British tribunal claim aims to take a bite out of Apple over App Store fees

Seven weeks of court action began this week as a case over alleged breaches of competition law by Apple is heard at the UK's Competition Appeal Tribunal (CAT). The case finally kicked off on January 13 and is expected to last until February 27. At its core is a claim that Apple's 30 percent commission breaches UK and EU …

[Guy de Loimbard]

Stable door anyone?

I appreciate the sentiment, but the big players have made their monopoly money and really couldn't care less about yet another lawsuit.

By the time the legal teams have taken their cuts, the amount given to the public will be pennies at best.

[MiguelC]

Re: Stable door anyone?

Even so, if this reduces fees going forward, everyone from then on will benefit (except the poor companies having to gorge themselves with a little less)

[MachDiamond]

Re: Stable door anyone?

"Even so, if this reduces fees going forward"

Doubtful. It will mean that instead of a straight percentage on each transaction, there will be a percentage plus a payment processing fee, a convenience fee, a hosting fee, an advertising fee, etc.

For small in-app purchases, the costs make a 30% fee barely profitable. If the purchase is 1£ and the payment costs 35p to process in addition to all of the back end to provide the machinery, there's not much left.

For a 100 quid purchase, 30% is too much and the rate chart should reflect this. eBay collects some 15% on average sales (cars and other big ticket items have a cap). 15% on a £2 transaction might not cover the payment processing fees the bank imposes so the issue has to be looked at both as percentages AND actual amounts of money.

[Anonymous Coward]

@Guy de Loimbard

"By the time the legal teams have taken their cuts, the amount given to the public will be pennies at best."

Can't upvote you enough

[Anonymous Coward]

Apple has attempted to change its ways...

Apple was forced to change its ways, but did everything in its power not to.

FTFY.

[User McUser]

I guess so?

Can someone explain how this is an end-user consumer issue? Seems like this is more for the app developers...

I mean, screw Apple and Google to be sure, but this seems to me as more of a fight between them and the app developers; the public won't get shit out of this.

By which I mean that even if there was zero% commission, it's not like the app makers are going to then charge us 30% less... They'll just keep prices the same and pocket the difference, because why wouldn't they? Who would make them do otherwise?

[gryphon]

Re: I guess so?

Presumably they think many developers won't even bother since they won't see the return on investment for the time and effort when they have to give 30% away to Apple.

Therefore lower number of developers and lower choice of products.

Agree that it is unlikely prices would fall, there will probably be many more apps offering a wrapper for cat videos from YouTube at a £4 a month subscription,

[MachDiamond]

Re: I guess so?

"Presumably they think many developers won't even bother since they won't see the return on investment for the time and effort when they have to give 30% away to Apple."

Some small developers aren't complaining since they don't have to faff with delivery, collecting payment, hosting an eShop, etc. They can just get on with creating apps/services since all of the other stuff takes time away from that. For a larger company, it might be cost effective to have people that can deal with all of the backend and what they are looking for is a directory listing and hosting more than anything. Having a way for people to know you exist is often a stumbling block for small companies.

[I could be a dog really]

Re: I guess so?

The key thing in these various litigations is not to say that Apple can't run an app store, or that it can't charge a commission. The argument is that only Apple can run an app store for iThings, so there's no alternative and no competition. No competition means Apple has been able to charge 30% and developers have had two choices - accept it or don't sell apps for iThings.

In a competitive market, the fees Apple charge would have to be a balance between making a profit and being competitive with the alternative app stores - if 30% is too much for the market, then you'll lose apps to the alternative stores.

Personally I try and avoid the "app for everyone and his dog" approach. For most stuff there's a perfectly acceptable, functional, cross platform option - it's called a web browser.

Leaving the iThings and "all your privacy belongs to Google" Android, on my laptop I'm not bound to use one company's app store - I'm free to go elsewhere (such as the developer's own site) for my software. As mentioned, for some developers it may make commercial sense to use (say) Apple's app store, but where it doesn't, they shouldn't be forced to.

[Jon 37]

Re: I guess so?

Apps do compete on price, where there are multiple basically-the-same apps from different developers.

In that case, lower fees mean they could reduce prices further. And if their competitors do that, then they may have to do that. That means consumers save money.

That doesn't apply to all apps, of course. But it does apply to some apps.