August 15th, 2024

Apple vs. the "Free Market"

Apple's 30% App Store fee impacts creators' revenues, distorts markets, and limits competition. Its DMCA interpretation enforces restrictive device rules, raising concerns about consumer rights and smaller businesses' viability.

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Apple vs. the "Free Market"

Apple's dominance in the digital economy raises concerns about its impact on creators and competition. The company imposes a 30% fee on transactions through its App Store, significantly affecting platforms like Patreon, where creators lose a substantial portion of their revenue. This practice, termed "enshittification," involves initially attracting users with quality products, then locking them into a system that restricts their choices and increases costs. Apple's control extends to enforcing strict rules on app content, which can lead to market distortions, as seen with Tumblr's censorship of adult content to comply with Apple's standards. Furthermore, Apple's interpretation of the Digital Millennium Copyright Act (DMCA) allows it to create legal barriers that restrict users' rights to modify their devices, effectively establishing a form of "private law." This regulatory power enables Apple to dictate market dynamics, favoring its own services while disadvantaging competitors. The company's practices illustrate a broader trend where corporations, rather than governments, shape the rules of the market, often at the expense of smaller businesses and consumer choice.

- Apple charges a 30% fee on App Store transactions, impacting creators' revenues.

- The company's practices create market distortions and limit competition.

- Apple's interpretation of DMCA allows it to enforce restrictive rules on device usage.

- Corporations like Apple increasingly dictate market regulations, sidelining government oversight.

- The trend raises concerns about consumer rights and the viability of smaller businesses.

Link Icon 16 comments
By @AlexandrB - 5 months
What's the conceptual difference between Apple charging 30% for Patreon subcribers vs. charging 30% for purchases on Temu or the Amazon app? This distinction seems completely arbitrary to me. I suspect the only reason it exists is that adding a 30% Apple surcharge to every Amazon purchase would cause too much outrage.

Disclaimer:

I've never used Temu or the Amazon app, but I'm assuming they don't apply a 30% surcharge on physical goods on iOS.

By @barryrandall - 5 months
It seems like Apple needs to be split up into separate Services, Devices, and Marketplace companies.
By @mikehearn - 5 months
"Every artist, performer and creator on Patreon is about to get screwed out of 30% of their gross revenue"

Does Apple have access to Patreon creators' gross revenue? I thought they only charged commissions on payments through IAP, which I assumed is only a minority of their overall gross.

By @2OEH8eoCRo0 - 5 months
People really need to read the article before commenting. He explains why there is no choice and why this affects everyone not just Apple users.
By @pentagrama - 5 months
I agree with some opinions and the sentiment of this article, but in some parts the author, perhaps unintentionally, makes false or misleading claims to simply provoke outrage and demonize Apple. For example:

> Every artist, performer and creator on Patreon is about to get screwed out of 30% of their gross revenue, which will be diverted to Apple.

This is inaccurate, as not all Patreon subscribers use iOS devices to support creators.

By @blackeyeblitzar - 5 months
General computing devices like smartphones should allow users to install whatever they want without any cost or restrictions.
By @Timber-6539 - 5 months
I don't see the issue here as much as I would like to dunk on the company. All those vendors on Apple's platform can take their wares elsewhere or if they feel so aggrieved they can start a class action motion.
By @Doches - 5 months
This article reads like an uneducated rant in so, so many ways. Apple rolling over its sleep and squashing Patreon isn't 'enshittification', it's just textbook monopoly abuse. And if you want to rail about the nuance of Apple's business practices you can at least not typo the name of two of their flagship products ("Iphone and Ipad").

> The fact that it's a felony to get your Iphone apps from anyone except Apple means that whatever policies Apple makes for the app store have the force of law.

The EC and US DOJ would like a word, please.

By @areoform - 5 months
> Tumblr still remains heavily moderated and heavily censored. Why? Because Apple kept kicking Tumblr out of the App Store on the basis that it contained sexual material, and without Apple users, Tumblr was dead in the water

> Apple claims this is merely a matter of "editorial standards," no different from a bookstore deciding not to shelve pornography. The difference is that in this case, Apple can block you from patronizing another bookstore, by forcing you to forfeit the $1,000 you spent on your device and potentially many thousands more in media and data and other switching costs.

The question at the heart of this issue is simple; do we own our devices, or not?

When I pay $1,400 for a computer, do I own it? If yes, then why does Apple get to decide what I get to watch or not?

And why does Apple prevent me from deciding what speech I get to engage with my device or not?

The app store is, at its heart, an enabler of totalitarianism. The first link of the chain is forged from the freedom to own your computer for marginal profits, but the rest are forged from your human rights.

Do you want Hong Kong to be a democracy? Too bad. Apple removed the application protestors were using to protect themselves from a totalitarian police state, https://www.nytimes.com/2019/10/09/technology/apple-hong-kon...

https://www.npr.org/2019/10/10/768841864/after-china-objects...

Oh are you gay or queer? Too bad. Apple removes apps made for and by LGBTQ+ people in 78% of countries. Everything from niche forums to dating apps. https://www.fightforthefuture.org/news/2021-06-14-apple-is-e...

Do we own our devices, or do we not?

By @brigadier132 - 5 months
Apple's product is its users. All of the privacy changes are not to protect the privacy of their users, it's to ensure that there are no ways to access Apple device users without Apple being the middleman.
By @FinnKuhn - 5 months
> Every artist, performer and creator on Patreon is about to get screwed out of 30% of their gross revenue, which will be diverted to Apple

Stopped reading after the first sentence as this just isn't true. First of all this only affects users who subscribe via the iOS/iPadOS app. Secondly Patreon creators have the option to have the prices for those Apps adjusted so that they receive the same amount of money and Apples fees are just added on top of it.

With blank statements like this that just aren't true and seem to only exist to enrage the reader I don't think the rest of the text will be any better and from just skimming it very quickly it just launches into a rant about Apples business practices without much structure and without any context to the claim in the beginning.

By @detourdog - 5 months
Apple exists within the same free market as it’ customers and competitors.

The high customer satisfaction is the lock-in. High customer satisfaction can easily explain the success. The idea that lock-in breeds high customer satisfaction needs to be proven to me.

Considering Microsoft’s dominance was cheered on by the Microsoft ecosystem and derided in customer satisfaction is noteworthy to me.

Apple has high customer satisfaction and a vocal group that consider the happy customers lemmings. These vocalists believe if Apple got out of the way they could show the happy customers what good really is.

By @adesanmi - 5 months
If Patreon doesn’t like Apple’s rules, they should just take their app off the App Store.

All these companies moaning about Apple yet aren’t doing the one thing they have the power to do which is just leave.

If they refuse to leave, then they’re admitting that Apple’s platform is providing value to them and they should pay what Apple wants. I support creators on Patreon, what exactly is wrong with just doing everything via their website? The mobile web is a thing, what more do they need for their glorified payments processing platform?