[stirlo]

And what's wrong with this? If developers think Apples frictionless payment system is worth their cut then they'd still keep it. Otherwise consumers and developers now have choice. What marginal benefit does apple provide on the purchase of "v-bucks" to justify a 30% cut when processing costs are far lower?

[Otek]

Developers would stop offering Apple payment and only allowed to buy subscriptions and full products by their websites. It wouldn’t be cheaper for consumers, maybe on the beginning it would, as a PR move. But as a consumer I would lose this amazing Apple support, that allows me to return in few clicks game I didn’t like, subscription that didn’t offer what it promised and other services I was dissatisfied with. I would lose one interface to manage all my apps subscriptions, and had to give my credit card number left and right for every, even small app, I would want to try. No thanks

[cageface]

If the frictionless payment system was so much more appealing to users that it generated enough extra income to offset Apple's fess then devs would offer it. This is how marketplaces are supposed to work.

[simondotau]

It's frictionless in part because it's exclusive and universal. I don't even have to think about what the payment method is, or whether I should trust it, or whether I should choose another one. I'm not necessarily arguing for this, just pointing out that friction can be as much about uniformity as it as about choice.

And let's be clear, this isn't an argument over competing methods of payment, it's an argument about whether Apple should be entitled to a percentage of revenue for iOS app sales, regardless how they are sold, regardless where they are sold.

We should be mindful to keep this question separate from whether there should be more than one place to acquire apps, or whether it matters if the financial transaction occurs prior to downloading or after the app is installed.

[cageface]

If you don't like the payment options the app offers then you're free to choose another app that does. Isn't that the same justification Apple's defenders always give?

[simondotau]

To be clear, are you arguing that what matters is a choice in payment methods even if Apple takes a percentage either way, or is your argument that Apple shouldn't be entitled to a percentage of revenue from apps built with their tools and libraries?

If it's the latter, then Epic disagrees with you.

Epic's own business model says they're entitled to a cut of your revenue if you use their tools and libraries. They don't care what payment method you use. They don't care if you sell copies or sell in-game hats. If you make revenue, they're entitled to a slice of it.

(Yes, Epic does waive their fee for low revenue games. That's very nice of them, though in reality it's obviously a clever strategic move to lure game developers over to their ecosystem, in the hope that more breakout indie successes happen to be built with Unreal Engine. But that doesn't change the underlying principle: they would be entitled to it if they had asked for it.)

[cageface]

I don't think Apple should be allowed to both require that all apps on the phone go through their store and that they get a cut of all the business that goes through that store. Either allow other stores or allow other payment methods in the one store they do allow. Unfortunately Apple has recently made it clear they will use their control over their store to disadvantage competitors.

[onelovetwo]

Exactly, it would force apple to lower the cut they take to make it worth it.

[stale2002]

Of course developers would allow people to purchase through the app.

They would do this by transparently showing the markup to the user, and allowing the user to choose if they want to pay 30% more or not.

That seems like a pretty reasonable solution to all of this. Give users the choice to buy on the app, and have them pay the full fee if that is actually what the user wants.

[Silhouette]

One-sided consumer protections are great if you're a consumer who actually is being wronged. They're not so great for merchants when consumers who haven't been wronged abuse them, though, and that has a chilling effect that hurts everyone. Merchants will either push their prices up to compensate for the abuse, so legitimate customers end up paying the price for abusive ones, or simply not offer their products or services for sale in that channel at all if it brings more trouble and risk than it's worth.

[narism]

Is there evidence of this chilling effect in action on the App Store? What’s the restock overhead for returning a digital game?

[Silhouette]

Yes, you're talking to it. My businesses operate web apps but do not offer native iOS apps despite the occasional request. The hostile developer environment, high fees and expectation of ridiculously low prices simply aren't worth it in our view.

[narism]

That sucks but what does it have to do with "consumers who haven't been wronged abuse them"? Especially in the context of "Apple support, that allows me to return in few clicks game I didn’t like, subscription that didn’t offer what it promised and other services I was dissatisfied with".

I guess my point is that App Store metrics (total revenue, subscription revenue, average revenue per user, etc) continues to grow and maintain their lead over Google Play so the chilling effect can't be too bad.

[Silhouette]

For example, if Apple's terms require that merchants take the hit any time a consumer gets buyer's remorse and demands a refund, it's hardly surprising that some merchants aren't willing to accept that liability.

I suggest that in terms of metrics, Apple's App Store vs Google's Play Store isn't really the right comparison to see the chilling effect I'm talking about, because both mobile ecosystems have broadly similar dynamics. A more telling comparison might be something like iOS app developers vs. web developers offering SAAS. How many businesses that run successful SAAS websites charging subscription fees for access also offer an equivalent mobile app where customers can subscribe, accepting Apple's 30% cut and other restrictions?

[Silhouette]

Exactly. The typical problem with these huge, two-sided online marketplaces is that they are the big guy in any "negotiation" of terms with both sides of the market, which means they can effectively dictate the terms. And yet, they are just an intermediary. The only value they contribute is connecting the other parties and facilitating the transaction. In other words, they are the least important player, yet often they are taking a huge cut that inevitably pushes prices up for buyers and profits down for sellers.

I suspect the best way to bust those marketplaces and reduce them to making profits commensurate with the true value they offer is to prohibit them from handling any financial transactions between the two parties at all. Instead, let them simply get paid by the sellers on some agreed terms. If they offer enough value to justify the rate they ask, the sellers will pay it. If they are too greedy, the sellers will go somewhere else. And if they have a monopoly or monopsony position, they are subject to the same competition law as any other business buying or selling anything else in an exclusive or dominant position.

[simondotau]

Whatever your stance is on Apple's control over apps on iOS, it's a little bit beyond the pale to claim that Apple does nothing other than connect parties and facilitate the transaction.

Apple literally made the town in which their marketplace resides. They attracted residents to their town from the goodwill of their brand name, through the creation of a desirable product, and through substantial investments of marketing. People are continually attracted to this town because the crime rate is low and the city council's ordinances are suitable for the vast majority.

Apple literally built all of the existing buildings, provided anyone who wanted to participate in the economy with a garage full of tools, provided free and near-free training to anyone who wants it, and supplied people (again, for free) many of the basic raw materials which people used to build products.

Apple literally built the marketplace itself. They did an imperfect but not terrible job at minimising the number of outright hucksters. They made it so financial transactions were perceived as secure transactions[0], and that merchants' customers felt confident opening their wallets more often than in the adjacent town.

[0] This is more important than you remember. Ten years ago the concept of trusting your credit card through an app on your phone was new. By making the system highly trustworthy from the get-go, people's trust was rapidly won and rarely shaken.

[Silhouette]

Even if that is all true, having built the town and then prohibiting anyone else from setting up a marketplace is exploiting one monopoly you hold to benefit another, which is a big no-no in terms of economics and competition law. In your analogy, why are the townspeople better off because the town bans anyone else from providing shopping facilities for them?

[simondotau]

You assert that the town and the marketplace are two separate monopolies. I disagree and assert that they're a single entity, because they are not separable. Neither could have been created without the other. And their cumulative success is (in many respects) dependent on them being intertwined.

But even if you do insist on separating them, you don't get to arbitrarily bisect them wherever you want to suit your argument. The "retail" App Store is only the surface layer of the iOS app ecosystem which Apple has developed, it's certainly not the totality of it. There's the toolchain, APIs, documentation, training resources and many other things besides, which are all necessary parts to that marketplace's existence.

You might argue that Apple chose to give away their developer tools rather than license their use with a revenue share arrangement (like Epic does with Unreal Engine). You might argue that Apple charges for their tools with the $99 annual developer fee. I disagree that these are relevant. How Apple chooses to monetise their own work is up to them. For example, Apple could have instead defined their 30% revenue share requirement as a license condition for the use of their tools and libraries. The outcome for consumers and developers would be largely identical, but the "store monopoly" argument would make a lot less sense.

Even Epic themselves understand that developer ecosystems are valuable and it's fair for a percentage of top-line profit to go to them regardless how the app is sold or how payments work.

More broadly I must admit some occasional frustration by people who insist Apple must change, as this insistence is all too often paired with a somewhat arrogant paternalism, that they know better than I do what I should want. "Free market" is certainly the simplest argument to side with and the easiest one to wax lyrical about, but that doesn't automatically make it the best one.

I'm not going to spend too much time explaining why I think the iOS ecosystem would be worse if "free markets" were forced upon it, because unfortunately Hacker News debates on this topic generally see more people throwing down-votes rather than engaging with the debate. But fundamentally I see the difference of opinion stemming from whether you see the smartphone as a computing platform or an appliance bundled with systems administration services from the vendor. I think of my smartphone as an appliance, despite being a software developer by trade. But I'm glad that the market includes many brands of Android phone so that everyone who cares can have a choice.

[Silhouette]

You are arguing that the platform and the app marketplace are inseparable, but many other platforms for personal computing have not had such a store yet have been popular with both users and developers. They provided tools and documentation for developers, often for free, too. Plenty more have had multiple marketplace-like sources for new software, not necessarily provided by the same organisation that built the platform itself. From Windows to Linux distros and from Steam to the plug-in marketplaces for many large applications, there is no shortage of counter-examples to your position here.

[simondotau]

No, I am only arguing they are inseparable with respect to questions of antitrust. Obviously there's no technical impediment to iOS becoming a complete free-for-all where you can download and run any binary with root privileges using an innocuous shell script command piped from wget.

The question of what's been done elsewhere isn't relevant, because there are many elsewheres, each with their own origin stories. Most of them look more like iOS than macOS—the personal computer marketplace is something of an outlier when it comes to software distribution.