apple had intentionally designed its alternative payment methods to be overly complex and confusing for consumers. "Other than to stifle competition, I can see no other answer," Judge Gonzalez Rogers said.

Fischer asserted that Apple is adhering to the court's directive while also aiming to protect iPhone users from malicious entities online and ensuring that the company benefits from its investments in the app store and mobile software.

He explained that a new commission structure has been implemented, ranging from 12% to 27%, with the expected effective rate for digital transactions via alternative payment methods being around 18%. "We are running a business," Fischer remarked, indicating the financial considerations behind Apple's compliance efforts.

The discourse around Apple's App Store policies isn't confined to the US courts. Similar debates are unfolding globally, with Apple facing legal challenges in South Korea and the European Union over similar issues.

In South Korea, new laws have been enacted forcing Apple to open its App Store to alternative payment methods, reflecting a growing global impetus to regulate dominant tech enterprises more stringently.

Despite the legal challenges, many developers and consumers continue to support Apple's existing model, valuing the security and seamless integration it offers. The support underscores the complex balance between fostering an open competitive landscape and maintaining a controlled environment that ensures security and user trust.



Read on AppleInsider

Comments

  • Reply 1 of 15
    mattinozmattinoz Posts: 2,371member
    Working in design, I can say from experience it is never fun to work on the bad option that is only on the table because the client insisted on it and is the only group that can't see it as the bad option. 



    watto_cobraFileMakerFeller
  • Reply 2 of 15
    rob53rob53 Posts: 3,263member
    Why does Apple has to have an alternative App Store payment process? When I go to any store, I pay the store. I don't pay the manufacturer of an individual product. I just don't understand why people can't see this. It's Apple's product so you pay Apple. 
    mark fearingiOS_Guy80williamlondonwatto_cobra
  • Reply 3 of 15
    mark fearingmark fearing Posts: 427member
    rob53 said:
    Why does Apple has to have an alternative App Store payment process? When I go to any store, I pay the store. I don't pay the manufacturer of an individual product. I just don't understand why people can't see this. It's Apple's product so you pay Apple. 
    Exactly. And grocery stores charge shelving fees based on placement. Yet I haven’t seen the government go after that.
    iOS_Guy80williamlondonwatto_cobraappplesFileMakerFeller
  • Reply 4 of 15
    mattinozmattinoz Posts: 2,371member
    rob53 said:
    Why does Apple has to have an alternative App Store payment process? When I go to any store, I pay the store. I don't pay the manufacturer of an individual product. I just don't understand why people can't see this. It's Apple's product so you pay Apple. 
    Exactly. And grocery stores charge shelving fees based on placement. Yet I haven’t seen the government go after that.
    Or them blocking mobile phone data to avoid comparison shopping. 
    watto_cobraappplesFileMakerFeller
  • Reply 5 of 15
    jdwjdw Posts: 1,380member
    The following article summary say it all more clearly...

    Judge Gonzalez Rogers frequently expressed frustration and skepticism while questioning Matthew Fischer, the Apple executive responsible for the iPhone app store. Her questions conveyed concerns that Apple's compliance efforts were more focused on protecting its profits than facilitating more accessible access to alternative in-app payment options, as her order intended.

    "We are running a business," Fischer remarked.

    The judge is wrong.  Fischer is right.

    Apple has every right to earn profits, exactly as it has been doing.  Some Apple developers are simply wanting judges to take away more profits from Apple so those profits can be handed over to themselves.  These loudmouthed developers have been working hard over the past few years to convince judges like this one that Apple isn't deserving of all the profits Apple works so hard for.  There's nothing that is overly complex or confusing to the consumer.  If anything, intelligent consumers who hold AAPL stock are rewarded every quarter when Apple pays them a dividend.  The only confusing thing is why so many in seats of power want to shift profits from Apple to a select few loudmouthed developers.  It really doesn't benefit the consumer at all in the end.

    One thing rings true.  If you work hard to build a successful business, a lot of seedy people will target you.  Some in seats of power, like this judge, will harm the business in the name of consumer advocacy.  In the end, businesses that survive these never-ending attacks must fight with all their might.  But the more they fight, the more cost they incur, and the more consumers end up paying in the end. 
    NickoTTiOS_Guy80danoxwatto_cobrarob53appplesFileMakerFeller
  • Reply 6 of 15
    beowulfschmidtbeowulfschmidt Posts: 2,218member
    Her questions conveyed concerns that Apple's compliance efforts were more focused on protecting its profits than facilitating more accessible access to alternative in-app payment options, as her order intended.

    As if there were something wrong with profit. 🤦‍♂️
    iOS_Guy80watto_cobrarob53appples
  • Reply 7 of 15
    MesonMeson Posts: 11member
    rob53 said:
    Why does Apple has to have an alternative App Store payment process? When I go to any store, I pay the store. I don't pay the manufacturer of an individual product. I just don't understand why people can't see this. It's Apple's product so you pay Apple. 
    Exactly. And grocery stores charge shelving fees based on placement. Yet I haven’t seen the government go after that.
    The problem with this analogy is that you can go across the street to another grocery store. You have choices. With Apple, you just have their store and that's it.
    avon b7williamlondonLettuce
  • Reply 8 of 15
    danoxdanox Posts: 3,056member
    Her questions conveyed concerns that Apple's compliance efforts were more focused on protecting its profits than facilitating more accessible access to alternative in-app payment options, as her order intended.

    As if there were something wrong with profit. ߤ榺wj;♂️

    Nothing wrong with profit but this is a fight among the one percent never forget that.....

    The people have already chosen what they want Apple but the other one percent making the argument don't care they want a piece of Apple this fight isn't political.

    It funny Apples secret is out in the open right in front make a very good product and people will buy the other one percent just can't believe it. How many times have you heard over the years Apple should go for marketshare not quality or Apple should just release a product early just to be first?
    edited May 9 watto_cobra
  • Reply 9 of 15
    gatorguygatorguy Posts: 24,356member
    rob53 said:
    Why does Apple has to have an alternative App Store payment process? When I go to any store, I pay the store. I don't pay the manufacturer of an individual product. I just don't understand why people can't see this. It's Apple's product so you pay Apple. 
    Do they only accept their own special card for payment on the toaster? How about cash? Maybe some competitor's card? Personal checks? Can I buy the toaster from someone else if the store I want to buy from won't accept my preferred payment method? Can I even buy the toaster direct from the manufacturer? What about a seller not liking that store's sales tactics and pulling their products to sell elsewhere? 

    That's why the point you were making is a silly one. 
    edited May 9 Lettuce
  • Reply 10 of 15
    mikethemartianmikethemartian Posts: 1,415member
    rob53 said:
    Why does Apple has to have an alternative App Store payment process? When I go to any store, I pay the store. I don't pay the manufacturer of an individual product. I just don't understand why people can't see this. It's Apple's product so you pay Apple. 
    Unless something is being sold on a consignment basis the retailer and/or wholesalers buys items in bulk and assume the risk of reselling them so they get a large discount. So the manufacturer (or developer) gets to sell hundreds or thousands of units all at once.
    williamlondonwatto_cobra
  • Reply 11 of 15
    LettuceLettuce Posts: 12member
    rob53 said:
    Why does Apple has to have an alternative App Store payment process? When I go to any store, I pay the store. I don't pay the manufacturer of an individual product. I just don't understand why people can't see this. It's Apple's product so you pay Apple. 
    Let’s say I buy a camera in a store that requires me to pay monthly to access online features. In the real world we of course pay the camera developer directly through their website. On the AppStore, the same process necessarily goes through Apple’s billing system. Forcing Apple to let people pay outside of this system actually brings it closer to what has always happened in grocery stores. Can you see this?
    williamlondon
  • Reply 12 of 15
    LettuceLettuce Posts: 12member
    jdw said:
    The following article summary say it all more clearly...

    Judge Gonzalez Rogers frequently expressed frustration and skepticism while questioning Matthew Fischer, the Apple executive responsible for the iPhone app store. Her questions conveyed concerns that Apple's compliance efforts were more focused on protecting its profits than facilitating more accessible access to alternative in-app payment options, as her order intended.

    "We are running a business," Fischer remarked.

    The judge is wrong.  Fischer is right.

    Apple has every right to earn profits, exactly as it has been doing.  Some Apple developers are simply wanting judges to take away more profits from Apple so those profits can be handed over to themselves.  These loudmouthed developers have been working hard over the past few years to convince judges like this one that Apple isn't deserving of all the profits Apple works so hard for.  There's nothing that is overly complex or confusing to the consumer.  If anything, intelligent consumers who hold AAPL stock are rewarded every quarter when Apple pays them a dividend.  The only confusing thing is why so many in seats of power want to shift profits from Apple to a select few loudmouthed developers.  It really doesn't benefit the consumer at all in the end.

    One thing rings true.  If you work hard to build a successful business, a lot of seedy people will target you.  Some in seats of power, like this judge, will harm the business in the name of consumer advocacy.  In the end, businesses that survive these never-ending attacks must fight with all their might.  But the more they fight, the more cost they incur, and the more consumers end up paying in the end. 
    That Apple helped developers become visible doesn’t mean Apple deserves to receive money from the developers’ hard work forever. 
    Anyway this discussion is now revolved because Apple has to let developers access outside payment systems, and all over the world. 
    muthuk_vanalingamwilliamlondon
  • Reply 13 of 15
    rob53rob53 Posts: 3,263member
    gatorguy said:
    rob53 said:
    Why does Apple has to have an alternative App Store payment process? When I go to any store, I pay the store. I don't pay the manufacturer of an individual product. I just don't understand why people can't see this. It's Apple's product so you pay Apple. 
    Do they only accept their own special card for payment on the toaster? How about cash? Maybe some competitor's card? Personal checks? Can I buy the toaster from someone else if the store I want to buy from won't accept my preferred payment method? Can I even buy the toaster direct from the manufacturer? What about a seller not liking that store's sales tactics and pulling their products to sell elsewhere? 

    That's why the point you were making is a silly one. 
    The market has ONE point of sale cash register/device. Sure, you can use the credit and debit cards they let you use (not all cards as accepted at all POS stations) along with cash (not all the time) but they still only have the one cash register system. That cash register is “Apple” when using their stores. As for buying the same product or app, there are other ways to pay for those apps via the web not counting Apple stores. 
    williamlondon
  • Reply 14 of 15
    gatorguygatorguy Posts: 24,356member
    rob53 said:
    gatorguy said:
    rob53 said:
    Why does Apple has to have an alternative App Store payment process? When I go to any store, I pay the store. I don't pay the manufacturer of an individual product. I just don't understand why people can't see this. It's Apple's product so you pay Apple. 
    Do they only accept their own special card for payment on the toaster? How about cash? Maybe some competitor's card? Personal checks? Can I buy the toaster from someone else if the store I want to buy from won't accept my preferred payment method? Can I even buy the toaster direct from the manufacturer? What about a seller not liking that store's sales tactics and pulling their products to sell elsewhere? 

    That's why the point you were making is a silly one. 
    The market has ONE point of sale cash register/device. Sure, you can use the credit and debit cards they let you use (not all cards as accepted at all POS stations) along with cash (not all the time) but they still only have the one cash register system. That cash register is “Apple” when using their stores. As for buying the same product or app, there are other ways to pay for those apps via the web not counting Apple stores. 
    For your iPhone? Not unless Apple agrees to it.  I'll still buy my toaster elsewhere and put it in my own kitchen. My homebuilder or apartment owner has no say, and I don't care if Walmart would prefer I didn't.

    It occurs to me there's a near-psychotic disconnect at play.

    -Many of us rail against our government telling us what we can do.
    -We would not buy a home that a builder is in control of improving, no other contractor permitted without approval.
    -Many of us think it intrusive when a neighbor questions what we do in our home.
    -Even renters do not have to allow their landlord to walk into their rental without asking first, and no will mean no.
    -We wouldn't entertain buying a vehicle whose manufacturer insists that, legally, we cannot replace the seat covers. or install an aftermarket radio they didn't sell to us.
    -Who here would shop at a box store that only permitted us to use their own store card for purchases and no other?
    -There's been oh-so-many- complaints about Youtube disabling ad-blockers. I could summarize it with "who do they think they are, telling me what I can do? They think they should be paid? I'll show them!"


    Yet here we are as smartphone owners not only accepting but embracing restrictions on what we can do with our expensive devices. In effect the companies say "we don't care how much money you paid or hard you worked for it, your phone is still ours."

    Does it make sense that so many of us think it's not only fine but wonderful that we have a benevolent dictator in the form of a megacorporation? Take my money please, I am unworthy.

    A dictator of any kind is still a dictator.
    edited May 10 muthuk_vanalingamavon b7ctt_zh
  • Reply 15 of 15
    avon b7avon b7 Posts: 7,831member
    rob53 said:
    gatorguy said:
    rob53 said:
    Why does Apple has to have an alternative App Store payment process? When I go to any store, I pay the store. I don't pay the manufacturer of an individual product. I just don't understand why people can't see this. It's Apple's product so you pay Apple. 
    Do they only accept their own special card for payment on the toaster? How about cash? Maybe some competitor's card? Personal checks? Can I buy the toaster from someone else if the store I want to buy from won't accept my preferred payment method? Can I even buy the toaster direct from the manufacturer? What about a seller not liking that store's sales tactics and pulling their products to sell elsewhere? 

    That's why the point you were making is a silly one. 
    The market has ONE point of sale cash register/device. Sure, you can use the credit and debit cards they let you use (not all cards as accepted at all POS stations) along with cash (not all the time) but they still only have the one cash register system. That cash register is “Apple” when using their stores. As for buying the same product or app, there are other ways to pay for those apps via the web not counting Apple stores. 
    The 'market'? Or the store? 

    Either way, why would you want more than one cash register system?

    Cash is an alternative that exists to modem based systems. Obviously cash is a problem for digital online stores.

    The problem is where there is only one store you can use. Just one. 

    That is a nut the EU has just cracked. Albeit still pending final approval of Apple's solutions. 

    The judge raises her point very clearly:

    "Other than to stifle competition, I can see no other answer,"

    Apple’s response was laughable:

    "We are running a business" 

    That is irrelevant to the issue. 

    He might as well have said:

    "We are running a business and that business is to abuse our dominant position" but of course that would have played into the judge's 'stifle competition' idea. 

    Apple seems to be on a similar hook to that of the EU. 


    ctt_zh
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