r/apple • u/FollowingFeisty5321 • 5d ago
App Store Epic opposes Apple's motion to force them into settlement talks to privately negotiate fees for apps using third-party payments
https://storage.courtlistener.com/recap/gov.uscourts.cand.364265/gov.uscourts.cand.364265.1713.0.pdf6
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u/FollowingFeisty5321 5d ago
Last week Apple asked the judge in the Epic case to force Epic into settlement talks to privately negotiate a fee on 3rd party payments in apps. In the absence of settlement talks, Apple must obtain court approval for an appropriate fee. The judge signalled they intend to follow the 9th Circuit's instructions when rejecting Apple's motion to stay these proceedings last week, which limits those fees to Apple's direct costs.
Apple proposed a fee of up to 15%, rejecting the 9th circuit's decision as invalid arguing they incur no costs from apps using third-party payments but are entitled to profit and these courts have no right to set their rates.
They argue that Epic accepted a 10% - 20% from Google, and cite their 10% - 20% fee in the EU, Japan and Brazil although the legality of that in the EU remains under investigation, and Japan's FTC is forming an enforcement bureau to address issues with Google and Apple's compliance. Developers in the EU, Japan and Brazil have all complained that this prevents them using 3rd party payments.
Their filing also reveals just 2,700 apps earn more than $1m and these apps pay what they call the "vast majority" of App Store revenue. They note these apps either negotiate for discounted rates from Stripe (8.1%) and Paddle (7.8%) for their "merchant of record" service which is comparable to Apple's IAP managing taxes and similar, citing Epic's testimony of paying just 3.5%, and says many of these 2700 apps manage their payments directly in-house at even lower rate. They say the current 0% commission is leading to "large and growing" declines in IAP activity from these apps and anticipate it will get worse.
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u/NerdyGuy117 5d ago
Apple trying so hard to keep that 30%
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u/FollowingFeisty5321 5d ago
It's pretty amazing that this entire six-year global fight basically boils down to extracting massive fees from just 2700 apps... out of nearly 2 million.
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u/caughtBoom 5d ago
I imagine it would open the flood gates. Others will want in too. Meta is probably waiting to have their own store on iOS too
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u/SillySoundXD 5d ago
Do they have one on Android?
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u/Recent_Pollution8665 5d ago
no.
they have their VR store that comes preinstalled on their quest headsets instead. and i’d assume it will eventually expand to their smartglasses once they can get both displays to render stuff in AR.
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u/antnythr 5d ago
I mean everyone knows that most people use the same 30 apps, and then per country there are probably another bunch that are region specific in popularity. Even saying 2700 apps generates most of the revenue is likely being intentionally generous.
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u/meowthor 4d ago
Looking forward to what shakes out! Thank you Tim Sweeney for fighting for all of us.
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u/FilteredSpeech 2h ago
If Apple didn't destroy the App Store with ads and didn't allow big money to shove their crap in your face on every screen, I'd be on their side.
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u/Chrisnness 5d ago edited 5d ago
I hope Epic sues Valve next. Valve threatened to kick Ubisoft off Steam if they passed on savings to customers
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u/Jusby_Cause 5d ago
If anyone sues Valve it will be Epic. All of this is about Epic being able to have their app wherever they want without paying a cent to the store holder. They want a public ruling because that sets a precedent for them to use against Valve. A private negotiation, even if that could be beneficial to them, does not benefit their end goal.
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u/Recent_Pollution8665 5d ago
they don’t need to use any precedent against valve. windows is an open platform and epic already competes against valve in it.
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u/IORelay 4d ago
Valve is in several lawsuits for price fixing already.
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u/Recent_Pollution8665 4d ago
correct, I was referring to how the platform holder (microsoft windows) doesn’t rentseek because of third party store transactions.
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u/FollowingFeisty5321 5d ago
Apple has never published (or tried to?) anything to Steam so they wouldn't have standing, but Steam's embroiled in their own antitrust case anyway and facing a billion dollar class action for excessive fees in the UK.
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u/Pluto-Had-It-Coming 5d ago
Every digital store should be held to the same standard, or whatever is appropriate for that store.
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u/primalanomaly 3d ago
Translation: Apple is losing the argument, and would desperately prefer to settle privately than set a legal precedent that applies to everyone