To everyone that is supporting Apple's position, let me run this hypothetical by you:
You buy a Nespresso machine on Amazon. Some amount of the purchase price goes to Amazon for facilitating the transaction and delivering it to you, some goes to Nespresso for actually making the device. Cool. Then you get a pod subscription from Nespresso – let's say there is a touch screen on the coffee machine itself where you enter your details to subscribe. Now, Nespresso ships pods to your house every month. Amazon then says that because the machine was originally bought on Amazon, they are entitled to a 30% cut of that ongoing subscription price, even though the subscription is neither facilitated nor fulfilled by Amazon.
I think we can all agree that would be ridiculous.
This looks like a great analogy, but it isn't. The app is still running on an Apple platform, with updates going through Apple infrastructure. It's a completely different situation.
Don't get me wrong, this statement isn't in support of Apple, I'm just saying that your analogy is bad.
The analogy holds. If I need a replacement part for my Nespresso (app updates) and I order that on Amazon, then Amazon gets their cut for facilitating and fulfilling the delivery of this replacement part. That's reasonable, because you are taking some portion of proceeds from a transaction that you have a hand in.
What is not reasonable is for Apple to take a cut from transactions that do not need to involve them. If Epic sells hats in their own online store and don't use Apple as the payment processor, this costs Apple nothing. No bandwidth costs, no nothing.
If Apple wants to charge Fortnite whatever it costs to distribute Fortnite updates on the App Store + 30% on top as their fee for delivering that service, I am 100% sure Epic would be OK with that.
This is not what they are doing.
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Here's an extreme hypothetical to illustrate how Apple is using their monopoly position for rent-seeking:
Imagine you have an app that is downloaded 100 times in the App Store. It is not marketed, advertised, other otherwise promoted by Apple.
In total, it costs Apple pennies to provide this service to your customers. You never push an update to the App Store – it is always on version 1.0.0. You are already paying Apple $99 per year for the privilege of your app being in their App Store, so they're pocketing a tidy profit.
Now imagine that you offer a subscription service, which all 100 customers who downloaded your app are paying for. This subscription costs $100 a month.
Apple is not involved in the delivery of this subscription at all (except in the delivery of the original app, which you are already paying $99py for), but Apple wants to take $30,000 a month from you, for something that in total cost them pennies.
If that's not ludicrous rent-seeking, I don't know what is. Obviously this is an extreme, totally made-up example, but the entire point is that it is bad to insert yourself into a transaction where you are not providing any added value – charge at the point where you are involved. Do not use your monopoly position to force yourself into transactions where you really have no business being.
I fail to see how this is a problem, honestly. A part of choosing to distribute to the iPhone platform is making sure all transactions related to the product you distribute go through Apple.
I don't see anybody complaining about Sony taking cuts and requiring transactions go through the PlayStation Network, even though purchasing things for Fortnite there does not in any way, shape or form need to involve the PlayStation Network to be properly facilitated.
If developers want to build out a system to accept microtransactions on their game without going through PSN, I think they should be able to do that too.
I do not think marketplace providers should be able to exert monopolistic pressure on developers that use their marketplace, full stop. I think it's anti-competetive and bad for the entire digital ecosystem as a whole.
I explicitly stated that I wasn't siding with Apple, because I expected exactly this response. Your analogy can be bad without you being wrong in your opinion.
Ok, so to make the analogy near perfect, we need to add in the detail that Amazon doesn't allow Nespresso machines with this touch screen + subscription service to be sold on Amazon at all if Nespresso doesn't use Amazon to process the payment. But that is exactly how Amazon would require a 30% cut for a service they have no hand in. I wouldn't be happy about Amazon saying you can't sell a Nespresso machine with that feature on Amazon. It would be a ridiculous thing to do.
Epic providing digital currency to their users costs Apple literally nothing. Apple does not participate in it. If Apple wants to charge Epic for whatever it costs them to distribute Fortnite to users (e.g. bandwidth costs) then power to them.
> Epic providing digital currency to their users costs Apple literally nothing
It's important to understand that this definitely isn't true. It probably doesn't cost them (anywhere near) 30%, but fraud, handling upset parents, providing a ubiquitous gift card system, etc etc. does have real operational and monetary cost. It's not just basic payment processing
No, the whole point is that Epic wants to be able to handle payments themselves. Their app, as they submitted it to the App Store, does not have Apple involved in the purchasing of digital currency at all. And Apple is saying there cannot be an app that doesn't have them as the payment provider.
Just like if Amazon said Nespresso couldn't sell a machine on Amazon that doesn't use Amazon as the payment processor when handling pod subscriptions.
It would be even more accurate if Nespresso gave away free machines on amazon that could only heat water, expected Amazon to advertise them, ship them free to prime customers and handle returns and customer support, and also insisted that pods required to do anything with the machine were exclusively available direct from Nespresso.
Though, in the real world of physical goods Amazon also sells generic pods from all sorts of manufacturers, which Nespresso can’t prevent. Yet Epic demands that they are the only company that can sell hats on Fortnite.
Epic isn't demanding anything. Apple's involvement has nothing to do with who can sell hats on Fortnite.
Epic also isn't "expecting" Apple to do all that. Apple does all that as part of paying for an Apple Developer License. If their costs are not being recouped by that, they should charge what it's actually costing them to deliver those services.
They should not be charging 30% on transactions they don't need to have any hand in, and the only reason they can is because they are using their monopoly position to force participants to use them as the payment processor.
The point about hats is where do you draw the line on restricting access to a market? When does Fortnite become a platform that locks out hat designers or is perceived as taking too large of a cut from the hat store?
If Apple did enforce fee-for-service on developer accounts you’d see HN light up in a way that would make this thread look tame in comparison. Consumers benefit massively from free and open source apps getting access to App Store, APNS, Game Center, etc. This makes the platform more valuable for giant companies like Epic.
Perhaps you think sidewalks should be reserved for those who pay property taxes? Or that people should make per-step micropayments? Or tourists and children should require credits to access parks?
> … the only reason …
A statement like this is bound to be false. Ecosystems are complex.
Apps are different from hats. Apps for iOS would exist without the iOS App Store, as evidenced by the fact that people were literally creating apps for iOS before the App Store existed. Hats cannot exist without coordination from Epic.
Sidewalks and parks are a public good... the App Store is not.
Why isn't your landlord getting a cut of those pod sales? I mean they're providing the foundations and the kitchen counter the Nespresso is standing on, without your landlords foundations you wouldn't even be able to plug it in.
But the App Store has free apps where the only revenue is up sell. Fortnite, for example.
Why should Apple be required to expend any resources at all, to facilitate something where they would get literally zero revenue, but the developer would get millions?
You buy a Nespresso machine on Amazon. Some amount of the purchase price goes to Amazon for facilitating the transaction and delivering it to you, some goes to Nespresso for actually making the device. Cool. Then you get a pod subscription from Nespresso – let's say there is a touch screen on the coffee machine itself where you enter your details to subscribe. Now, Nespresso ships pods to your house every month. Amazon then says that because the machine was originally bought on Amazon, they are entitled to a 30% cut of that ongoing subscription price, even though the subscription is neither facilitated nor fulfilled by Amazon.
I think we can all agree that would be ridiculous.
That is what Apple is doing.