“On June 30, 2020, Epic’s CEO Tim Sweeney wrote my colleagues and me an email asking for a ‘side letter’ from Apple that would create a special deal for only Epic that would fundamentally change the way in which Epic offers apps on Apple’s iOS platform,” former Apple Senior Vice President Phil Schiller wrote in a declaration. Schiller, whose title is now Fellow, runs Apple’s App Store.
Apple said Sweeney was asking permission for Epic to bypass in-app purchases and allow Fortnite players to pay it directly, as well as permission to launch a third-party app store for iPhones. Schiller said that Sweeney emailed him the morning that Fortnite changed its payment mechanism saying that it “will no longer adhere to Apple’s payment processing restrictions.”
“Because of restrictions imposed by Apple, Epic is unable to provide consumers with certain features in our iOS apps,” Sweeney wrote in the June 30 email titled “Consumer Choice & Competition” produced by Apple. It was sent to Apple CEO Tim Cook as well as Schiller and other top Apple executives.
“Apple would need to provide a side letter or alter its contracts and standards documents to remove such restrictions to allow Epic to provide a competing app store and competing payment processing option to iOS customers,” it continued, although the letter did note that “we hope that Apple will also make these options equally available to all iOS developers.”
jdreyer wrote on Aug 23, 2020, 16:16:
That said, I didn't call you a Nazi supporter. I was pointing out a historical context: both of those (rather recent) regimes thrived on a close relationship between authoritarian governments and corporate conglomerates like the zaibatsu. It was through those relationships that both governments were able to ramp up their war machines and embark in misguided adventures resulting in the deaths of millions. Through mergers and acquisitions and other techniques, American business is steadily consolidating, and that's not a good thing.So this has much less to do with Sweeney, and more to do with the US government's lackadaisical approach to anti-trust and enforcing free markets in general, a problem which has been festering and getting worse for decades. And the reason is that these megacorps donate to both parties, and neither party wants to give up that sweet donation cash by going after these companies. Massive corporations that are able to fleece consumers and control the government are bad for both capitalism and democracy.
As for keeping devices longer, welcome to the PC industry, where people keep desktops and laptops for years, but those hardware companies don't require vertically integrated walled garden software shops to prop up their hardware business. Quite the opposite: You can get an amazing gaming laptop for less than a new phone due to the robust competition in that market. Market pressures keep companies innovating and prices reasonable.
As for user agency, there is none. Apple leveraged an amazing hardware and OS combination into an exclusive vertically integrated walled garden where it rules by fiat. Google gave away its OS for free in order to gain its market share, pushing out Blackberry and MS. There is no agency, because there's no choice. You need a phone, phones need apps, and it's either Apple or Android, that's it.
Beamer wrote on Aug 23, 2020, 07:53:Sepharo wrote on Aug 23, 2020, 02:50:
"I don't think they're a monopoly."
--"You know who else liked monopolies... Nazis."
Thank you for the funniest exchange of the week.
You know who else would find that funny?
Hitler. So there!
Verno wrote on Aug 23, 2020, 10:32:Yeah, I'd had a beer when I wrote that. Apologies.jdreyer wrote on Aug 23, 2020, 02:16:
Wow. I really just don't know what to say to that statement. That's as pro-monopolist, pro-corporatist statement as I've ever read. You know who else loved corporate conglomerates and monopolies? Imperial Japan and Nazi Germany. And we know how that politically cozy military-industrial complex turned out for the rest of the world.
I know you typed this late at night but yeesh man, you're a nazi supporter if you don't see things my way? Haha wow that is really below you. And you deserve a bit of a dig for that so quite frankly for a guy who didn't know who was being sued three days ago you really have some unbending opinions on this stuff and seem to discard any questions or other opinions out of hand. I'm sorry but I don't agree with your take on the situation right now and I was pretty patient and articulate in laying out why at several points here. I think it's premature to break up these companies at this stage, especially Google who allows users to choose to install alternative apps and storefronts. I can see all of the perspectives here and I feel they all have some merit. I also don't feel the phone market developed through anti-competitive action but consumer choice and I laid out my reasons. Maybe going forward this is a problem and these companies will need to be reigned in, I don't know, we'll see what the investigations reveal but "off with their heads" right off the hop feels irresponsible to me. I think that these platforms do need a central authority and trusted source for users because many app developers have shown themselves to be shitheads time and time again who will abuse users and these devices are starting to integrate into societal functions.
I don't think there is a lot of incentive for Apple and Google to operate platforms that they can't profit from.
Hardware profitability is a real question mark moving forward, users are keeping devices longer and its a much more competitive marketplace for devices.Not sure why you'd say that given that people still routinely pay hundreds or even thousands of dollars for new phones every two or three years. Apple is a two trillion dollar company, and the app store only adds ten billion or so in revenue every year.
And I see the perspective that as Apple and Google compete on services that they have a real conflict of interest in providing the app distribution and vetting.The free market has a solution for that: companies that don't vet apps lose business and shut down. Also, I would agree that come kind of regulation would be needed, just like we have for other industries where consumer protection is paramount.
Again though I think there's some alternatives that are less harmful than just immediately breaking up companies at the first of issues. But I guess we'll see what this case brings. Maybe Apple and Google need to charge for the operating system itself, spin off their respective storefronts and offer a "storefront catalog" the way that Microsoft does with search engines, I don't know. I think you're discounting the agency of users here and I'm not sure that deleveraging will be the solution that you seem to think it is. Regardless there are some shades of grey here and complexities that require a bit more thought in my opinion, I don't think that qualifies me or anyone else who disagrees with you as a nazi supporter though.Well, I wasn't calling you a Nazi supporter, just pointing out that those the kinds of governments that prefer that kind of relationship aren't good for society.
jdreyer wrote on Aug 23, 2020, 02:16:
Wow. I really just don't know what to say to that statement. That's as pro-monopolist, pro-corporatist statement as I've ever read. You know who else loved corporate conglomerates and monopolies? Imperial Japan and Nazi Germany. And we know how that politically cozy military-industrial complex turned out for the rest of the world.
Sepharo wrote on Aug 23, 2020, 02:50:
"I don't think they're a monopoly."
--"You know who else liked monopolies... Nazis."
Thank you for the funniest exchange of the week.
Verno wrote on Aug 22, 2020, 23:22:
Calls to breakup Apple and Google are reactionary and totally unnecessary at this stage.
I'm not even sure how you could possibly accomplish that, users have been given alternatives in the past and chose this path.
Users need a regulated, trusted source to download apps that have been vetted because cellphones carry far too much personal info for anything else. People point to other vertically integrated markets but they were vastly different. The only sensible solutions I've seen involve some sort of third party like a mediator, union or etc. I can see some sort of government appointed oversight to regulate revenue sharing but breaking up app distribution and the platform doesn't seem realistic, especially considering how close we are to these things serving as identity verification.If you're not going to break them up, regulation is an alternative. But we've seen how that has failed to work with telecoms and ISPs again and again. The rules are ignored, and there are no consequences.
They've tried when they brought out the Windows store with Windows 8, about 8 years ago. What was the reaction of Valve/Steam? The creation of Steam OS and then making Proton (a Wine fork) compatibility program to run Windows games on Linux OS'es. Timmy Tencent was also rather unhappy with MS when they announced a desire to lock most software behind the store. It was a silly idea because it would kill much of the reason people still use Windows, its open nature.
RedEye9 wrote on Aug 22, 2020, 06:38:Jonjonz wrote on Aug 22, 2020, 06:26:Well luckily Tim Sweeney knows the cost and it's obviously a lot less than 30%. And are you implying that brick and mortar costs the same as a computer serving a file?
This has been going on for years now, and still I am amazed at the number of people here that are totally ignorant of how distribution and retail operates in the real world. Taking at least 30% (or marking up the wholesale price by 30% with the retailer keeping the profit) is pretty much standard for retail world wide. People just seem to have no clue what it takes to run a retail operation bricks and mortar or online.
Verno wrote on Aug 22, 2020, 14:12:Because there's no other choice.twobit wrote on Aug 22, 2020, 09:32:
Nobody is asking Apple to host a competing storefront at Apple's expense.
Well Epic did.
Regardless though, should these companies and platforms be decoupled because of a revenue squabble?Yes, because this industry is noncompetitive and predatory ATM. It's either that, or regulation.
I can see there being an argument for some sort of objective third party for dispute resolutions like revenue sharing for example. That I could get behind. I just don't know how you come up with something that is fair to everyone, someone is always going to be unhappy.Yup, either divest or be regulated.
FloorPie wrote on Aug 22, 2020, 12:29:Now imagine MS had done that 25 years ago. Valve could respond the way it did because it already existed and was a multi-billion dollar privately owned corporation.
"* It is probably very tempting for Microsoft to have their own Walled Garden and money printing machine."
They've tried when they brought out the Windows store with Windows 8, about 8 years ago. What was the reaction of Valve/Steam? The creation of Steam OS and then making Proton (a Wine fork) compatibility program to run Windows games on Linux OS'es. Timmy Tencent was also rather unhappy with MS when they announced a desire to lock most software behind the store. It was a silly idea because it would kill much of the reason people still use Windows, its open nature.
Verno wrote on Aug 22, 2020, 08:36:Yes, he's trying to pay zero. That's how market pressure works. iOS wants him to pay 100%. He want's to pay 0%. In a free market, he could shop around and bargain. Can't do that here. Look, I don't think Tim is an altrustic humanitarian. I think he's doing what's best for Epic. However, I sympathize with his struggle to pay a fair amount in a $50B duopolistic market. If this raises the profile of this issue, and gives ammo to the government cases against Apple and Google, then I'm all for it.Orogogus wrote on Aug 22, 2020, 05:03:jdreyer wrote on Aug 22, 2020, 00:24:Sure they would. Because even if there were competition, Apple would still have way more than 50% market share, and you'd still be complaining about a monopoly, like you do with the PC market and Steam's 75%.
The point is that all iOS developers wouldn't have to swallow an egregious 30% cut if there was more competition in the market.
I asked before but didn't see an answer -- where do you see artists getting more than a 70% cut of revenue? It seems to me that you've accepted that it's outrageous based on Sweeney's say-so, but I haven't seen much evidence.
Again I think it bears worth repeating that Tim is continually trying to pay zero. There is no fair cut because the cut he wants is nothing and we now have evidence from the source in that regard. He's done it with Google and now Apple. He's also suing Google who allow users to install their own apps and storefronts. What's the excuse there?
Apple and Google should not be forced to host a direct competitor to their store on their store and do it for free. And breaking up Apple and Google is no solution to any problem here. We can't just breakup every closed software platform when they become successful.And software developers shouldn't have to operate in a duopoly. Imagine if MS had a vertically integrated walled garden and all software, including games, had to be sold through the MS store: no Steam, no GoG, no EA store, just MS. When MS got 96% market share for Internet Explorer, they stopped development. Can you imagine if we were all still using IE 6.0?
The "just trust Tim" argument is amusing but ignores the fact that he's been hypocritical about these and other issues many times, not to mention deceptive about seeking an arrangement with Apple while he attempts to recruit children for his PR campaign. Tim is a businessman like most others, he acts out of self interest. I don't mind when his interests align with consumers but there are bigger questions here with serious ramifications to these platforms and I don't see a lot of answers from the people who seem eager to just accept his version and want these companies broken up.Why shouldn't these companies be broken up? Ma Bell was broken up, and we got much better and cheaper innovation and phone service. Intel was not broken up, but was prevented from enforcing its patents on CPUs, resulting in at least nominal competition in the CPU market (such as it is). Duopolies are terrible, but they're still preferable to monopolies. If Apple and Google were forced to sell off their app store divisions and allow multiple app stores on their devices, we'd see actual competition in this market.
jdreyer wrote on Aug 22, 2020, 16:09:wait, what’s that you said about competition??.?Jonjonz wrote on Aug 22, 2020, 06:26:
This has been going on for years now, and still I am amazed at the number of people here that are totally ignorant of how distribution and retail operates in the real world. Taking at least 30% (or marking up the wholesale price by 30% with the retailer keeping the profit) is pretty much at the low end of markup. Some industries the markup is often much higher. Clothing can be any where from 50 to 125%. Restaurants anywhere from 50% to 500%. It is just verbiage between a suggested list price of $100 + 30% or $130 with the 30 going to the retailer and a list price of $130 with the retailer keeping $30.
Sure, but restaurants and clothes retailers operate in environments of nearly infinite competition. Market pressures keep the difference between cost and price very close. Profit margins are in the low single digits. Also, there's more overhead in those industries with respect to physical retail spaces and employee salaries. These industries are linear, meaning a 10% expansion requires a 10% increase in cost. Digital distribution, on the other hand, is exponential: a 100% expansion requires only 10% increase in outlays. Add to that little market pressure because of Apple's vertical integration and 50% market share, and there's little innovation. The app store is a profit center that has changed very little over the past decade, because it hasn't had to.
RedEye9 wrote on Apr 19, 2019, 16:52:
Competition is good for gamers, developers, storefronts and publishers.
Mr. Tact wrote on Aug 22, 2020, 06:30:
So, everyone who thinks Apple and Steam are screwing over developers with their 30% cut -- you must really despise professional sport team owners. Right? I mean, as far as I know the major sports (MLB, NBA, NFL) all have around a 50/50 split of revenue between the owners and the players.
Jonjonz wrote on Aug 22, 2020, 06:26:
This has been going on for years now, and still I am amazed at the number of people here that are totally ignorant of how distribution and retail operates in the real world. Taking at least 30% (or marking up the wholesale price by 30% with the retailer keeping the profit) is pretty much at the low end of markup. Some industries the markup is often much higher. Clothing can be any where from 50 to 125%. Restaurants anywhere from 50% to 500%. It is just verbiage between a suggested list price of $100 + 30% or $130 with the 30 going to the retailer and a list price of $130 with the retailer keeping $30.
Orogogus wrote on Aug 22, 2020, 05:03:jdreyer wrote on Aug 22, 2020, 00:24:Sure they would. Because even if there were competition, Apple would still have way more than 50% market share, and you'd still be complaining about a monopoly, like you do with the PC market and Steam's 75%.
The point is that all iOS developers wouldn't have to swallow an egregious 30% cut if there was more competition in the market.
I asked before but didn't see an answer -- where do you see artists getting more than a 70% cut of revenue? It seems to me that you've accepted that it's outrageous based on Sweeney's say-so, but I haven't seen much evidence.
Verno wrote on Aug 22, 2020, 08:36:Orogogus wrote on Aug 22, 2020, 05:03:jdreyer wrote on Aug 22, 2020, 00:24:Sure they would. Because even if there were competition, Apple would still have way more than 50% market share, and you'd still be complaining about a monopoly, like you do with the PC market and Steam's 75%.
The point is that all iOS developers wouldn't have to swallow an egregious 30% cut if there was more competition in the market.
I asked before but didn't see an answer -- where do you see artists getting more than a 70% cut of revenue? It seems to me that you've accepted that it's outrageous based on Sweeney's say-so, but I haven't seen much evidence.
Again I think it bears worth repeating that Tim is continually trying to pay zero. There is no fair cut because the cut he wants is nothing and we now have evidence from the source in that regard. He's done it with Google and now Apple. He's also suing Google who allow users to install their own apps and storefronts. What's the excuse there?
twobit wrote on Aug 22, 2020, 09:32:
Nobody is asking Apple to host a competing storefront at Apple's expense.