Apple not a monopoly but must allow alternate payment methods for apps, judge rules

12357

Comments

  • Reply 81 of 136
    dewmedewme Posts: 4,019member
    I'll take a wait & see approach on this to see how it unfolds in practice.

    I do suspect that some game makers like Epic will take advantage of this to allow its kiddie customer base to rack up massive charges on Mom & Dad's credit card by slurping up loot box types of slimeware embedded in new forms of highly deceptive in-game purchases. When this happens, and it will, at least Apple won't have to field all of the media scrutiny and blowback from Mom & Dad when they open their credit card statement and see the damage their cyber spawn has wrought on the family finances. Just a matter of time before this starts to happen, perhaps in as little as 90 days.
    radarthekatkillroyFidonet127watto_cobra
  • Reply 82 of 136
    Bosa said:

    the payment thing will not matter , 90 percent of developers will stay same because the cost of collecting your own payments will be much more of what Apple charges 
    Yeah, that math checks out. Stripe for example is 2.9% + 30 cents per successful charge. Apple charges 15-30%. lol
    killroyelijahg
  • Reply 83 of 136
    jimh2 said:
    There is no way you should be able to get away with paying $99 to give away in the App Store and then collect money from outside of the App Store. I'll equate it to being able to install a sign inside of Walmart directing the customer to your online store completely which completely cuts Walmart out. The world does not work like this. There are real costs to running the App Store, just like any other store. Of course many people do not realize what it costs to run any type of store including virtual stores which many assume are virtually free. 

    This will come back to hurt Epic and others, but it will not be in an obvious way. The biggest risk to Epic is that Fortnite is their pinnacle and interest in it is waning. Prior to phones gamers were a minuscule part of the population and irrelevant to most people. When phones became ubiquitous the group of gamers expanded exponentially and with that came large groups of people who are not serious gamers and never will be. The cool kids always lead the way and they can and do flip in an instant when something is deemed no longer cool. Epic will never have the growth they had with Fortnite again.
    Well you could probably pay people to walk around in Walmart wearing T-shirts with those advertisements.
    And Walmart can legally deny entry to such people, both into its stores and its parking lots.  

    I remember Best Buy doing exactly the same thing, with people going in the store and doing price checks against another store.
    watto_cobra
  • Reply 84 of 136
    Bosa said:

    the payment thing will not matter , 90 percent of developers will stay same because the cost of collecting your own payments will be much more of what Apple charges 
    Yeah, that math checks out. Stripe for example is 2.9% + 30 cents per successful charge. Apple charges 15-30%. lol
    Bosa’s comment is dumb, but it’s ultimately correct, because Apple isn’t going to just sit there and take it. They are going to get paid. Epic, and anyone else trying to avoid the App Store fees, which support the platform, isn’t going to be able to use it for free. If Epic wants to lose money by circumventing the App Store payment/fee system in order to collect data on their customers, they’re welcome to do so. But let’s get real — if they do so, Apple can expose them for the predators that they are. The judge commented on this in the trial. Competition works both ways.

    I’ve been drinking, so I’m not going to reread the revised article right now, but I gather Mike and Malcolm have been working on it.
    watto_cobra
  • Reply 85 of 136
    davidwdavidw Posts: 1,413member
    mubaili said:
    Apple could just ask any app that provides link to external payment must also support IAP, and the prices in the outside link must not be a better deal than what is offered in the IAP, and then drop the commissions to 10%, and call it a day. Would that stand in the court?
    That's the way it is now. No platform, not Apple, Google, Microsoft, Sony, Amazon or Nintendo, would allow a developer to sell their products that can be used on their platform, that can also be used on other platforms, cheaper on the other platform. And no platform owner would allow Epic to charge less, for playing the same game on another platform. If it were cheaper to play Fortnite on a Playstation, than on an Xbox, Microsoft would complain about it and force Epic to charge the same to play on an Xbox. 

    For instance, why would Microsoft agree to let Epic sell V-Bucks at a discount on their own website, that can be spent by players using an Xbox? All the Xbox players would just go online, using the Xbox none the less, to purchase their discounted V-Bucks and spend those V-Bucks while playing Fortnite on an Xbox. While bypassing Microsoft commission and yet be able to take advantage of what the Xbox has to offer.  

    When Epic advertised V-Bucks for iOS and Android at a discount, when purchased on their website, just before they were kicked out of the Google Play and Apple App stores, they had to offer the same discount on the Xbox, Playstation and Switch. They had to to appease Microsoft, Sony and Nintendo. Even though Epic still had to pay the 30% on game consoles.

    But iOS and Android players did not receive the discount if they purchased their V-bucks using iOS or Android. But Epic got kicked out soon anyway  and none of the already downloaded Epic Fortnite app could be updated to take advantage of the discount. So Epic gave these iOS and Android players matching V-Bucks that were already in their account, that can be used on other platforms. 


    https://www.theverge.com/2020/8/13/21366259/epic-fortnite-vbucks-mega-drop-discount-iphone-android/

    https://fortniteintel.com/epic-games-offer-free-v-bucks-to-mac-ios-users-following-apple-ban/36286/

    So even if Epic were to offer a discount for V-Bucks on iOS or Android, iOS and Android players would not really be getting a discount from Epic for not having to pay Google and Apple the 30%. Xbox, Playstation and Switch p[layers would also get the same discount, even though Epic is still paying the 30% there. 

    This is also true for nearly all subscription services and IAP, whose purchases are accessible on multiple platforms (by usually using a free app). Netflix, Spotify, Apple Music, YouTube, HBO, Disney, Hulu, etc. all cost the same, no matter which platform you close to pay from.

    But one can get a discount by purchasing discounted iTunes gift card and using iTunes to pay for them. (One can do the same on Android with discounted Google Play gift cards.). This includes the IAP of V-Bucks.

    https://www.yahoo.com/now/secret-way-discount-netflix-every-160513614.html


     
    edited September 2021 n2itivguywatto_cobra
  • Reply 86 of 136
    danoxdanox Posts: 725member
    Xed said:
    This is a foolish verdict and sucks for Apple and consumers, but it's only possible because the judge doesn't really see non-iPhones as real choices. At least that's something positive Apple can take away from this.
    So you think you're smarter than the judge? Go apply for her job.  Apple's a company, not your friend.  Sooner you realize that the better your life will be.  Apple got exactly what it deserved.
    Yes, and smarter than the current congress too. :)
    edited September 2021 watto_cobra
  • Reply 87 of 136
    Hoping for other companies to bring anti trust suits against Apple and a judge forcing it to change. Apple shouldn’t be able to hold on to their iphone customers on their purchase of other Apple products. AirPod or beats approach is fairer. Apple Watch not so. 
  • Reply 88 of 136
    I didn't see mentioned in the AI articles whether Apple can now revoke Epic's developer license, as it did last year, but with Epic at that time winning an injunction against Apple for that action being overreach at the time. So now that the case is over can Apple go ahead and revoke Epic's developer license?
    watto_cobra
  • Reply 89 of 136
    Beautiful is that we will be able to see how harmful is for Consumers!

    next step: right to repair & etc ! I want to be able to change the battery on my iPhone, the memory on my Mac Mini and etc. !
    you mean like I buy a car from Mercedes Benz but I have the freedom to put whatever has and repair it wherever I like? I’ve never understood why everyone thinks that Apple still owns the device you purchased? 
    mariowincoelijahg
  • Reply 90 of 136
    thttht Posts: 4,209member
    Ok, I read the judgement, except for the appendix and some footnotes, and my memory isn't that great anymore, but here are some comments:

    1. Nicely written document and easy to read. Please read it instead of relying on headlines, Twitter, or other media. There is a cute typo with CEO Steve Jobs where they expand the acronym to Chief Executive Order. That's ranked autofill right there. ;) Then, unfortunately, the remedy language against Apple's anti-steering guideline is simply atrocious grammar. Anyone who reads that has to do some mental interpolation on what they meant as it seems to be missing a colon, a comma and or has a hanging prepositional phrase. This should have been the most clearly written graph in the document, and it was the worst written. As best as I can tell, it means Apple is prohibited from barring developers from putting links (ie information, not a payment button) to outside payment options for IAP.

    2. The market construction from Judge Gonzales' court is pathological, references regarding its size is incorrect, and basically provided no line of causation to anything pertaining to the Court's ruling. The "digital mobile games transactions" market as described was really just poorly reasoned. If you need 3 adjectives to describe it, you are already in a deep hole. While you may think it is reasonable sounding, the document further narrowed the market definition to exclude the Nintendo Switch and exclude China. So, only Android and iOS, and not including China where surely they have a huge chunk of game paying customers. Moreover, they excluded upcoming game streaming models, and readily admitted the market is in a state of flux because of it. Then they refer it to be a $100b market. They describe it as a "transactions" market. That means payment processing to me. If so, that means the revenue for this market is somewhere between 1% to 3% of the 100b revenue number. Ie, $1b to $3b. That's the current size of the market, not $100b which is the amount of money that the payment processor transacts, not the actual value of the market. As far as I can tell, this market definition didn't have anything to do with the Court's judgments, and so, I'm unclear on what this had to do with anything.

    3. Epic definitively lost their gambit, as currently written in the judgment. What it was trying to get was 100% share of the impulse spenders, who comprise 90% of the money spent on games. The document went through the usual discovery where they found out that the games market is dominated by just a few big spenders. Not a surprise as is this is true in a huge tracts of human endeavors. The remedy is a link which provides sufficient friction to stop enough impulse buyers from buying $100 of digital game currency every few days. If a player has to stop a game, go to a website and push a buy button, that's 1 step too many and they'd have to pay Amazon for the 1-click buy button patent if Amazon so chooses to enforce it. So, no Epic Games Store, no built buy button in the game, and likely having to include Apple's payment methods in addition to theirs, if Apple lets them back in the App Store.

    4. Epic's lawyers seriously led Sweeney astray or allowed him to be stupid. The Court clearly saw Epic's contractual breach and PR actions were premeditated and they refused all efforts to be reasonable, including not even doing the easy action of removing the offending payment page, getting back in the App Store and putting the 30% in escrow while the court case proceeded. They were given a mulligan and chose not to use it. I think this led to Court's judgment of letting Apple keep them out of the App Store, and more critically, letting Apple remove Unreal International's (the game engine licensing arm of Epic that operates at near 100% margin!) developer license if they so choose. That puts a cloud over companies using the Unreal Engine for their App Store app, with their apps being threatened, and makes looking at Unity a little more tempting.

    5. Apple lost with their steering rules, which they already or were well on their way to changing given their court losses in East Asia. Here, the court made a bit of stretch. This wasn't based on a Federal, Sherman antitrust law, which Apple won on all counts, but a California anti-competition law. And here, the court went with the premise that it prevented customers from knowing that digital goods could be cheaper if paid outside the App Store. Then, in what is not clear to me, the Court said their prohibitions on Apple's anti-steering is applied nation wide. That is an interesting judgement. So, if Apple moves out of California and into a state where they don't have this law, Apple can continue apace? Seems a lot of people think this is a big win for developers, but as long as it is link to a web page, it's minor at best, and possibly nothing if Apple says they must offer Apple's payment method as well. So, it will depend on the details.

    6. Based off the Epic Games Store financials as revealed in the document, the minimum commission is somewhere between 15% to 20% for profitability. The EGS at 12% is a loss leader with Epic expecting profitability in 2023 (after 5 years) and the Court expecting profitability in 2027 based on Epic's data. Obviously dependent on projections of increasing popularity, and if things go wrong, it could be never. Like, Steam could steam roll them with their own branded hardware providing a mobile advantage. If the commission fee goes lower, it means an App Store will offer less features, less services, less, less, less, to be profitable. There was a bit of hubris in the court document, by the court, where they ruminated on what was an appropriate commission fee, what a store could do, et al. It's good that none of that made it to a judgment as doing business isn't easy, and with 100% confidence, I can say a court and a cohort of its academic experts will fail at least 99% of the time in any business adventure they may enter.

    7. There was a good amount of detail on what market share and market power a company needs to have to be considered a monopoly under Sherman Antitrust laws. Looks like the market share floor for a monopoly is about 65%. The court document ruminated in to pre-crime a lit bit by saying Apple is what was the word, pre-anticompetitive, pre-something. The word definitely venture into pre-crime territory and they seem very ready and willing to make rulings base on pre-crime. Pre-crime is an oxymoron as it implies a crime has been committed, even though it hasn't been yet, but it's going to. Obviously, that's plain stupid, and good that it was left out of the judgement. It was horrifying to see words implying as such.

    8. I've got thoughts on Apple's implementation of their App Store, but none of it involves anti-trust or anti-competition. Every agrees, including Apple, that the App Store should be better. Apple just needs to work up the gumption to do it. Problem is, their primary business isn't selling software or selling a software platform, and they don't care about it or have the time to care about it. That's their prerogative.
    watto_cobra
  • Reply 91 of 136
    danoxdanox Posts: 725member
    chelin said:
    Beautiful is that we will be able to see how harmful is for Consumers!

    next step: right to repair & etc ! I want to be able to change the battery on my iPhone, the memory on my Mac Mini and etc. !
    you mean like I buy a car from Mercedes Benz but I have the freedom to put whatever has and repair it wherever I like? I’ve never understood why everyone thinks that Apple still owns the device you purchased? 

    Tesla would be a better example or Porsche…..any high price worthwhile device can’t be fixed by any joe idiot down the street….
    watto_cobrasconosciuto
  • Reply 92 of 136
    lkrupp said:
    Beautiful is that we will be able to see how harmful is for Consumers!

    next step: right to repair & etc ! I want to be able to change the battery on my iPhone, the memory on my Mac Mini and etc. !
    Consumer: Hey Apple. I bought this app and it doesn’t work right. I want a refund.

    Apple: Sorry, you may have bought it in the App Store but you didn’t pay for it through the App Store. You used the developer’s gnarly payment system to get a discount.

    Consumer: What do you mean I didn’t pay you for it? I want my refund.

    Apple: Sorry, you’ll have to contact the company/developer directly. We’re out of this. You’re on your own.

    Consumer: Fucking Apple! The government needs to break you up! Okay, how to I contact the developer?

    Apple: As we told you, you’re on your own.

    Consumer: @#$^$%&$&(&%^&) I’ll never buy an Apple product again.

    I’d say that’s harming the consumer right there. Tell me this scenario won’t happen. 


    I pay at least Disney+, Barron’s, economist and NordVPN outside the AppStore. Nothing to complain about it. 
    I also use PayPal as much as possible to not have to share my CC a lot. 
    As such, your scenario can happen, but probably is worth the cost for many of us. All of us? Maybe not, as you say.

    next step is to be able to repair our devices and upgrade when needed/wanted, reducing environmental impact on the operation.

    the writing is on the wall that big tech should be regulated, what’s going on in China will happen on “our world” also. by example, addictive games are not good for children (or adults), even Apple said that when presenting Arcade.

    And: we will be able to buy the dips 
    elijahg
  • Reply 93 of 136
    davidw said:
    jcs2305 said:
    georgie01 said:

    So you think you're smarter than the judge? Go apply for her job.  Apple's a company, not your friend.  Sooner you realize that the better your life will be.  Apple got exactly what it deserved.
    So you believe that Apple should be required to allow developers to put their apps on Apple’s App Store for free and users download them for free and the developer can charge for the app outside of Apple’s App Store. So then Apple makes no money for providing a really easy place for the developers to distribute apps while spending money for the resources and infrastructure to maintain a secure App Store?

    Talk about a spoiled and entitled attitude…
    I have paid for Netflix and Youtube Premium outside of the app store for years now. Netflix premium is what actually made me aware of the 30% charge that Apple adds if you do the recurring payment through the app store. I was paying $12.99 a month , but I kept seeing the price advertised as $9.99? Eventually it dawned on the extra $3.00 was being put back on me because of Apple charging them 30% to handle the payment? I cancelled my subscription on my iPhone and set up my monthly billing through youtube's website. I have been paying $9.99 ever since.

    You can also sign up for Disney+ or their bundle with ESPN+ and Hulu on Disneyplus.com and pay them directly instead of through the app store.


    These services didn't steer me like Epic did by offering alternative payment options within the app, but the end result is still the same.



    That is wrong. One do not get a discount from Netflix (or YouTube Premium) for paying outside the platform. Whether paying on Android, iOS or a computer, Netflix charges the same.

    For one

    There is no $9.99 Netflix subscription plan. The lowest cost plan now is Basic and cost $8.99. Basic plan can only stream on 1 screen at a time and no HD. The Standard plan cost $13.99, stream on 2 screen at a time and has HD. The Premium plan cost $17.99  has 4K and can stream on 4 screen at a time. 

    For two

    $9.99 is not a 30% discount from $12.99. A 30% discount on $12.99 would be $3.90. So if you got a 30% discount, it should cost you $9.10.

    For three

    I don't think you can pay for your Netflix subscription on YouTube. And even if you could, you would not get a discount.

    For four

    About the only way to get a discount on your Netflix subscription is to buy discounted iTunes gift cards and use your iTunes account to pay for your subscription. But this has ended for new subscribers.

    https://runningwithmiles.boardingarea.com/a-trick-for-cheaper-netflix-has-ended-with-one-big-exception/

    I been paying for my Standard Netflix subscription for over 15 years now. I started when Netflix was only a mail order DVD rental business. And i've been paying using auto CC deduction since the second or third month. No discount given and no discount ever offered when they became a streaming service on mobile devices using their free app.  



     

    Back to school, Buddy: the mathematics of discount vs surcharge is a little more complicated than that 👀😳🥸


                  9,99

    +                30%

                  2,997

    --------------------

    =         12,987

    --------------------

    fastasleepsconosciuto
  • Reply 94 of 136
    Allowing links to external developer stores is fine. I would bet most mainstream users will opt for Apple's App store for convenience sake rather than saving 10-30% on an App. I wonder, will the AppStore auto update system be supported on external purchases? Or will the purchaser have to revisit the external site to get updates. Also surely the unsubscribe process for third party purchases will super simple <sarcasm>
    Time will tell if store security, price and convenience will have a material impact on Apple's bottom line. 
    Problem is, some developers won’t give customers the option to pay via the App Store.  They might take all in-app payments only via their external payment gateway.  And there will be an opportunity for someone to be that gateway outside the App Store for all iOS developers who want to take advantage.  A third-party payment gateway could slide in under the 30 or 15% Apple commission with a 10%, or 5% commission for handling transactions.  This will be great for developers, but will leave Apple with nothing for its work creating and maintaining the App Store, it’s work testing apps, it’s costs to host and provide bandwidth to download apps, and it’s efforts to design, develop and maintain the 150,000 APIs and associated developer tools.  Well, except the $99 developer fees.  Not sufficient to cover costs I’d guess.  
    From my reading of the “injunction” that is not what it says. It says Apple cannot prevent a developer from offering and including a payment system in addition to Apple’s IAP mechanism. This says to me that a developer can still be barred from the App Store for not including Apple’s IAP if they offer their own payment mechanism.

    It’s an anti-steering provision injunction which only stops Apple from barring apps that have external payment systems in addition to their own. It does not stop them from barring apps that have only external payment systems.
    ericthehalfbeejdb8167killroywatto_cobrasconosciuto
  • Reply 95 of 136
    cropr said:
    Bosa said:

    the payment thing will not matter , 90 percent of developers will stay same because the cost of collecting your own payments will be much more of what Apple charges 
    As a developer I can say it is the opposite.  Up to now I had to develop and maintain 3 interfaces to payment systems, 1 for iOS apps, 1 for Android apps and 1 (commission 2,7%)  for the rest: web apps, Windows apps and Mac apps.     As I see it now, the last one will be sufficient in the future.  Next to the lower commission, there is also a cost savings in development and also in administration, as I need only 1 reconciliation of the payments in my accounting system.

    I think you need to re-read the judgement. You will still have to accept payments from the store payment API as the injunction makes quite clear that the ability to take external payments is in addition to taking payments from the store API.
    jdb8167watto_cobrasconosciuto
  • Reply 96 of 136
    I noticed those points in the ruling too. I also noticed that 70% of apps are games, so by corollary 98% of the revenue comes from 70% of the apps.

    But the really interesting statistic was that virtually ALL of the game revenue came from only 10% of the total iOS user base! There’s quite a bit to unpack there, but the questions that I’d like to get answered are:
    1. How popular are games really? Yes they make lots of revenue but it’s only from a tiny minority of platform users.
    2. Do the other 90% have any games on their devices? I would guess so but they are likely free, ad-funded, or they just play the big games for free without buying the in game credits and stop when they have to start paying.
    3. Is Apple Arcade included in this revenue figure? If not, then subscription based gaming may actually increase the overall “paying” market size.
    4. Are games actually too expensive to play given only 10% (I assume those who can afford to drop 1,000’s on in game credits) actually pay to play them?

    Epic seem to think they can expand their market by offering a 20% discount on in-game credits, but I suspect the growth opportunity with their current business model is not actually as big as they think it is.
    watto_cobra
  • Reply 97 of 136
    I didn't see mentioned in the AI articles whether Apple can now revoke Epic's developer license, as it did last year, but with Epic at that time winning an injunction against Apple for that action being overreach at the time. So now that the case is over can Apple go ahead and revoke Epic's developer license?
    According to the judgement passed down Apple is cleared to revoke all developer licences for Epic including all of its subsidiaries and affiliates should it choose to do so as a consequence of one of Epic’s companies breaching the terms of its developer licence.

    The existing injunction has now expired. Whether Apple decides to do so is another matter given the prevalence of the Unreal Engine in games/apps unrelated to Epic directly.

    IMO, I don’t think Apple will retaliate in such a way as I suspect they are going to focus on meeting the conditions of the judgement. They have yet to say they will appeal and I doubt they will as they will need to counter Epics appeal and let’s face it, they effectively won all elements of the case except for the area we all knew they had shaky ground.
    jdb8167watto_cobra
  • Reply 98 of 136
    This is no tragedy. If external payment system link should be added as an option next to Apples in-app purchase, not replacing, and that option must be the same price, than it gives people choice to give it all to Epic, or to award Apple it’s 15% cut. If I was gamer, I would choose in-app purchase ; )
    watto_cobra
  • Reply 99 of 136
    davidwdavidw Posts: 1,413member
    rundhvid said:
    davidw said:
    jcs2305 said:
    georgie01 said:

    So you think you're smarter than the judge? Go apply for her job.  Apple's a company, not your friend.  Sooner you realize that the better your life will be.  Apple got exactly what it deserved.
    So you believe that Apple should be required to allow developers to put their apps on Apple’s App Store for free and users download them for free and the developer can charge for the app outside of Apple’s App Store. So then Apple makes no money for providing a really easy place for the developers to distribute apps while spending money for the resources and infrastructure to maintain a secure App Store?

    Talk about a spoiled and entitled attitude…
    I have paid for Netflix and Youtube Premium outside of the app store for years now. Netflix premium is what actually made me aware of the 30% charge that Apple adds if you do the recurring payment through the app store. I was paying $12.99 a month , but I kept seeing the price advertised as $9.99? Eventually it dawned on the extra $3.00 was being put back on me because of Apple charging them 30% to handle the payment? I cancelled my subscription on my iPhone and set up my monthly billing through youtube's website. I have been paying $9.99 ever since.

    You can also sign up for Disney+ or their bundle with ESPN+ and Hulu on Disneyplus.com and pay them directly instead of through the app store.


    These services didn't steer me like Epic did by offering alternative payment options within the app, but the end result is still the same.



    That is wrong. One do not get a discount from Netflix (or YouTube Premium) for paying outside the platform. Whether paying on Android, iOS or a computer, Netflix charges the same.

    For one

    There is no $9.99 Netflix subscription plan. The lowest cost plan now is Basic and cost $8.99. Basic plan can only stream on 1 screen at a time and no HD. The Standard plan cost $13.99, stream on 2 screen at a time and has HD. The Premium plan cost $17.99  has 4K and can stream on 4 screen at a time. 

    For two

    $9.99 is not a 30% discount from $12.99. A 30% discount on $12.99 would be $3.90. So if you got a 30% discount, it should cost you $9.10.

    For three

    I don't think you can pay for your Netflix subscription on YouTube. And even if you could, you would not get a discount.

    For four

    About the only way to get a discount on your Netflix subscription is to buy discounted iTunes gift cards and use your iTunes account to pay for your subscription. But this has ended for new subscribers.

    https://runningwithmiles.boardingarea.com/a-trick-for-cheaper-netflix-has-ended-with-one-big-exception/

    I been paying for my Standard Netflix subscription for over 15 years now. I started when Netflix was only a mail order DVD rental business. And i've been paying using auto CC deduction since the second or third month. No discount given and no discount ever offered when they became a streaming service on mobile devices using their free app.  



     

    Back to school, Buddy: the mathematics of discount vs surcharge is a little more complicated than that 👀😳🥸


                  9,99

    +                30%

                  2,997

    --------------------

    =         12,987

    --------------------

    That's not the way it's done. 

    If Netflix is charging $12.99 for their Standard plan, Apple commission would be $3.89. If Netflix were to save on the commission and wanted to pass that saving to the subscriber, they would discount the $12.99 by $3.89 and not by $3.00. This is not like a surcharge or sales tax that the buyer pays. It is a commission that is based on the selling price of the app sold (Without any tax added), that the seller has to pay.

    If the buyer had to pay Apple the 30% commission after paying $9.99 and the seller collected the commission and turned it over to Apple, then it will work out the way you stated. But that is not the case. The seller is paying Apple the 30% commission based on the  price the buyer paid for it (without the tax). Apple does not remove the cost of the commission that the seller might have added to the final price, when calculating their commission. 

    Look at it this way. If Netflix wants to make $9.99 from selling a subscription plan, after paying the 30% commission, they don't charge $12.99 ($9.99 + $2.99). If they charge $12.99, Apple commission would be $3.89 not $2.99. And Netflix would only make $9.09. That's because Apple's commission would not be based on $9.99 but on the final selling price of $12.99. Netflix would need to charge $14.27, in order to make $9.99, after paying the 30% commission. 

    It goes like this 

    x -.3x = $9.99           where x is how much they have to charge in order to make $9.99, after paying the 30% commission (.3x) on x.

    3.33 x - x = $33.27

    2.33x = $33.27

    x = $14.27 


    BTW- if this guy been paying his/her Netflix subscription with iTunes for years, then Netflix would only be paying Apple a 15% commission after 1 year. Why would Netflix be giving him/her a 30% discount for paying outside iTunes? 

     
    elijahgrundhvidwatto_cobra
  • Reply 100 of 136
    dewmedewme Posts: 4,019member
    I think the worst part of this deal for Apple is the 90 day deadline. I cannot imagine how Apple can roll out much of anything other than a quick hack in that time period unless they’ve been doing some preparation for this in the background.

    At the end of the day, as a consumer, I think the only change that we will see, and it’ll still be fairly uncommon, is that a number of Apps that are free to download with the lovely “In-App Purchase” tag will now have their own private payment system for what we all have come to love/loath - subscriptions. Instead of getting all of your subscriptions rolled up into your monthly Apple charge to your AppleID linked account, you’ll have to set up a separate payment for each subscription that goes to the third party. Doing so will mean handing out your personal and financial information to the third party.

    Is setting up a payment relationship with another vendor really that much of an inconvenience? For some folks no, but for others it’s just another opportunity for your personal information to be breached and another bill to keep track of. Personally, do I trust companies like Epic to safeguard my personal information with the same level of trust as Apple? No, but that’s just me.

    I’ve also been doing everything in my power to simplify my life. Consolidating subscriptions into bundles like Apple One make my life a little simpler. Having all of my third party app subscriptions rolled up into one billing cycle that hits my credit card predictably on cue is reassuring, as is knowing that if I have a billing problem, I can go to one source to obtain support to resolve the issue. 
    watto_cobra
Sign In or Register to comment.