EU to Investigate Apple Over Spotify's Antitrust Complaint

Discussion in 'MacRumors.com News Discussion' started by MacRumors, May 6, 2019.

  1. MacRumors macrumors bot

    MacRumors

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    Apple is to be formally investigated by the European Commission after Spotify accused the company of using the App Store to deliberately disadvantage other app developers.

    [​IMG]

    According to a report by the Financial Times, EU competition commission has decided to launch a formal antitrust investigation into Apple's conduct "in the next few weeks" after surveying customers, rivals and others in the market.

    Spotify in March filed an antitrust complaint against Apple with the EU in which it argued that the iPhone maker enforced App Store rules that "purposely limit choice and stifle innovation at the expense of the user experience."

    Apple swiftly hit back at the accusation, labeling it as "misleading rhetoric" and arguing that "Spotify wants all the benefits of a free app without being free."

    Spotify's complaint focuses on Apple's policy of charging a 30 per cent fee on App Store purchases, which means Spotify has to charge existing subscribers $12.99 per month for its Premium plan via the App Store just to collect its standard $9.99 per month charge.

    Spotify CEO Daniel Ek claimed that the policy gives Apple an "unfair advantage," since Spotify is unable to fairly compete with Apple Music's standard $9.99 per month price within the App Store.

    Alternatively, if Spotify chooses not to collect payments via the App Store, Ek said that Apple "applies a series of technical and experience-limiting restrictions" on the company. Over time, this has also included "locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch."

    The EU can force companies to change business practices they deem unlawful and levy fines of up to 10 per cent of a company's global turnover. However, investigations by the European Commission can take years to resolve unless the companies involved offer to settle the probes by making legally binding agreements to change their behavior.

    For further details on each company's stance on the issue, see Spotify's Time to Play Fair website and Apple's press release addressing Spotify's claims.

    Article Link: EU to Investigate Apple Over Spotify's Antitrust Complaint
     
  2. Sciomar macrumors regular

    Sciomar

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    Spotify is definitely sounding greedy here, how dare they be held to the same standard as other app makers.
     
  3. willyx macrumors member

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    May be because other app makers don’t face a first party competition from Apple
     
  4. martyjmclean macrumors 6502

    martyjmclean

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    #4
    I hope Spotify win! The lengths Apple goes to, to avoid Spotify collecting 100% of their profits is disgusting. I’m glad 100% of my money goes to them, instead of just 70%.
     
  5. YaBe macrumors 6502a

    YaBe

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    #5
    Three post and no "It's their store then can do what they want" yet, may be there's hope...
     
  6. PickUrPoison, May 6, 2019
    Last edited: May 6, 2019

    PickUrPoison macrumors 68040

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    More than half of Spotify’s users are unpaid—100 million paid vs 117 million unpaid. Apple hosts all of the iOS downloads from the ad-supported users as well as all the premium subscribers who pay Spotify directly for free. I haven’t really been following that closely; is it Spotify’s position that they shouldn’t have to pay the normal 15/30% commissions for subscribers who sign up and are being billed through the App Store? So zero commission to Apple for App Store sales?
     
  7. 123 macrumors 6502

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    Right, not paying 30% for nothing is now considered greedy. Are you a greedy person? I'll be glad to send you my bank details so you can put your money where your mouth is.
     
  8. PickUrPoison, May 6, 2019
    Last edited: May 6, 2019

    PickUrPoison macrumors 68040

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    Are you saying sales made via in-app purchase should be free? Apple deserves nothing? Would that apply to all vendors, or just Spotify?
     
  9. Sciomar macrumors regular

    Sciomar

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    That is exactly Spotify's position, they feel entitled to not have to pay the usual commission fee which other makers must pay for using the app store.
     
  10. 123 macrumors 6502

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    Do you know what Spotify does? Can you even imagine the amount of data that goes through their servers? Hosting the app is really the least service they'd need.
    Their position is that they shouldn't be forced to pay $36/year per subscription when their competitor pays $0 because it controls the platform.
     
  11. Oohara macrumors 68030

    Oohara

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    Wow, so Apple gets a competitive advantage in the marketplace they themselves built and maintain? *shocker*
     
  12. PickUrPoison macrumors 68040

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    Sounds like a good deal for Spotify. Probably everyone would prefer to pay Apple nothing.

    I guess Apple could raise the fees on everyone else and give Spotify a free ride, but that really doesn’t seem fair.
     
  13. Kabeyun macrumors 68020

    Kabeyun

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    I expect Apple to lose here. Not commenting on the merits of the case but on what I think the EU will do.
     
  14. Pepe4life macrumors regular

    Pepe4life

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  15. iSayuSay macrumors 68040

    iSayuSay

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    #15
    Apple should just allow Spotify to put in the "Subscribe" button that linked out to Spotify.com page so consumers can choose whether they want to pay Spotify directly or not.

    No need for bloodshed like this. No need for the 30% cut since the purchase system is handled directly by Spotify.

    This is fair and square since Apple Music also put in the giant "Try It Free" button inside the Music app that redirects to AppStore subscription page.
     
  16. Harvey Zoltan macrumors newbie

    Harvey Zoltan

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    #16
    Maybe Spotify should just take their business elsewhere.
     
  17. itsmilo macrumors 68020

    itsmilo

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    I would not be surprised if the EU forces Apple to allow apps to be installed without going through the App Store in the future. This way devs can decide themselves if they want to take advantage of the already existing infrastructure and paying 30% commission on it or if they want to distribute it themselves.

    However the easier solution would be to simply allow a „subscribe / buy now“ redirect button to be built into apps
     
  18. PickUrPoison, May 6, 2019
    Last edited: May 6, 2019

    PickUrPoison macrumors 68040

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    #18
    Netflix didn’t want to pay either, and Apple wasn’t—and still isn’t—a competitor. I think Netflix just wanted to pay Apple less. That’s why they don’t allow signups through in-app purchase.

    Why doesn’t Spotify remove the ability to sign up through the app if they don’t want to pay the commission? Like Netflix does. Then people would sign up on Spotify’s website. Spotify could even get free app hosting with no revenue whatsoever going to Apple!

    Or would that be anticompetitive, with Apple having to pay 100% of the cost of hosting Apple Music as well as 100% of Spotify’s app hosting/distribution costs.
     
  19. dumastudetto macrumors 68040

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    I'll have more sympathy for Spotify when they stop ripping off artists. Only Apple pays artists their fair share.
     
  20. TVOR macrumors member

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    #20
    I think you have been out in the Aussie sun a little too long my friend! Do you think, when you walk into a supermarket and see "brand name" products there, that the brands get 100% of the price charged? Of course not, the "retailer" makes a profit because they have invested heavily in infrastructure and building up a customer base which the brand benefits from in exchange for giving the retailer a profit...basic economics...

    Now, in terms of Spotify (the "brand name") not being able to compete with Apple (the supermarket "own brand" products) on price...again this is nothing new! Here in the UK you often see a supermarket's "own brand" versions of "brand name" products on sale right alongside, and usually significantly cheaper as well. Those that by the "brand name" do so because they feel it is a better product or because of customer loyalty.

    In the Spotify/Apple scenario, Spotify wants to not pay anything to the "retailer" (Apple/iOS App Store) for all of the infrastructure they have developed and the inherent costs (however small they may be) of hosting and fulfilling the downloads, let alone the costs associated with actual payment processing if the monthly subscription is billed through the App Store. They then cite it as anti-competitive behaviour which is just ludicrous! So if Apple decides to price Apple Music at $4.99 per month will Spotify then demand $5 per month per user from Apple because it's "uncompetitive" for Apple to offer a similar product at a cheaper price? Sounds ridiculous doesn't it? But how is that different from exactly what they are proposing now?

    Spotify are completely at liberty to price their product/service however they choose, and equally Apple, as a retailer, is completely at liberty to set their own "mark up" on third-party products that they sell on their own store. I would understand the anti-competitive narrative if Apple routinely charged 10% but were charging direct competitors 30%...but that's not what is happening. All apps on the App Store are subject to the same T&C's. Basically, Spotify want all of the benefits of the App Store and the Apple platform but don't want to pay for the privilege of being "stocked" at the App Store.

    Not being on the App Store doesn't mean that they can't sell subscriptions. They routinely sell them on their website in fact. But it seems like they want access to all of the Apple customers but don't want to pay for it! Apple has invested billions of dollars in R&D and marketing over the last decade to build its iOS platform into what it is today with the huge user-base that it has. Spotify seems to feel entitled to have access to those customers for free just because Apple creates a competing product. Spotify could just leave the price at $9.99 in the App Store and accept that 30% as a cost of doing business in the same way that most B2C companies have "cost of sale" considerations.

    Look at it this way, if they didn't have their app on the App Store and no way for iPhone users to use Spotify on their phone then some percentage of those iPhone users would still subscribe to Spotify (for laptop/browser use) but a good number wouldn't. Let's then say that they put their app on the App Store (at $9.99 per month) and they then pick up an additional 10 million subscribers that they didn't have before. Their revenue will now be $70 million per month more versus not having a presence on the App Store. I would consider that worthwhile but no, they won't be happy with $70 million...they want the whole $100 million because it's "unfair" that Apple can make more money than they do...even though Apple invested huge amounts of money in the tech and the platform...
     
  21. Oohara macrumors 68030

    Oohara

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    Fully agree with the first part. As for the second one, maybe after I go to the men's and snort me a thicc line...

    Overall though, I definitely choose to give my business to Apple in this case. None of them pay artists right, but at least Apple didn't begin building their streaming service on blatant piracy like Spotify did.
     
  22. Piggie macrumors G3

    Piggie

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    #22
    So how would you feel about Microsoft playing by the same rules Apple does, and locking down all things Windows related?
    Can you just imagine the outcry?
     
  23. PickUrPoison macrumors 68040

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    #23
    To be fair, there are other streaming services that pay more than Apple. But Spotify is not one of them. They pay significantly less than Apple does.
     
  24. Piggie macrumors G3

    Piggie

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    #24
    Honestly I have no issue myse;f with companies like Spotify having to pay a fee for using the App store.
    Now, whether 30% is the right fee for a subcription service that's another issue.
    Personally that seems wrong to me.
    Yes, for a simgle 1 off purchase then, ok, I could just about be ok with 30%, ideally a little less, but hey.
    But I don't feel 30% is acceptable for subscription payments as that's long term on-going.
    If it was 25% 1st payment (like when you buy an app) then 5% for long term subscription payements, then I'd feel that as resonable.
    You got your money for the purchase at the start, but it seems wrong to want to take the same cut just for the follow up payments.

    However, all that aside, what I di feel is wrong, is, then limiting how you can use Spotify on Apple products if you don't buy vie the app store. That smacks of doing something just out of spite, and is working against the benefit of Apple consumers in general.

    Just my 2 cents anyway :)
     
  25. mdnz macrumors 6502

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    #25
    Apple already earns $100 each year from developers, I think that's more than enough to keep their cloud running looking at how many developers there are.
     

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