[chipotle_coyote]

Folks here on HN are (understandably) leaping on the notion that this will force Apple to allow other app stores, or sideloading, or something else that keeps the App Store from being the exclusive distributor of iOS apps. But, a few notes that are important to keep in mind:

(1) Apple is the petitioner here. They're the ones asking the Supreme Court to make a ruling, specifically on whether the complainant has the legal standing to bring this case at all.

(2) If Apple loses at the Supreme Court, this just gets sent back to a lower court. It's not going to force Apple to do anything at this point.

(3) Most importantly, there's no guarantee that if Apple does ultimately lose that the remedy will be opening the iOS ecosystem up to other app stores.

The complaint in Apple v. Pepper is literally that Apple's lock on app distribution drives up app prices. If app prices are not being driven up by that lock, the argument has a very good chance of falling apart.

This is not a case about what restrictions Apple puts on the app store , about software or device freedom, and it's not even a case about whether Apple's mandatory 30% cut is "fairly priced" by whatever definition of fair you care to use -- the case as filed literally hinges on the claim that iOS app prices are artificially inflated by that cut. And I think that in a world where people have been trained to think that $4.99 is a crazy high expensive price for software, that could be a real tough case to prove.

[jsjohnst]

This isn’t an Apples to Apples comparison (no pun intended), but all the folks who think 30% is high, I question if they’ve ever sold physical goods via a store/marketplace.

Say I want to sell my sprocket I designed, built, packaged, and marketed 100% on my own on Amazon. Anybody want to guess how much Amazon takes? I’ll give you a hint, many companies selling on Amazon would kill for 30%.

Think it’s better in brick and mortar land? Try again! Say you go buy a new TV from a major electronics store like Best Buy. Their effective margins are usually 50% or more. It gets even worse in other categories. Take shoes for example, in some cases 80% of the purchase price goes to the middleman.

Let’s also not forget that getting into the App Store, while us developers (myself included) whine about it like it’s the worst abuse, is far far easier than retailers like Amazon, Walmart, etc. Of course staying in the store is important too, talk to any businesses who were pulled due to low sales volume for their not even niche product. When has Apple really done that?

In conclusion, do I think what Apple is doing is fair, maybe, maybe not. I do however wish everyone would get out of their bubble though and realize as much as we like to complain, it’s really been a disruption to what was the status quo before.

[rasteau]

What you describe could also be used to argue that prices are higher than they would be in a competitive market, i.e., that for the 30% ratio it's not that the numerator is too small, but that the denominator is too large.

[cm2187]

When is the last time you bought a software in a brick and mortar store? Every software is now downloadable, including video games. There are no cost other than hosting.

I don't think the "it could have been distributed at much greater cost with a horse carriage a century ago" argument is very compelling.

[jasode]

>There are no cost other than hosting.

If one is trying to sell non-free software, it requires a payment processor like PayPal, Stripe, DigitalRiver, or paying a bank a monthly maintenance fee for a full-blown merchant account to accept credit-cards. A cursory google of Steam says they charge 5% fees for video games. They all have fees based on a percentage of the sales price. Even something outside of traditional payments infrastructure such as Bitcoin has fees.

If the cost is truly $0 like a sibling comment mentioned, how are people selling software for money without paying any fees to any intermediaries?

[cm2187]

Agreed. Add hosting and the fair cost is probably in the region of 7%. That's still very far from 30%.

[jsjohnst]

When was the last time I bought software in a brick and mortar store? It's been so long I can't remember. I have bought software on Amazon in the past year though.

That still doesn't negate my point though, Gamestop shelves are covered in video games, electronic stores sell software of all types. Do you legitimately think they would be on the shelves if they didn't sell? My root point was to step outside of your bubble and understand that many folks have different experiences than you. In those less optimal environments for selling software, the markups for the store are far greater than the 30%. Do I think the 30% is warranted? I don't have the financial figures to say one way or another (and neither do you), but the fact many think 30% is exorbitant and it should be 3-8% is a bit absurd and really isn't reflective of reality for the costs involved.

[cm2187]

Well, keeping in mind the reason why video games are still sold in physical format is that they require enormous binaries which downloading is very problematic for people in remote locations (plus it gives a physical object to wrap for a gift). But even that is going away. There are rumors of a disc-less xbox [1]. This binaries size problem isn't really relevant to anything that is meant to run on a smartphone.

https://www.thurrott.com/xbox/192184/microsofts-building-a-d...

[jsjohnst]

There's games in the App Store which are > 2gb in size for initial download. It is very much still a problem for folks not in cities in the US.

[chipotle_coyote]

I think it's worth asking whether Apple's 30% cut is too high, and worth asking whether they would still be able to have that cut if there were official ways to load commercial apps onto iOS devices other than the App Store. (By "commercial" I'm explicitly excluding enterprise software and TestFlight.) But I don't think it's the question that's going to be answered by this court case, whether or not that was the original intent of the plaintiffs.

[Jyaif]

Like you said, your comparison is worthless. A better comparison is the web, where the fee is 0%.

[jsjohnst]

Guess I should’ve expected such a quality response to my factual and detailed comment. But I’ll bite.

0% you say? What about the overhead of hosting the site? The cost to develop it? Drive traffic to it? Credit card processing fees? Managing fraud on payments? Etc etc.

There’s no such thing as a free lunch. If you prefer one avenue’s cost basis over another’s, feel free to use it. But don’t make bogus claims to justify your choice.

[Jyaif]

Whether you like it or not, the fee is 0%.

Regarding the other costs:

> What about the overhead of hosting the site?

Hosting a static bag of bytes (e.g. a mobile app) costs nearly nothing. Just the cost of apple developer program (99$/year) would cover a huge amount of downloads.

> The cost to develop it?

Those are the same when developing an iOS app, except that with the web you would be able to target a much bigger market... if Safari was not actively slowing down the web.

> Drive traffic to it?

Breaking news, you also have to drive traffic to your app.

> Credit card processing fees? Managing fraud on payments?

Other people mentioned 2.9% on stripe. And if you are feeling adventurous, nothing spots you from creating your own payment system.

[auslander]

> Folks here on HN are (understandably) leaping on the notion that this will force Apple to allow other app stores

I'm leaning in quite opposite way. Apple enforces security and privacy policies of its store apps, which is main reason why it is much safer to use than Android.

As for app prices, Apple Store is an open competitive market, no apps are restricted to compete. I see the point being moot. Adtech industry would love to see Apple lose though, don't let them.

[auslander]

Apple cut the oxygen to Adtech business models.

iOS Apps have no way to identify user's devices, apps can only store two bits of info locally, DeviceCheck. Location while using the app option, hello Android? :)

Safari's ITP 2.0 clears tracking cookies in a way, that no tracking is longer possible. Adtech not happy.

[Tsubasachan]

And yet Apple restricts ad blockers... Same as Google.

[auslander]

It does not. I have Firefox Focus Content Blocker enabled in iOS Safari, and other Content Blocker apps for Mac Safari.

[mmebane]

They have banned the use of VPN APIs to tunnel traffic through a filtering proxy. Apps such as AdGuard Pro used to use this to perform whole-device adblocking.

[auslander]

VPN APIs is for VPNs, not ad blocker apps. Apple is “sandboxing” applications, so apps have limited ability to interfere with each other or alter the overall workings of the phone. Which is a good thing, one app should not see other app's traffic.

[daveFNbuck]

> no apps are restricted to compete

Apps are restricted from competing on price. I can't release a 79 cent app to compete with a similar 99 cent app.

[jsjohnst]

At some point the race to the bottom is a losing battle where no one wins. Apple decided to put that bottom point at 99 cents.

[daveFNbuck]

So you agree that Apple is using its market position to increase prices compared to what they would be if apps were available from other sources?

[chipotle_coyote]

I'm not convinced that "Apple's refusal to let developers set app prices at a more granular level is an unfair predatory practice" is a slam dunk argument.

Additional later note: the actual court case here does, in fact, argue that requiring that all app prices end in 0.99 means Apple is dictating pricing terms, which on some level is of course absolutely true, i.e., it's Apple's fault I can't price my app at $1.49, or $3.33, or whatever. But (1) that still doesn't prove that the 30% cut is harming consumers, which is what American antitrust law is relentlessly focused on, and (2) if that's the crux of the argument, it can be addressed simply by removing that restriction. It can probably be met even if Apple says "you can price your apps anything you want to, but if your app is not free, we're going to take a minimum 29¢ cut."

[daveFNbuck]

I'm not saying it's a slam dunk argument. I have no opinion on how this case will go because I don't know much about the law. I just think it's pretty clear that setting a 99 cent price floor increases the price of some apps.

[auslander]

Free apps are most likely to sell your data. Don't be a product, or if its your app, charge decent price and don't sell user's data :)

[daveFNbuck]

That may be good advice, but it has nothing to do with whether price controls restrict competition.

[ender89]

The difference here is that the 30% cut is on everything digital sold through apple's payment system - including in app purchases. Amazon has removed in-app purchases from it's kindle and comixology apps because they'd owe a 30% cut to apple. Make whatever justifications for the app store purchases you want, it's the digital content from other stores (video, music, books, etc) that will bring about the anti-trust issues. Add to that the fact that apple is the only one restricting users to their app marketplace and you have the recipe for an antitrust lawsuit. Microsoft got hit with antitrust because they included internet explorer by default, how apple has only allowed one source for applications for ten years and never been challenged on it I will never know.