The difference is that apps have never given anyone a significantly discounted price like magazine subscriptions. Discount = ad supported version.
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Apple Allows Spotify to Show Pricing Info to EU Users in iPhone App
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Agreed. It's needs to be a flat 15% for all transactions under $1 million, one-time payment and subscriptions from Day 1 of being listed.
Apple has a clear standard - if an app sells digital goods or services that are consumed on device, the commission applies. If it is a physical good or service, the commission doesn't apply. You may not like that is the decision they've made, but since iOS is their intellectual property, in a free market they get to decide what they charge for it.
Obviously the EU is making changes to what Apple is and is not allowed to do with its intellectual property, but prior to that it's been the same for years and years.
It's like selling your product in Costco if Costco was one of only two stores in the world, and it was not a physical store, but on a digital store viewable on devices individuals own.
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It wouldn't really be about Wendy’s advertising McDonald’s products but more like Wendy's allowing (or not allowing) information about what food delivery services customers can use.
That sort of thing can and does happen where companies promote on or in their packaging alternative and sometimes cheaper ways to buy their product. For example:
What a hateful company HP became... amazing how they invented a way to turn simple home printing into what is essentially a scam.
When Spotify originally complained to the EU, less than 1% of their iOS subscribers were subject to a commission from Apple and all of those were at the 15% level. That's because they only allowed in-app subscriptions for a two year period that had ended long before the EU complaint. The vast majority of Spotify's history on the App Store revolved around offering the free ad-supported version for download and limiting premium subscription sign-ups to the internet. They never needed the DMA to get people to sign up that way. It always worked for them which is why the growth charts for their service show an uninterrupted upward curve regardless of the Apple Music launch and without the DMA being in effect.
If that was the case then they would already have a subscription and wouldn’t need to click on a link to get one.
All people are specifically searching out Spotify. Not all downloaders will be subscribers, as they offer a free tier, and might never need or use the App beyond their phone, nor ever subscribe.
I was a Spotify subscriber long before I ever installed it on my iPhone.
I'm aware of the physical vs digital goods difference.
The point is if Apple isn't getting paid a commission from Amazon, Robinhood, Uber, DoorDash, etc, then, as WiseAJ stated, they're freeloaders.
Once sold, it isn't their product anymore!
I made the switch from Spotify to Apple Music last week, after 11 years with Spotify. I did it because I'm tired of the terrible Apple Watch app for offline playback. Total mess. And then their childish behavior didn't help to stay with them. I hope music discovery through Apple Music is good enough...
If Apple says "we aren't going to charge you" those apps are not freeloading.
Apple says "you have to pay us a commission if you want to link to your sign-up form" and Spotify goes crying to the EU and says "make them give it to us for free" - then they are freeloading. If Apple said, on their own accord "we aren't going to charge you" they wouldn't be freeloading.
For example, I would argue Spotify isn't currently freeloading by only offering subscription on the web. Because Apple has said it's fine to do so, and it's Apple's IP - they get to make the rules.
I refuse to use Apple Music until I can fully separate my 20+ year (since the iPod 4th gen), highly-curated personal music collection, from Apple Music..Including on my iPhone.
I would argue that Apple is freeloading by requiring a purchase to go through them, on a device I OWN.
When I bought my car, I never need to visit the dealer ever again, and I haven't. I still service everything needed and required while keeping my warranty and I have given VW $0 in the four years I've owned it. Electronic devices should have the same rules.
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Goto the magazine section at Costco and every magazine has inserts in them showing cheaper prices by mail.
You don't own iOS. You license iOS. And developers license iOS to build apps. Said developers use Apple's intellectual property to build apps, so Apple has a right to request compensation for use of that property. I know lots of people wish it was different, but it's not.
And - good news for those who don't care about intellectual property rights - in the EU it looks like Apple is going to be told "you can't charge developers to use your OS or APIs". Why they didn't write that into the DMA I don't know, but they'll eventually get there, Apple will eventually comply (probably after a lot of negotiation and lawsuits), and Apple will raise prices elsewhere to make up the lost revenue. Everyone wins!
It's too bad these two couldn't come to terms because while Spotify is offering the service for users, arguably Spotify wouldn't have grown to the size that it has, had it not been for iPhone. I certainly wouldn't subscribe to Spotify if it were not on the App Store.
It could've been a symbiotic relationship where all parties involved make money. The record labels are for sure making money on the back end. But the artists aren't making as much money off of Streams as they were off of sales of physical media like Vinyl Records, CDs, etcetera. But that is another discussion for another day.
Also, since Apple Music is a competing service, and Apple Music doesn't have to be subjected to the same terms and conditions as Spotify (30 percent cut on subscriptions, for example), I could see why Spotify would be miffed...
It could've been a symbiotic relationship where all parties involved make money. The record labels are for sure making money on the back end. But the artists aren't making as much money off of Streams as they were off of sales of physical media like Vinyl Records, CDs, etcetera. But that is another discussion for another day.
Also, since Apple Music is a competing service, and Apple Music doesn't have to be subjected to the same terms and conditions as Spotify (30 percent cut on subscriptions, for example), I could see why Spotify would be miffed...
The above-mentioned complaint by Spotify was not about the subscription fees anyway and preceded the DMA by years. It was mostly about the anti-steering clauses of the App Store.
Also, how can you say, that Apple's rules did not harm competition? Just because Spotify was growing, does not mean that the competition was fair.
API usage in the US is Fair Use, and can be used without payment or permission, per SCOTUS in Google vs. Oracle.
Apple has it as a term in their TOS to approve Apps for the store, but there is no legal recourse to it being violated.
Yep and Apple's systematic rejection of Spotify's app updates often for completely arbitrary reasons.
The 'no harm, no foul' argument doesn't make sense anyway. Just because Spotify was still able to grow the service doesn't mean it won't hurt the next company.
His lawyers would tell him there's nothing he can do. He would stall, which Cook did. But I feel like Jobs would have explained to us, like a father giving an important life lesson to a son, that getting apps outside of the App Store and paying for things without using in app purchases is dangerous, and even if Apple is obliged to provide links to do it that you should stick to the App Store that has kept you clean and safe all these years. But really he'd know the gravy train is over, he's seen cycles, microcomputers went out of style and replaced with IBMs, then PC desktops, then laptops, then phones and tablets. He'd have known that phones and tablets days were numbered. And what else could replace it except AR/VR. The next step from AR/VR is microchips or whatever implanted in your body, and Apple would adapt to that to when it comes around.
Jobs may be stuck in the moment, wanting to win what makes him angry now, but he knew no matter what product he introduced that it will be obsolete within a decade or two and the market would move on without Apple if they didn't innovate first.
I can say Apple's anti-steering rules didn't harm competition because:
A. Spotify's growth curve was the best in the industry with those rules in place
B. Apple's growth curve was very similar to other services like Tencent and Amazon
C. Music streaming as an industry is full of competitors and continues to grow overall
D. None of A thru C happened as a result of the DMA being in effect
And, when it comes down to it, that’s still an agreement between the publishers and the shop owner (unless someone thinks the magazines are SNEAKING them in there without the shop owners knowledge/permission). If a shop owner didn’t want those in there, they have the freedom to negotiate that with the publisher and any agreement they come up with is between them.