> Apple is already pretty clear in its developer agreement [0] that the 30% commission is for "its services as Your agent and/or commissionaire" (Schedule 2 3.4), not for its services as a payment processor. They are contractually allowed to take the 30% fee out of payments collected, but merely using a different payment processor doesn't remove the obligation to pay them for their other "services as Your agent and/or commissionaire".
> Yvonne-Gonzalez was skeptical of the 30% fee during the trial, and in the ruling she was suspicious about Apple's justification of the commission, writing that "the 30% is not tied to anything in particular and can be changed," but did not order Apple to do so.
> It'll probably need to be another lawsuit since it's in the developer agreement.
Mind you, you can be blocked from doing needed Apple dev stuff (eg sign binaries, etc) until you've manually logged into your Apple account and clicked on the "I accept" button whenever they change terms.
This happened to us (sqlitebrowser.org) in recent weeks, as our CI just stopped working one day.
It turns out there was a new developer agreement that needed signing, and until I'd logged in and done that then Apples servers would no longer sign binaries.
There's literally no choice but to sign the things - regardless of terms - if you want your users to have software that runs.
>There's literally no choice but to sign the things - regardless of terms - if you want your users to have software that runs.
This gets to be a real nightmare in large organizations with multiple Apple Dev Portal admins, some of which may not even be authorized to sign legal documents on behalf of the company.
It’s a pain even in small orgs. There are some things only the account owner can do. You can make someone else an admin with every possible authorization, and if the person who set up the account is tied up or out of office, a whole dev team and testing can be stopped.
It's a massive pain when working with non-technical entities. Both professionally and in my side-business I have to do this and it's a horrible experience. I'll pay the damn $99/yr, just let me admin everything for the client. Tracking down the owner and getting them to login and click a button is harder than it sounds and it brings updates (even internal on TF) to a screeching halt.
EU already forbids consumer contracts from e.g. having the business force a change of terms (though ending the contract on disagreement might count as good enough behavior).
I suspect if the EU courts consider denying access to a website if they refuse GDPR permissions illegal they'll probably consider ending a contract based on not accepting new terms as forced.
To add, I'm not sure what legal basis there is for "you're charging too much". My only guess is filing against Apple and Google jointly for being a duopoly, but Epic has made it extremely hard to do something like this because of their existing jury trial against Google which gives a lot of concessions to third-party app stores in terms of functionality.
"You're charging too much" seems unlikely to be the actual argument presented though. Something along the lines of the scare message, still not actually allowing it to be handled via in app flow like a first party payment, and intentionally making a 3rd party choice potentially impossible to compete vs a 1st party choice by arguably hiding part of the processing fee margin in the overall fee would be the kinds of arguments I'd expect.
I.e. Epic's goal here isn't about whether Apple charges 99% or 1% rather it's about allowing other payment methods (theirs in their case of course) to compete with equal footing regardless what Apple wants to charge to do it through them instead.
I think the percentage charged is very relevant though.
And the fact the developer is to hide the fee and not list it on the receipt (subscription: $10, Apple tax: $3)
And the fact you cannot charge less for the same service if you sold it outside the platform (as you'd like to do as you didn't need to collect the Apple tax).
Honestly Apple does not act as an agent for companies that are known outside of the Appstore.
Netflix has an app, Netflix “is not” an app. Google Chrome, Airbnb, Epic, anyone who has spent marketing bucks promoting their service and providing a supporting app, was rather acting as a marketing agent for Apple than the opposite.
Apple’s new stance has no merit. We all understand it’s fair to participate in the funding of the Appstore, but it is a very bad defense.
The fact that your example has a lower apple tax than actual ($3.9 apple tax for $13.0 subscription, not $3.0 as you've stated in the example where a developer would itemize the price or tariff) and none of the people who replied to you noticed is very relevant, too, in the same context as your comment.
Is it still enforced/rule that you can't charge a lower price for a subscription outside the app store? Perhaps thats why streaming services like netflix and max still charge the same price but spend that "Apple tax" to pay other kinds of distributers/promoters like american express, mobile carriers, etc. to offer promotions, bundles or discounts. I think this is how the largest players in the app/subscription market are trying to penetrate the apple tax fortress.
Other streaming services fall into the same category.
If I recall, and from what I’m now able to find, Netflix didn’t lower their prices when they did that move. And remember they have added ads, are cracking down on password sharing, and prices keep increasing.
So while Apple’s cut is high, let’s not fall into the trap of believing that other big companies are somehow fairer and would totally pass the savings onto us. The overwhelming majority, if suddenly exempt from paying Apple’s cut, would keep charging the same thing and pocket the extra revenue.
> And the fact you cannot charge less for the same service if you sold it outside the platform (as you'd like to do as you didn't need to collect the Apple tax).
I thought that was expressly permitted - just that Apple Tax still must be collected:
> The link can mention the specific price of content on a website, or that content is discounted on the website from the App Store price. Comparisons are allowed.
Only in the manner that it is silly: Since Apple demands a 27% tax on a linked purchase, there is no room for an actual discount anymore. You can't charge less for the same service because you're required to pay Apple either way.
In that manner, this ensures you cannot compete with Apple IAP on price, and is hence still wholly anticompetitive.
Price gauging has a very particular meaning; it isn't simply a subjective "you're charging too much".
It is the practice of significantly increasing the prices of goods, services, or commodities during a time of crisis or high demand. This can happen when there is a sudden shortage of a product, like during a natural disaster, or when there is a surge in demand, like for popular concert tickets.
Characteristics of price gauging include:
- unconscionable prices
- taking advantage of a crisis
- limited supply or high demand
In the United States price gouging is illegal after a state of emergency has been declared.
Your tone is unexpectedly adversarial, and yet you're not disagreeing. I was simply answering gp's question about legal foundation of whether one can be considered to be "charging too much" under the law.
But overpriced goods and services are fairly common and accepted in the marketplace. Gucci handbags, houses, TurboTax, any product or service at a car dealership…
The 30% App Store tax does suck but I’ve never understood why it’s singled out. My best guess is that people hate platforms because it’s a 3-way transaction, which makes everything harder, including price negotiation. And also the service isn’t particularly unique, unlike the house, or a status symbol, unlike the Gucci handbag.
Ironically, if Apple made App Store publication more expensive but invite-only, like a high end Bugatti sports car, I don’t think it would’ve ended up in court.
30% is a lot, but it's particularly egregious when your one and only option is to pay 30% to Apple, who is doing everything in their power to make sure it remains your only option. Apple is a monopoly in this specific scenario, and setting the fee so high comes off as a "fuck you, try and stop me" kind of move.
"Google's lawyer highlighted Epic's willingness to pay the same 30% commissions to Sony, Microsoft, and Nintendo for transactions on gaming consoles previously in the trial."
They're kind of in a weird position because each of those companies are sticking them up, but because mobile isn't the bulk of their revenue, they can afford the legal costs of proceeding against Apple even if Apple retaliates against them in the meantime. Whereas if they got kicked off all the consoles they'd be out of business before the court case is over.
The argument that the consoles are subsidizing the hardware is just an excuse which has the causation reversed. They're not charging 30% because they have to subsidize the hardware, they're subsidizing the hardware in furtherance of their scheme to charge 30%. Without it they would stop subsidizing the hardware, but so what? People would pay less for games and more for hardware.
You might even pay less for hardware, because there would be no more reason to restrict games to a particular console and then you would only need one to play all the games, and Sony/Nintendo/MS would compete like (or be replaced by) Dell/HP/Lenovo.
The legal basis is that Apple is not privy to the transaction that happens outside. Purely on a data privacy basis, Apple cannot force a vendor to tell Apple what it does outside of Apple property. So any link tax that Apple wants to impose would have to be a fixed cost, and not a percentage of what happens in a different universe.
Doesn't sound interesting at all, as the two matters are unrelated.
Apple isn't charging for use of the iOS platform SDKs; the developer agreement is much more vague and weasely about what they're charging for, being the developer's "agent and/or commisionaire".
Per-sale licensing for a copyrighted (or patented) work is pretty normal and done in many industries. Apple's agreement doesn't specify any fees for licensing at all.
Moreover, if they would actually admit what they were nominally charging for then someone could create a third party implementation of whatever that is, people would want to be able to use that instead of paying the fee, and what is their excuse supposed to be then?
The case has been about whether preventing others from competing on pricing is anticompetitive not whether having pricing should be illegal in itself. Whether that's about the App Store or the SDK it would be extremely odd to suddenly expect Epic to instead try to argue it's the payment model that's the problem not the anti-competitiveness of only allowing 1 option.
Apple's justification seems counterintuitive, given that the commission only applies to app sales or in-app purchases. Since free apps don't pay anything, what is the commission for if not for "services as a payment provider"?
It's very normal for companies to charge some customers more than others based on their ability and/or willingness to pay. See: student, senior, and military discounts, SaaS with organization pricing vs individual pricing, etc.
>Yvonne-Gonzalez was skeptical of the 30% fee during the trial, and in the ruling she was suspicious about Apple's justification of the commission, writing that "the 30% is not tied to anything in particular and can be changed," but did not order Apple to do so.
She basically signaled that she wished she could do something about it but that Epic didn't challenge the 30%, they challenged the existence of a commission at all. Epic overreached and she can't just make up a judgement about things that haven't actually been brought before her.
> Apple is charging a commission on digital purchases initiated within seven days from link out, as described below. This will not capture all transactions that Apple has facilitated through the App Store, but is a reasonable means to account for the substantial value Apple provides developers, including in facilitating linked transactions.
> Apple’s commission will be 27% on proceeds you earn from sales (“transactions“) to the user for digital goods or services on your website after a link out (i.e., they tap “Continue” on the system disclosure sheet), provided that the sale was initiated within seven days and the digital goods or services can be used in an app.
So tl;dr: of that page is that Apple is saying "if you wanna link to your website, it can't be prominent (only a single text link with our language in our chosen placement) and we still get our commission."
Yes. Which the judge explicitly said they'd be entitled to do:
> As discussed in the findings of facts, IAP is the method by which Apple collects its licensing fee from developers for the use of Apple’s intellectual property. Even in the absence of IAP, Apple could still charge a commission on developers. It would simply be more difficult for Apple to collect that commission.
> In such a hypothetical world, developers could potentially avoid the commission while benefitting from Apple's innovation and intellectual property free of charge. The Court presumes that in such circumstances that Apple may rely on imposing and utilizing a contractual right to audit developers annual accounting to ensure compliance with its commissions, among other methods. Of course, any alternatives to IAP (including the foregoing) would seemingly impose both increased monetary and time costs to both Apple and the developers.
They did back when they were part of the developer program. If they can make their case that it is bad faith compliance as part of their original case before the Court goes “c’ya, we’re done here”, they might have something, but Apple revoked Epic’s membership for violating their terms in the developer program worldwide and at the conclusion of this lawsuit, Apple has not been ordered to reinstate it. So Epic can’t really argue that they have or will have suffered a harm under these new terms since they’re still in a position where Apple isn’t doing business with them and their lawsuit under which they did have standing is basically at its conclusion.
IANAL, but at face value, that seems like it would be, well, quite insane? To emphasize, I've seen plenty of insane stuff in the legal system, but if the argument is basically that Epic doesn't have standing because Apple won't let them be in a position where they could have standing, yet they generally offer that position (dev program membership) to the public at large, that seems like some sort of Catch-22-ish nightmare.
Again, little surprises me in the legal system these days, but I have to think courts would be very skeptical of an argument where a potential defendant controls the gates that decide whether a potential plaintiff has standing.
They're not in a position where they could have standing, though, since they were in that position and violated the terms of their agreement. The judge has not ordered Apple to reinstate Epic's account and the termination was found to be legal.
It’s not that difficult to follow. As I recall, and feel free to correct me on the chronology if I get something out of order, it went something like this:
- Epic pushed an update to Fortnite at some point to the App Store that would allow them to issue an update from the server side to enable a flag to offer Epic’s own payment processor where you could buy in-game currency from them instead of IAP. They then issued a server update toggling this flag and began advertising it to Fortnite players immediately.
- Apple removed Fortnite from the App Store for violating their policies.
- Epic files suit almost immediately and begins a PR and advertising blitz they had clearly prepped far in advance. In other words, picked a fight. Epic has standing for this suit because they have suffered a harm (Apple removed their app).
- After a grace period in which Apple explicitly laid out to Epic that they were risking their developer account, offered them time to get back into compliance and resubmit Fortnite to the App Store, they terminated Epic’s developer program account. This ended Apple’s business relationship with Epic.
- That lawsuit has now concluded. Apple took it on the cheek for the anti-steering provisions and has come up with a plan to comply which they are now implementing, all appeals have been exhausted, and Apple and Epic no longer have a business relationship.
(I’m missing some details, and the language is vague because I honestly can’t remember the full timeline of events and would rather be vague than wrong here, but that should the gist of it.)
Put another way, when you choose to be in a business relationship with Apple, Apple is also agreeing to be in a business relationship with you. Apple has not chosen to re-enter a business relationship with Epic, and has rejected Epic’s offers to do business with them. It’s a simple as that. So how can Epic now argue that they have standing for harm caused by Apple’s plan for compliance that affect the way they do business with developers in their developer program when they are no longer in Apple’s developer program?
Once the judge decides they’re done and there’s no more avenues of appeal or additional grounds for appeal, they’ll have no more standing than some random guy off the street who has never signed a single agreement with Apple, not even an iTunes ToS agreement. From what I gather, the Judge wants to be done here too, Epic has had their days in court with the full due process of law but there are other cases to be heard and Epic doesn’t get to hold up the courts any longer because they didn’t get the W they were looking for.
Somebody else, if they think they can do it, can try to have a go at Apple next, but even with the one L they took on anti-steering, I think without some new laws being written their entire business model just got a lot more legally resilient.
Now why is standing important? Put simply, in theory, you can basically file suit against anyone for anything, but if you didn’t actually suffer a harm, and you can’t convince a Judge in the jurisdiction in which you allegedly suffered the harm that you did, then they’re going to throw out your case. It’s a waste of the courts time if there’s no case to be made, you filed suit in the wrong jurisdiction, or you filed suit under the wrong provisions of the law under which you are arguing you suffered a harm.
> Apple has not chosen to re-enter a business relationship with Epic, and has rejected Epic’s offers to do business with them. It’s a simple as that.
Apple's public comments to the point have been that Epic is free to resume publishing under the developer program if they abide by the developer agreement, and Epic's CEO has stated they have no intention to do so.
Agreeing to the program terms would seem to put them in a position where they can either argue they have standing or that they have been caused harm, but not both.
Really? How recent is this? I was pretty much under the impression that Apple was done with Epic, but I would be happy to be wrong here. If they can’t come to terms, they can’t come to terms, but it would be nice if they could.
> Agreeing to the program terms would seem to put them in a position where they can either argue they have standing or that they have been caused harm, but not both.
Google got slapped in their case with Epic because they offered inconsistent terms, and promoted the idea of alternative app stores while taking business measures on the back-end to prevent them.
Apple gives much more consistent terms.
The speculation is that the 15%-after-first-year subscription change was something they had actually negotiated with Netflix in an attempt to keep in-app subscriptions, which they then rolled out to everyone rather than keep as a Netflix-only deal.
I'm sure Apple is not sad Epic is off their platform, because they are a bad partner. But they would still let them back under the same terms as everyone else, if they agreed to actually abide them this time.
Okay, but in your prior comment you made it sound like Apple had made public comments that they would allow Epic back on the App Store if they agreed to abide by their terms.
The issue is the last time I recall them saying that was before they terminated Epic’s developer accounts. That was a couple of years ago at this point.
So my question was not about any of that, none of it is new to me, my question was the following: how recently, to your knowledge, did Apple say they would let Epic back in the program? I tried searching around but I didn’t turn up anything recent, or anything from after 2021, but I don’t think Apple’s statements from before they terminated the relationship are applicable at this time, so I was hoping you could provide some additional information that I am lacking.
You missed where Epic was ordered to pay the 30% cut they "saved" when using their own payment processor. It was ruled this cut is completely legal. Now that Epic lost appeal with Supreme Court that ruling sticks.
Apple is likely asking for 27% cut for non-IAP w/Apple because they are saving 3% by not processing credit cards directly. They don't need devs complaining it's MORE expensive to use their own payment processor.
> So how can Epic now argue that they have standing for harm caused by Apple’s plan for compliance that affect the way they do business with developers in their developer program when they are no longer in Apple’s developer program?
Maybe they want to be the competing payment processor for third party developers who are in Apple's developer program, but don't have the resources to litigate against Apple themselves.
Eh well, that’s an angle for standing I suppose, but it’s a bit hard to argue a harm against a service they don’t actually offer. It’s especially hard to argue it before a Judge that already ruled that even under California’s anti-steering law, Apple has a right to collect their commission (that 12 or 27% after the 3 percentage point discount payment processing discount). Apple’s argument would then also be easy: Epic can offer payment processing if they want, that’s between developers and Epic, but Apple is still going to collect their commission no matter what deal Epic does with iPhone developers.
Maybe the argument would be that Apple is actually charging more than 3% for payment processing and is continuing to charge the difference even when you use a third party payment processor, to discourage anyone from doing so. Which could provide a new chance to raise the issue of their high fees, if this is the first time Apple has tried to declare a split.
And doesn't Epic Games Store already do payment processing for third party game developers? We know they want to offer the whole store on iOS but if that isn't yet possible then you do what you can.
> And doesn't Epic Games Store already do payment processing for third party game developers?
Yes, but they don’t currently offer it for iPhone apps and games. Just to reiterate, I think this is the best argument for standing I’ve seen, but it’s not an easy sell and if Epic does get into this business, it leaves them in a position of basically trying to undercut the 3 percentage points that Apple is valuing their payment processor at.
> Maybe the argument would be that Apple is actually charging more than 3% for payment processing and is continuing to charge the difference even when you use a third party payment processor, to discourage anyone from doing so. Which could provide a new chance to raise the issue of their high fees, if this is the first time Apple has tried to declare a split.
Judges don’t usually want to get into the business of setting prices for private businesses. Judge Yvonne Gonzalez Rogers has already determined that Apple has a right to collect their commission, and Apple has already had to define the value of what the payment processing portion of what that is in the Netherlands. ~3% is also generally what you can expect to pay a payment processor to begin with which is why it never, even from the beginning of the App Store, for people to interpret “30%” as Apple’s payment processing fee because even back then, that’s not what any reasonable payment processor charged. If needed, Apple could probably produce documentation showing what they pay a processor.
> Yes, but they don’t currently offer it for iPhone apps and games.
Isn't the whole premise that they want to be in that market and Apple precludes it?
> ~3% is also generally what you can expect to pay a payment processor to begin with
But that's kind of the point. If Apple is charging more than that for payment processing but then only refunding the ordinary amount when you don't use their service, it precludes anyone else from competing with them on price because the customer is still paying Apple the remainder of Apple's payment processing fee which isn't refunded.
The way to evaluate this isn't to look at what payment processors charge, it's to look at what the rest of what Apple ostensibly charges for would cost in a competitive market.
At which point the first thing you'd have to ask is, why is this still a percent of revenue? It is for payment processors because their fee has to account for fraud risk, which scales with the amount of the payment being processed.
Fees as a percent of revenue are quite unusual for providing any kind of hosting services or marketing or development tools etc. Even sales commissions are a percent of the sales attributable to the salesperson, not a percent of all sales including the ones via other sales channels.
Charging a percent of revenue is a strong indication of a monopoly rent because it's so hard for anyone but a monopolist to get away with it. Even when Visa does it, the fraud risk is more of a fig leaf and the truth is a big chunk of that amount is going to fund credit card rewards programs intended to get people to prefer credit cards to other payment alternatives and the credit card networks only get away with charging it because of the weak competition.
And in any event the balance of what Apple provides is typically extremely inexpensive. Development tools are widely available for free, search engines don't charge to be included in search results (and the fee can't be for search advertising when it's paid by everyone), the per-download hosting cost for an average-sized app on Amazon S3 rounds to zero cents. What are they doing that could explain 27% if it isn't a monopoly rent? Why is it 12% for smaller entities, when economies of scale go the other way?
> Judges don’t usually want to get into the business of setting prices for private businesses.
Which is why the better solution is to prevent this kind of tying of products and services together, so the prices can be set individually by the market instead of trying to disambiguate the price of each service when they're all tied together.
I think where this could work with Epic is if they can convincingly argue that the reason they no longer have a business relationship with Apple is because of the issues still under dispute in front of the court. No idea if they'd win that argument, but if standing ends up being a question, that's probably where they'd have to go.
Judge Yvonne Gonzalez Rogers already knows Epic no longer has a working business relationship with Apple—the developer account termination happened under her watch after all—and from the court’s perspective, that’s really more Epic’s problem. The trial is over. The appeals are exhausted. Stick a fork in this lawsuit, it’s done. The best Epic can do going out the door is try to spite Apple and piss in their cheerios a little more.
They can. They have little interest to. Very miniscule reward (the only ones winning in a class action are the lawyers... I am due for a solid $20 from Google though!) for a huge risk.
I'm repeating the words of another commenter, but most app devs aren't competing against Apple but other devs. They aren't billion dollar businesses that stand to benefit by trying to get a lower rev share.
But you've just described the dynamics of every single class action lawsuit. It doesn't matter that the individual devs have little interest, the lawyers have huge interest because winning a sizable class action for a lawyer is equivalent to a having a startup that hits.
The purpose of this class action would be to force Apple to change policies going forward (which would presumably give choices to developers that would allow them to save money and increase their profits). Any cash distributed in the settlement would be a bonus.
But I do agree that most developers probably wouldn't be interested. They don't want to stand up their own payment processor, or don't care to do integrations with a bunch of third parties, and tolerate the fees to use Apple's payments platform. And for many of these developers, their entire business is built on their relationship with Apple. Getting their developer accounts terminated would mean shutting down entirely.
I agree. As much as I disagree with the ruling the courts made, they definitely decided Apple was allowed to ban Epic for their store permanently, and so Apple's fees no longer are Epic's problem, legally speaking. Someone else would have to be willing to invest the funding on the legal battle, with pockets as deep as Tim's and the same willingness to go up against a Goliath... one that already won against Epic, and won't be bought out a special deal. Tim Sweeney was uniquely concerned with getting fair treatment for everyone here and that is shockingly rare in billionaire CEOs.
Yeah, as much as I defend Apple against the “they have a monopoly on the iPhone” crowd, this seems worse than the original restrictions. People have been buying stuff online for decades. There’s no new security issue at play here. Taking a commission from a company that’s already paying for payment processing can’t possibly be seen as reasonable.
How are they even going to attempt to enforce compliance. Is every store required to integrate with their payments API?
If they’re taking payments from the platform and it does turn out to be a scam, now their hands are dirty as well.
> ... this seems worse than the original restrictions.
This is worse from the original restrictions _specifically_ because the original restrictions were chosen to simplify from this sort of scenario.
If Apple says all app purchases and purchases of digital goods/services within the app are subject to the 15/30%, and those payments are always made through Apple, then Apple can check for non-compliance with the contract terms up-front (via App Store review) and then there are no separate books to audit, there is no commingling of revenue from in-app purchases vs independent web purchases or purchases made on other platforms, and so on. No need to audit the company's books, because they are using Apple's books.
It is hard to take Apple to task for charging too much, because the 30% ceiling and who pays it has effectively been the same since day 1 of the App Store. They have only created special cases to reduce that percentage (small business program, multi-year subscriptions).
Regulators can say that you can't block other companies from the "iPhone in-app payment for digital goods" market without being anti-competitive, but it is much more onerous to force a company to continue to provide a set of services (maintaining developer tools and SDKs, reviewing and signing binaries, providing backward compatibility in new OS versions) but for a fee schedule determined by regulators.
> Taking a commission from a company that’s already paying for payment processing can’t possibly be seen as reasonable.
Why not?
There's a decades-running assumption by some that Apple was a ridiculously expensive payment processor, only existing because they gave you no other choice than to use them for certain things (and outright forbade you from using them for others).
But Apple provides other services and access to developers per a financial agreement, and was doing payment processing to meter the revenue split.
The regulator argument is that Apple is blocking other companies from taking in-app revenue for digital services. Apple has now split that out in a few markets for companies willing to take on such complexity.
IMHO the only apps I think actually have benefited from the split are dating apps in the Netherlands - because quite frankly the way many dating services charge people is user hostile and/or discriminatory.
> Regulators can say that you can't block other companies from the "iPhone in-app payment for digital goods" market without being anti-competitive, but it is much more onerous to force a company to continue to provide a set of services (maintaining developer tools and SDKs, reviewing and signing binaries, providing backward compatibility in new OS versions) but for a fee schedule determined by regulators.
A rather obvious thing they could do is just prohibit the fee from being a percent of the developer's revenue. If Apple wants to charge everyone $1000 for a copy of Xcode and the iOS SDK, go to town. But then, people should be able to make competing developer tools and SDKs for iOS, and have competing stores where someone other than Apple is doing the reviews etc.
The main issue isn't even what they're charging, it's that they constrain you from using the alternatives that would induce them to charge less via competitive pressure.
>How are they even going to attempt to enforce compliance.
Per the judge's own words, Apple is allowed access to the company's financials and other information that would allow them to audit developers' use of third-party payment systems.
The relevant quote is below. She's not explicitly granting them that permission, she's saying that it would already be within their rights to make that the rule for participating in the App Store:
> As discussed in the findings of facts, IAP is the method by which Apple collects its licensing fee from developers for the use of Apple’s intellectual property. Even in the absence of IAP, Apple could still charge a commission on developers. It would simply be more difficult for Apple to collect that commission.
> In such a hypothetical world, developers could potentially avoid the commission while benefitting from Apple's innovation and intellectual property free of charge. The Court presumes that in such circumstances that Apple may rely on imposing and utilizing a contractual right to audit developers annual accounting to ensure compliance with its commissions, among other methods. Of course, any alternatives to IAP (including the foregoing) would seemingly impose both increased monetary and time costs to both Apple and the developers.
A "bad faith" claim essentially admits Apple is in fact in compliance.
It's the weakest objection you can have, and typically would only be sufficient to get relief in very, very specific circumstances where the unfairness could be proven (as intended). But this case involves broad policies for millions of developers, and it's perfectly compliant with permitting other payment processors.
So: there's almost no chance it would be "shot down" on those grounds.
How are they possibly in compliance? The judgement was about Apple's "steering practices", not just allowing 3rd party payment processing.
They're clearly making Apple's in-app purchases the preferential choice by prohibiting developers from using anything but a single plain text link, and scaring users with strongly worded warnings.
IIUC, the ruling said Apple has to allow devs to link to an alternative payment processor (i.e. Netflix can now link to netflix.com instead of the absurd rigmarole they had to endure before). Apple now allows devs to do this, with certain requirements (namely, a 27% commission). Since the court said Apple is allowed to collect a commission, those requirements don't seem to be (to this non-lawyer) illegal.
Are the strongly worded warnings untrue?
Absolutely no one should be surprised by the new policy. Every podcast I listened that discussed the matter when the judge handed down the initial verdict predicted this outcome.
If we’re talking about the details of the implementation, maybe.
If it’s about the commission that still needs to be paid, then no. That’s directly mentioned in the original ruling by the district court, a commission is due regardless.
I think the real problem is unlimited access to accounting books for any business that has an iOS app. This will affect free apps too, since they now have the potential to offer purchases outside the app store. (Obviously, strategic partners and FAANG are exempt.)
This is not particularly unusual for royalty licensing scenarios. As a matter of fact Epic's Unreal Engine EULA has a similar clause:
You agree to keep accurate books and records related to your development, manufacture, Distribution, and sale of Royalty Products and related revenue. Epic may conduct reasonable audits of those books and records. Audits will be conducted during business hours on reasonable prior notice to you. Epic will bear the costs of audits unless the results show a shortfall in payments in excess of 5% during the period audited, in which case you will be responsible for the cost of the audit.
In theory, perhaps, in practice Apple will only audit the developers that use the special entitlement.
Ironically, this is something that is bothering the appellate court as well if you read between the lines of their judgment[0].
They gently criticize the district court for both saying that developers should be able to link and sell outside the app while simultaneously saying that it’s undesirable for Apple to audit developers because it’s too cumbersome.
But the appellate court isn’t meant for do overs, just for when courts have erred in a significant way, so they only gently lament this, instead of doing something about it.
The difference between the Apple and Google lawsuits (from what I can tell), is that Apple didn’t exempt FANG and held them to the same terms as everyone else while Google made private deals with special terms for individual businesses (Spotify was one, IIRC) that were not available to all customers.
What exactly is bad faith about this compliance? The original ruling specifically called out that Apple would still be entitled to a commission even if people used alternative payment processors.
The main thing that feels icky to me is the hurdles to getting approved to link to alternative payment methods, but even if those are walked back that doesn't solve the main issue, which is that alternative payment providers were never a sensible solution to Apple's tax.
Apple has always argued that the commission is for the App Store, not for payment processing, and it is only collected through their payment processor as a matter of convenience. The policy announced here is essentially the same that they announced two years ago in the Netherlands in response to a similar ruling [0]. I'm surprised that anyone here is surprised that they're doing the same thing in the US.
I'd love to hear your reasoning for why there is a strong chance this will be struck down.
The court didn't rule against the Apple Tax, just on the monopoly for payment provider. I understand that many people misunderstand this point, but that does not change it.
The Apple Tax is very clearly tied to the app store though.
By trying to make it apply to apps purchased on other stores, they are essentially saying they have a right to add a commission fee to any transaction involving Apps that happens on an Apple Device, which seems like an overreach to me.
This whole lawsuit is because Epic wanted to avoid the Apple Tax by processing in-game purchases via their own payment provider, bypassing Apple App Store or Apple Pay or whatever other thing Apple forces everyone to use on iOS.
So Epic is now allowed to use their own payment processer for in-game purchases, but Apple is saying that they will still have to pay the Apple Tax for those purchases.
In this case the "store" is not an app store but an in-game store, sure.
> This whole lawsuit is because Epic wanted to avoid the Apple Tax
That may be, but that's not what the court ruled. The court ruled in favor of Epic on only one count of ten - specifically that Apple must allow other payment processors.
As long as the app was originally installed via the Apple App Store, it's still subject to the Apple Tax.
https://twitter.com/timsweeneyepic/status/174740814726057173...