One can praise a corporations products, I can get behind that. But to defend business practices that are a result of market dominance, that's something I don't understand.
Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Apple to Be Fined Over $500 Million in EU Music Streaming Probe
- Thread starter MacRumors
- Start date
- Sort by reaction score
This is an interesting philosophical conundrum:
On the one hand, you have app developers that have to pay Apple 30% while complaining that it's unfair because Apple is exempt from the 30% tax.
This gives the appearance that Apple can operate with a lower cost structure, but is this actually true?
Apple has spent billions of dollars and millions of man-hours to build, develop and maintain the iOS platform and acquire the customers, and the cost of that is baked into the price of every single Apple product and service.
Is it 30%? I don't know, and I don't even know if it matters.
In other words, what makes this so complicated is that Apple and Spotify have completely different business models:
Spotify is purely in the business of selling music subscriptions and the 30% hurts their bottom line that is already hurting anyway.
Apple, meanwhile, is in the device and services business where Apple Music may not drive much profit for the company, but is an integral part of the services ecosystem Apple provides for its customers.
I can see both sides of the argument, but what I struggle with is the decision on whether a platform owner - such as Apple - is allowed to charge rent for the use of their platform and access to their customers or whether they should be forced to give access to it - that they've built with huge amounts of time and money - away for free.
Furthermore, what is the correct ruling FOR ALL INDUSTRIES AND COMPANIES in these situations?
Because the EU can't stipulate different rules for different companies, they will have to come up with a "universal rule" and for the reasons mentioned above, I think this is going to be extremely complicated.
On the one hand, you have app developers that have to pay Apple 30% while complaining that it's unfair because Apple is exempt from the 30% tax.
This gives the appearance that Apple can operate with a lower cost structure, but is this actually true?
Apple has spent billions of dollars and millions of man-hours to build, develop and maintain the iOS platform and acquire the customers, and the cost of that is baked into the price of every single Apple product and service.
Is it 30%? I don't know, and I don't even know if it matters.
In other words, what makes this so complicated is that Apple and Spotify have completely different business models:
Spotify is purely in the business of selling music subscriptions and the 30% hurts their bottom line that is already hurting anyway.
Apple, meanwhile, is in the device and services business where Apple Music may not drive much profit for the company, but is an integral part of the services ecosystem Apple provides for its customers.
I can see both sides of the argument, but what I struggle with is the decision on whether a platform owner - such as Apple - is allowed to charge rent for the use of their platform and access to their customers or whether they should be forced to give access to it - that they've built with huge amounts of time and money - away for free.
Furthermore, what is the correct ruling FOR ALL INDUSTRIES AND COMPANIES in these situations?
Because the EU can't stipulate different rules for different companies, they will have to come up with a "universal rule" and for the reasons mentioned above, I think this is going to be extremely complicated.
Last edited:
That 30% remember though is an industry standard, not sure who came up with it originally but others copied it, so Sony or Microsoft take a 30% cut from digital game purchases made on their platforms as an example. And Apple is meant to half it to 15% under certain circumstances.
Off the top of my head: preinstalled apps, banners nagging customers to sign up for their own service. Not allowing competitors to use beneficial APIs, not allowing competing apps to promote payment options for subscriptions. This is just an educated guess. As I said, the official announcement has not been made yet.
Because I simply don't agree with you on the idea of market dominance here. Again, this article we're responding to is about Apple and Spotify, and spotify clearly dominates Apple in the streaming market.
Also, again, Apple provides, for free, IP for which Spotify builds its apps, free hosting and download of millions of apps, and a well-curated list of customer to whom Spotify can sell their product. Spotify does not provide those same benefits back to Apple; in fact, just the opposite, Spotify tries to be a pain in the ass anytime they can. Meanwhile, Spotify under pays its artists. But most importantly, perhpas, Spotify is operating a business that is losing money. Apple is operating a business that is making money.
It matters to me that Apple is successful; the "praising a corporations products" is only possible when a corporation is profitable. Why would I not support a company who I can trust to be around in the future?
Apple did not get to where Apple is through market dominance. They got there due to great products. That consumers want.
Its there product, its there store. They are not forbidding people from selling apps in there store but like all stores they do get a commission. Also like all store, if you don't abide by the rules, for example, no shirt, no shoes no business. Stores are free to place there brand first, again its there store. It's like simple logic and common sense are missing here.
Market dominance no, Apple doesn't have that, but unfair biased control of the market on its platforms absolutely yes, for me that's where the fine is valid.
To not even allow links in someone's app to a cheaper price is anticompetitive at the end of the day.
Apples platforms are successful due to that third party support as much as first party.
Does Spotify allow Apple to even be on their platform? No. Spotify doesn't advertise anyone else's streaming service, at all. Apple provides a whole platform and customer base to Spotify. Trying to argue that Apple is harming Spotify by providing Spotify with so much, while not recognizing that you're not requiring the same of Spotify, shows me a blindness in your analysis.
So you think when Apple competes with Spotify iOS, then there is a level playing field?
Spotify underpaying artists is a myth. Please do some research. They pay out roughly the same percentage of subscrption revenue. Also, they have an ad-supported tier and are present in many market where monthly subscriptions are much cheaper than in richer countries.
We don't know, if Apple is not cross-subsidizing Music. I have used Apple Music for almost a year for free because of generous free trials.
More generally, if you don't agree, that competition is important for innovation and low prices, then we should stop discussing.
Yea we had round disks called CDs and before that vinyl records you ignorant kids!Streaming? When I was your age I had to buy my own damn music!
Now get off my lawn!
It's not about the fines, it's about Apple's business practices in this special case. If they don't change them, there will be another fine.
Money goes into the EU budget. But it's not a major source of funding of the EU, as many here like to say.
This isn't the issue though. The issue is that Apple prohibited companies from saying "you can pay less for this subscription if you buy this on another device". Thats the problem.
Whether Apple can charge 30% or not isn't part of the problem, its that they didn't allow companies to tell customers they could save 30% by buying products through another method.
Let's imagine a totally anti-anti-competitive iPhone based on your post:
- Apple ships blank phones with zero built in apps.
- They don't promote their own services.
- They don't even control the payment processing.
- You get to install whatever App Store or app you like.
- No 30% cut of anything.
Super fair and anti-anti-competitive, yes?
There's just one problem with it:
The company that has spent years, millions of man hours, and billions of dollars to create the platform and everyone else gets to profit from for free without compensating the creator for it in any way.
In a world like that, why would anyone bother creating and investing in a platform in the future?
Last edited:
No apple doesn’t have unfair biased control. It seems that if all business were forced to allow signs saying you can get my product cheaper somewhere else, the law wouldn’t stand as popular.
It was market share combined with anticompettive behavior that got MS in trouble. However, a company doesn't necessarily need to have MS/Windows level market share for their anticompetiive behavior to be an issue. It's sort of like a speeding situation e.g., if the speed limit is 55 mph, a driver doesn't have to be doing 120+ mph to be considered violating the law as doing 65 mph can also violate the law and result in a ticket.
So you would prefer Apple to kick out Spotify out of the App Store. And how would that benefit competition in the music streaming business? Is that better for customers?
Ah but that sort of is the same issue, because telling customers "pssst, if you buy it from over there, we don't have to pay Apple anything" is essentially the question whether Apple get 30% or 0% for the use of their platform.
No, it is not a level playing field. Apple has to pay for development of the entire platform. Development of the IP that allows Spotify to build its app for free. Hosting and downloads of Spotify's app to millions of customers for free. Apple doesn't get any of that for free; Apple has to pay for all of it. In a very real way, Apple is subsidizing Spotify's business, and Spotify cries about it.
It's actually not. But to discuss this we need to get into the nuance. Apple pays more per stream. Spotify pays more in total since it has a much larger market share. But either way, this is tangential to the discussion at hand.
I think competition is extremely important. The most important element. I'm not sure why you'd think I don't.
Since the PayMeister of the EU (Germany) is in a recession, they need all the help they can get. Germany won't be able to save them this time.