Sidebar Sidebar
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.

UK Class Action Accuses Apple of Breaking Competition Law by Overcharging for Apps

Dr. Rachel Kent is just using this to seek attention, probably does not even use Apple products.
As for the law firm Hausfeld and the VC Vannin Capital they are just as bad as Patent Trolls.

Apple is charging what all stores are charging for commission.

It is developers that set the prices, does anyone truly believe that developers will lower their prices if Apple lower their commission?

I moved from Android due to of malware and privacy issues on that platform to Apple, I do not want Apple's platforms ending up like Android.
 
  • Like
Reactions: icerabbit, BKDad and amartinez1660
Saturnine said:
I'm not a lawyer but you're right in what you say.

Ultimately this is a lawsuit brought-about by one person - "King's College London digital-economy lecturer" Dr Rachael Kent, on behalf of everybody affected.

It seems quite frivolous to me. Ultimately, 30% is an arbitrary number on which Apple decided. It is not for the courts to decide "how much profit is fair." That is up to the market. If the claim is that Apple has a monopoly, then that also doesn't hold water since nobody is forced to buy Apple devices.

If the claim is that "Apple has a monopoly on selling iPhone apps" then, of course, the statement is true, but is there anything wrong with that? For me, it's a little bit too much like walking into a Tesco supermarket and then complaining then you have to purchase PG Tips at Tesco's prices rather than Aldi's.
Click to expand...
Apple is does not have a monopoly on selling iPhones, you can buy them from phone companies etc.

Someone is going to say next that BMW and Mercedes have a monopoly on the cars that they manufacture.
 
  • Like
Reactions: icerabbit, secretbum, Saturnine and 3 others
Saturnine said:
I'm not a lawyer but you're right in what you say.

Ultimately this is a lawsuit brought-about by one person - "King's College London digital-economy lecturer" Dr Rachael Kent, on behalf of everybody affected.

It seems quite frivolous to me. Ultimately, 30% is an arbitrary number on which Apple decided. It is not for the courts to decide "how much profit is fair." That is up to the market. If the claim is that Apple has a monopoly, then that also doesn't hold water since nobody is forced to buy Apple devices.

If the claim is that "Apple has a monopoly on selling iPhone apps" then, of course, the statement is true, but is there anything wrong with that? For me, it's a little bit too much like walking into a Tesco supermarket and then complaining then you have to purchase PG Tips at Tesco's prices rather than Aldi's.
Click to expand...
Actually, I don’t think the 30% number is arbitrary. The distribution costs I’ve seen from the days of boxed software was 70%, to which the developer got 30%. I think Apple just wanted to flip the 70/30 ratio. I don’t know for sure, but it seems like a logical reason to me.
 
  • Like
  • Disagree
  • Haha
Reactions: icerabbit, Mescagnus, secretbum and 5 others
djcerla said:
30% is industry standard, and Apple has a minority share of phones in the UK. Hardly a "monopoly".

These actions will end up ruining the iOS experience for consumers, which is at present far superior compared to the competitor's.
Click to expand...
Not true on having a minority share of phones in the UK actually. UK is very 'iPhone-heavy'.
 
  • Like
Reactions: ksec
I think Apple should have reduced the App Store commission to 15% years ago. They should have seen this coming and been proactive to be seen as generous. Every year they could have reduced the commission by a few percent. Going forward they can reduce the commission by another 1% each year just before Xmas. Ho ho ho But I’m serious. In a decade from now 5% commission will seem reasonable. The eco system is huge and apps add value to the whole ecosystem. I have no concern about Apple profit margin on sales throughout the eco system.
 
  • Disagree
  • Like
Reactions: diandi and 1258186
It's a gateway with good reason. The devs set the price knowing they're creating on a platform asking for that 30% cut.

It's not a monopoly over everything either. You're not paying to action every part of your life on an iPhone, that's what the internet does.
 
PhilJustRidingAlong said:
Dr. Rachel Kent is just using this to seek attention, probably does not even use Apple products.
As for the law firm Hausfeld and the VC Vannin Capital they are just as bad as Patent Trolls.

Apple is charging what all stores are charging for commission.

It is developers that set the prices, does anyone truly believe that developers will lower their prices if Apple lower their commission?

I moved from Android due to of malware and privacy issues on that platform to Apple, I do not want Apple's platforms ending up like Android.
Click to expand...
I think the use of the term "commission" is not an accurate way to describe what the 30% represents, and the fact it is used to describe it makes it sound much more palatable.

The truth is that it's a payment processing fee in a marketplace where all other methods of payment are forbidden.

Let's use Spotify as an example. Spotify, like all other developers pay $99 a year to have their app present on the App Store, which includes the use of apples tools to create the app. I have paid somewhere in the region of $500 to have my free app on the App Store over the last 5 years, which presumably has covered apples costs otherwise the price would be higher. This covers my use of the tools and hosting for the app.

Apple are not providing any further services for Spotify since they're not hosting the music or providing any of the backend infrastructure being used by the app. In fact, if Spotify's service was free they would pay nothing to Apple at all outside of that $99 for running the exact same app.

So the 30% "commission" is the price that apple charge developers for payment processing, which in reality costs in the region of 1%-2% of a transaction value. And of course they force you to use their payment processing, or offer no method of receiving payments in your apps at all. And if you opt for the latter you are not allowed to point out to your users that they can sign up elsewhere.

Now some will argue that Apple is providing advertising or product placement in the store to these brands which increases their profits. But it's a symbiotic relationship because Apple benefits from that same promotion and from having these apps on its store. I never for a moment considered purchasing a HomePod for example on its release because Spotify was not available, and the same would be true for many users if it wasn't available on the iPhone. Apple benefits from the inclusion of these services on its ecosystem.
 
  • Disagree
Reactions: diandi
As a British person I would be glad to see this case succeed, only because reading into it I may get some money from it, although 1.5 billion amongst millions of users will probably equally £20, more would be nice to help fund my next iPhone, but £20 is a start.
Still I doubt it'll get very far and be refused to proceed.

Indeed the only fines levied against Apple so far are for breaches of individual regulations or laws, and have not been high amounts.
To claim Apple is profiteering forcing its customers to only use them is quite a stretch to prove in court.
 
Last edited:
  • Like
  • Disagree
  • Angry
Reactions: diandi, LeadingHeat and CJM
Ubuntu said:
Nah. The Mac does quite well as it is and that’s not down to the App Store so iOS would survive.
Click to expand...
The Mac was nearly killed off when 3rd parties could decide Apple’s fate. Apple should close the store to all but free apps. Let the moochers fend fir themselves and spin off versions of Apple Music and Dive deep into games but fund the hell out of them to make sure there are always great alternatives for real Apple users. The reason Apple makes Apps and now underlying tech like chips is because their platforms kept being sidetracked by developers who would partner with them until they decide they want to complete against them. From Microsoft, to Google, to Samsung and on and on.

Apple’s choice to do it themselves was because they had no choice. They made iWork because MS was using Office apps to demand more and more access to Mac technologies that they appropriated with Windows and then threatened to not support office on the Mac if they complained. The same with Maps and even the development of Logic, Final Cut Pro, and even Apple TV+ came from the realization that when they depend on 3rd parties for their business, they are at risk.
 
  • Like
Reactions: BKDad
Aurial said:
I think the use of the term "commission" is not an accurate way to describe what the 30% represents, and the fact it is used to describe it makes it sound much more palatable.

The truth is that it's a payment processing fee in a marketplace where all other methods of payment are forbidden.

Let's use Spotify as an example. Spotify, like all other developers pay $99 a year to have their app present on the App Store, which includes the use of apples tools to create the app. I have paid somewhere in the region of $500 to have my free app on the App Store over the last 5 years, which presumably has covered apples costs otherwise the price would be higher. This covers my use of the tools and hosting for the app.

Apple are not providing any further services for Spotify since they're not hosting the music or providing any of the backend infrastructure being used by the app. In fact, if Spotify's service was free they would pay nothing to Apple at all outside of that $99 for running the exact same app.

So the 30% "commission" is the price that apple charge developers for payment processing, which in reality costs in the region of 1%-2% of a transaction value. And of course they force you to use their payment processing, or offer no method of receiving payments in your apps at all. And if you opt for the latter you are not allowed to point out to your users that they can sign up elsewhere.

Now some will argue that Apple is providing advertising or product placement in the store to these brands which increases their profits. But it's a symbiotic relationship because Apple benefits from that same promotion and from having these apps on its store. I never for a moment considered purchasing a HomePod for example on its release because Spotify was not available, and the same would be true for many users if it wasn't available on the iPhone. Apple benefits from the inclusion of these services on its ecosystem.
Click to expand...

An interesting analogy for sure, however for this to be challenged in court it would require the developer, like Spotify or Epic, to challenge, not the consumer because the consumer has a choice not to use the platform. They will need to prove to the court that the consumer cannot access the internet to sign up for a service outside the App Store, because Apple won't allow the developer to tell you to. That's a huge assumption to make of the consumer.
 
If we consider that the App Store is fundamentally a technical device for people to install and update their apps in their smartphone of choice, yes 30% commission over in app transactions as payment is way outside the industry prices. The industry practice is actually 0, a facility included in the OS license, with only few exceptions extremely limited in scope, such as gaming consoles.

A comparison with a regular store is nothing but a smoke screen to hide from consumers minds what it is at its core.
 
Last edited:
  • Like
  • Disagree
Reactions: LeadingHeat, JagRunner, flofixer and 3 others
If Apple overcharges for iOS apps, that makes it just easier for Android to compete, doesn't it? So it's not anti-competitive at all? Overcharging is not anti-competitive. Anti-competitive means there must be several parties competing with each other, and someone prevents one or more of these parties from competing. Nobody is prevented from competing.
 
  • Like
Reactions: BKDad and amartinez1660
obamtl said:
Not true on having a minority share of phones in the UK actually. UK is very 'iPhone-heavy'.
Click to expand...

Yes. iPhone has 50%+ market share in the UK.

But you know modern world likes to redefine the word "minority" as they sit fit. And it is also sad that was the most upvoted comment in the thread, and it took dozens more comments before a correction was mentioned.

And this is not just MR, Tim Cook has been extremely deceptive and quote

“Apple does not have a dominant marketshare in any market where we do business."
Click to expand...

I guess 50% or even 70% ( Japan ) does not equate to "dominant". Or They are deceptively talking about Market Shipping data which they only have ~20%.
 
You can't force Apple to hand back 30% to consumers when Sony, Google, et al have been taking the same.
As an app developer I wouldn't mind though if Apple said "sorry, we should have never taken 30% it should always have been 15%, here's several years worth of 15% back.". New car time, probably a Tesla... ;)
 
  • Haha
Reactions: amartinez1660
CJM said:
I don't think they'll win but the Apple apologists (share holders?) are hilarious.

As stated in the article, their costs for running the App Store were £70m but they made £10.6B last year. And this has nothing to do with government, as one commenter replied.
Click to expand...
Excuse me, but where exactly did you see the cost of running the App Store being £70m? The fact alone that my app ships to 150 different countries and that Apple takes care of the taxes and legal stuff in 150 different countries for me is worth 30%.
 
  • Like
  • Love
Reactions: diandi, LeadingHeat, FCX and 3 others
Seoras said:
They don't. The app publisher sets the price. Apple and Google both take 30% of sales from their app stores.
Click to expand...
So the complaint is totally wrong? Apple isn't overcharging at all, unlike the complaint says? This case is just ridiculous.
 
  • Like
Reactions: Seoras
genovelle said:
The Mac was nearly killed off when 3rd parties could decide Apple’s fate. Apple should close the store to all but free apps. Let the moochers fend fir themselves and spin off versions of Apple Music and Dive deep into games but fund the hell out of them to make sure there are always great alternatives for real Apple users. The reason Apple makes Apps and now underlying tech like chips is because their platforms kept being sidetracked by developers who would partner with them until they decide they want to complete against them. From Microsoft, to Google, to Samsung and on and on.

Apple’s choice to do it themselves was because they had no choice. They made iWork because MS was using Office apps to demand more and more access to Mac technologies that they appropriated with Windows and then threatened to not support office on the Mac if they complained. The same with Maps and even the development of Logic, Final Cut Pro, and even Apple TV+ came from the realization that when they depend on 3rd parties for their business, they are at risk.
Click to expand...
I think the bit in bold is a great snippet...To me it seems that the success of apple over the years also is becoming its downfall. It has attracted users who just look for the cheapest in everything and don't really care about what they use. They now want it work like the competition does but somehow don't want to go to the competition. I find it fascinating. As daft as it sounds I think there is something in it. Many nowadays just aren't Apple users, they just want the look, the badge, whatever it is, but don't really care how it operate. Very interesting....
 
  • Like
Reactions: amartinez1660
PhilJustRidingAlong said:
Apple is does not have a monopoly on selling iPhones, you can buy them from phone companies etc.

Someone is going to say next that BMW and Mercedes have a monopoly on the cars that they manufacture.
Click to expand...
They do, of course. It's called a "natural monopoly" and doesn't count as far as competition law goes, because it's a monopoly in your own product, but not a monopoly in a relevant market.
 
You must log in or register to reply here.
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.
Top Bottom
Back