Apple Responds to EU's Decision to Narrow Antitrust Case Prompted by Spotify

[obviouslogic]

Hey Spotify, if you don’t like these anticompetitive rules all you have to do is start up your own hardware business and enter a market with incredibly high barriers to entry that already has two dominant, established competitors, one of which is sitting on enough cash to buy you and at least five companies your size.

That’s what this comment sounds like. It’s all noise, signifying nothing.

I tend to agree. It's silly to believe it's easy to enter a market with entrenched companies. But it's not entirely implausible. And that's when and where real innovation actually comes into play.

Although I think it is going to be much easier for Apple to remain relevant much longer and enter new markets than most of their competitors because they chose to remain vertically integrated and built an ecosystem around it.

 

[thejadedmonkey]

Eh? I must have missed the HomePod marketing that says 'Compatible and works seamlessly with Spotify and Amazon Music'.

Apple briefly showed the Spotify logo when they announced the Homepod Mini. It was certainly implied, and part of the reason I bought one.

 

[No5tromo]

BTW and just for the record this topic is political on by U.S. standards

 

[Coochie Boogs]

Hey Spotify, if you don’t like these anticompetitive rules all you have to do is start up your own hardware business and enter a market with incredibly high barriers to entry that already has two dominant, established competitors, one of which is sitting on enough cash to buy you and at least five companies your size.

That’s what this comment sounds like. It’s all noise, signifying nothing.

This is what your comment sounds like - "You are running faster than me, its not fair, slow down, so I can get a trophy too."

 

[webkit]

You are joking yes?

Let's see...

1. Microsoft forced OEMs into Windows only contracts, meaning if you wanted deep cuts to Windows licensing fees so you could compete with other Windows-based systems, you weren't allowed to sell computers with other OSes pre-installed. This effectively pushed non-Windows operating systems out.

2. Required any company that wanted site-wide licensing for Windows/Office/Server they had to count and pay for every "seat", which included, Macs, Unix workstations, mainframe terminals. Those agreements were far, far more costly than the actual hardware, so eventually it became cheaper for companies to start replacing hardware. This effectively pushed all non-Windows compatible hardware out.

3. Whenever a cross-platform technology starting making headway in the market, Microsoft was famous for, "embrace, enhance, extinguish" tactics. Netscape was a victim of that when Microsoft - who had a monopoly in the desktop computer market, decided that IE should be tied into Windows 98. This effectively pushed all non-Windows based technologies out.

Apple "forces" third party retailers (AT&T, Best Buy, etc.) to sell iPhones that can't include alternative app stores.

Apple "forces" third party retailers (AT&T, Best Buy, etc.) to sell iPhones that can't include alternative browser engines.

Apple "forces" all browser companies that want to use iOS to use the WebKit browser engine instead of Blink/Chromium or another option.

On top of all that, Apple has gone further and even restricts end users from using alternative app stores, alternative browser engines, etc. on iOS. Microsoft didn't/doesn't put those restrictions on Windows end users.

And remember this was a company that had an actual monopoly. When monopoly still meant; a single entity that controlled a vast majority share of its respective market. (And building and owning something does not make you a monopoly, it makes you the owner.)

Apple (with iOS) and Google (with Android) have dominant positions as part of a duopoly in mobile OS and can/should be subject to antitrust laws and regulations.

 

[obviouslogic]

For software that has very low marginal costs, 30% may not be a huge burden. But when you are passing a huge percentage of each subscription to license holders or other parties, it’s a whole different story. It’s impossible for Spotify to offer the same price through their app as Apple does.
Apple and Spotify likely pay very similar rates to license music. I want Apple to compete by having better software for streaming, not because they are abusing their monopoly position to make their service more convenient or cheaper to sign up for.

What monopoly? Apple doesn't have a monopoly in any of the following, music streaming services, mobile software market, mobile OS market, or mobile device market. They do however own and maintain the AppStore, that comes on devices that they make and sell which makes up about 20% of worldwide marketshare.

So yes, Apple controls how software is sold and distributed on 20% of the world's mobile devices and 100% of Apple's mobile devices. That does not make them a monopoly.

 

[spazzcat]

Apple "forces" third party retailers (AT&T, Best Buy, etc.) to sell iPhones that can't include alternative app stores.

Apple "forces" third party retailers (AT&T, Best Buy, etc.) to sell iPhones that can't include alternative browser engines.

Apple "forces" all browser companies that want to use iOS to use the WebKit browser engine instead of Blink/Chromium or another option.

On top of all that, Apple has gone further and even restricts end users from using alternative app stores, alternative browser engines, etc. on iOS. Microsoft didn't/doesn't put those restrictions on Windows end users.





Apple (with iOS) and Google (with Android) have dominant positions as part of a duopoly in mobile OS and can/should be subject to antitrust laws and regulations.

Everything you listed here is good; I would never buy an iPhone from those stores if they started putting this crap on the phone before I bought it.

 

[PhoenixDown]

Everything you listed here is good; I would never buy an iPhone from those stores if they started putting this crap on the phone before I bought it.

People forget the olden days when you would buy a phone and it come with a ton of crap and you'd have a hard time deleting it.

 

[obviouslogic]

(1) Apple "forces" third party retailers (AT&T, Best Buy, etc.) to sell iPhones that can't include alternative app stores.

Apple "forces" third party retailers (AT&T, Best Buy, etc.) to sell iPhones that can't include alternative browser engines.

(2) Apple "forces" all browser companies that want to use iOS to use the WebKit browser engine instead of Blink/Chromium or another option.

(3) On top of all that, Apple has gone further and even restricts end users from using alternative app stores, alternative browser engines, etc. on iOS. Microsoft didn't/doesn't put those restrictions on Windows end users.





(4) Apple (with iOS) and Google (with Android) have dominant positions as part of a duopoly in mobile OS and can/should be subject to antitrust laws and regulations.

1. Is Target allowed to switch out pieces in a box of Legos? You mentioned resellers, not the same as forcing an OEM how their hardware works. By the way, OEM, is Original Equipment Manufacturer... Dell, HP, GateWay, Lenovo, etc.

2. Webkit is an open source engine... anyone and everyone is free to develop it.

3. Apple's sells you a device. It works a certain way. You don't like that device you return it and get something else. Back in the 90's when Microsoft did all this, there really wasn't another choice unless you wanted to buy a product that was incompatible with what everyone else was using (aka monopoly). If you don't like your Apple device, your alternatives are more compatible with everything else on the planet.

4. Duopoly... iOS 20%/ Android 80% You really think it's fair to hold them to the same standards? What if that duopoly is, I don't know, 10% / 90%... should those two companies be treated the same? That's the desktop market Mac / Windows.

This is more ridiculous when you think that of all the possibly 100's of other OEMs in the world only Apple can create and maintain a viable alternative platform? This is not Apple's problem. This mess is because Google gave away Android for free and OEMs flocked to it, ditching every other licensable OS and creating this duopoly. So yeah, let's just keep adding restrictions to Apple, maybe they'll go away and we'll be left with a single Android monopoly.

 

[erikkfi]

This is what your comment sounds like - "You are running faster than me, its not fair, slow down, so I can get a trophy too."

I'm not terminally online enough to think there are trophies for losing an argument on the internet.

 

[Mrkevinfinnerty]

Let's all stop defending Apple here - they're as bad as Microsoft were with IE 20 or so ago and they're rapidly heading for an antitrust case. Their conduct here is appalling and it's going to be a huge stain on Tim Cook's legacy.

Let's remember that Standard oil did all the hard work in opening up oil fields, building distribution and then charging what they wanted.

Except the US federal gov realised that oil was going to be critical to the USA in 20th century and Standard oil's grip on the oil market was going to back the wider economy and thus broke them up.

It wouldn't take a genius to see the parallels between what Apple - and Google - are doing now with app stores and mobile.

Correct.

Pushed it way too far with the App Store and invited regulatory scrutiny.

 

[Jensend]

What monopoly? Apple doesn't have a monopoly in any of the following, music streaming services, mobile software market, mobile OS market, or mobile device market. They do however own and maintain the AppStore, that comes on devices that they make and sell which makes up about 20% of worldwide marketshare.

So yes, Apple controls how software is sold and distributed on 20% of the world's mobile devices and 100% of Apple's mobile devices. That does not make them a monopoly.

Remove the word “monopoly” and my point still stands. Even if users could have gone with an Android phone instead, I don’t like Apple can use their dominance in one area to get an unfair advantage in another.
Apple has 50% of the US smartphone market share. If you looked at the subset of smartphone users who subscribe to a music service, I’d bet the percentage who own an iPhone would be even higher.

Wouldn’t it be better if Apple had to compete by offering a better service instead of by disallowing their competitors to offer the convenience of managing subscriptions within their apps?

 

[Mrkevinfinnerty]

For software that has very low marginal costs, 30% may not be a huge burden. But when you are passing a huge percentage of each subscription to license holders or other parties, it’s a whole different story. It’s impossible for Spotify to offer the same price through their app as Apple does.
Apple and Spotify likely pay very similar rates to license music. I want Apple to compete by having better software for streaming, not because they are abusing their monopoly position to make their service more convenient or cheaper to sign up for.

Someone will be along shortly to erroneously claim that Apple pay the artists more ..

 

[Coochie Boogs]

I'm not terminally online enough to think there are trophies for losing an argument on the internet.

You clearly missed the context, but all good unknown internet entity.

 

[contacos]

I don’t get this. What is even the point of this investigation when there is already the new law coming up that is going to deem Apple a „Gatekeeper“ for sure anyway? Seems redundant

 

[Mrkevinfinnerty]

I don’t get this. What is even the point of this investigation when there is already the new law coming up that is going to deem Apple a „Gatekeeper“ for sure anyway?

Spotify filed a complaint

 

[TracesOfArsenic]

You know Microsoft made the same argument in the 90s regarding web browsers during United States of America vs Microsoft and the DoJ shot that argument down quickly.

Now that the shoe is on the other foot I see we can't keep that same energy.

I think the same rules should apply now as they did then when MS was dragged over the coals. The status quo needs to change and rules need to constantly be re-evaluated as technology and its environments evolve. We're already decades behind the eight ball because of how slow policies take to come to fruition.

 

[gregmancuso]

I agree, that is a pretty big percentage and what is Apple providing to a service as large as Spotify? I could see a smaller company taking advantage of the hosting and transactions etc. but I am pretty sure that Spotify has it covered.

True, a larger organization with a cross-platform username may not believe they get the same value for the service fees as a smaller developer. But, Spotify does still get the tax, reporting, m and customer service support all developers get. Spotify's customers also get the convenience of subscribing via Apple's central payment platform and the ability to easily manage their subscription. Of course, Spotify may not like that last "benefit".

 

[gregmancuso]

If a consumer has access to a better price outside the store, I don't see why Apple can't provide a means of bypassing the App Store price? In other words if you have the transaction occur externally via a email directing you to complete the transaction via the web, why can't a code be entered similar to iTunes streaming content redeem (movies/TV shows) and the user gets the app via the Apple Store free?

They do - Spotify relies on it. You sign up on Spotify'com and then just log into the Spotify app on iOS. No need to subscribe via the App Store or (importantly - have Spotify) pay Apple anything. This is really all for the developer. There is no benefit to the consumer. Spotify may charge more to allow me to subscribe via the App Store. And I, as a consumer, may opt to pay a little more for the self-service / centralized payment / etc benefits that come to me as a consumer. And, as a consumer, I don't care who pays what fees. I know I pay $10.99 / month. How much goes to Spotify and how much to Apple is, frankly, not my concerns.

 

[gregmancuso]

You know Microsoft made the same argument in the 90s regarding web browsers during United States of America vs Microsoft and the DoJ shot that argument down quickly.

Now that the shoe is on the other foot I see we can't keep that same energy.

You really should read up a bit on that. It was a lot more than MS saying "go make your own OS."

 

[obviouslogic]

Remove the word “monopoly” and my point still stands. Even if users could have gone with an Android phone instead, I don’t like Apple can use their dominance in one area to get an unfair advantage in another.
Apple has 50% of the US smartphone market share. If you looked at the subset of smartphone users who subscribe to a music service who own an iPhone, I’d bet it’d be even higher.

Wouldn’t it be better if Apple had to compete by offering a better service instead of by disallowing their competitors to offer the convenience of managing subscriptions within their apps?

People always tend to think the grass is always greener on the other side.

Given satisfaction numbers, I would have to guess a vast majority of iPhone users like the way their iPhones work (having a centralized place to manage all of your transactions and subscriptions). And a very vocal minority don't.

20 years ago, mobile software was a mess and it was extremely expensive. Distributors took up to 70% of cost. And a lot less "copies" were sold because of it. Since then, the App Store has taught us that if you create a single, easy to access, software distribution point, software sales will sky rocket... it allows the developer access to a larger audience, enabling them to drop the price.

 

[gregmancuso]

Yes, and typically you get one or two percent back. So, effectively, the fee is one or two percent.

No. Not at all. The swipe fees are 2-4% or so. That is paid by the merchant, not the consumer.

A bank offering a couple of points back to the cardholder as a benefit of using their card is a marketing and product decision on the bank's part. And not all cards offer cash back (which is really the only card benefit that couple possibly be conflated as reducing the effective fees.

Lets use some simple round numbers:

1,000,000 cardhlders total
600,000 cardholders of that with a 1% cash back card

Each cardholder makes a $10 purchase.
Total swipe fees PAID BY MERCHANT = $20,000
Total cash back TO CARDHOLDER = $6,000

The swipe fees are still the full amount. Some banks include a cash back benefit to their cardholders that is paid out of either the $20,000 swipe fees, or most likely, from a corporate marketing budget or other promotional funding source.

 

[obviouslogic]

Someone will be along shortly to erroneously claim that Apple pay the artists more ..

Apple pays 0.01 per stream
Spotty pays 0.001 to 0.008 per stream



source: https://www.lalal.ai/blog/streaming-payots-2022/

 

[Mrkevinfinnerty]

People always tend to think the grass is always greener on the other side.

Given satisfaction numbers, I would have to guess a vast majority of iPhone users like the way their iPhones work (having a centralized place to manage all of your transactions and subscriptions). And a very vocal minority don't.

20 years ago, mobile software was a mess and it was extremely expensive. Distributors took up to 70% of cost. And a lot less "copies" were sold because of it. Since then, the App Store has taught us that if you create a single, easy to access, software distribution point, software sales will sky rocket... it allows the developer access to a larger audience, enabling them to drop the price.

Nobody is saying the App Store should've been regulated in 2008 but it's 2023 and things have changed.

 

[Jensend]

Since then, the App Store has taught us that if you create a single, easy to access, software distribution point, software sales will sky rocket... it allows the developer access to a larger audience, enabling them to drop the price.

As I’ve pointed out, skyrocketing software sales don’t help if the app developer has to pay a license fee per copy/sub, and then have to compete with the owner of that App Store who doesn’t have to worry about the 30% cut. Heck, I wouldn’t be surprised if Apple made more profit from a Spotify sub than from an Apple Music sub.

I subscribe to a musician on Twitch. Twitch passes on 70% of the cost of the sub to that musician. If they charged their regular rate on their app, they’d have no margin left after paying the musician and Apple.
So, instead, Twitch charges more for subscriptions and donations from within their iOS app. So I get the privilege of paying an extra dollar or two a month if I want to do it through the Twitch app instead of switching to their website.