Apple complies with Dutch ruling, lets dating apps use other payment systems(nltimes.nl)
nltimes.nl
Apple complies with Dutch ruling, lets dating apps use other payment systems
https://nltimes.nl/2022/01/15/apple-complies-dutch-regulators-ruling-allowing-apps-use-payment-systems
62 comments
> It is your privilege/responsibility to conflict resolution with regards to refunds and such.
Every time the apple fee comes up, this part of the discussion rarely comes up. This is a huge part of what you pay Apple/Google for. Lets say you roll your own on top of stripe [0]; each dispute/chargeback costs you $15 on top of the transaction cost. On an app with $0.99 purchases, each dispute will undo 15 purchases. If you get enough of these you _will_ be banned, quickly and with very little warning. I'm not going to claim that this on it's own is worth the full 30% whack but it does neet to be taken into consideration.
[0] https://stripe.com/docs/disputes
Every time the apple fee comes up, this part of the discussion rarely comes up. This is a huge part of what you pay Apple/Google for. Lets say you roll your own on top of stripe [0]; each dispute/chargeback costs you $15 on top of the transaction cost. On an app with $0.99 purchases, each dispute will undo 15 purchases. If you get enough of these you _will_ be banned, quickly and with very little warning. I'm not going to claim that this on it's own is worth the full 30% whack but it does neet to be taken into consideration.
[0] https://stripe.com/docs/disputes
Generally, developers I have seen that seem to want their own payment solution (which is not all developers, but the ones that matter here obviously) this is a good thing, because it lets them be in control of when refunds are done. Until now all app developers had to throw up their hands and put up a line on their website asking customers to contact Apple, which was obviously a poor experience and increased friction even in cases where a refund was desired by both the developer and user.
> which was obviously a poor experience and increased friction even in cases where a refund was desired by both the developer and user.
I've had much more luck with apple than I have with "developers". NYT is the textbook example that comes up here. You can sign up in one click but cancelling still requires phoning them up.
It's also analogous to a physical store; I don't ask kellogs for a refund if my cereal doesn't work, I ask the grocery store.
I've had much more luck with apple than I have with "developers". NYT is the textbook example that comes up here. You can sign up in one click but cancelling still requires phoning them up.
It's also analogous to a physical store; I don't ask kellogs for a refund if my cereal doesn't work, I ask the grocery store.
Note this is in the EU, not the USA, so consumer protection is a lot higher.
If the NYT tried this here, I'd just revoke access from my bank account, assuming they even had any. There is probably also a law specifying how to unsubscribe, but I can't tell how it works in the Netherlands.
UPDATE: Thinking this through, it allows us to put a monetary value on consumer protection. Much of what the apple 30% tax gives you as a consumer is built into law. So assuming a more reasonable cost of say 5%, small time devs get a loss of 25% of income because of the state of payments and consumer protection in the USA. You can haggle over percentages, but there is a cost.
If the NYT tried this here, I'd just revoke access from my bank account, assuming they even had any. There is probably also a law specifying how to unsubscribe, but I can't tell how it works in the Netherlands.
UPDATE: Thinking this through, it allows us to put a monetary value on consumer protection. Much of what the apple 30% tax gives you as a consumer is built into law. So assuming a more reasonable cost of say 5%, small time devs get a loss of 25% of income because of the state of payments and consumer protection in the USA. You can haggle over percentages, but there is a cost.
> There is probably also a law specifying how to unsubscribe, but I can't tell how it works in the Netherlands.
The law here in the Netherlands is that you must be able to unsubscribe by the same method you subscribed in the first place.
The law here in the Netherlands is that you must be able to unsubscribe by the same method you subscribed in the first place.
NYT offers a subscription that can be purchased outside the US (I'm a subscriber to NYT cooking living in the UK), and to the best of my understanding you're still required to call even outside the US.
I was able to cancel NYT subscription from the EU without calling them.
At least from Germany. And at least last year I could just cancel online
> small time devs get a loss of 25% of income
Nitpicking: Apple takes 15% from small time devs (less than a million $)
Nitpicking: Apple takes 15% from small time devs (less than a million $)
Right, but ideally it would be that Apple would step in for cases where the developer is not cooperating. For cases where the developer wants to give you your money back, they still have to refer you to Apple so that they can make their own decision on whether you’re owed a refund, which is kind of stupid.
So does apple have to foot the bill for this service independently, or do we charge the developers some percentage of their revenue to provide this service?
Snark aside, I do think you're going to require some sort of hold/guarantee from the developers to apple if you want to force that sort of relationship.
Snark aside, I do think you're going to require some sort of hold/guarantee from the developers to apple if you want to force that sort of relationship.
I dunno, traditional payment processors have gotten away with 1-2% charges in order to mitigate that kind of problem. I think Apple/Google are entitled to up-to a 5% cut to keep the lights on, but everything after that... it's a stretch. The big issue though (as many others have noted) is that there is no alternative. You have no opportunity to compete with Apple in this space, and that's what pisses off a lot of people. Normally, a competitive market is what ensures that those kinds of taxes stay reasonably low. Without anyone to compete with, Apple can set their own prices.
> I dunno, traditional payment processors have gotten away with 1-2% charges in order to mitigate that kind of problem
They do? In my experience it's much higher, particularly if you're dealing with low value transactions. When I worked in retail 15 years ago our payment handler charged a 1% fee on cash drops, and charged 0.30 plus 2% capped at some number I can't remember off the top of my head, _plus_ the card issuer fee. On a $100 transaction sure that's close to 2%, but on a $2 IAP or a $10 subscription (like Netflix) that's 17% and 5% respectively. I'm also pretty sure on top of that we had to pay a dispute fee if one was lodged with the issuer; presumably in the region of $10-15 per dispute. the risk of those disputed being opened on an online purchase vs an in person purchase is significantly higher.
> You have no opportunity to compete with Apple in this space, and that's what pisses off a lot of people
That's what a lot of people say, but how much of that is _really_ they just don't want to pay a 30% cut?
They do? In my experience it's much higher, particularly if you're dealing with low value transactions. When I worked in retail 15 years ago our payment handler charged a 1% fee on cash drops, and charged 0.30 plus 2% capped at some number I can't remember off the top of my head, _plus_ the card issuer fee. On a $100 transaction sure that's close to 2%, but on a $2 IAP or a $10 subscription (like Netflix) that's 17% and 5% respectively. I'm also pretty sure on top of that we had to pay a dispute fee if one was lodged with the issuer; presumably in the region of $10-15 per dispute. the risk of those disputed being opened on an online purchase vs an in person purchase is significantly higher.
> You have no opportunity to compete with Apple in this space, and that's what pisses off a lot of people
That's what a lot of people say, but how much of that is _really_ they just don't want to pay a 30% cut?
> They do? In my experience it's much higher
I'm not sure where you work (or where you live), but my experience has indeed been that payment processing is a pretty cut-and-dried technology at this point. People charge insane overhead for it because, as a marginal utility, other people have no way of determining what it's actual value is.
> That's what a lot of people say, but how much of that is _really_ they just don't want to pay a 30% cut?
I don't really think it matters, the statement is true nonetheless. If third-party app stores exist, Apple would be undercut in a heartbeat. By obstructing other people from competing with their App Store business, they're eliminating the need for the market to set a price.
You can argue to the ends of the earth with that logic (lord knows Apple keeps lawyers on retainer for that express purpose), but Apple's strategy here is to prevent them from having to compete with the rest of the market. There's a reason why European regulators are wising up to this nonsense (and a reason Apple obeys); it's a lost case. Everyone knows that it's dumb, the only defenses I've seen for it boil down to apologism and misunderstanding.
Why do we need to keep giving the world's largest company the benefit of the doubt? Can't we just hold them accountable for once?
I'm not sure where you work (or where you live), but my experience has indeed been that payment processing is a pretty cut-and-dried technology at this point. People charge insane overhead for it because, as a marginal utility, other people have no way of determining what it's actual value is.
> That's what a lot of people say, but how much of that is _really_ they just don't want to pay a 30% cut?
I don't really think it matters, the statement is true nonetheless. If third-party app stores exist, Apple would be undercut in a heartbeat. By obstructing other people from competing with their App Store business, they're eliminating the need for the market to set a price.
You can argue to the ends of the earth with that logic (lord knows Apple keeps lawyers on retainer for that express purpose), but Apple's strategy here is to prevent them from having to compete with the rest of the market. There's a reason why European regulators are wising up to this nonsense (and a reason Apple obeys); it's a lost case. Everyone knows that it's dumb, the only defenses I've seen for it boil down to apologism and misunderstanding.
Why do we need to keep giving the world's largest company the benefit of the doubt? Can't we just hold them accountable for once?
That’s because they are forcing consumers with high interest (usury) rates.
I would imagine all purchases to be a low dispute risk, as the merchant can simply offer refunds to all no questions asked. After all the marginal cost of goods sold for an app is probably effectively 0.
That being said, a $1 purchase through stripe likely has an effective fee higher than 30%, so this would only make sense for larger purchases.
That being said, a $1 purchase through stripe likely has an effective fee higher than 30%, so this would only make sense for larger purchases.
The problem is that even with a no-hassle refund process some customers will still call their credit card company and ask for a chargeback because it's a process they're familiar with and it's easier for them to do than to go through any kind of custom process you've built for them. I imagine after dealing with customer support BS enough times your goodwill is eroded and you're just going to choose the path of least resistance for yourself.
Not everyone who does a chargeback is looking to get their money back.
Some do it specifically because it will harm the merchant. Especially if they feel they've been wronged.
Some do it specifically because it will harm the merchant. Especially if they feel they've been wronged.
> I would imagine all purchases to be a low dispute risk, as the merchant can simply offer refunds to all no questions asked.
That only works if you offer a no questions asked refund, and even at that, that doesn't imply 0 risk. Cards get stolen and tested on low value purchases all the time; if a scammer decides to check 1000 credit cards on your app, you're going to have a very bad time.
That only works if you offer a no questions asked refund, and even at that, that doesn't imply 0 risk. Cards get stolen and tested on low value purchases all the time; if a scammer decides to check 1000 credit cards on your app, you're going to have a very bad time.
> ...Apple complied with the law...
This is the only part that matters here. Doesn't matter how narrowly the law was complied with. Laws are the purview of lawmakers. If the lawmakers leave loopholes in their legislation all companies that can will avail themselves of these loopholes.
Blame the legislators. Those assholes left barn-door sized loopholes in their legal requirements for Apple's compliance.
This is the only part that matters here. Doesn't matter how narrowly the law was complied with. Laws are the purview of lawmakers. If the lawmakers leave loopholes in their legislation all companies that can will avail themselves of these loopholes.
Blame the legislators. Those assholes left barn-door sized loopholes in their legal requirements for Apple's compliance.
> Blame the legislators. Those assholes left barn-door sized loopholes in their legal requirements for Apple's compliance.
Well that remains to be seen. The court just applied existing law for this specific conflict. Apple was found not complying, which is why the court issued this ruling. After implementing this narrow change they probably still do not comply. It would surprise me if dating apps would somehow be legally different from any other app. Apple is just stalling here. The next court case is going to cost money in addition to broadening the requirements on Apple, I think.
Well that remains to be seen. The court just applied existing law for this specific conflict. Apple was found not complying, which is why the court issued this ruling. After implementing this narrow change they probably still do not comply. It would surprise me if dating apps would somehow be legally different from any other app. Apple is just stalling here. The next court case is going to cost money in addition to broadening the requirements on Apple, I think.
I'm not sure it makes sense to blame legislators for loopholes. Bugs exist all the time in a variety of products. And few have to withstand the scrutiny of trillion dollar companies paying experts to pour over every aspect to find them.
I wonder if Apple restricting this to Netherlands only complies with the EU Digital Single Market: https://en.wikipedia.org/wiki/Digital_Single_Market
> The Geo-blocking regulation adopted by the EU in February 2018 prohibits any attempt to restrict consumers access to goods and services on e-commerce websites on the basis of their nationality or country of residence and establishment.[31]
> The Geo-blocking regulation adopted by the EU in February 2018 prohibits any attempt to restrict consumers access to goods and services on e-commerce websites on the basis of their nationality or country of residence and establishment.[31]
I think they did a rather good job and personally expected almost exactly this outcome given Apple’s position, to be honest. I was concerned that we’d get some sort of weird “you’re making these rules about us but we actually follow the rules” that they did elsewhere that was a real headscratcher.
You can be pretty sure that Apple lobbied hard to leave these holes. The legislators are happy they can tell their voters they finally did something and that they found a compromise.
It's a bit on us, the public, to not accept those alibi-type compromises.
It's a bit on us, the public, to not accept those alibi-type compromises.
I think Apple does not hold much sway over lawmakers here in the Netherlands. US tech companies are not very popular in general, and politicians are not corrupt for the most part. Many laws originate in Brussels.
Incompetence/cluelessness and lack of resources around tech is the bigger problem here.
Incompetence/cluelessness and lack of resources around tech is the bigger problem here.
>The ruling allows dating app developers to avoid the commission fee between 15 to 30 percent Apple charges
Was this actually confirmed? I remember in the epic vs apple lawsuit (in the US), the media reported something similar, but if you read the decision more carefully, it explicitly says that apple was still entitled to their 30%/15% cut. The logic was that the 30%/15% cut wasn't the fee paid for processing payments, it was also the fee paid for access to the ecosystem, SDK, and placement on the app store.
Was this actually confirmed? I remember in the epic vs apple lawsuit (in the US), the media reported something similar, but if you read the decision more carefully, it explicitly says that apple was still entitled to their 30%/15% cut. The logic was that the 30%/15% cut wasn't the fee paid for processing payments, it was also the fee paid for access to the ecosystem, SDK, and placement on the app store.
IIRC, the loophole gave Apple the right to bill you afterwards for the use of their services. I don't know if that means they tally the 30% and come back to collect later, or just pass the direct charges of hosting onto you, but in any case I doubt Apple would be ballsy enough to try that outside the United States.
That’s not loophole. That’s common sense.
Which part? I think retroactively billing people for arbitrary values like "30%" is dumb, since it doesn't actually address the issues people have. I wouldn't be mad if Apple passed me an itemized bill for my hosting costs and whatnot, but without that kind of transparency it still feels like I'm being scammed.
>I think retroactively billing people for arbitrary values like "30%" is dumb [...]
>[...] without that kind of transparency it still feels like I'm being scammed
It's not arbitrary because it was part of the developer agreement you signed.
>since it doesn't actually address the issues people have
Must all regulator action "actually address the issues people have"? Regulators/courts are limited in what they can do, so it's not surprising that the ruling isn't some sort of decisive victory for independent software companies.
>[...] without that kind of transparency it still feels like I'm being scammed
It's not arbitrary because it was part of the developer agreement you signed.
>since it doesn't actually address the issues people have
Must all regulator action "actually address the issues people have"? Regulators/courts are limited in what they can do, so it's not surprising that the ruling isn't some sort of decisive victory for independent software companies.
> It's not arbitrary because it was part of the developer agreement you signed.
The value is arbitrary, not the fee.
> Must all regulator action "actually address the issues people have"?
Not necessarily, I'd think "address the issues people have" is a good place to start when you're regulating American corporate policy in a modern democracy.
The value is arbitrary, not the fee.
> Must all regulator action "actually address the issues people have"?
Not necessarily, I'd think "address the issues people have" is a good place to start when you're regulating American corporate policy in a modern democracy.
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Developers still have to pay Apple a commission on transactions.
https://developer.apple.com/support/storekit-external-entitl...
As in the Epic case, this interestingly expands the number of transactions that apple could potentially claim commissions for (in-app and out-of-app) depending on the specific definition of a transaction. In the case of dating apps nearly all user-activity is within the app, so Apple could claim that all transactions for iOS uses are within scope.
This will of course be negotiated and settled in some way, but as long as the 30% cut has not been deemed illegal, Apple can still demand the cut on relevant transactions.
As in the Epic case, this interestingly expands the number of transactions that apple could potentially claim commissions for (in-app and out-of-app) depending on the specific definition of a transaction. In the case of dating apps nearly all user-activity is within the app, so Apple could claim that all transactions for iOS uses are within scope.
This will of course be negotiated and settled in some way, but as long as the 30% cut has not been deemed illegal, Apple can still demand the cut on relevant transactions.
Nice, so they going to lower the subscription prices now that they don't need to pay the 30% cut from Apple?
It's already the case: if you buy your subscription on tinder.com rather than within the app itself, it is noticeably cheaper.
"The ruling allows dating app developers to avoid the commission fee between 15 to 30 percent Apple charges. "
Looks like everybody gangsta till regulator steps in.
Looks like everybody gangsta till regulator steps in.
Apple is/was just making hay whilst the sun shined. I know many on this site would disagree, but regulation generally is for everyone's benefit. Just like a healthy progressive taxation system.
Most regulations I have been directly impacted by that have happened since I was born have made my life harder or worse in some way, so I strongly disagree.
Two easy examples:
Obama passing health care regulations greatly increased my health insurance costs.
EPA mandating new regulations on "safety" of gas cans has made gas cans nearly unusable with dangerous splashing of gasoline when using them.
Two easy examples:
Obama passing health care regulations greatly increased my health insurance costs.
EPA mandating new regulations on "safety" of gas cans has made gas cans nearly unusable with dangerous splashing of gasoline when using them.
>Two easy examples:
>Obama passing health care regulations greatly increased my health insurance costs.
This is called paying into a system to support others in society who suffer healthcare events. Sucks if you are healthy and never need healthcare, nice for when you get hit with a NICU baby, cancer, heart attack, or any other healthcare event where you need hundreds of thousands or millions of dollars of healthcare.
ACA explicitly transfers wealth from the young and/or health to the old and/or sick. There is no other way to provide more healthcare to more people, at current levels of healthcare supply.
Of course, letting people go without healthcare if they cannot afford it is also a perfectly valid position.
>Obama passing health care regulations greatly increased my health insurance costs.
This is called paying into a system to support others in society who suffer healthcare events. Sucks if you are healthy and never need healthcare, nice for when you get hit with a NICU baby, cancer, heart attack, or any other healthcare event where you need hundreds of thousands or millions of dollars of healthcare.
ACA explicitly transfers wealth from the young and/or health to the old and/or sick. There is no other way to provide more healthcare to more people, at current levels of healthcare supply.
Of course, letting people go without healthcare if they cannot afford it is also a perfectly valid position.
I maintain my own health and I shouldn't be paying for those who choose not to. That's a bankrupt system of responsibility.
I can point to dozens of regulations in the EU that have made my life better as a resident of an EU country. Some very easy examples off the top of my head that I have benefitted from; no roaming charges between EU countries, PDO regulations, EURO standards for car fuel, Freedom of movement in the EU (and pet passports), Flight compensation and working time directive. Sure I can pick some out that suck, but that doesn't mean that they are all bad; overwhelmingly they are positive changes.
Obamacare's impacts varied. In NY, Obamacare at least temporarily lowered healthcare premiums despite being a new regulation. Most of those rules were already in place within NY state law, but the introduction of the employer and individual mandates added many healthy people to the risk pool, fixing a pre-existing adverse selection problem and therefore lowering premiums. The Obamacare risk corridor provisions also helped.
I only say "at least temporarily" lowering premiums to reflect subsequent events, like the removal of the individual mandate and the risk corridor, and the general increase in healthcare costs over time.
I only say "at least temporarily" lowering premiums to reflect subsequent events, like the removal of the individual mandate and the risk corridor, and the general increase in healthcare costs over time.
No.
The commission charged by apple is not a payment processing fee. It's a platform licensing fee, as has been common practice in the industry since day 1.
What this means is that the companies are allowed to use a separate company to charge users, and now they are required to manage refunds, etc themselves in line with local laws and the apple license.
Now they also have to manually track everything and pay apple the appropriate 15-30% licensing fee.
The commission charged by apple is not a payment processing fee. It's a platform licensing fee, as has been common practice in the industry since day 1.
What this means is that the companies are allowed to use a separate company to charge users, and now they are required to manage refunds, etc themselves in line with local laws and the apple license.
Now they also have to manually track everything and pay apple the appropriate 15-30% licensing fee.
Not if you believe the complaints that 30% is too much “Apple Tax”. No, they’ll keep the price the same and use the profit to improve their apps and business model.
(Can you see my crossed fingers?)
(Can you see my crossed fingers?)
Not necessarily. Now smaller software shops can now make a healthy margin to pay their engineers and grow their product. This will result in higher quality software and services.
They have now seen consumers are willing to pay the higher price with the 30%, so it would seem unlikely to me.
I wonder if this law is similar with legislation in other EU countries? My impression is that consumer legislation usually is.
If it is. This might end up being EU wide in the future.
Even if it isn't, because of the Common Market any EU company can just open an entity in the Netherlands and start using this trick.
The next step is for somebody else to sue to remove the limit to dating apps, which is obviously ridiculous (and likely still not compliant with NL law). After that, the door is effectively opened for the whole Union. I expect at that point Apple will just allow it for all EU countries, with much fanfare, trying to spin it as them doing good for us plebs.
The next step is for somebody else to sue to remove the limit to dating apps, which is obviously ridiculous (and likely still not compliant with NL law). After that, the door is effectively opened for the whole Union. I expect at that point Apple will just allow it for all EU countries, with much fanfare, trying to spin it as them doing good for us plebs.
Everyone is quoting 30%.
For the majority of apps it's 15%.
That commission is not a payment processing fee, it's very clearly a platform commission as has been common in the industry for 30-40 years at this point.
All this (and the similar rulings elsewhere) seem to confirm is that
* A developer can use their own preferred payment processor
* A developer still has to pay the platform commission
Finally, no one in their right mind should think that even if there was a reduction in commission that prices would decrease. We already have direct evidence: Both Google and Apple dropped platform commission to 15% for the vast majority of apps and there was no reduction in app prices. Additionally it is common sense: app devs already know that you will pay X for an app, if they get an arbitrary reduction in expenses through any mechanism why would they reduce their prices? This is the same flaw present in trickle-down economics. The price for anything is determined by what the market will bare, not the cost of production - this is as true for an app, as it is for an NFT, as it is for a banana.
For the majority of apps it's 15%.
That commission is not a payment processing fee, it's very clearly a platform commission as has been common in the industry for 30-40 years at this point.
All this (and the similar rulings elsewhere) seem to confirm is that
* A developer can use their own preferred payment processor
* A developer still has to pay the platform commission
Finally, no one in their right mind should think that even if there was a reduction in commission that prices would decrease. We already have direct evidence: Both Google and Apple dropped platform commission to 15% for the vast majority of apps and there was no reduction in app prices. Additionally it is common sense: app devs already know that you will pay X for an app, if they get an arbitrary reduction in expenses through any mechanism why would they reduce their prices? This is the same flaw present in trickle-down economics. The price for anything is determined by what the market will bare, not the cost of production - this is as true for an app, as it is for an NFT, as it is for a banana.
my economics 101 teacher would argue that a reduction in cost would encourage certain app makers to seek greater market share by undercutting their competitors. Unless competing app makers collude, prices should be loosely based on cost.
According to Dutch authorities, dating apps were first on the list because they generated the most complaints. They don't confirm or deny that this will continue with other apps.
Allowing dating apps to use other payment systems.
So theoretically a dating app could today add a PayPal button or stripe pay box.
They don't even need to go through appstore review if they add it to a webview server side.
So... Have any apps done this yet? Seems like the kind of thing that could be pushed out in a few hours by some teams.
They don't even need to go through appstore review if they add it to a webview server side.
So... Have any apps done this yet? Seems like the kind of thing that could be pushed out in a few hours by some teams.
They still are going to pay a fee to Apple.
And the mighty walled garden breaks into smaller walled gardens. Eventually each country will have its own version of each app to comply with local laws.
EU should follow.
So what does this mean store Epic Games and fortnite? Well it be coming back to the app store?
I don't think so but the title seems to be generalized too much.
"The ruling allows dating app developers to avoid the commission fee ..."
It says dating apps so I don't think apple allowed other app to bypass the rule. But good thing is it sets a precedence.
"The ruling allows dating app developers to avoid the commission fee ..."
It says dating apps so I don't think apple allowed other app to bypass the rule. But good thing is it sets a precedence.
* There are two new entitlements related to this, which you ask Apple to give you if you're a dating app.
* Once you get the entitlements, you need to create a new version of your app (it cannot be the same as your international one) that will ship exclusively in the Netherlands with that entitlement.
* Details of how this entitlement work will come at a later date.
* Apple will still charge a commission on these purchases, the details of which will also come at a later date.
* It is your privilege/responsibility to conflict resolution with regards to refunds and such.
In essence, Apple complied with the law in the narrowest terms they could, but they did indeed change things and I suspect many companies will go through this process even if it's made somewhat inconvenient. I guess what remains to be seen is if these entitlements slowly get rolled out in other countries as they also enact legislation to require it.