Apple Loses Supreme Court App Store 30% Commission Case Ping!
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Posted on 05/13/2019 7:28:45 AM PDT by Red Badger
So often that’s the case! It *sounds* like something should be interpreted by them differently, but of course is not their job to interpret laws as they ought to be.
And I don't want the expense and threat of malware.
Nor do I want my personal life sold, as happens with Google's products.
I consider the iPhone a bargain.
To each their own.
I don’t think any reasonable conservative could read Gorsuch’s dissent and think Kavanaugh ruled correctly here.
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No it isn’t exorbitant. It’s a commission to sell their product for them in Apple’s market. If they were to sell their product in a retail store, they would have to wholesale it. Typical wholesale cost of a retail software product is 40-50% of the retail price. 30% is a bargain for them.
Ouch. AAPL is back in the 180s, down almost $11 today. Sorry that I missed the all-time high, but glad that I've been off that sleigh ride.
Rush Limbaugh has been talking about it.
"In sum, Apple is engaging in a practice now called “efficient infringement,” which is increasingly common today, especially among high-tech giants like Apple and Google. This occurs when a company chooses to infringe another’s patents given its calculation that it will pay less money in a court-ordered judgment than in a properly negotiated license agreement—after years of fighting the patent owner in court and before regulatory tribunals at the Patent Office and after forcing the patent owner to pay millions in legal fees. Too often, companies like Apple really think they can just get away with infringing others’ patent rights because they have the resources to outlast patent owners in these legal challenges."
Who sells phone apps in a retail store?
KAVANAUGH, J., delivered the opinion of the Court, in which GINSBURG, BREYER, SOTOMAYOR, and KAGAN, JJ., joined. GORSUCH, J., filed a dissenting opinion, in which ROBERTS, C. J., and THOMAS and ALITO, JJ., joined.
It’s retail software. . . And software is sold retail. Standard normal retail software markups would apply if the publishers had to sell their products through normal product channels of jobbers, salesmen, wholesalers, etc., with their overheads, commissions and commiserate costs. Use your head. I’ve been there, done that. Even if the publishers do it themselves they’d have to have their own online marketing and advertising trying to reach 1.2 billion iOS users, maintain a website, payment, bookkeeping, delivery, updating, and customer service systems and be prepared to expand to meet demand beyond anticipation if their app goes viral. I assure you those costs would come to greater than 30% of their retail costs. . . But what do you do if you publish a free app? Those have no 30% commission. 60% of all apps are free.
Apple sells as an agent for the publisher, they do not buy the software at wholesale and mark it up, but charge a flat 30% of the retail price set by the publisher. That covers marketing, online store, credit card costs, delivery, online presentation, rating system, feedback, customer service, automatic updating to millions of users, etc. That’s a bargain.
Anti-malware works only after the malware is discovered and identified. The latest Android malware affected 250 million Android devices’ apps. The highest count on iOS was a little under 4000 and those were in China in third party non-Apple side-load app stores of the kind this law suit wants to make legal in the US, breaking Apple’s security model for iOS which has kept malware out of iPhones and iPads.
Indeed. If we are to have any privacy at all, what the court needs to do is take a close look at the reasoning behind previous decisions involving "3rd party information". Right now, the court says you have zero privacy interest in this information. I think that may have been arguable 30 years ago, but they really need to look at the reality of the world we now live in and see if their arguments really do hold water.
If we actually did live in a free country, some cell phone company would compete based on a 30-day data retention period, where they wipe out all collected data 30 days after the billing cycle. The biggest problem we have with this stuff is that these companies hold on to the data effectively forever. There was an example mentioned during oral arguments on the case, where police had requested over a years worth of location data for an individual. That's freaking insane given the level of detail that has. The court claims that the police could spy on someone for however long they wanted if they had a warrant to do so, but what's really happening here is retroactive spying where the police have the ability to dig through a person's life in incredible detail for a year or more in the past because they can, and it is relatively cheap to do so. It would be much more costly to have to set up that kind of personal surveillance on an individual, but the court is still treating the two situations as being equivalent due to old rulings that have little relevance to today's world.
Unlike Microsoft which has always used this practice from its founding, Apple has always attempted to license or own the IP it uses, not steal it. The case your linked article uses in prime is the Qualcomm case which in every case brought around the world in many venues, Apple has won. Apple sued Qualcomm due to their insistence on charging royalties on the entire completed device instead of the industry standard practice of charging royalties only on the components that Qualcomm provides that are included in that device. Qualcomm also ignores the concept of patent exhaustion, which holds that once they’ve sold their product, a chip, to a company which incorporates into their final product and its functionality, Qualcomm’s patent is exhausted and its royalty has been satisfied. Qualcomm demands royalties on the subsequent full value of every device their product is ever installed in. For example, if a 25¢ Qualcomm chip is installed in a $25 billion aircraft carrier, even though the function of the Qualcomm chip remains the same, Qualcomm demands the same percentage of the value of that aircraft carrier as they do for a $16 Android phone with the same chip in it. That is why Apple was suing Qualcomm. AppleID won in every venue in the world and only settled here in the US when Intel dropped out of the 5G development race.
So the “cost” of the commissions are passed to the consumers.
That is not how the poorly educated “journalists” wrote it.
When I read that “commissions were passed to party X”, that reads as though ‘party X’ GOT the commissions; not that the App publisher/developer’s “cost” for the commissions paid to Apple were paid by - passed on to - the consumer.
“Unlike Microsoft which has always used this practice from its founding, Apple has always attempted to license or own the IP it uses, not steal it.”
That’s laughable. “Efficient infringement” is nothing but a euphemism for patent theft and Apple has been one of the prime drivers of it.
Apple got a big boost in this when Obama appointed a corporate attorney for one of Apple’s fellow efficient infringers as the head of the patent office.
Fortunately Trump’s choice to head the USPTO is cleaning house and trying to restore America’s standing as a defender of patents, instead of being the enabler of massive theft by the world’s richest corporations.
With any luck SCOTUS will help this along by driving a stake through the kangaroo court created during Obama, the Patent Trial and Appeals Board, which has acted as the getaway driver for the efficient infringement thieves.
Once again it will require an Article III court to take away property, instead of an administrative body filled with corrupt hacks who routinely violate the protections offered by a real court.
You’ve provided zero proof for your claims, Pelham. Apple has always licensed the software and tech it uses. Don’t trot out that old canard from Steve Jobs about great artists steal ideas, because that was taken out of context. You literally have zero proof of this contention that Apple makes a conscious decision to steal IP because the litigation will be cheaper because it is not in an age where juries are awarding multiple hundred million dollar to multi-billion dollar awards for infringement. USE YOUR HEAD for something other than growing hair. It just is not cheaper than paying a few cents per component licensing that is passed on in the price of the product.
Most of the lawsuits are brought NPEs (non-practicing entities, i.e. a company that monetizing owning patents that are not actually being used for anything except suing actual companies using other patents to build their products) bring lawsuits on minor claims in inventions that never made it to market that were not viable (some are mere ideas that were never built or even proved to work), but were granted patents on techniques that are actually not used in the products they claim are infringing the patents.
The Qualcomm licensing scheme cited in your linked article was charging a license on the entire widget when they made only one or two minor component(s) — AND were demanding it even if another maker was providing that component(s) on some of the widgets merely because they had a monopolistic position in those components and the companies requiring those components because they were part of the standard had few or only one competitor from which to choose — was an aberration in the industry and it had to be stopped from breaching the FRAND requirements they agreed to abide by when their components were accepted into the standard.
Your claim that Apple has been a “prime driver of it” is patently false. The facts do not back your assertion at all and in fact falsify your claim.
The price of everything is passed on to the consumer AND the taxpayer!
Yes, and IMO it is Congress that should deal with it. So much easier and more within the intended system to have Congress address it.
Too bad they’re so dysfunctional and Deep State-captured!
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