Apple Accuses Spotify of 'Resorting to Rumors and Half-Truths', Sets Record Straight on App Rejection

[castlerock]

For two reasons, the referral claim isn't so dubious.
- If the user knew about Spotify beforehand, wouldn't he sign up on their site for the lower price instead of through the app? Seems that only an uninformed user would use IAP, unless...
- Maybe he just doesn't want to set up payments through Spotify's site and would rather use the convenient IAP payment feature, maybe with iTunes gift card money.

By the way, strictly speaking, the App Store isn't the only way to install apps, even if you're not jailbroken and aren't a dev. But of course, this is sketchy, and Spotify wouldn't do it.

Yes and no. My point was about the fact that, for all intents and purposes, the App Store is the only way to install a native app on iOS. So the fact that the app gets installed is not necessarily due to the promotional effect of being on the App Store- what choice does someone who wants to use Spotify on their iPhone have?

To make a further example, I am both an Amazon Prime and Netflix subscriber. I have an iPhone and have the apps installed. Apple has, objectively, nothing to do with my decision to start subscribing to those services because they were on the web before the iPhone app was released. So Apple hardly gets to take credit there, right?

 

[AsherN]

No, it's not.

All Apple is doing is providing a "store shelf" for the Spotify app.
All Walmart is doing is providing a "store shelf" for let's say World of Warcraft.

When you buy World of Warcraft, it comes with the option of subscription. Would it make sense for Walmart to take a cut of the monthly subscription fees? Of course not, but that's what Apple does.

If you went to Walmart.com to activate the subscription and paid your recurring fee through Walmart, you bet I'd expect Walmart to take a cut.

You can go to Spotify's web site and buy a subscription from there. Then download the FREE app and use your existing subscription. All FREE, Apple gets no cut. BUT, if you buy the subscription through IAP, thenApple gets a cut as they handle the billing.

See the Kindle app reference. It offers no IAP. The only way to buy books for it is through th Amazon store. Apple gets no cut.

Spotify could do the same thing. Install the app and your only option is to enter your Spotify user ID. And the only way to get one of those is on Spotify's website.

Why the cut? well, for one, Apple pays the merchant fee. And the big one is that as a developper, I don't have to build and maintain a PCI compliant infrastructure. That is worth money.
[doublepost=1467644711][/doublepost]

Here is what Apple wants the companies to do:

1. You can pay for Apple Music, Apple's own service, that is arguably inferior right now
2. You can pay 30% more for Spotify or have them eat the 30%, the most popular streaming service in the world

The situation is even worse with books:

1. You can pay normal prices for books in iBooks Store
2. You can pay 30% more for books on Kindle, by far the largest ebook store in the world

You've never used the Kindle app, have you? You can't buy books through the Kindle iOS app. That's how Amazon gets around the 30%. There is nothing directing you to their site, but you are forced to login with your Amazon account. Just put 2 and 2 together. Spotify could do the same thing. No IAP, just a login with a Spotify account. If you can't figure out how to get a Spotify account, you have bigger issues.
[doublepost=1467645062][/doublepost]

And that's what I was asking earlier. I'd love to know what Apple does with, say, the $4 a month they get from a Spotify subscriber.

Credit card fees would be less than a dollar a month. The app might only be updated a few times a year... or a person may never download it again after the first install... so storage and bandwidth might only be pennies. I'm sure there are other costs though.

Do we think it's possible that Apple's costs to process an iOS-subscribed Spotify customer are nearing the $4 mark? Could they be breaking even?

Or how about this: imagine if there was an app with a $100 a month subscription. Apple would be getting $30 a month for the same amount of work as a $3 a month app.

That's when it would get interesting!

Do keep in mind that the fee is applied to every developper. To be able to charge recurring fees, you have to store CC information on your server. Go have a look at the PCI compliance specs. If you are a developper, not having to build an infrastructure to meet that is well worth the money.

 

[forgotmyhandle]

People who use iOS devices who are willing to subscribe to a paid subscription to Spotify may see value in starting the subscription thru the app, in the way that convenience and trust provide a value. Also, Apple made the App Store the exclusive place where apps are downloaded, and surely it places potential subscribers in a barrel from which it is easier to fish. Spotify claims the value of these things is zero, Apple claims it is worth 30% of the price that the developer sets. I don't think anyone is arguing that Apple is requiring this percentage only from Spotify and not other developers. Apple is asking Spotify to pay a fee for placing their wagon on the tracks that Apple built. In the end, this is an argument of whether a specific provision is acceptable in the terms for developers. Terms of an agreement are not in place to ensure fairness.

Depending on whether the loyalty is to the device, regardless of app, or loyalty to the service regardless of device, people will choose accordingly. Whether the business model is fair.

 

[gnasher729]

I'm pretty sure that the credit card companies don't charge 30% on top of the transaction amount, or even 15%. It's not the fact that Apple are expecting some kind of payment here, but the ridiculous percentage they are after. I'm pretty sure than many people wouldn't mind if it was more like 2% to 5%

If you have an app with $100,000 in app purchase revenue per year, you'd find it very hard to handle that for $30,000. It's not the credit card fees. It's the fact that you accept credit card information which must be handled in a very, very secure way. Buying servers, keeping them running, paying developers to make it work, and so on, that eats a lot of money.

In addition, you lose out because there are people who don't trust you, people who have Apple gift cards, people who find it too inconvenient to go to your website. And Apple sells things world wide. I have not the slightest idea how I would sell to the USA, Australia, Saudi Arabia etc. without getting into major trouble with the British tax office.

But what you miss completely is that Apple doesn't charge 30% to handle _your_ credit card payments. Apple runs the store, and decided that developers don't pay what they cost Apple, but to simplify things they pay nothing for free apps, and 30% of their revenue for everything else. So Spotify is among others paying for _my_ app to be in the store. Thanks, Spotify!
[doublepost=1467648046][/doublepost]

There is no contract with firm rules. There are only review guidelines, and those are, by Apple's own admission, a "living document", meaning they can (and do) get changed unilaterally by Apple all the time. Here's a quote:

"This is a living document; new apps presenting new questions may result in new rules at any time. Perhaps your app will trigger this."

On the other hand, this case didn't do any of these. There are rules that have been there for ages, without changes, that Spotify followed, and suddenly they decided not to follow the rules. Their app was rejected for violating rules that had existed for a long long time.

 

[gotluck]

Give developers a way to distribute and sell non web apps without apple, like every other non game console os, and all the complaints fall apart. There should be an option for devs who don't want to accept the store terms (and users who want apps for purposes or with features apple has decided to ban)

 

[gnasher729]

Exactly, if Spotify wants to use Apple's IAP then they must abide by the subscription rules as does everyone else. They are free to sell their product exclusively though their website. Apple has no problem with that. If you want to use their paid services to process transactions, you agree to those terms. Same with Visa and Mastercard etc.

They are also free to sell both through their website _and_ through the app store, as they have done for a long time. And to charge more on the app store, and to tell people on their website that they can save money by not buying on the app store. The only thing they can't do is to tell people _through the app on the app store_ to go and buy elsewhere.

 

[Michael Goff]

Give developers a way to distribute and sell non web apps without apple, like every other non game console os, and all the complaints fall apart

Part of the iOS way is that things get updated through the store. It's good for both convienence and security.Why ruin it just because Spotify has a bad business model?

 

[gotluck]

Part of the iOS way is that things get updated through the store. Why ruin it jus because Spotify has a bad business model?

Because it effects more than just Spotify, it is a basic freedom

 

[Michael Goff]

Because it effects more than just Spotify, it is a basic freedom

You're right. Spotify and others have to pay 30%. They should be allowed to sell heir wares off site, maybe people could even be allowed to side load apps. That's worked well for Android developers , right? No rampant piracy problem there.

 

[Rogifan]

If this is about security, safety and convenience why doesn't Apple force all developers who offer subscriptions or the ability to buy things in-app to offer iTunes billing as an option?

If it's about Apple deserving a cut for giving other companies access to a customer base willing to spend money then why does the 30% only apply to digital goods? How come I can buy an Echo speaker in the Amazon app but not an e-book or mp3 or Prime subscription?

 

[Michael Goff]

If this is about security, safety and convenience why doesn't Apple force all developers who offer subscriptions or the ability to buy things in-app to offer iTunes billing as an option?

If it's about Apple deserving a cut for giving other companies access to a customer base willing to spend money then why does the 30% only apply to digital goods? How come I can buy an Echo speaker in the Amazon app but not an e-book or mp3 or Prime subscription?

Is that a serious question?

 

[gnasher729]

To my knowledge there is no rule that prohibits apps from advertising anything. It's not at all clear to me if the rules were actually broken. Of course, in the end Apple reserves the right to do whatever they please, rule or not.

App developer here: It's absolutely clear in the app store rules. No directing people to purchases elsewhere in an app store app. It's the kind of thing where any app developer hearing it will say "there is no f***ing way that Apple will accept this". Sometimes developers have to tell that kind of thing to their marketing people. Marketing says "wouldn't it be great if we did X, Y and Z" which for example violates user's privacy or other rules in the app store, and then the developers have to tell them "there is no f***ing way that Apple will accept this". This may have been one of the cases where marketing is always right and doesn't have to listen to stoopid developers, and that's when apps get rejected.

 

[gotluck]

You're right. Spotify and others have to pay 30%. They should be allowed to sell heir wares off site, maybe people could even be allowed to side load apps. That's worked well for Android developers , right? No rampant piracy problem there.

Is there rampant piracy on osx? Apple does not force use of the store there.

And preventing piracy(which is possible now without a jailbreak anyway) is worth giving up freedom? Happy 4th!!

 

[gnasher729]

Why is using a credit card to pay through Apple any more trustworthy than using the same card to pay Spotify directly?

Without saying anything about Apple or Spotify, either a company can be trusted or not.

In the case of Apple, you have to trust them with so much... You have to trust them that they keep your phone safe, that they don't let hackers in, and so on and so on. Your credit card information is maybe one percent of what you trust Apple with. There are so many things that would be worse, like if the phone wasn't secure then hackers could get access to may share account with half a million dollars of shares in it (Hackers: If you can find that account, I'll give you a ten percent reward If you use an iPhone intensively and Apple wasn't trustworthy, you would be so deep in ****. That's why you trust Apple with your credit card, because you trust them with so much else.

And there are plenty of people with personal evidence that Apple isn't going to cheat on them. Apple can lose a Mac and iPhone customer for life if they mess up. Spotify can lose a subscription that doesn't make money anyway. Apple has much more reason to do this right.

 

[28monkeys]

I feel like Spotify should pull out of the Apple App Store completely. I have a feeling the result would backlash on Apple and not on Spotify. Android owns the mobile market anyways. If anything, it would make more people switch to Android. Anytime you get in between a person and their music, your asking for trouble.

Why would they abandon millions of their subscibers on iOS.

 

[Rigby]

App developer here: It's absolutely clear in the app store rules. No directing people to purchases elsewhere in an app store app.

Fine, but is it "directing" if an app, say, displays a banner saying "Introductory offer: Try 3 months of Premium for $0.99" without any link or button?

 

[Michael Goff]

Is there rampant piracy on osx? Apple does not force use of the store there.

And preventing piracy(which is possible now without a jailbreak anyway) is worth giving up freedom? Happy 4th!!

You can try to make this a freedom issue if you want, I guess. Instead, I think of it as a business transaction for com0anies/developers and a promise of security and convienence for me. It's worked out well for every company that isn't Spotify. Also, I bet there is rampan piracy on all PC platforms that don't restrict to a store.

 

[gotluck]

You can try to make this a freedom issue if you want, I guess. Instead, I think of it as a business transaction for com0anies/developers and a promise of security and convienence for me. It's worked out well for every company that isn't Spotify. Also, I bet there is rampan piracy on all PC platforms that don't restrict to a store.

That means we have rampant piracy problems on all os that are not iOS or a game console. iOS is the only consumer computer os that forces use of the store and apple accounts for what 90%+ of mobile profits? Apple has too much power IMO. Microsoft would never get away with getting 30% of everything on their os, I don't think marketshare should be the only metric for measuring abuse.

 

[AdonisSMU]

So you're admitting in a public forum that you've violated the DMCA? I don't think jailbroken app stores get to count. And note that I said NATIVE. This HTML5 nonsense doesn't count toward "native app".

I built the app myself. So you can take your foot out of your foot out of your mouth now. HTML 5 apps are still apps. Maybe native access isn't as much of a necessity for some apps like NYT or HuffPo or most news like websites.

It's actually crazy easy for someone to download Xcode which is free now and install any app to their phone they want to that they have the source code for. The courts have ruled people can install whatever app they want to their iPhone.

 

[shplock]

No, what Apple is doing is asking for 30% on your electricity bill from your power company, because you downloaded an app on Apple store. basically if you sign up using an app, apple wants 30% of what-ever for providing nothing else than the initial download. And you can't add a signup here in your app.

Actually it is more like the fact that Apple provides the ecosystem for the 'power company' to have an app that enables them to attract customers without going to the cost and hassle of advertising for customers. They then get the advantage of Apple collecting the revenue and handing a large chunk over to the 'power company'.
If the 'power company' does not like it then stop using the app store.
If I had a really popular magazine that millions of people read and spent lots of money on the products the advertisers advertised then surely I am justified if I wanted to not only charge for the advert but also a chunk of any repeat business that advertiser enjoyed, seeing as it was down to me they got that business in the first place.

 

[gotluck]

I built the app myself. So you can take your foot out of your foot out of your mouth now.

It's actually crazy easy for someone to download Xcode which is free now and install any app to their phone they want to they have the source code for. The courts have ruled people can install whatever app they want to their iPhone.

Yes the app must be open source which means many for profit companies can't take that avenue. Free dev accounts must also reinstall the app every 7 days (with a 10 app per week maximum too) to keep using it on their devices.

 

[AdonisSMU]

Yes the app must be open source which means many for profit companies can't take that avenue. Free dev accounts must also resign the app every 7 days to keep using it on their devices.

ahhh I didn't know about this...but it makes sense. I guess the other option is jailbreaking the phone option.

 

[shplock]

That means we have rampant piracy problems on all os that are not iOS or a game console. iOS is the only consumer computer os that forces use of the store and apple accounts for what 90%+ of mobile profits? Apple has too much power IMO. Microsoft would never get away with getting 30% of everything on their os, I don't think marketshare should be the only metric for measuring abuse.

It is not abuse it is free market enterprise. In short if you do not like it then go elsewhere or never use Apple. If it enables Apple to continue to keep the app store as safe as they reasonably can and malware free then it is worth it.

 

[gotluck]

It is not abuse it is free market enterprise. In short if you do not like it then go elsewhere or never use Apple. If it enables Apple to continue to keep the app store as safe as they reasonably can and malware free then it is worth it.

If it was all about malware that would be fine. Apple bans and denies apps for many other reasons. I would have no complaints if the app store review process was all about malware.

 

[Michael Goff]

That means we have rampant piracy problems on all os that are not iOS or a game console. iOS is the only consumer computer os that forces use of the store and apple accounts for what 90%+ of mobile profits? Apple has too much power IMO. Microsoft would never get away with getting 30% of everything on their os, I don't think marketshare should be the only metric for measuring abuse.

Legally, it is. Legally, Appoeis in the right. If people don't spend money on other platforms, why should Apple be penalized for it? They have no monopoly. They're doing everything by the letter of the law.