The court decision itself is worth reading for a revealing look behind the curtain. [0]
>> In Slack communications dated November 16, 2021, the Apple employees crafting the
warning screen for Project Michigan discussed how best to frame its language. Mr. Onak suggested the warning screen should include the language: “By continuing on the web,
you will leave the app and be taken to an external website” because “‘external website’ sounds scary, so execs will love it.” [...] One employee further wrote, “to make your version even worse you could add the developer name rather than the app name.” To that, another responded “ooh - keep going.”
"Apple willfully chose not to comply with this Court’s Injunction. It did so with the express intent to create new anti-competitive barriers which would, by design and in effect, maintain a valued revenue stream; a revenue stream previously found to be anti-competitive. That it thought this Court would tolerate such insubordination was a gross miscalculation. As always, the cover-up made it worse. For this Court, there is no second bite at the apple."
I'd recommend skimming through the whole thing because Judge Rogers just eviscerates Apple over and over.
> Internally, Phillip Schiller had advocated that Apple comply with the Injunction, but Tim Cook ignored Schiller and instead allowed Chief Financial Officer Luca Maestri and his finance team to convince him otherwise.
The bean counters won. I guess Tim Cook does care about the bloody ROI after all.
They charge 27% for purchases made using external payment processors. Including Stripe fees that's net-zero (not even accounting for any chargeback risks). They severely limit how you can display the external purchase link too, and display an obnoxious warning screen when you tap it.
I would be surprised if a single developer adopted it.
I am concerned that the App Store has become the norm. For many young people, iPhones and iPads have been their only computer. Many have never seen a world where app developers can distribute independently. The NYT had an article out about ruling, and the number of people supporting the App Store was astounding.
I think Apple has done a great job marketing the App Store as the reason for the security/UX of their platform, when in reality, it's the OS. It's the OS that requires apps to get permission before accessing my location, it's the OS that isolates apps from each other, it's the OS that provides an easy way to install/uninstall packages.
The confusion between benefits of the OS/benefits of the App Store combined with many peoples' unfamiliarity with third party distribution has made it more difficult to convince people of the merit of these antitrust suits.
Apple has zero moral justification for them. They are quadruple-dipping:
1. Consumers pay premium prices for Apple devices.
2. Developers have to pay $100 a year to be able to publish an app.
3. Developers need to buy expensive Apple hardware to develop for iOS. XCode doesn't work on Linux or Windows.
4. And on top of it, Apple also wants 30% of all the gross app sales.
All while their tools that developers _have_ to use are buggy and often nigh unsusable (Apple Connect....).
But wait, there's more! To keep the stronghold on developers, Apple is not allowing third-party apps to use JITs, resulting in a huge amount of time wasted to work around that.
It’s a shame Phil Schiller has gotten sidelined. He always seemed like a good guy and a big part of the “soul” of Apple as it made its resurgence under Jobs after the NeXT merger.
There's a whole class of sh*t-software that only exists (and is profitable) because users subscribe to them and then forget – primarily because the subscription fee is charged as "Apple" on their Credit Card. I wonder what's gonna happen with this type of scam.
Nothing? The ruling is that app developers get to choose how they communicate to users, or how they charge in-app fees. The kind of shady developers you describe would simply continue to use Apple, as it benefits them to do so.
Apple sends a specific, detailed receipt on the billing of every such item. Apple has some of the most user-friendly subscription management options of anyone. Apple lets you cancel a subscription immediately without cancelling the service immediately, and so on.
There is a lot to criticize Apple for -- the 30% fee is disgusting, and the subject of this order where they bar external payments without fees is criminal -- but the subscription complaint has always been weak.
About time. I'm tired of apologizing to customers who purchase subscriptions in my app only to discover they could have purchased the exact the same thing from my website for 15% less. "Why didn't you tell me?"
Excerpt from the filing:
"In stark contrast to Apple’s initial in-court testimony, contemporaneous business documents reveal that Apple knew exactly what it was doing and at every turn chose the most anticompetitive option. To hide the truth, Vice-President of Finance, Alex Roman, outright lied under oath. Internally, Phillip Schiller had advocated that Apple comply with the Injunction, but Tim Cook ignored Schiller and instead allowed Chief Financial Officer Luca Maestri and his finance team to convince him otherwise. Cook chose poorly. The real evidence, detailed herein more than meets the clear and convincing standard to find a violation. The Court refers the matter to the United States Attorney for the Northern District of California to investigate whether criminal contempt proceedings are appropriate."
About time for what? Another company to get charged with something that they don't get punished for?
The fines are always less than the companies' net gains from the practice. Gains are often indirect, risk-related, and/or part of a larger strategy, so they cannot be calculated.
Everything short of prison is a waste of time, waste of tax dollars, and spits in the face of decent citizens.
> Internally, Phillip Schiller had advocated that Apple comply with the Injunction, but Tim Cook ignored Schiller and instead allowed Chief Financial Officer Luca Maestri and his finance team to convince him otherwise.
Here's the fun question though. Do Roman, Maestri et al not have any specific damages to this? (I know the answer, but it's a good question to ask....)
Oh c'mon, 16 years into a product line ain't too bad, is it?
If you had a kid when the App Store first came out, that kid would now be nearing high school graduation and you still can't do as you describe. The great recession, the pandemic, the iPad, proliferation of AI, legalization of Gay marriage in the states and weed in some places, annexation of crimea and the war in Ukraine, the foxconn suicide issue, 4G, LTE, 5G, fiber to the home, brexit, Golang, Rust, TypeScript, Swift, APFS, Arm and the downfall of Intel, the rise of NVIDIA, Netflix, TikTok, drones, electric cars, scooters, bikes, end-to-end design and construction of their mothership headquarters, and federal acknowledgement that climate change is an issue, have all basically happened in that time; but nope, it's for security reasons. Hell, even their lead industrial designer retired long before they'd let up.
Edit: Not that any of those have anything to do with the App Store, but still.
In the inevitable case where this lands Apple serious monetary penalties affecting the quarterly earnings, how many employees will be laid off? Will Alex Roman be one of them?
The heart of Apple's hypocrisy is this: they claim their 30% is necessary to support the developer ecosystem and fund its operations. But of course if that were true, they could easily charge a high enough platform membership fee directly to developers. Instead they opt for a structural tax to cover what are mostly completely opaque and secret operational costs. They're opaque and secret for obvious reasons: those expenses come nowhere close to the ~$30 billion in App Store commission Apple generates every year.
As described in the ruling, Apple hired a consulting group to estimate how much value developers get from the iphone platform, which found that
(1) Apple’s platform technology is worth up to 30% of a developer’s revenue.
(2) Apple’s developer tools and services are worth approximately 3%–16%.
(3) Apple’s distribution services are worth approximately 4%–14%.
(4) Apple’s discovery services are worth approximately 5%–14%.
Then Apple claimed this study was how they came up with the 27%, but the Judge basically said nah you guys came up with that number before the study, and you even know it would be a non-starter for almost all developers.
They don’t make that claim. That’s the service they are selling and the margin they choose. The royalty is similar to software retailer margins going back a long time. Steam charges a similar rate.
It’s pretty trivial to bypass. Just don’t charge for your software, and use the app to access paid resources purchased outside the platform. My company distributes a few dozen apps to thousands of employees, Apple gets $0, because they utilize an existing subscription or license unconnected to Apple.
Were they transparent, what would inhibit developers from bargaining against the costs and benefits shown? Sometimes that also outweighs the benefits of transparency.
You just can't show anything to anyone without kicking a wasp's nest.
I am not defending Apple, if anything, I am pro-Android here, but I understand the pickle they'd be in, were they be transparent with the cost structure.
The math of a one time fee is different than a percentage. Not sure what you are getting at by presenting a business model that doesn’t make sense as an argument
Is there any hope of a non-joke fine here? Or are we just looking at another kiss of the wrists as them and Google and all the other big tech cos fuck literally everyone over?
Responding to a comment by bn-l, but also to the general sentiment about Apple and untrusted code I often see on hacker news.
> The broader consumer base will install anything a bad actor wants them to and then blame the manufacturer for not stopping them with some draconian rule.
Has this even happened? Has anyone ever sued and won the case with a laptop manufacturer (or Microsoft or Apple), because they downloaded and executed an executable with malware on their computer? Do average people really blame Microsoft for malware?
I would kind of agree that they should, but not because Microsoft allows people to run untrusted code, but because the security model of Windows (and other PC operating systems) is still bad. But not because it allows people to run unsigned code.
Don't get me wrong, I don't think we should return to security model of old operating systems - smartphone OSes definitely got that right, except for the part that forces users to give up control of their devices. It's just that the argument, that allowing people to install software not signed by Apple on their own devices would make iPhones insecure, is totally unsubstantiated to me.
I see some people still arguing that (ex. older) people will do what they are told and will install shady software. If Apple really cares, they could provide a switch that allows users to disable installing "unverified" software. Maybe ask about it during setup. Maybe allow locking it until factory reset, or allow head of icloud family to control it. There are many options to keep some people secure from all unverified apps, while allowing others to run them.
Not to mention that the idea that all apps not signed by Apple are somehow malicious is just bad. You could have other entities than Apple verify code.
Currently, even running apps you yourself wrote, on your own hardware, is hard and limited. For no good reason.
The only reason Apple is blocking other stores, or preventing people from installing homebrew, is to collect more money. It's good that they are investing into security of their software and hardware, but in this particular case, security is used only as a distraction.
> . If Apple really cares, they could provide a switch that allows users to disable installing "unverified" software.
This exists on the Mac. You can configure Gatekeeper to always allow unsigned executables and packages to run, and skip the "You should move this to the Trash it could damage your computer" BS prompts. You can only do this with a Configuration Profile.
Some country recently fined Apple every day until they resolved the issue. I think such solution would both help push Apple to actually resolve the issue and do so in a timely manner.
As much money as they have, no shareholder wants to see a $1m/day expense on the balance sheet.
The court is pushing for criminal censure of some of the involved participants. If that happens -- and it absolutely should -- it will have a tremendous impact on the hubris seen in Apple, and in the industry in general. Hopefully bribes don't get them out of this, and some Apple execs really do end up with prison sentences.
Apple makes tens of billions of dollars a year off App Store royalties. If this ruling is upheld this fine has a net present value of 100 billion - trillion dollars depending on your discount rate. They will lose billions of dollars a year forever.
The timing of this with Tim Sweeney's interview with Lex Friedman is great. Watching a few hours of it, it's no wonder he hasn't slowed down in the slightest in this fight against Apple, he is unrelenting in his focus.
Apple should abandon the console model for iPhones (and iPads, etc.). It's corrosive. By my back-of-the napkin math (subtracting an estimate of Google's quarterly search payments from Apple's stated "services" revenue and comparing to iPhone revenue), Apple would make the same amount of money by just charging me an extra 25% when I bought a phone. I would gladly pay that up-front instead of indirectly when I buy apps.
Its not a dollar value. It’s an ongoing percentage based tax on your business relationships and consumption with other providers.
For instance, say Netflix has an iOS app with 10M installs. Apple wants 30% of the subscription revenue even though their costs are static. The only variable cost is payment infrastructure which to some degree is proportional to amounts (fraud etc). But what is the market value of that? A couple percent at most? Are apple even taking any risk?
And honestly, Apple could easily take 5-10% and I’m sure lots of vendors would still use them due to user preference - it’s trustworthy, provided an overview of ongoing subscriptions, and importantly you can cancel without being on a 30min retention call with absolute garbage companies.
But that needs to be played out by the markets. Competition will make Apples option cheaper and most likely competitors will step up to match the UX at lower prices. Free markets, like democracy, have this paradox of tolerance, ie bad faith players can abuse the very system to destroy it in self-interest.
I'm glad this happened, although I would have prefered if the result came from a new law eg. the Open App Markets Act rather than have to rely on what is or is not legally considered a market in terms of the sherman act etc.
[+] [-] neonate|10 months ago|reply
[+] [-] troad|10 months ago|reply
>> In Slack communications dated November 16, 2021, the Apple employees crafting the warning screen for Project Michigan discussed how best to frame its language. Mr. Onak suggested the warning screen should include the language: “By continuing on the web, you will leave the app and be taken to an external website” because “‘external website’ sounds scary, so execs will love it.” [...] One employee further wrote, “to make your version even worse you could add the developer name rather than the app name.” To that, another responded “ooh - keep going.”
[0] https://storage.courtlistener.com/recap/gov.uscourts.cand.36...
[+] [-] thealexliang|10 months ago|reply
I'd recommend skimming through the whole thing because Judge Rogers just eviscerates Apple over and over.
[+] [-] tyre|10 months ago|reply
I love whichever clerk wrote this and then got it through. The real MVP
[+] [-] xuki|10 months ago|reply
The bean counters won. I guess Tim Cook does care about the bloody ROI after all.
https://www.forbes.com/sites/stevedenning/2014/03/07/why-tim...
[+] [-] bze12|10 months ago|reply
They charge 27% for purchases made using external payment processors. Including Stripe fees that's net-zero (not even accounting for any chargeback risks). They severely limit how you can display the external purchase link too, and display an obnoxious warning screen when you tap it.
I would be surprised if a single developer adopted it.
https://developer.apple.com/support/storekit-external-entitl...
[+] [-] jim201|10 months ago|reply
I think Apple has done a great job marketing the App Store as the reason for the security/UX of their platform, when in reality, it's the OS. It's the OS that requires apps to get permission before accessing my location, it's the OS that isolates apps from each other, it's the OS that provides an easy way to install/uninstall packages.
The confusion between benefits of the OS/benefits of the App Store combined with many peoples' unfamiliarity with third party distribution has made it more difficult to convince people of the merit of these antitrust suits.
[+] [-] caseyy|10 months ago|reply
Now that US courts are doing it more, it seems that corporations abusing their monopoly powers are the problem, not EU laws. But what do I know.
[+] [-] cyberax|10 months ago|reply
Apple has zero moral justification for them. They are quadruple-dipping:
1. Consumers pay premium prices for Apple devices.
2. Developers have to pay $100 a year to be able to publish an app.
3. Developers need to buy expensive Apple hardware to develop for iOS. XCode doesn't work on Linux or Windows.
4. And on top of it, Apple also wants 30% of all the gross app sales.
All while their tools that developers _have_ to use are buggy and often nigh unsusable (Apple Connect....).
But wait, there's more! To keep the stronghold on developers, Apple is not allowing third-party apps to use JITs, resulting in a huge amount of time wasted to work around that.
[+] [-] snowwrestler|10 months ago|reply
[+] [-] rafaelcosta|10 months ago|reply
[+] [-] pasc1878|10 months ago|reply
If done through third parties directly the scammers will not make unsubscribing easy and it will not be as easy to find out where you are subscribing.
Thus I expect the scamming to increase.
[+] [-] redleather|10 months ago|reply
[+] [-] llm_nerd|10 months ago|reply
There is a lot to criticize Apple for -- the 30% fee is disgusting, and the subject of this order where they bar external payments without fees is criminal -- but the subscription complaint has always been weak.
[+] [-] mil22|10 months ago|reply
Excerpt from the filing:
"In stark contrast to Apple’s initial in-court testimony, contemporaneous business documents reveal that Apple knew exactly what it was doing and at every turn chose the most anticompetitive option. To hide the truth, Vice-President of Finance, Alex Roman, outright lied under oath. Internally, Phillip Schiller had advocated that Apple comply with the Injunction, but Tim Cook ignored Schiller and instead allowed Chief Financial Officer Luca Maestri and his finance team to convince him otherwise. Cook chose poorly. The real evidence, detailed herein more than meets the clear and convincing standard to find a violation. The Court refers the matter to the United States Attorney for the Northern District of California to investigate whether criminal contempt proceedings are appropriate."
[+] [-] autobodie|10 months ago|reply
The fines are always less than the companies' net gains from the practice. Gains are often indirect, risk-related, and/or part of a larger strategy, so they cannot be calculated.
Everything short of prison is a waste of time, waste of tax dollars, and spits in the face of decent citizens.
[+] [-] musicale|10 months ago|reply
Well that sounds rather damning.
[+] [-] stillatit|10 months ago|reply
[+] [-] Muromec|10 months ago|reply
[+] [-] to11mtm|10 months ago|reply
Here's the fun question though. Do Roman, Maestri et al not have any specific damages to this? (I know the answer, but it's a good question to ask....)
[+] [-] zelphirkalt|10 months ago|reply
[+] [-] brailsafe|10 months ago|reply
Oh c'mon, 16 years into a product line ain't too bad, is it?
If you had a kid when the App Store first came out, that kid would now be nearing high school graduation and you still can't do as you describe. The great recession, the pandemic, the iPad, proliferation of AI, legalization of Gay marriage in the states and weed in some places, annexation of crimea and the war in Ukraine, the foxconn suicide issue, 4G, LTE, 5G, fiber to the home, brexit, Golang, Rust, TypeScript, Swift, APFS, Arm and the downfall of Intel, the rise of NVIDIA, Netflix, TikTok, drones, electric cars, scooters, bikes, end-to-end design and construction of their mothership headquarters, and federal acknowledgement that climate change is an issue, have all basically happened in that time; but nope, it's for security reasons. Hell, even their lead industrial designer retired long before they'd let up.
Edit: Not that any of those have anything to do with the App Store, but still.
[+] [-] unknown|10 months ago|reply
[deleted]
[+] [-] unknown|10 months ago|reply
[deleted]
[+] [-] gorbachev|10 months ago|reply
I'd bet no.
[+] [-] unknown|10 months ago|reply
[deleted]
[+] [-] mvdtnz|10 months ago|reply
[+] [-] scarface_74|10 months ago|reply
[+] [-] mrcwinn|10 months ago|reply
[+] [-] elpool2|10 months ago|reply
(1) Apple’s platform technology is worth up to 30% of a developer’s revenue. (2) Apple’s developer tools and services are worth approximately 3%–16%. (3) Apple’s distribution services are worth approximately 4%–14%. (4) Apple’s discovery services are worth approximately 5%–14%.
Then Apple claimed this study was how they came up with the 27%, but the Judge basically said nah you guys came up with that number before the study, and you even know it would be a non-starter for almost all developers.
[+] [-] Spooky23|10 months ago|reply
It’s pretty trivial to bypass. Just don’t charge for your software, and use the app to access paid resources purchased outside the platform. My company distributes a few dozen apps to thousands of employees, Apple gets $0, because they utilize an existing subscription or license unconnected to Apple.
[+] [-] m463|10 months ago|reply
It didn't make sense to me for media from an external subscription or store account was taxed by apple (like netflix or kindle).
[+] [-] ivanmontillam|10 months ago|reply
You just can't show anything to anyone without kicking a wasp's nest.
I am not defending Apple, if anything, I am pro-Android here, but I understand the pickle they'd be in, were they be transparent with the cost structure.
[+] [-] m3kw9|10 months ago|reply
[+] [-] sensanaty|10 months ago|reply
[+] [-] plst|10 months ago|reply
> The broader consumer base will install anything a bad actor wants them to and then blame the manufacturer for not stopping them with some draconian rule.
Has this even happened? Has anyone ever sued and won the case with a laptop manufacturer (or Microsoft or Apple), because they downloaded and executed an executable with malware on their computer? Do average people really blame Microsoft for malware? I would kind of agree that they should, but not because Microsoft allows people to run untrusted code, but because the security model of Windows (and other PC operating systems) is still bad. But not because it allows people to run unsigned code.
Don't get me wrong, I don't think we should return to security model of old operating systems - smartphone OSes definitely got that right, except for the part that forces users to give up control of their devices. It's just that the argument, that allowing people to install software not signed by Apple on their own devices would make iPhones insecure, is totally unsubstantiated to me.
I see some people still arguing that (ex. older) people will do what they are told and will install shady software. If Apple really cares, they could provide a switch that allows users to disable installing "unverified" software. Maybe ask about it during setup. Maybe allow locking it until factory reset, or allow head of icloud family to control it. There are many options to keep some people secure from all unverified apps, while allowing others to run them. Not to mention that the idea that all apps not signed by Apple are somehow malicious is just bad. You could have other entities than Apple verify code. Currently, even running apps you yourself wrote, on your own hardware, is hard and limited. For no good reason.
The only reason Apple is blocking other stores, or preventing people from installing homebrew, is to collect more money. It's good that they are investing into security of their software and hardware, but in this particular case, security is used only as a distraction.
[+] [-] wpm|10 months ago|reply
This exists on the Mac. You can configure Gatekeeper to always allow unsigned executables and packages to run, and skip the "You should move this to the Trash it could damage your computer" BS prompts. You can only do this with a Configuration Profile.
[+] [-] gamblor956|10 months ago|reply
That's big. You really have to piss off a judge for them to refer a case for criminal investigation.
[+] [-] fsckboy|10 months ago|reply
[+] [-] brudgers|10 months ago|reply
Apple has close to 1/2 trillion in revenue a year. A few billion is rounding error.
[+] [-] sureIy|10 months ago|reply
As much money as they have, no shareholder wants to see a $1m/day expense on the balance sheet.
[+] [-] bobmcnamara|10 months ago|reply
[+] [-] llm_nerd|10 months ago|reply
[+] [-] HDThoreaun|10 months ago|reply
[+] [-] EcommerceFlow|10 months ago|reply
[+] [-] yieldcrv|10 months ago|reply
Apple Pay on websites works flawlessly and is great for impulse purchases. Its the same as the inapp experience.
I think this user experience will be fine.
[+] [-] neallindsay|10 months ago|reply
[+] [-] MarioMan|10 months ago|reply
[+] [-] klabb3|10 months ago|reply
For instance, say Netflix has an iOS app with 10M installs. Apple wants 30% of the subscription revenue even though their costs are static. The only variable cost is payment infrastructure which to some degree is proportional to amounts (fraud etc). But what is the market value of that? A couple percent at most? Are apple even taking any risk?
And honestly, Apple could easily take 5-10% and I’m sure lots of vendors would still use them due to user preference - it’s trustworthy, provided an overview of ongoing subscriptions, and importantly you can cancel without being on a 30min retention call with absolute garbage companies.
But that needs to be played out by the markets. Competition will make Apples option cheaper and most likely competitors will step up to match the UX at lower prices. Free markets, like democracy, have this paradox of tolerance, ie bad faith players can abuse the very system to destroy it in self-interest.
[+] [-] Vt71fcAqt7|10 months ago|reply