Archive for May 21, 2021

Friday, May 21, 2021

Epic v. Apple, Day 15

Nick Statt (tweet):

Apple CEO Tim Cook took the stand on Friday for the final day of testimony in the Epic v. Apple antitrust trial.


“When they buy an iPhone today, they buy something that just works. I think they buy into a total ecosystem when they buy an iPhone,” Cook said. Bornstein presented Cook with the notion that Apple has no idea if it’s more dangerous to open up the iOS ecosystem because it has not once allowed it in the iPhone’s nearly 15 years of existence. “It’s an experiment I wouldn’t want to run,” Cook replied. Cook said his assertion that a more open IOS would be “terrible for the user” to be based on his “business judgment.”

Juli Clover:

Cook was asked if third-party companies could implement app review as effectively as Apple, and Cook said no.

They’re not as motivated as Apple is. For us, the customer is everything. We’re trying to give the customer an integrated solution of hardware, software, and services. We deliver a brand of privacy, security, and safety. I just don’t think you can replicate that in a third-party.


Judge Rogers engaged Cook in a long debate about in-app purchases and how they’re driven by games. Rogers is curious what’s wrong with Apple providing users with choice within in-app purchases. If people want to buy v-bucks separately, what’s the issue with Apple giving them that option? Or telling them they can make the choice?

Cook said that if people were allowed to link out, Apple would “in essence give up [its] total return on [its] IP. The judge then pointed out that games make up most of the in-app purchases. “It’s almost as if they’re subsidizing everybody else,” she said.

“We need a return on our IP,” said Cook. “We have 150,000 APIs to create and maintain, numerous developer tools, and processing fees.”


Do all developers like things the way they are? asked the lawyer. “Some developers don’t like it,” said Cook, referencing Epic Games . He said there are a “few others” who aren’t satisfied with the App Store policies[…]

Adi Robertson:

Judge asks to clarify what the data says. “There’s about 1-2% of the malware is on the iPhone vs. around 30-40% on Android and another 30-40% on Windows. It’s quite a difference,” says Cook.


The [small business] program was in the works for years but only happened in 2020. Why? “I was very worried about COVID and the effects of COVID on small businesses in particular,” Cook says.


How have prices consumers paid for software changed?

“They’ve definitely gone down significantly,” says Cook, from the days of buying a “shrink-wrapped package from the local retailer.”


What about references to locking customers into devices?

“It means making all the product work so well together people don’t want to leave,” Cook says.

Is there anything Apple could do to lock people into iOS?

“Not that I’m aware of.”


Cook looks over an email calling iMessage the toughest thing to leave behind, and he characterizes it as somebody having configured iMessage wrong and having issues getting their messages on a new phone.


Epic’s lawyer says Apple has 1.8 million apps, so it couldn’t possibly be “curated,” a term Apple has linked with the store.


Lawyer says, “if people really value Apple’s curation and Apple’s App Store, even if there are multiple stores, people could still go shop at Apple,” right?

“It seems like a decision that they shouldn’t have to make,” Cook says.


Epic now going to Cook’s congressional testimony saying Apple’s never increased the commission rate in the store. But Apple has “expanded the scope of transactions” to which the commission applies, right?

Cook says yes if that means they’ve added new product features.


Judge Rogers: “You don’t charge Wells Fargo or Bank of America, right? But you’re charging gamers to subsidize Wells Fargo.”

“In the gamers example, they’re transacting on our platform,” Cook says.

“People are doing lots of things on your platform,” judge says.

“I understand this notion that somehow Apple’s bringing the customer to the gamers, to users. But after that first time, after that first interaction … the developers of the games are keeping their customers. Apple’s just profiting off that, it seems to me.”

“I view it differently than you do. We’re creating the entire amount of commerce on the store, and we’re doing that by focusing on getting the largest audience there, we do that with a lot of free apps so those bring a lot to the table,” says Cook.

Leah Nylen:

“We could no longer make the promise” of safety, security and privacy, Cook says. The promise depends on the app review. I know they want that because they tell us that.

What would be the consequence of not having to use IAP? Moye asks. Customers would then have to post their credit cards in all these different apps. It would be a huge inconvenience and the fraud risk would go up, Cook says.

Apple would also have to come up with a new way to collect its commission. IAP is the most “efficient” way to do it, Cook says.

Apple Pay already prevents customers from having to enter their credit cards, and it gives Apple a commission, but Apple forbids its use in cases where it requires IAP.

Khaos Tian:

lol Apple think even if they allow other payment methods, they are still entitled to get a cut for transactions happened within an app 😛

Leah Nylen:

You maintain Apple did not retaliate by threatening to shut down the Unreal Engine, Bornstein says. Cook confirms.


Update (2021-05-25): Adi Robertson:

Rogers noted that most of Apple’s App Store revenue comes from games, and she asked Cook why developers can’t use other payment methods to sell in-app purchases, or at least tell users they can make those transactions elsewhere. “If they wanted to go and get a cheaper Battle Pass or V-Bucks, and they don’t know they’ve got that option, what is the problem with Apple giving them that option?” she asked.

Adi Robertson (Hacker News):

Cook used more privacy and safety claims to defend that system, saying it would be both insecure and inconvenient to let apps process payments separately. He was also, however, a little blunter about Apple’s own interests. “IAP helps Apple efficiently collect a commission” — for payment processing, but also customer service and the use of Apple’s intellectual property. Without in-app purchases, “we would have to come up with another system to invoice developers, which I think would be a mess.” If Apple let developers tell users about other payment methods, Cook said later, “we would in essence give up our total return on our IP.”

Juli Clover:

She spent several minutes grilling Cook on Apple’s App Store policies and some of the statements that he made. “You said you want to give users control, so what’s the problem with allowing users to have a cheaper option for content?”

Cook clarified that by control, he meant control over data, and he told the judge that customers can choose between Android phones and the iPhone.

Nick Statt (tweet, Hacker News):

The end result was the best hint yet how Gonzalez Rogers is thinking about the Fortnite dispute, which one of Epic’s many complaints she finds credible and how she may decide to rule when the trial ends. In particular, the judge seems concerned about the rigidness of the 30% cut and Apple’s rules against allowing developers to communicate ways to purchase digital goods off-platform.


The general takeaway is that Gonzalez Rogers expressed deep skepticism of Apple’s claims that it operates the App Store the way it does out of the goodness of its heart. Apple executives have reiterated throughout the trial that they built iOS and the App Store this way out of concern for user security and privacy and for an end-to-end experience. But Gonzalez Rogers says there were also clear financial incentives to do so and that it appears Apple is incapable of responding to any concerns that may threaten the benefits it receives.

Florian Mueller:

Getting back to the first trial week, its second half actually went better for Epic than some observers realized. Not only did Judge Gonzalez Rogers identify some inconsistencies and a certain degree of arbitrariness in Apple’s app review decisions but she also made a remark on how competition spurs innovation, which in turn improves security.


As a complainant whose problem with Apple relates to its inherently-subjective Objectionable Content guideline, I don’t see how the problem could be solved without third-party app stores like the Epic Games Store. The 30% could be undercut and undermined in other ways. But for developers to regain some essential freedoms we had in the past, when the primary platform was Windows followed by the Mac and Linux, it takes more than an “anti-anti-steering” order, though it was another key moment when Judge YGR indicated she wasn’t going to buy Apple’s American Express analogy (that case was about an anti-steering provision).

Kosta Eleftheriou:

Users don’t know the input to the app review process, so they can’t really know if it’s better for them overall.

When my app wasn’t allowed on the App Store, users didn’t know that.

Steve Troughton-Smith:

‘But Epic just want their own App Store’

One of the major contributing factors to the success of iPhone & the technological revolution it sparked is how Apple wrested control away from the carriers — ‘orifices’ as Steve Jobs called them.

Apple has become the orifice.

It’s OK for Epic to want its own App Store, or Steam, or Xbox Cloud Gaming, or the ‘unspeakable’, and there’s a generation of innovation outside the App Store just waiting to happen along vectors that Apple just defines out of existence today on a whim

Marco Arment:

Is all online commerce thanks to Netscape and Internet Explorer?

Should every website be forced to pay them 30%?

Once the scale gets large enough to encompass an entire generation of broad-ranging commerce, arguments like Apple’s here are completely childish and ridiculous.

Francisco Tolmasky:

I constantly feel that the customer perspective is the best reason to want multiple AppStores[…]

Kosta Eleftheriou:

If I search the App Store for an app by its exact name, e.g. “Netflix”, who brought the customer?

Kosta Eleftheriou:

If I listen to a developer’s ad on the radio and then go and download their app from the App Store, who brought the customer?

Benjamin Mayo:

I can’t believe that Apple keeps testifying that it doesn’t know how much profit it makes from the App Store. It’s just an insane declaration. On financial statements, Apple publicly reports Services business with ~63% margins. App Store is most of that. Done.

Stephen Nellis:

Cook on the stand answering questions about App Store curation and approvals: “We’re not making a moral judgement on them, if that’s what you’re asking”

Here are the App Store review guidelines, where the first rule is about “objectionable content”

John Gruber:

99 percent of Snap’s revenue is from advertising, not a nickel of which Apple gets a commission from. I’m not faulting Snap in the least for building an ad-based business — Daring Fireball gets at least 95 percent of its revenue from advertising. But the CEO of a company whose business doesn’t rely on in-app purchases or subscriptions doesn’t really seem like a good person to ask about Apple’s commission structure.

Find me the CEOs of companies that generate a significant percentage of their revenue through App Store transactions who espouse the same sentiment as Spiegel.

Update (2021-06-07): Tanay Jaipuria:

Google pays Apple $10-12B/yr to be the default search engine on iOS.

But apparently Tim Cook doesn’t remember the amount or why Google is paying it


New Many Tricks Upgrade Model

Rob Griffiths:

In theory, upgraders and new customers for a new release funded all the work we did between initial release and the major update. In reality, that model is broken for us—and for you, our customers—and it’s been broken for quite a few years.


A related issue is the amount of other work we have to do for free; there’s no way with our current model to ever cover the time we put into updating for new macOS features, or to work around bugs in other apps that cause problems in our apps, etc. […]

So you’re not happy (no new features) and we’re not happy (stressful, no revenue stream). Clearly the model had to change. So we changed it.


At the end of the full year, you’ll own the latest version released during that year, and you can keep using it without any sort of restrictions. It’s your app, and it won’t stop working just because a year has passed. At some point, if you want to update to the latest version, you can do so by paying a much lower “update only” price—and that price also includes at least one more full year of updates.

This is not a subscription in any way. You own the app, and you decide when (and even if) you want to add features we’ve added to the app over the time since your original year of updates passed.

It seems like they are keeping initial prices the same and offering a year of updates for 50% off. So, for a customer who wants to always be current, this represents a price increase vs. the old model of up to 9 years between major upgrades. But, as popularized by Sketch, it’s a good compromise vs. subscriptions in that you’re not renting the app and are never forced to upgrade. In theory, you can get access to new features sooner because they don’t need to be held for business reasons. And the predictable schedule has benefits for both sides. For the customer, there’s not really a bad time to buy. For the developer, as long as you keep making good updates you can get smoother revenue.

Rob Griffiths:

[The] App Store doesn’t support anything like what we’re trying to do. Thankfully, we don’t have to answer it right away, as our App Store apps aren’t up for major updates right now. (Moom 4, which will be our next major update, won’t be in the App Store, because it’s not allowed under their rules. It’s only there today because Apple allowed the current version to stay when they changed the rules.)

Benjamin Schaaf:

Sublime Text license keys are no longer tied to a single major version, instead they are now valid for all updates within 3 years of purchase. After that, you will still have full access to every version of Sublime Text released within the 3 year window, but newer builds will required a license upgrade. These are the same license terms we use for Sublime Merge, and they allow us to deliver more frequent and exciting updates as soon as they're ready, without having to roll them into a new major version.


Update (2021-05-25): Zengobi:

We actually just switched to this model for our Curio 15 traditional licenses. Ironically Sketch was an inspiration.

30 Years of the Web

CERN (via Hacker News):

The first website at CERN – and in the world – was dedicated to the World Wide Web project itself and was hosted on Berners-Lee’s NeXT computer. In 2013, CERN launched a project to restore this first ever website:

On 30 April 1993, CERN put the World Wide Web software in the public domain. Later, CERN made a release available with an open licence, a more sure way to maximise its dissemination.

Epic v. Apple, Day 14

Nick Statt:

CEO Tim Cook is up first thing tomorrow. But today we’re back with experts and third-party witnesses.

  • UCLA’s Dominique Hanssens
  • Ocean Tomo CEO James Malackowski
  • Aviel Rubin, JHU technical director

Adi Robertson:

Hanssens’ survey assessed how much iOS users relied on non-iOS devices on a regular basis, and what devices they had “available” but didn’t necessarily use, like devices family members had.


We are back onto the Microsoft OS smartphone question, and Apple’s lawyer is suggesting that maybe people have a newer Microsoft phone even if it doesn’t technically run a Microsoft OS. I’d guess she’s talking about the Android-powered Surface Duo.


Malackowski also looks at the steady rise of patents applied for and granted — wants to note that Apple has a “significant and sustained commitment” to innovation based on these two charts.


We’re looking at the Apple developer agreement, which Malackowski describes as an agreement by which developers are allowed to use Apple’s IP. There’s no fee to signing the license, he says. (There is a separate fee for putting an app on the App Store.)


Lawyer is asking Malackowski probing questions about whether Apple would really be giving up revenue from its IP under Epic’s demands, especially compared to, say, its hardware profits.


Forrest says Schiller denied what Epic believed was an “obvious point,” and Epic was scrambling to grab documents. “It came as a surprise to me that he would deny it so vehemently.” (“It” being that people were processing payments before IAP.)


We’re still debating whether Epic will get to add more testimony about in-app purchases, but Judge Rogers shuts it down. “Everybody knew what was going on, and the fairest thing is to leave the playing field as the playing field.”

Leah Nylen:

Malackowski says he looked at Epic’s requested relief: They are asking for a defacto compulsory licensing agreement without payment and it would harm innovation.


There does not exist a list what IP is being licensed subject to the DPLA, Moskowitz agrees. He also agrees that a licenses should generally include what is being licensed in it.


Rubin says he was asked to look at the app review process and the App Store distribution model and determine if they have an impact on security, privacy, reliability and trustworthiness.


Apple’s app store review and centralized distribution model offers “significant benefits,” Rubin says. There are lower infection rates of malware and a lower volume of infectious apps in the App Store, he says.


YGR asks: couldn’t that be because there are more Android devices. Rubin says there are 3x as many Androids as iPhones. You’d expect there to be about 5 percent of devices infected then not 26 percent.