Congress Reportedly Asks Spotify for Information on Apple's Alleged Anticompetitive Behavior

[jonblatho]

Users don’t pay the 30% tax. The developer pays to have their product sold on these stores. When an app is purchased 30% of its cost goes to the store and 70% to the developer. It’s been this way since 2008 and is nothing new.

Users would still pay the same price even if 30% didn’t go to the store. These companies are not going to lower their pricing. They just want more of your money.

False. When Spotify offered in-app subscriptions, they charged more for the IAP (iirc, $12.99) and then emailed you later saying that if you wanted to pay the regular $9.99 you needed to subscribe through their own billing system, with instructions to do so.
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What preferential treatment? It’s their ecosystem. So it’s only fair of apple puts itself at a substantial disadvantage?

Apple’s putting competitors at a substantial disadvantage. Kind of what antitrust is for. Anticompetitive practices.

 

[RicD]

Apple wants all the benefits of being an American company with out paying the taxes

What? Apple paid a 25.8% tax rate, what was your net tax rate? Apple bringing money back to the USA will be paying $38 Billion. They will also invest $30 Billion in the US over the next five years. According to all records Apple (and other tech companies) pay their tax share by way of the applicable local tax laws. Now, before you scream they are avoiding taxes, you too are. You take every legal deduction afforded you by your State tax board and the IRS. Companies do the same, if not they can be in deep trouble by their share holder (to whom companies are ultimately obligated too) for mishandling monies, and the government will do the same as well. In order to lower their tax obligations companies around the world do their best following local tax laws (same as you do for you and your family).

What is happening now is governments have seen tax revenue slip out of their hands not because of companies not paying, but from the manner governments structured their tax laws. Remember, it is not you I and corporation paying too few taxes (either by percent or actual money) it is governments over spending. When governments receive a windfall of money they again go on a over spending spree. When the windfall is gone governments again cry poor-mouth; economics 101. There is much more to this, but you will have to read, so give this a go https://www.apple.com/newsroom/2017/11/the-facts-about-apple-tax-payments/

Ignorance can be fixed, stupidity cannot.

 

[KidAKidB]

OMG, Spotify is Booty Tickled that Apple Music is gaining on them and will soon stomp them out. Spotify proves to be childish.

They also want to replace AppleCore OS services with their services.... not going to happen... LOL

You're so wrong on this.
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Why should Spotify be exempt from 30 percent fee? If you do not like platform, then remove your app from it. Problem solved.

Spotify wants special treatment that will increase their revenues, which is unfair to other apps and their developers.

There's so much more to this than just the 30% cut. Apple doesn't even let Spotify advertise any deals in app. Apple's being extremely anti-competitive.

 

[KidAKidB]

I, along with a LOT of people, refuse to use PayPal. Why should I be forced to use another payment system I don't like?

And even more people DO use PayPal than those who refuse.

 

[oneMadRssn]

What preferential treatment? It’s their ecosystem. So it’s only fair of apple puts itself at a substantial disadvantage?

So you admit Spotify is at a substantial disadvantage compared to Apple?

As I said several times: Apple is using its exclusive control over market A to advantage itself in market B. That is illegal under various laws, including EU and US antitrust laws.

Either you actually don't understand this, or you refuse to acknowledge this because it would fly in the face of a preconceived view you hold. Either way, I'm not going to argue this point further.

You can disagree about what the law should be, but clearly the EU regulators and now the US congress understand that Apple is close enough to violating what the laws actually are to warrant further investigation.

 

[realtuner]

And even more people DO use PayPal than those who refuse.

Not based on the number of subscribers they have.

PayPal had 286 million subscribers worldwide as of this year. That's a small number compared to how many credit card users there are.

 

[Mabus51]

False. When Spotify offered in-app subscriptions, they charged more for the IAP (iirc, $12.99) and then emailed you later saying that if you wanted to pay the regular $9.99 you needed to subscribe through their own billing system, with instructions to do so.
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Apple’s putting competitors at a substantial disadvantage. Kind of what antitrust is for. Anticompetitive practices.

Yeah they raised their fees to $13 on purpose for the lawsuit and nothing more. They aren’t being nice, they don’t care about you or the artists they make their money from. They pay no one but themselves and they owe a ton in back royalties that’s about due. Hence why the lawsuits are popping up now.

 

[jonblatho]

Yeah they raised their fees to $13 on purpose for the lawsuit and nothing more. They aren’t being nice, they don’t care about you or the artists they make their money from. They pay no one but themselves and they owe a ton in back royalties that’s about due. Hence why the lawsuits are popping up now.

ok

 

[genovelle]

„Apple also forbids Spotify and other developers from alerting users that they can sign up for a subscription or complete a purchase outside of its iOS app, and disallows Spotify from advertising deals to its customers in the app or by email, as these practices would circumvent Apple's in-app purchase system.“

i always thought this part was messed up. it is one thing not allowing 3party apps to be installed from other sources but this is clearly just unfair competition to make sure Apple is getting their share

Apple or any store is designed to make money from their investment. If Spotify is marketing to acquire their own customers, the customers will sign up directly and they would be downloading the app just to use it. Apple makes nothing in that case. They want Apple to market for them and get the benefits with out paying their share.

 

[justperry]

Spotify wants all the benefits of being on the most lucrative mobile platform without having to pay for it.

I mostly agree with you on other topics, this though is not as white or black as you say, If Apple did not have their own streaming service there wouldn't be a conflict, the fact is they have, Apple pays nothing for being in the App store, others including Spotify do, that's the problem amongst other lesser issues.
It's like unfair subsidies.

 

[smileman]

Apple said the App Store "welcomes competition"

Laughable.

Come on Apple, if you welcome competition then you’d allow your iOS customers to install apps from competing/alternativ distribution channels or app stores, like I can with MacOS.

Since it seems Apple isn’t going to budge on this and is instead choosing to lie, its time for the government to forcibly end the AppStore distribution monopoly.

 

[smileman]

I see lots of whining about App Store fees, but nobody offering up any alternative solutions.

The alternative is for Apple to cease monopolizing distribution / installation of apps on iOS devices via its AppStore.

Let us do what I can do with a Mac and download/install from elsewhere.
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The problem is there is no other place to install apps on iOS devices than the Apple App Store. If there were an alternative store, that would be a different story. But the fact that Apple only allows distribution through their store AND insists on 30% cut on all billing means the app maker doesn't have alternatives.

bingo

 

[Arndroid]

The issue is Apple Music doesn't pay a 30% commission to the iTunes/App Store like Apple is expecting Spotify to pay. And yes obviously it's all owned by Apple - but still, Apple Music is getting special treatment with the only way to purchase apps and services on an iPhone. Whether or not that qualifies as monopolistic behavior is not for me to decide.

I think Spotify is in the right. If you make an exception for one category of app (Uber) then you can't really say Spotify isn't also deserving of an exception. Slippery slope. I think Apple should reduce the commission for IAPs and apps themselves and charge it across the board.

Actually the probably do pay 15/30 percent.

 

[FaustsHausUK]

And Apple wants a 15–30% fee from Spotify that it’s not charging itself for the same courtesy. To paraphrase Warren, does Apple want to play the game or be the referee? When you try to do both, you’re practically begging for a justified investigation into anticompetitive behavior when you begin abusing the power you have over competitors.

Edit: Double-posted for some reason; removed the second.

Apple are not abusing anything. They are shouldering all of the burden of maintaining an operating system that works well with millions of Internet-connected devices, maintaining an online store (with all of the customer service and payment processing infrastructure that requires), maintaining the means of distributing software to users (who can redownload the app for free as often as they need to).

Apple provide all of this whether or not you charge your users (and thus whether or not they get a cut of your revenues) - they make zilch from Spotify's millions of ad-supported users. So, the app store fee is no more a "tax" than rent is a "tax" on retail stores - it's a basic cost of doing business.

Spotify are being very misleading in their statements about all of this. They want you to think of them as the poor little David facing down Apple's Goliath. It's a crock. The real Davids are the hundreds of thousands of musicians and songwriters they pay abysmal royalties to (if they pay them at all, here's a fairly recent, high profile example of them not doing that: https://www.cnn.com/2019/08/22/entertainment/eminem-spotify-lawsuit-trnd/index.html ). Spotify are not alone in poor royalty rates, but Apple, Tidal and Napster are all ahead of them: https://www.digitalmusicnews.com/2018/12/25/streaming-music-services-pay-2019/

They are still one of the most popular streaming services, a position they would not enjoy without Apple. iPhones and the app store (and Android phones and Google Play) created an audience and a business model for them that desktop streaming alone would not have done (last I heard, ~60% of Spotify's traffic came from phones and tablets).

I'm not saying 15% or 30% are _fair_ because I have zero detailed data on the matter. That said, 0% is also not fair, which is what Spotify seem to want. Added to how they treat artists, it seems they want to have their cake, eat it, then take a giant dump on everyone else.

 

[jonblatho]

Apple are not abusing anything. They are shouldering all of the burden of maintaining an operating system that works well with millions of Internet-connected devices, maintaining an online store (with all of the customer service and payment processing infrastructure that requires), maintaining the means of distributing software to users (who can redownload the app for free as often as they need to).

Apple provide all of this whether or not you charge your users (and thus whether or not they get a cut of your revenues) - they make zilch from Spotify's millions of ad-supported users. So, the app store fee is no more a "tax" than rent is a "tax" on retail stores - it's a basic cost of doing business.

Spotify are being very misleading in their statements about all of this. They want you to think of them as the poor little David facing down Apple's Goliath. It's a crock. The real Davids are the hundreds of thousands of musicians and songwriters they pay abysmal royalties to (if they pay them at all, here's a fairly recent, high profile example of them not doing that: https://www.cnn.com/2019/08/22/entertainment/eminem-spotify-lawsuit-trnd/index.html ). Spotify are not alone in poor royalty rates, but Apple, Tidal and Napster are all ahead of them: https://www.digitalmusicnews.com/2018/12/25/streaming-music-services-pay-2019/

They are still one of the most popular streaming services, a position they would not enjoy without Apple. iPhones and the app store (and Android phones and Google Play) created an audience and a business model for them that desktop streaming alone would not have done (last I heard, ~60% of Spotify's traffic came from phones and tablets).

I'm not saying 15% or 30% are _fair_ because I have zero detailed data on the matter. That said, 0% is also not fair, which is what Spotify seem to want. Added to how they treat artists, it seems they want to have their cake, eat it, then take a giant dump on everyone else.

I’m not saying Spotify’s a great company. They’re trash, and so is Apple. I’m not even a Spotify user; I use Apple Music. But Spotify’s in the right here: Apple gets 100% of a $9.99 in-app subscription. If Spotify still supported IAP for new subscribers, which they don’t, Spotify starts out with $7 and eventually gets $8.50 for some users, and with their sole business being streaming music and on fairly low margins at that, that is simply unacceptable. They’d bleed cash on iOS subscriptions.

So, their choices are to swallow that 15/30% fee and bleed cash that Apple’s not bleeding — impacting their ability to pay royalties, thus impacting their ability to make licensing deals, etc. — or to jack up their price to recover some of that 15/30% so that Apple’s service is now cheaper and Spotify’s no longer priced competitively. They can’t use their own payment system or direct users outside the app (by link or instruction) to subscribe; they must either use IAP or not allow users to subscribe in the app at all.

That’s anticompetitive and abusive and exactly why people are spending time on this. Really, this committee certainly has more pressing stuff on their plate, so I’m surprised it hasn’t been put on the back burner. Probably an unpleasant surprise for Apple, too.

 

[Lalatoon]

Apple with its massive market, has always been a bully not just in the App Store but in other areas too. Its typical for giant companies like Apple to have unfair competition practices. Fans will bark at me for this comment but whether you accept it or not, its a fact.

 

[4jasontv]

There's so much more to this than just the 30% cut. Apple doesn't even let Spotify advertise any deals in app. Apple's being extremely anti-competitive.

When did Apple prevent them from offering a lower IAP price? Apple isn’t letting them advertise how to sidestep the fee they charge developers, but Spotify is free to offer a discount whenever they want.

 

[Mabus51]

ok

As someone that worked in the music industry that gets paid on some royalties. Believe me when I say I know what I’m talking about on this. Spotify is one of the worst offenders of not paying up or under cutting dues the owe. Look up their history if you want. There are tons of suits against them and it’s all public record.

 

[Jakewilk]

Apple wants all the benefits of being an American company with out paying the taxes

Every company is within their rights to do that. Blame the broken system not the companies who use it legally

 

[4jasontv]

Apple with its massive market, has always been a bully not just in the App Store but in other areas too. Its typical for giant companies like Apple to have unfair competition practices. Fans will bark at me for this comment but whether you accept it or not, its a fact.

What exactly is your fact? Are you being a bully by not letting me use your house? I want a more open layout so I’m going to remove one of your walls. I don’t care if it was load-bearing.

It’s a bit unfair to call Apple a bully when you are asking to play with their toys. To me Spotify is being the bully because they are jealous of Apple’s offerings.

 

[jonblatho]

As someone that worked in the music industry that gets paid on some royalties. Believe me when I say I know what I’m talking about on this. Spotify is one of the worst offenders of not paying up or under cutting dues the owe. Look up their history if you want. There are tons of suits against them and it’s all public record.

See above where I address that deflection.

 

[macfacts]

Apple or any store is designed to make money from their investment. If Spotify is marketing to acquire their own customers, the customers will sign up directly and they would be downloading the app just to use it. Apple makes nothing in that case. They want Apple to market for them and get the benefits with out paying their share.

Apple does no advertising for Spotify. Apple doesn't even run the servers used for streaming the music. Apple is just a leech.

 

[supercoolmanchu]

You're so wrong on this.
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There's so much more to this than just the 30% cut. Apple doesn't even let Spotify advertise any deals in app. Apple's being extremely anti-competitive.

Yeah, it’s almost like how Target doesn’t let Apple put advertisements for the Apple Store on Target store displays.

This is retail boilerplate 101. Spotify is trying to cry victim, to get special exemptions. This is nothing new for Spotify.

Their credibility might be improved, if they paid the artist’s whose content they use. Spotify still refuses to pay artists for music used for years without authorization.

And since the majority of their business model and app development is largely other people’s music IP and Apple SDKs, maybe they should acknowledge that instead of constantly trying to nickel and dime everyone. They are a media player on top of a database With a branding logo, there’s nothing particularly deep happening there.

Spotify is a highly unethical company, they are not to be trusted.

 

[Rob_2811]

break them up ...

 

[Heineken]

False. When Spotify offered in-app subscriptions, they charged more for the IAP (iirc, $12.99) and then emailed you later saying that if you wanted to pay the regular $9.99 you needed to subscribe through their own billing system, with instructions to do so.
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Apple’s putting competitors at a substantial disadvantage. Kind of what antitrust is for. Anticompetitive practices.

What disadvantage? Spotify waltzing in demanding everything to be free is typical sjw snowflake behaviour.