Wednesday, July 29, 2020 [Tweets] [Favorites]

Tim Cook’s App Store Testimony

Juli Clover (also: 1, 2):

Apple CEO Tim Cook is today participating in an antitrust hearing with the U.S. House Judiciary Antitrust Subcommittee alongside Alphabet/Google CEO Sundar Pichai, Amazon CEO Jeff Bezos, and Facebook CEO Mark Zuckerberg.

[…]

Cook is expected to be grilled about Apple’s App Store policies in regard to app rejection and competition, disputes with the FBI over encryption and law enforcement access to locked devices, Apple’s relationship with China, and its App Store fees and subscription policies.

Cook was initially reluctant to participate in the hearing because he does not believe Apple should be grouped with Facebook, Amazon, and Google as an antitrust violator, but he was not able to avoid testifying after a threat of a subpoena from subcommittee chairman David Cicilline, who publicly criticized Apple’s App Store fees.

Tim Cook (text, also: Mark Gurman, tweet):

When the App Store was created, the prevailing distribution options available to software developers at the time did not work well. Brick-and-mortar stores charged high fees and had limited reach. Physical media like CDs had to be shipped and were hard to update.

[…]

The App Store guidelines ensure a high-quality, reliable and secure user experience. They are transparent and applied equally to developers of all sizes and in all categories.

It’s sad to see Cook shred his credibility like this.

For the vast majority of apps on the App Store, developers keep 100% of the money they make. The only apps that are subject to a commission are those where the developer acquires a customer on an Apple device and where the features or services would be experienced and consumed on an Apple device.

I’m not sure what point this is trying to make. Are we supposed to be happy that Facebook pays nothing, while privacy-respecting apps that are exclusive to iOS pay 30%? Does it make sense that gym classes need to start paying Apple 30% because they now must be conducted remotely due to the pandemic? How does Apple giving the high-profile ClassPass a reprieve until the end of the year accord with the earlier statement about everyone being treated equally?

In the more than a decade since the App Store debuted, we have never raised the commission or added a single fee. In fact, we have reduced them for subscriptions and exempted additional categories of apps.

They added a de facto fee for search ads; if you don’t pay it, when someone searches for your app it won’t appear at the top of the list even if it’s the best match. They also changed the unwritten rules so that e-mail apps (as well as other categories) now have to offer IAP (and, thus, pay more fees). It also used to be allowed to sell e-books within an app’s Web view.

Ben Thompson:

Notable to see Apple confirming a point I’ve been trying to make: the company believes it is entitled to all commerce that happens on an iPhone.

Michael Love:

No new arguments, just the same tired comparison to physical retail + reminder that most apps pay nothing because this particular Apple Defending 30% Statement is a Most Apps Pay Nothing Statement rather than an Everybody Should Pay Their Share Statement.

John Gruber (Hacker News):

Take for example the Netflix Rule — the “reader apps” exception that allows Netflix (to name the most conspicuous example) to offer an iOS app that does not use Apple’s in-app purchase system.

[…]

It is prima facie wrong that one of the rules is that an app is not allowed to explain the rules.

[…]

No mention here of Steve Jobs’s statement, announcing the App Store in 2008: “We don’t intend to make any money off the App Store. We’re basically giving all the money to the developers and the 30 percent that pays for running the store, that’ll be great.”

[…]

The analogy to a “quality department store” holds as much water as a sieve. The App Store is analogous only to something like Amazon, an everything store, with apps ranging from premium products to abject junk.

[…]

Talking about brick-and-mortar software distribution without even mentioning direct downloads and sales over the web is flat-out dishonest, and clearly the most disappointing aspect of Cook’s prepared testimony.

Rob Pegoraro:

Apple CEO Tim Cook comes closest to offering outright alternative facts to Congress in a defense of the company’s App Store that essentially erases the history of online distribution before the 2008 debut of the App Store.

[…]

Installing apps on early handheld organizers was not so easy, requiring a download to a computer and then a transfer to the gadget. But by the mid 2000s, Palm OS handhelds and smartphones hosted a thriving market for third-party software.

Brent Simmons (tweet):

If I make and distribute toothpaste, I can offer the exact same product via Kroger, Safeway, and Albertson’s — and I could sell it from my own website and via Amazon.

That’s a lot of choices I have for selling my product.

But if I write an iOS app, I can sell it via the App Store and through no other method.

[…]

And they haven’t realized that current App Store policies actually hurt the situation: we don’t have the quantity and quality of apps we should have. Which hurts that very ecosystem.

David Heinemeier Hansson:

Apple is unlike any other platform when it comes to the North American market for premium services like HEY. As of today, 90% of everyone who pays for our service uses at least one Apple device. 3/4 of all paying customers have the iOS HEY app that Apple was threatening to evict installed on their phone.

Apple isn’t just a dominant player in this market, they are the market.

[…]

Apple controls who can and cannot compete in virtually all sectors of the digital economy through the monopoly power they wield capriciously with the App Store. It is simply not possible to even get the chance to take on the likes of Google, Microsoft, and Verizon with a new email service without begging Apple for permission to do so.

Zac Cohan:

I would argue a heathy indie population does more for Apple than the sliver of service revenue we contribute to the balance sheet. We cater to niches and sometimes invent new things. In fact, according to an Xcode engineer, the design of Swift Playgrounds was based on Soulver.

[…]

Better yet, how about a model where App Store revenue is derived from the apps that use the most resources? Like, does Soulver (a paid upfront app) really need to subsidise Facebook’s free apps like Instagram & Messenger?

See also: this quote about using the App Store to strong-arm Random House into supporting the iBooks Store.

Previously:

Update (2020-08-03): Ben Thompson:

It’s so funny how Apple has adopted this “The Internet doesn’t exist as a distribution channel” approach to its App Store rhetoric.

The App Store was revolutionary, particularly in the way it made users feel safe, relative to the Internet, which existed. It’s ok to admit that!

Jim Rea:

I’ve been selling Mac software since 1984. Brick and mortar has never been a big player. In the 80’s/90’s it was mostly mail order, late 90’s transitioned to online, which our business still uses. Mac App Store was a flop for us, fortunately online is still strong.

Josh Centers:

Something that should be asked at the hearing, but won’t: why does Apple let some companies blatantly violate App Store rules? For instance, why is Youtube allowed to break background audio and resell that feature as a subscription?

See also: Ben Thompson.

Mark Gurman (article, Reddit):

Now we know how Apple convinced Amazon to finally put Prime Video on the App Store in 2017: Apple agreed to only take 15% of revenue from Prime Video subscriptions made on iOS, versus the 30% they were taking from others.

Juli Clover:

When asked about the inconsistency over the approval of the [Hey] app and the subsequent controversy, Cook didn’t have much to say other than pointing out that the issue was resolved and that the App Store provides a lot of value for developers.

Benjamin Mayo:

Having Tim Cook say that everyone is treated equally when it is clearly not the case is not a good look.

Michael Margolis:

In 2008 we were contracted to build an app

Apple held it up for 9+ mo over CC payments

Meanwhile, ComiXology was released and was allowed to do the same thing

In 2011 they was the #1 grossing app in the App Store

[…]

We were just contractors building it but It was heart breaking watching Apple give ever-changing reasons to deny the app which imo led to the failure of the company. Hard to build a business when everything is made up and the points don’t matter.

Matt Deatherage:

The App Store upheaval is a nightmare of Apple’s own creation. The concept of a “curated” store got kicked to the curb when addictive games like Candy Crush started bringing in $50 million per month.

[…]

Tim Cook testified that all developers are created equal, but anyone paying attention knows that’s false.

Tim Bray:

The key sticking point remains that the App Store is the only distribution channel for iOS. It is an officially designated, formally recognized monopoly.

If there were a Plan B for developers, then Apple would be able to prove that the value added by the App Store justifies the 30% Apple cut. But there isn’t.

Steve Troughton-Smith:

At least one of the elephants in the room: Apple already has a longstanding platform where the App Store is optional — the Mac — and very few of the developers you care about are present in its App Store, because the terms just aren’t good enough.

Nilay Patel:

Neguse to ask Cook about the App Store. Does Apple have to operate by the same rules as developers? Yes, says Cook. Neguse asks why Apple gets to submit clones of apps when the rules specifically prohibit that for others. Cook is “not familiar with that.” Woof.

Guilherme Rambo:

There’s no other word to describe this other than lie. Just look at how many of their apps in the AppStore have private entitlements and use private API. The Clips app doesn’t even ask you for camera permission, it gets it by default

Flux:

In 2009 we first approached Apple to get f.lux on iPhones. Years of promises of API access. The last conversation we had with them was “that’s too weird for most of our users. Like the Klingon keyboard.” Then, they announced their clone onstage, Macworld 2016.

Hartley Charlton (also: Nilay Patel):

Originally, Kindle books were available for purchase via the iOS app. Since 2011, the Kindle iOS app has only allowed users to read books in the app.

[…]

Phil Schiller expressed concern in one of the emails that Amazon was advertising the fact that users could still access Kindle books purchased on iOS on Android devices, suggesting it was convenient to switch from iOS to Android.

Schiller explained that Apple initially made an exception for Amazon[…] Over time, as sales of iOS devices rose dramatically, Schiller believed that it was time to reconsider the exception. […] Amazon later removed a link to the Kindle Store in the iOS app to comply with the new App Store subscription rules.

The Proton Team:

We have come to believe Apple has created a dangerous new normal allowing it to abuse its monopoly power through punitive fees and censorship that stifles technological progress, creative freedom, and human rights.

See also: The Talk Show, Accidental Tech Podcast, the evidence presented to the House Judiciary Committee.

10 Comments

Old Unix Geek

More than a little disgusted by Apple's testimony today... This is the sort of rewrite of history of which Orwell would be proud.

One subtext seems to be that their "150,000 APIs" make it so easy for people to make apps that school children can make them. I.e. Apple provides all the value, third party developers actually do very little: they just provide a way for users to "customize" their devices. Since that's all they do, third party developers should be grateful to have been allowed to have been given access to the iPhone and sell software.

Apple say they "invented" the "App Store" to allow users to install software, conveniently ignoring the fact that Steve Jobs didn't want to allow native apps... he thought Web Apps would be a "sweet solution". Users disagreed and the first iPhone was jailbroken a couple of days after its release in 2007, allowing people to create their own apps.

Apple also claims that the App Store ecosystem created half a trillion dollars of wealth, as if it were responsible for all that economic activity. But that includes wealth that would have been generated elsewhere otherwise. It's rather like if my ISP claimed to be owed a royalty if I sell something over the internet. Apple did not create this wealth. They are simply sitting between the third party developer and the user of the third party developer's software/services.

Then Apple claims to invest in the App Store's improvement, APIs, and education out of "no obvious financial interest". What rubbish. They are doing it for two very self-interested reasons: the multitude of APIs create barriers to moving software to other platforms, and simultaneously they commoditise their complement by creating more and more "engineers" who only know their platform.

I hope Congress proves to be a little less thick than Apple seems to think it is.

It's totally ridiculous that Apple is framing it as if they are the ones generating all this money. If it weren't for developers -- *particularly* indie devs that make iOS-only apps -- nobody would buy iPhones or iPads. Apple already makes 30%+ in profits on each device sold. Then they take another 30% every time somebody buys an app, even though it's the developer that is creating 90% of the value (yes I agree that Apple does create some of the value by APIs, hardware like the Pencil, new iOS features that make new types of apps possible).

I don't know the solution to this: it seems totally wrong that companies like Facebook and Google pay zero to distribute their apps on the App Store. Especially since they make some of the worst apps, constantly submit weekly (or more frequent) app updates which require App Review and annoy end users, their apps use an inordinate amount of bandwidth resources, etc. The 30% from indie app devs should not be subsidizing free apps from billion dollar corporations.

After reading all of the arguments for the past several weeks I think Apple would earn a lot of goodwill by reducing their fee to 20%, changing some of their crazy rules like not being able to tell customers how to sign up over the web, adding a few more types of apps that don't have to pay the fee (like the situation with Hey email), and get rid of Search Ads which are just sleazy.

Also: stop lying and trying to gaslight us.

Another interesting comparison that came to my mind (which I grant is not very equal) is how companies such as YouTube and TikTok and I think Twitch (?) actually pay popular creators to be on their platforms -- often to be exclusive. They realize that their platforms would be nothing without something interesting for people to watch.

What would happen if instead of taking 30% from app creators, Apple actually paid the best developers who create unique apps that keep users stuck on iOS? I mean aren't they kinda doing this with Arcade? If Apple supported indie devs with, I dunno, a $10/month subscription which gets me access to my choice of 5 of the best 100 apps on the app store, and Apple gave 100% of that money to those 5 devs ($2 each), I'd probably sign up in a heartbeat (especially if I could change which apps I wanted to "rent" on a monthly basis). Because those best apps would likely be much more amazing than what we have today since it would open up so much more opportunity for devs if they had the time and money to invest in it.

Apple needs to start viewing creators as an asset that brings money TO Apple, not something to take money FROM.

Side stepping the App Store issues, There is something VERY wrong with Apple's PR.

Something has changed since Steve Jobs. And it was shown in the Qualcomm vs Apple's Case. Tim Cook was basically flat out lying. But Apple got away with it because the public were siding with Apple.

And it is the same here. The narrative from Apple is in stark contrast to Steve Jobs's era.

>What would happen if instead of taking 30% from app creators,
>Apple actually paid the best developers who create unique apps
>that keep users stuck on iOS?

That's exactly what they should do. Instead of stealing from the very people who make their platform worthwile, Apple should let them share in the wealth these developers helped create.

In fact, if there was competition between different stores, that would actually happen. That's what happened with PC games, where Epic is paying developers to put games into their store.

But as long as Apple has a monopoly on software distribution on iOS, nothing will change. That's the root of the problem, the reason why Apple thinks they can steal money from the people who make software for their platforms, the reason why the App Store sucks for users, and the reason why there's so little good software on iOS.

You were all thoroughly warned when Apple started soldering RAM in Mac Minis that Tim Apple no longer considered the personal computer “personal” any more. In Catalina it’s a glorified Apple TV and you’re not consuming enough “curated” weepy boomer content. Per Phil Schiller you’re a “deadbeat” if you develop or consume “free apps.”

Quality has taken a back seat to vacuous platitudes and profit, and AAPL execs know that we’re all a bunch of simps for swallowing their obvious lies along with their repugnant (to me) politics. My MBP now on Catalina kernel panics every 3 days. It *used* to be my Spamsieve mail server. Now it just “power naps” while I experiment to see if Spamsieve still works, Never had a kp until Crapalina, Thanks Tim Apple.

Recently one of our MBPs from 2010 finally died. Did I get a new MBP? Nope. No more. A 2011 Mini was handed down, and High Sierra was installed. Remember when Macs were fun? High Sierra was the last enjoyable OS for me. Mojave had serviceable clunk, Crapalina is now merely annoying after 6 iterations, and Apple’s not getting my big money any more. “Big Sur” just looks obnoxious and infantile and my 2013 MBP is not going to be upgraded past Catalina. They really need 3 more releases of Catalina to get back to “old Apple reliable.”

ATP they can bottom feed me 1-2 dollars at a time and no “Apple Pay” ever.

I barely remember when Apple kit was “fun” so I won’t be buying “Apple silicon” from the MBA bottomfeeders who run a company that’s going the way of Sun Microsystems. And “I have enough apps.” I don’t need to run junk iOS apps on a work Desktop.

I only pray there will be enough developers who can tolerate AAPL’s gaslighting & mistreatment before I have to hunt for replacement kit sometime in the next 5 years. That’s how long I give them under the current “leadership.” They pulled a Sun and will go the way of Sun.

Paying the best developers like they do with Arcade seems like a good idea. I don't know how the experience from the companies actually having Arcade games are - it would be useful to know more about it.

My wishlist:
- 10% fee on in-app purchases
- Allow companies to use their own payment solutions
- Completely drop search ads and raise annual developer fee to $999

Apple should then start working on improving the tools given to developers using in-app. It's current state is embarrassing and wildly lacking in features; "Refund? Yeah, ask Apple about that, I know you are our customer but we can't help". Hell, we can't even look up a customer and see their history with us. It's an insult we get to pay 30% for....

And Apple should absolutely find a way to make the likes of Facebook pay for their presence. Millions (billions?) of downloads and updates for $99 a year is crazy.

Niall O'Mara

Yeah it's sad to see Apple/Tim being so disingenuous.

The biggest lie is the pretence that Apple curate the App store like a department store. If that analogy held true people would be very REALLY wary of department stores given the amount of spam and disguised in app crap that exists in the App store - not to mention the money making app search feature that allows dodgy developers to buy the first place result of a search for something different. Yeah that must really drive up the 'User Sat' figures.

With Apple increasingly driven by services revenue - I am under no illusion that Apple truly have their customer's interest at heart.
This was deeply understood by me when I had no way to stop the music app playing the lyrics "I'm not half the man I used to be' to my father who had just been admitted to a nursing home as the app screen was obscured by a yet to download advert for Apple Music.

I WAS UNABLE TO CONTROL MY OWN APPLE DEVICE, PLAYING MY OWN BOUGHT FROM ITUNES MUSIC BECAUSE APPLE WANTED TO UPSELL ME TO A MUSIC STREAMING SERVICE

They are merely the least-worst technology company nowadays and, sadly, not by very much.

And lets all (un)kindly remember that Apple can killswitch any App that you’ve bought, from anywhere, anytime they want because of “Notarization.”

Notarization as a “security feature” has turned into a deal breaker for me. If I bought an App that they previously vetted and there has been no change or update AND I’m on a deadline *and* some muppet at Apple kills the App I bought and paid for ... I just don’t see the value of Apple iron anymore. Apple should not be able to interfere with a developer I’ve had good business with, with an App that’s better designed and actually useful that I rely on. Apple can “Patreon” me at any time, there’s an App for that: “Notarization.”

They did this just today with Charlie Monroe. To Downie and Permute, 2 apps I rely on. I’m sure it was a “mistake” of “subjective judgment.” /s

And don’t talk to me about Apple Silicon, don’t even talk to me until Notarization is dead and gone from macOS. All Apple did was make tortious interference an app and call it “Notarization.” If I were Congress I would be investigating Apple for this dubious “feature” NOW.

But this isn’t fair Leo. It totally is because other companies haven’t gone this far and wouldn’t do this. And Tim Apple wants a premium for “services” such as this. Nah.

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