I am of the opinion that the only fair option is to allow 3rd party stores with the same permissions as the official app store.<p>Apples curation isn't (as they suggest) preventing malware, theft of information, etc - this if verifiably false given recent history with apps like tiktok stealing clipboard content. The ability to change content of payment screens post-approval (as epic have just done) also means that curation isnt stopping apps from potentially injecting phishing, etc, either. In short, they are just choosing what they like - just as any 3rd party store could do.<p>The security comes from the sandbox (and surrounding permissions) - not from the curation.<p>Jobs originally said that the aim of the 30% was to cover costs of running the store. It is evident from the MASSIVE profits that this is no longer the case.<p>The size of these app marketplaces (I dont just mean apple) make them markets in their own right - its about time they were recognised and treated as such.
Note how many sources wanted to stay anonymous "for fear of upsetting Apple".<p>Apple knows they can end businesses with the click of a finger. That's what they tried to do by ending the dev license for Unreal Engine. And Apple wants everybody to know that they know. I'm almost certain that the Unreal Dev license revocation is a result of a similar email chain as what happened to Kindle - <a href="https://www.macrumors.com/2020/07/31/emails-apple-blocked-kindle-purchases/" rel="nofollow">https://www.macrumors.com/2020/07/31/emails-apple-blocked-ki...</a> - execs just thinking of a way to punish the company.<p>This, for me, is the biggest monopoly argument. Too much business success is hinged on Apple being happy, and they start to abuse this power more and more by tightening (the interpretation of) App Store rules like requiring in-app purchases etc.<p>IMO Epic is not the best company to challenge Apple in all this, but in American judicial system Epic may be one of the very few companies that can afford this lawsuit.
One idea I don't see discussed is that the App Store model is a disincentive for Apple to come up with better sandboxing and security.<p>Apple is in fact uniquely positioned to introduce a better sandboxing model. They control most of the stack, crucially the CPU and the build toolchain, not to mention the PL. They could, were they not so reliant on the App Store auditing process, make it less likely for people to develop malware and privacy-invasive software, by building better abstractions around processes and IPC, through eg. virtualization and capabilities [0].<p>That, of course, would take away the main raison d'être of App Store, which is a significant money-maker for Apple.<p>[0] <a href="https://fuchsia.dev/fuchsia-src/concepts#fuchsia_is_designed_for_security_and_privacy" rel="nofollow">https://fuchsia.dev/fuchsia-src/concepts#fuchsia_is_designed...</a>
I'm divided.<p>As a programmer, I'm as happy as a pig in mud in the low-level innards of my computers and operating systems, and like that I can get at them etc. That's why I have linux on my desktop.<p>But 'open' systems don't work out well for 'normal' users. Remember the viruses and trojans and instability and all the rest of the Windows days, or Android?<p>I want my parents and friends and everyone else to use an iphone because its hassle-free and secure.<p>Do we really want 'unlocked' iphones? Actually, the idea of having to help someone who wants me to 'just look at the iphone and work out what's wrong' scares me.
This quote is relevant:<p><i>The problem for Epic — and, I suppose, for me — is that to this observer it seems exceedingly likely that Apple is going to win this case, last night’s decision notwithstanding. Current Supreme Court jurisprudence is very clear that businesses — including monopolies — have no duty to deal with third parties, and if they do choose to deal with them (or are even compelled to), that they can choose the terms on which to do so. The only exceptions are if the monopoly in question changes the rules in an unprofitable way with the express purpose of driving out a competitor, or if any company — not even a monopoly — changes access to after-market parts and services.</i><p>Current US antitrust law does not favor Epic in this matter. Of Epic's ten claims, their strongest claim is probably the one tying in-app payment processing to app distribution services, but even that one is far from a slam dunk. And even if they were to succeed on that particular claim, the likely outcome would be that they would get to keep their payment system in Fortnite, not that they would be able to run their own app store.<p>I think people need to temper their expectations unless the laws change in the years it takes for this case to make it through the courts. A court ruling that Apple must allow third-party in-app payment systems is a somewhat realistic outcome, whereas a court ruling that Apple must permit third-parties to run their own app stores is probably a non-starter.
The most important changes Apple needs to make would not cost them a single line of code- they just get rid of their policy to require consistent pricing across all platforms, and allow promotion/linking of external (i.e. not on iOS) payment sources.<p>If Spotify could charge +30% for a subscription purchased through the App store, and include a link to their main sign up page where subscriptions are regular price, everyone is happy. No security is changed and developers pass along the price of being in the App store to only those consumers who wish it. Only loser is Apple, who does not get to use their gatekeeper status on iOS to enforce monopoly-style pricing controls across all platforms.
The concept that Apple needs to have a monopoly on app distribution for privacy and security is a smokescreen.<p>The OS does that with its capability based design which of course the desktop OSs have a very hard time migrating to after the fact.<p>Having other means to install apps doesn’t change that at all.<p>And what’s more, nothing forces a user to actually go outside the Apple App Store if they want the supposed benefits they provide.
One argument that I think deserves extra scrutiny is the idea that extra app stores can be “optional”.<p>The reality is that developers would have a strong incentive to go to the most permissive App Store, and users will follow. Users will also underestimate or ignore risks. You can dismiss that by saying it’s the user’s responsibility, but I think that’s just an abdication of good systems design.<p>I’m not saying that Apple has the perfect model - it doesn’t - but the trade-offs are not as simple as we might like.
This is really quite a simple problem: the rent is too damn high.<p>Apple should drop or tier their pricing so that a $10 subscription is paying say 5% to them. Developers are happy. Anyone raking it in pays more, a progressive system that ensures small companies can innovate.<p>Is this bad for Apple? In the long-term, they get more innovation and a better user experience. Financially, they lose some income on a subset of existing transactions and gain income from transactions they wouldn't have processed, as apps switch to native dev, and the market sizes increase as incentives change.<p>At the most they could lose a few billion in revenue a year (very unlikely) and gain $0. That's the upper bound. But how many more subscriptions would go through the store if apps like Spotify had signup via the app? I'd guess hundreds of millions of dollars at least, could be much larger in the long-term.<p>Apple are losing the argument, even the best possible cut isn't worth the reputational damage and harm to the user experience, they should restructure the pricing so they save face and potentially benefit, or at least limit the damage.<p>The writing is on the wall at this stage, and they will act or be forced to act.
I think Apple have no incentive right now to change anything, although the PR and perception of them is shifting slightly against them. I think there are two things that can happen here:<p>1. There are more and more cases like wordpress, Hey and Fortnite, and after a while the PR gets so bad that they have to change something, or it becomes so costly to be in the app store that developers will stop developing for it, making the iphone less valuable to users. Of course this will take years if not decades to happen, it would be a really slow process. Fortnite is a really big deal, because I think it does start to chisel away at the iphone market for 12-18 year olds.<p>2. Government steps in and forces them to do something. But as Ben said, the legal grounds are very shaky. They don't have a monopoly on the phone market, or apps, or anything. Almost all other app stores have fees around 30%. It's very hard to make a strong case to say they're guilty.
Gaming Retain the 30% Cut, as Standard in the Gaming Industry.<p>Apps and IAP is now down to 15%. And 10% for Subscription.<p>That also puts Spotify And Amazon Prime or other Streaming Services to the 10% category.<p>I honestly dont like the idea of an Open Platform where you can side load Apps. If you want that Android is your choice. Apple tries to built an App Platform on its Appliance or Phone. Android tries to built a Pocket Computer that acts like and look like a Phone. These are two fundamentally different sets of trade offs.
Why do we need 3rd party stores? Why not just have a standard for an app endpoint url that iOS knows how to interact with. So I could publish an app on a private domain and then iOS would know how to download the app and check for updates from that end point? While there is value in a centralized store to search for apps (and that can certainly stick around), I don't understand why apps are forced to be hosted centrally in a store, Apple or third party.<p>Ex: To install the "Pepsi" app just go to pepsi.com and click the install app button. Then iOS could take over from there.
I love Stratechery, but I think this one gets it wrong.
Think of App Store as three products:<p>1. App quality screening<p>2. App promotion/distribution<p>3. In app purchasing<p>Ask any reasonable dev if they are willing to foot a fixed cost to get their app screened, a fixed cost per app download (bandwidth), and variable cost to get their app promoted in the store (not everyone needs this) and they would agree. What pisses people off is Apple’s entitlement to the revenue of a company when there is no value add from Apple after the customer has gotten the app. So Apple is using their monopoly to force #3 on developers at no less than 30% of revenue.
Fantastically well-written article.<p>The "problem" with forming an opinion about Apple Store rules is that the users are willingly and knowingly putting themselves in the golden cage of apple by buying an iPhone.<p>Under this view the problem is not with Apple, that created a framework that users want, and communicate accurately to its customers what they get - but rather with the app developers, who wants to reach Apple clients, without accepting the rules of the framework that those clients chose willingly.
Interesting this is not positioned as a civil rights issue too.<p>I understand, you have a developer company vs Apple.<p>But what about people buying these computing gadgets? The millions upon millions of them. Shouldn't they have the right to run whatever software they feel like it on this general purpose computing OS without Apple's forced intermediation?
There's a very simple law: You can't use a strong position in one market to enhance your position in another market. Simply put, the entire tying up of payments to Apple is classic anti-competitive behaviour, and there's little chance the courts won't put an end to it. Same will happen with Apple using private APIs for its store owned apps. That said, it's very unlikely the courts will interfere with the 30% fee. There are no legal grounds for demanding a smaller fee.
This is a well-written and researched article, but I have to disagree with some stuff. The suggested alternative payment processing policies make no sense for Apple; they would incentivize people to <i>not</i> make iPhone-exclusive experiences. That's something the walled-garden aficionados at Apple would never go for. And a court order to implement a change like that (or any change) would be a bad idea. As for the reduced 10% rate, why 10%? In a truly competitive market, we might see figures lower than that.<p>I think that trying to come up with perfect changes for Apple's practices is a waste of time. Apple shouldn't be forced to make changes to their store, nor should we bother trying to convince them to do it themselves. Let them do whatever they want, but allow third-party stores. Competitive forces will fix everything in the long-term.<p>What I'm not sure of is how that would work in practice. Will Apple be forced to release (and maintain) their SDKs and dev tools for free? Will they be forced to make changes to the operating system to allow side-loading? If they are, how long would that take? and wouldn't it be catastrophic from a security point of view, since iOS has never had to worry about the security issues of side-loading.
This is a very emotive issue here and we're never all going to agree on these issues. I hope though that it is possible to reach a consensus on a few areas I think were well explained in the article.<p>One is in-app signup. I have no problem with Apple charging a fee for services accessed via the phone when you sign up through the phone. I do think it's user hostile and opaque to not allow apps to refer the customer to a web site to buy a subscription though. Apple should compete on convenience, not awkward asymmetric information restrictions.<p>The other is the organising principle issue. I agree it makes sense to base the decision to charge on whether the service incurs marginal cost. That seems a fair way to do it, I just don't understand how that could be made into a clearly and unambiguously applicable rule. You may well end up with even more of a fractious grey zone.
I am more in favour of going back to installing apps from the web, reading app reviews (also from the web), bringing back app listing websites (remember nokia days?), running an antivirus and cutting any chance of another monopoly rising.<p>Alternative app stores won't break this monopoly. Android for example already have alternatives.. but how many know them and how many use them? The one that's shipped with the OS always wins. Besides, most of them take like 20% tax.. which is still hugely profitable.
<i>In short, what is needed are new laws built for the Internet, which is why it was encouraging that Congress is holding hearings about these issues, and also frustrating that Apple received relatively little attention.</i><p>That's because the Google and FB monopolies are a much bigger problem. If you don't like Apple then there are plenty of other choices. It's much harder to avoid Google or Facebook.
The security argument is flawed: iOS devices would be fully secured if Apple allowed secondary app stores on their devices.<p>Using other stores not supported by Apple would have come with a big risk warning anyway. It would then be the user's responsibility.
The problem with the App Store monopoly is greatly aggravated by the fact that they are blocking web engine competition on iOS. They don't want PWAs to bypass the system.
Much as I love Ben Thompson, this is rearranging the deck chairs while the Titanic is sinking. Or maybe arguing about which dinner fork the gorilla should use while it's eating you.<p>Treat the App Store like any other modern open market. Apply real world market rules to all these digital markets.<p>- rule of law. contracts, civil, business, etc.<p>- fair and impartial judiciary<p>- right of appeal<p>- regulations to ensure equal footing of participants<p>- tort<p>Etc.<p>Voila, fixed.<p>A bit more discipline is needed to rationalize Google, Facebook, and Amazon. Starting with no self-dealing (conflicts of interest). And the social networks need particular mitigations to deweaponize their outrage engine feedback loops.<p>This is all pretty simple, obvious stuff.<p>Seriously, am I the only person whose read books like The Mystery of Capital?<p>Why are so many self-proclaimed capitalists so painfully oblivious to liberal and neoliberal traditions?
Why doesn't Apple bump into the same problem with the App store as Microsoft did with IE and the browser ballot screen, imposed on them by the EU?
Having read the whole thread, what amazes me is how most people here seem to be thinking about iOS products as general purpose computing products, when in reality the iPhone has been a console-like ecosystem from the start.<p>I'm personally very happy it works like an Xbox or Switch rather than Android, and that I don't have to figure out which app store a given app came from, deal with different parties if I need to resolve billing issues, etc.<p>Any comments focusing on the technical issues are missing the point. Of course it <i>can</i> be done. The benefit of the iOS ecosystem is knowing that it <i>won't</i> be done.
For any app which has an existence beyond the app store, customers can already pay without Apple. Customers can pay for Microsoft Office, Amazon Prime, or Netflix on their own through conventional channels.<p>Apple's position is that if you are delivering digital goods to be used on their devices, then you must offer an additional way to pay.<p>From the consumer's perspective my choices have now grown. Where before I could've managed my own relationships with Microsoft and others, now I can have the option for Apple to intermediate. For people with elderly parents and runaway subscriptions, this is crazy valuable.<p>And while I say customers can manage their own relationships, the truth is that without Apple backing them up, it's companies who will get the better of the relationship by successfully compelling customers to go through their bad payment system, like they already do.
In other news, i wonder why ios app developers aren't considered apple's employees? In fact someone could sue apple to force them to do so. Their developer guidelines are so strict and hands-on that they don't justify them being used as "gig workers". And apple's statements in this document make the emphatic point that they use those developers to deliver an excellent experience. They even provide their paycheck (and get to keep 30%)
Here's an open secret. Most people globally buy an iDevice because it has become a fashion symbol, a status symbol and the peer pressure is huge to sport one, once you reach the financial ability to buy them.<p>It has little to do with otherwise non-technical people somehow appreciating the technical nuances of security, curation, walled gardens, sideloading and so on.