Apple & Google under fire for outragous Appstore tariff

[darknessblade]

Summary

The App Stores Claims foundation will soon drag Google and Apple to a Dutch court for a mega claim of 1 billion euros. The claim is motivated by high developer commission rates in the Google Play and Apple App Store.

 

Quotes

Quote

According to the App Stores Claims foundation, end users and developers are forced into paying unreasonable amounts of money for apps. The foundation argues that these costs are due to the tech giants abusing their economic position. Google and Apple allegedly make it very difficult for app developers to facilitate alternative payment systems for app purchases, such as iDeal.

In addition, they charge commissions of up to 30 percent, which essentially forces app developers into passing costs onto end users. Resultingly, apps are said to be unnecessarily expensive.

The foundation bases its 1 billion euro claim on the sum of all purchases made in the Dutch Apple App Store and Google Play Store. The goal is to return the amount to buyers.

 

My thoughts

 

 

Sources

 

macrumors.com/2022/01/24/dutch-third-party-iap-plan-insufficient/

https://www.techzine.eu/news/trends/73005/billion-euro-mega-claims-against-google-and-apple-over-app-fees/

https://nltimes.nl/2022/02/14/dutch-foundation-claims-eu1-billion-apple-google-expensive-app-stores

 

FD article {financial magazine} [dutch]

https://fd.nl/bedrijfsleven/1430052/klopping-claimt-miljard-van-apple-en-google-voor-te-dure-appwinkels-cnb2ca42GNXB

 

Foundation {right to consumer justice}

https://righttoconsumerjustice.nl/nl

Big tech play fair site

https://www.bigtechfairplay.nl/claim

 

Dutch news acticles

https://nos.nl/artikel/2417243-stichting-van-klopping-wil-miljard-terugvorderen-van-apple-en-google

https://www.iculture.nl/nieuws/stichting-app-store-claims-alexander-klopping/

https://radar.avrotros.nl/nieuws/item/stichting-klaagt-apple-en-google-aan-nederlanders-betaalden-1-miljard-euro-teveel-in-hun-appstores/

https://br.atsit.in/nl/?p=165307

 

Edited February 14, 2022 by darknessblade
Misread the article

[Bombastinator]

1 hour ago, darknessblade said:

Summary

The App Stores Claims foundation will soon drag Google and Apple to a Dutch court for a mega claim of 1 billion euros. The claim is motivated by high developer commission rates in the Google Play and Apple App Store.

 

Quotes

 

My thoughts

 

 

Sources

 

macrumors.com/2022/01/24/dutch-third-party-iap-plan-insufficient/

https://www.techzine.eu/news/trends/73005/billion-euro-mega-claims-against-google-and-apple-over-app-fees/

https://nltimes.nl/2022/02/14/dutch-foundation-claims-eu1-billion-apple-google-expensive-app-stores

 

FD article {financial magazine} [dutch]

https://fd.nl/bedrijfsleven/1430052/klopping-claimt-miljard-van-apple-en-google-voor-te-dure-appwinkels-cnb2ca42GNXB

 

Foundation {right to consumer justice}

https://righttoconsumerjustice.nl/nl

Big tech play fair site

https://www.bigtechfairplay.nl/claim

 

Dutch news acticles

https://nos.nl/artikel/2417243-stichting-van-klopping-wil-miljard-terugvorderen-van-apple-en-google

https://www.iculture.nl/nieuws/stichting-app-store-claims-alexander-klopping/

https://radar.avrotros.nl/nieuws/item/stichting-klaagt-apple-en-google-aan-nederlanders-betaalden-1-miljard-euro-teveel-in-hun-appstores/

https://br.atsit.in/nl/?p=165307

 

The long term question becomes can google and the apple store be regulated as utilities? And if so what will be regulated.  The problem I see with this is that a 30% margin is normal for utilities.  It’s the rate insurance companies are allowed to charge for example.  Even if they are regulated it may not change much. 

[Master Disaster]

25 minutes ago, Bombastinator said:

The long term question becomes can google and the apple store be regulated as utilities? And if so what will be regulated.  The problem I see with this is that a 30% margin is normal for utilities.  It’s the rate insurance companies are allowed to charge for example.  Even if they are regulated it may not change much. 

Utilities? Why would you need to apply that to Appstores? We already have plenty of regulations covering business operations, marketplaces and monopolies.

 

Utilities are public services that are deemed essential to live (Water, Electricity, Gas, Sewerage etc), if you removed the Apple Store tomorrow nobody is going to die of thirst or catch cholera. Arguing an Appstore is a utility is absolutely ridiculous.

 

TBC I get that you're making that argument

 

Edit - Interesting aside, TV is a utility and is arguably not essential to live so I guess it can be done. I get phone & Internet, without those you cannot contact anyone, be contacted by anyone, do banking things etc but yeah, you can live without TV just fine so

[Stahlmann]

1 billion? That's not even gonne make a dent in their business...

 

And for google:

 

[Master Disaster]

2 minutes ago, Stahlmann said:

1 billion? That's not even gonne make a dent in their business...

 

And for google:

 

Its not meant to, if they win then the courts will hopefully apply sanctions forcing them to drop the 30% cut and/or allow alternative methods of payments.

 

If the EU talks companies tend to listen.

[RejZoR]

I don't see 30% to be excessive. People who just look at company's net worth or income numbers and demand things are absolute idiots. Last time I checked, no one is a charity and maintaining servers is expensive. They also provide you with all the dev kits and API's to create apps rather easily as well as providing you a central store front where you can sell your product (app). But I guess that's worth nothing, we demand everything to be handed over for free while devs can reap 100% profits from it. Or based on everyone whining, 5% would still be acceptable. Barely...

[Donut417]

2 hours ago, darknessblade said:

high developer commission rates in the Google Play and Apple App Store.

So they are not suppose to make money? They are the ones who maintain the stores, provide the server spaces and such. You could argue that maybe they should allow third party stores. Which I think could be a compromise. 

 

26 minutes ago, Master Disaster said:

If the EU talks companies tend to listen.

Or they pull a Facebook and GTFO. 

[Gamer Schnitzel]

3 minutes ago, Donut417 said:

So they are not suppose to make money? They are the ones who maintain the stores, provide the server spaces and such. You could argue that maybe they should allow third party stores. Which I think could be a compromise. 

 

Or they pull a Facebook and GTFO. 

Facebook is not going anywhere. They just think the EU works like the US and will waive their requests out of fear. If the EU was not occupied with Ukraine they would have already banned Facebook from the EU just by trying to blackmail them.

[Bombastinator]

1 hour ago, Master Disaster said:

Utilities? Why would you need to apply that to Appstores? We already have plenty of regulations covering business operations, marketplaces and monopolies.

 

Utilities are public services that are deemed essential to live (Water, Electricity, Gas, Sewerage etc), if you removed the Apple Store tomorrow nobody is going to die of thirst or catch cholera. Arguing an Appstore is a utility is absolutely ridiculous.

 

TBC I get that you're making that argument

 

Edit - Interesting aside, TV is a utility and is arguably not essential to live so I guess it can be done. I get phone & Internet, without those you cannot contact anyone, be contacted by anyone, do banking things etc but yeah, you can live without TV just fine so

It’s the merely the term used for regulated monopolies.

[CTR640]

1 hour ago, Stahlmann said:

1 billion? That's not even gonne make a dent in their business...

 

And for google:

 

All the Lambo's, yachts, private jets I can buy with 1 billion and still have a shitload of money left...

 

But maybe I can buy a factory that can produce 32" OLED monitors and still have a lot of money left

[darknessblade]

4 hours ago, Donut417 said:

So they are not suppose to make money? They are the ones who maintain the stores, provide the server spaces and such. You could argue that maybe they should allow third party stores. Which I think could be a compromise. 

 

Or they pull a Facebook and GTFO. 

 

You really think apple does not make any money other than the 30% cut they take from the appstore/ IAP

 

Do you really think apple can do whatever they want, just because they are the SOLE owner of a platform?

---------

There are consumer protection laws for a reason.

or do you live in a country where ANY company can screw over consumers without a care!

[Lightwreather]

4 hours ago, Donut417 said:

So they are not suppose to make money? They are the ones who maintain the stores, provide the server spaces and such. You could argue that maybe they should allow third party stores. Which I think could be a compromise. 

Just to put this out there: Apple charges a 100USD Developer fee to develop and publish to the app store (that is recurring annually, tho not too sure about this part).

But yes, third party app stores would be a goos compromise

[WolframaticAlpha]

5 hours ago, Donut417 said:

they are not suppose to make money?

They are. But they also should allow others to use their own payment processing/hosting if they want.

 

1 hour ago, J-from-Nucleon said:

Just to put this out there: Apple charges a 100USD Developer fee to develop and publish to the app store (that is recurring annually, tho not too sure about this part).

But yes, third party app stores would be a goos compromise

For enterprises it is 300/member a year. ie If you want to have private betas shipping to multiple people inside your company.

[Donut417]

2 hours ago, J-from-Nucleon said:

Just to put this out there: Apple charges a 100USD Developer fee to develop and publish to the app store (that is recurring annually, tho not too sure about this part).

But yes, third party app stores would be a goos compromise

The city of Romulus charges a $100 business license fee to do business in the city. Same difference, it’s called the cost of doing business. 

[darknessblade]

1 minute ago, Donut417 said:

The city of Romulus charges a $100 business license fee to do business in the city. Same difference, it’s called the cost of doing business. 

But Rome does not demand a additional 30% on every single sale you made. 

 

And don't say but that is VAT.

 

VAT and apples 30% fee are 2 entirely different things.

 

 

[Doobeedoo]

I wonder we'll we see end of APK stores and have web apps one day.

[Bombastinator]

6 hours ago, CTR640 said:

All the Lambo's, yachts, private jets I can buy with 1 billion and still have a shitload of money left...

 

But maybe I can buy a factory that can produce 32" OLED monitors and still have a lot of money left

Doubtful.  There are a couple problems with flatscreen monitors that make things really expensive.  One is the vacuum oven the screens have to be cured in.  It’s not the only one though.   There’s a reason there are way more brands that there are actual manufacturers

[mr moose]

Good is all I can say.  Getting tired of these 8 figure companies taking more and more from 4 figure consumers. 

[poochyena]

Seriously 30% is outrageous? How laughable. Retail starts at 50%. Here is an article I found with the most direct relevance, cost of a $60 game disc

https://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/02/anatomy-of-a-60-dollar-video-game.html

Quote

Another way to look at it is to say publishers such as Activision and Electronic Arts receive $45 after retailers take a $15 cut. Publishers turn around and pay a $7 licensing fee to console manufacturers such as Microsoft, Sony and Nintendo. The cost of making, packaging and shipping game discs to stores carves up another $4. Finally, not all games sell, so the expense of returning unsold inventory eats up another $7.

That leaves publishers with about $27 per disc sold for development, marketing and other expenses.

I'm all for lowering the fee, but don't come out acting like 30% is some crazy fee. Its a big improvement over selling discs through retail. Anyways, selling android games on your own platform is always an option. Nutaku appears to be doing very well with their android games, despite not being on the google play store, for example.

[Fnige]

We can argue whether it is outrageous or not but how much does it actually cost to run the app store?

[Donut417]

2 hours ago, darknessblade said:

But Rome does not demand a additional 30% on every single sale you made. 

 

And don't say but that is VAT.

 

VAT and apples 30% fee are 2 entirely different things.

 

 

But the state will charge you a higher fee if you choose to pay with plastic vs cash, the city does the same with what ever you need to pay with them, they have a fee that they charge. Apple is just charging a fee to handle the payments. Its called the cost of doing businesses. Dont like their policies, dont sell on their store. Case and point. Sams Club at least at the last time I shopped their didnt take Visa Credit, because the fees were too much. If the fees are too much then dont sell on the Apple store. 

 

Which is why I said maybe they can make a compromise by adding 3rd party stores or side loading. All of which does not pay Apple fees and its not Apple's problem if your device gets messed up or you get scammed. 

[poochyena]

43 minutes ago, FnigePython said:

We can argue whether it is outrageous or not but how much does it actually cost to run the app store?

Thats probably a little complicated since it also funds development of ios and android too. I'm sure its very expensive, especially moderating apps and reviews, and providing support, but unless apple or google say it themselves, it would be very difficult to estimate it.

[Bombastinator]

2 hours ago, poochyena said:

Seriously 30% is outrageous? How laughable. Retail starts at 50%. Here is an article I found with the most direct relevance, cost of a $60 game disc

https://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/02/anatomy-of-a-60-dollar-video-game.html

I'm all for lowering the fee, but don't come out acting like 30% is some crazy fee. Its a big improvement over selling discs through retail. Anyways, selling android games on your own platform is always an option. Nutaku appears to be doing very well with their android games, despite not being on the google play store, for example.

It’s a big chunk, but that’s how profit works.  Iirc it’s actually the idea behind the term “value added”. Screw 50% btw, The markup on mall jewelry is often 400% or more.  The markup on gasoline at the average convenience store is nearly zero though.  The gas pump is a draw for the convenience store.  There are even loss leaders that are sold at a loss. 

Edited February 15, 2022 by Bombastinator

[poochyena]

39 minutes ago, Bombastinator said:

It’s a big chunk, but that’s how profit works.  Iirc it’s actually the idea behind the term “value added”. Screw 50% btw, The markup on mall jewelry is often 400% or more.  The markup on gasoline at the average convenience store is nearly zero though.  The gas pump is a draw for the convenience store.  There are even loss leaders that are sold at a loss. 

no, you are talking about retail profit, i'm talking about whole-selling or marketplace costs. For most non-food/perishable items, a retailer will want at least 50% profit. If you have an item you make and you sell it for $10, then Walmart won't buy it from you unless you sell it to them for $5 or less.

But yes, some things, retailers will buy whole-sale for less than 50% profit margin. Video game discs they make less than 50% margin, specifically new games, but the game owners make less than 50% margin after all the other fees are included.

 

Anyways, is 30% a lot? Yes. Is it an unnaturally huge amount that can only exist due to anti-competitive practices? No.

12 hours ago, Stahlmann said:

1 billion? That's not even gonne make a dent in their business...

 

And for google:

 

I don't understand comments like this. What do you mean it won't "a dent in their business"? It absolutely will. I just don't understand why ever single time apple or google is sued someone comes in to mention how, relative to their income/profit/etc/ its a small amount. So what?

[Kisai]

7 hours ago, J-from-Nucleon said:

Just to put this out there: Apple charges a 100USD Developer fee to develop and publish to the app store (that is recurring annually, tho not too sure about this part).

But yes, third party app stores would be a goos compromise

 

I don't see a third party store ever happening. Likewise, I don't see them dropping the developer fee because that keeps people from signing up just to download the SDK's and things and then pass it to developers who aren't authorized. Basically the point of developer fees itself is to keep people from just dumping fake and malicious software on the app store.

 

There is not a connection between the commission amount and Apple's store itself. For all intents, Google and Apple pay nothing for bandwidth, they are large enough to have peering arrangements, and they absolutely do. That IS however a barrier for new entries. Epic, not so sure (they have a 4-digit ASN, so that's relatively old by internet standards where google has 6-digit ones.)

 

The best compromise in the short term would be Apple licensing a second source store, which would then split the paid software from the free software.