EU to Investigate Apple Over Spotify's Antitrust Complaint

[78Bandit]

Sure add in app as well still doesn’t make a difference, iTunes billing trumps all three.

Sure but again amazon, eBay, Uber, etc all sell tangible goods or service.
Spotify doesn’t, perhaps that is a concept to difficult for you to grasp.


I actually have, repeatedly. The difference between tangible goods and services vs intangible goods and services is one is tangible and the other is intangible.

Don’t think that would make a difference to you.

It certainly does to apple.

It makes a difference to Apple because that distinction is also where they directly compete with other sellers. Hence the EU investigation to see if that distinction and the resulting restrictive app store polices is being made for the purposes of hurting competition. You may not be able to provide a reasonable argument as to why intangible items should be singled out for restrictive payment terms and conditions, but Apple is certainly going to be asked that question directly as part of the investigation. Let's hope they have a better answer than "intangible is intangible"

 

[ajistewart]

I don't feel that Spotify should get this for free. Effectively Apple is providing a consignment based platform whereby they are getting a commission for hosting Spotify's software; whereby they are getting subscribers from the Apple userbase. if spotify don't like it, how about they just write a web browser login for the iphone, pull the app from the app store and see their userbase deminish because it will become clunky. it would be like me purchasing a house that costs an extra $10,000 than what it should be so that the seller can recoup the real estate agents' fees. what Spotify are asking is that the real estate agent advertise and show people through a house and expect nothing in return. If Apple are providing a platform whereby Spotify reap the benefits of it, i don't see Spotify winning.

 

[truthertech]

You have no clue what ambush marketing is. Putting a link to your own website from your own app is definitely does not fall into that category. Apple forcing their own payment solution on developers is also a form of ambushing then too, or showing a samsung ad on Safari on iPhone. Simply by your flawed logic, so is basically every app ever created.

So you think that Spotify et al should just create a free app but then create a link to sign up on their own website?

No, we think that Apple should allow Spotify to add their own payment solution, like a dozen of apps on my iPhone already have, including transportation apps (taxi, uber, scooters, train) or food services. Some of these support Apple Pay and adding credit card and other mobile payment solution.

So essentially just using the App Store as free advertising?

Are you kidding me? App Store is also good for Apple, that's what ultimately makes their phone useful, it is a symbiosis and not Apple doing favours. Ultimately it is neither about Apple or Spotify, but the consumer.

Consumer benefits from competition and Apple is CLEARLY using their advantage as distributor of apps to make their competitors product less viable, and they are being schmuck about it citing bunch of ******** reasons about customer experience, security and so on. There are dozens of apps with more downloads (Facebook, snapchat), that generate NO REVENUE to Apple, yet they are trying to go after a music streaming company.

Most people have to stop looking at this issue from company first perspective. Apple is providing a service and by their size and popularity they are obligated to provide it in reasonable fashion, not exploiting their prime position.

But who am I to say, maybe you also like the super competitive and cheap cellular service in the US...

So if it's ultimately about what is best for the consumer, then an App store that has made the vast majority of Apps free and the rest 99cents is not good for the consumer???? LOL. You win the award for the most ironic post of the week.

 

[PickUrPoison]

Everything you just said falls apart if the EU agrees with Spotify and finds Apple is only applying the restrictive terms to digital goods in an effort to hinder its competitors in that market. Apple is going to need to answer the question "why are you doing it this way only for a market in which you also compete, but not others?"

Spotify isn’t being singled out for special treatment, and Apple having a competing product is of no consequence. For most of the apps in the App Store, Apple doesn’t have a competing product but the still have to pay the fee. Competitor, non-competitor—it’s not relevant, everyone is subject to the same rules.

 

[78Bandit]

Spotify isn’t being singled out for special treatment, and Apple having a competing product is of no consequence. For most of the apps in the App Store, Apple doesn’t have a competing product but the still have to pay the fee. Competitor, non-competitor—it’s not relevant, everyone is subject to the same rules.

If a reason Apple decides to charge only sellers of digital goods is to hurt competition in a market in which they also compete then they have no right to do so. The issue is not it being acceptable to charge fees for some products and not others, it is whether doing so harms competition. Apple is going to have to make an argument that their decision to only apply the restrictive payment terms to sellers of digital items is based on a rational, non-discriminatory reason. The fact that some digital sellers don't compete with Apple is not relevant, they are just collateral damage from policies that appear designed to benefit Apple at the expense of their competitors for certain products like music, movies, and eBooks.

 

[PickUrPoison]

You still haven’t explained why Apple deserves a share of revenue for digital goods.

Why wouldn’t they?

Apple runs a store that sells digital goods, and they charge a fee for selling those goods, whether as an initial app purchase itself, or an in-app purchase of other digital goods.

 

[hans1972]

A few questions:

1. Why does Apple only take a cut of digital goods? Why the arbitrary distinction? One could argue Lyft and Uber owe their success to the App Store more than Spotify does but Apple doesn’t get a cut of their transactions.

It has to be enforceable, has a certain form of fairness as seen by users (not developers) and it has to make Apple a lot of money.

Taking money for physical things and things happening outside the iOS ecosystem would not be acceptable to Apple's customers.

2. If the App Store shouldn’t be free then why does Apple allow free apps? Why doesn’t every app cost at least .99 cents with Apple getting a cut of that sale?

It is Apple as the owner who should decide. If they want it to be free that's fine. If Apple wants the store to be expensive, that's also fine. If they want to charge only under certain circumstances, that's fine too.

Again, enforceability and acceptance is important. Taking money only when the developer is making money is easier to accept both for customers and developers.

Also a certain amount of free apps to increase the value of the ecosystem and increases the likelihood for customers to buy hardware.

3. If a friend says to me ‘man Spotify is great you really should be using it and sends me an App Store link to download it is it really Apple acquiring the customer for Spotify? And if you say yes because the app is coming from the App Store I’d say back well that’s because the App Store is the place to get it. No other app store or methods are allowed.

Let's say your friend says that a store in town sells a great brand of apples. You go to that store and buys apple. Is that store really acquiring you as a customer? Shouldn't the apple producer or your friend get all the money?

That is the point of owning a store. It doesn't matter how you got there, the store owner wants the money anyway. If you don't like the store, you can go elsewhere. Like using a different kind of device.

4. Why not allow other payment options in-app (with requiring Apple billing to be there as an option)? There are plenty of people who would stick with Apple billing because they think it’s the most secure and/or want to manage all of their subscriptions in one place.

Apple would loose billions of dollars each quarter. Most app developers, except very small one, would not include Apple billing.

Think about doing this in any kind of store. You go to a store, and there is a way not to pay the store to get the goods. It sounds quite stupid for the store owner to allow something like this.

5. Once an app is downloaded to a device is it really part of Apple’s store anymore?

It is not. The App Store rules only apply to hosting in the store. If you don't host the app in the store, the developer does not have to follow the rules for the App Store.
[doublepost=1557183343][/doublepost]

You are still arguing about how things currently are with no rhyme or reason as to why they should be that way. I'll ask one more time, what justification is there for Apple to restrict how Spotify can collect payments for its services while a company like Uber can directly link to its own account signup and payment services from within the app? Why should both companies not have the same options?

The store is Apple's property and they should be able to make the rules however they see fit, yes even in the EU. Even if it hurts competition and developers and users. And especially if there are alternatives available for consumers.
[doublepost=1557183893][/doublepost]

From Apple's perspective though, the distinction of business models of digital items vs. services vs. physical goods and deciding which one to force to only offer in-app payments that are subject to Apple's 30% fee for providing revenue collection and remittance services while the others can link to their own payment systems is going to be hard to justify. Why should Apple care what the source of the revenue is unless they are also a direct competitor in that market and want to more firmly entrench their market share.

It is more acceptable to customers (not developers) that Apple charge for digital goods and not physical goods. If Apple believed they had the power (long term) to charge for physical goods bought through Apple devices, they would probably do it.

So the justification is quite easy. Apple has the power to force the fee for digital goods. They do not have the power for physical goods and services.

 

[Rogifan]

The App Store is literally a store that sells digital goods... that’s what an app is, right? Whether it’s 99¢ or $99, Apple is entitled to revenue sharing. In-app purchases are not an acceptable way to short circuit the fees due Apple. Otherwise, that $99 app would just be free on the App Store, with a $99 in-app purchase to activate it, thus cheating Apple out of its rightful share. No one would ever have to pay Apple anything.

If customers buy computer programs, audio files, video files, ebooks, audiobooks (and probably a lot of other digital products that I’m not aware of) using an iOS app, Apple charges a fee. Why you think that’s not acceptable unless they also charge fees on services and/or physical goods is (to me) quite bizarre.

Apple decides what categories they want to charge fees on, and the amount those fees should be. That’s not for you to decide. You don’t have to like it, you can think they should also charge fees on other categories, but neither is relevant. Apple is a business, and they make their decisions regarding categories and rates for App Store fees according to what they think will best meet their goals and expectations.

Uber being a business started after the App Store has no relevance. If I book and pay for a dog grooming from Petsmart through their app, there’s no fee charged by Apple, just like there isn’t with Uber. Before the App Store, after the App Store, it’s a distinction without a difference. Services aren’t subject to revenue sharing. Whether Uber would/could exist with only an Android app is also not relevant.

Well how does one define a digital good? Only something that is consumed on a computer? To me that’s an arbitrary distinction that Apple has made. And you still haven’t explained why you think Apple is entitled to a percentage of this revenue. You said it wasn’t about customer acquisition. OK then if it’s about the cost of running and maintaining the App Store why does it only apply to digital goods, especially goods where Apple isn’t hosting the content, they’re just hosting the app (and payment system if they choose to use iTunes)? Yes I know this is the decision Apple made. I’m saying I think it’s nonsensical and either should be broadened or done away with all together.

 

[hans1972]

But again, unless Apple can legitimately argue that getting a cut of sales of digital goods is warranted there’s no reason for them not to offer an alternative payment method in-app.

Why should a store have to communicate a rationale for its rules or its pricing?

Apple does not have to justify it rules. They exist because Apple wants those rules, usually for maximising profit long term.

But the justification is very easy: We provide access to customers who are willing to pay. If you make money, we take a cut. We are a business and we want to make a lot of money for our shareholders.

 

[Rogifan]

It has to be enforceable, has a certain form of fairness as seen by users (not developers) and it has to make Apple a lot of money.

Taking money for physical things and things happening outside the iOS ecosystem would not be acceptable to Apple's customers.

Apple taking 30% cut for digital goods (which in most cases is passed on to the consumer) is not something customers like either.

It is Apple as the owner who should decide. If they want it to be free that's fine. If Apple wants the store to be expensive, that's also fine. If they want to charge only under certain circumstances, that's fine too.

Again, enforceability and acceptance is important. Taking money only when the developer is making money is easier to accept both for customers and developers.

Also a certain amount of free apps to increase the value of the ecosystem and increases the likelihood for customers to buy hardware.

But again this is only applying to what Apple considers digital goods. Uber makes a ton of money but for whatever reason Apple has decided ride sharing services aren’t digital goods. Eddy Cue once said Uber wouldn’t exist without the App Store. I guarantee you if Apple thought it could get away with taking 30% of Uber and Lyft transactions it would.

Apple would loose billions of dollars each quarter. Most app developers, except very small one, would not include Apple billing.

Think about doing this in any kind of store. You go to a store, and there is a way not to pay the store to get the goods. It sounds quite stupid for the store owner to allow something like this.

And herein lies the rub. Apple won’t allow it because they’d lose a ton of money. Because this system was put into place when the App Store was small and the number of users wasn’t anything like it is today. But you can’t compare to a physical store. A physical store is stocking the merchandise. If I buy an e-book from Amazon or listen to a song on Spotify Apple isn’t hosting that content. The only thing Apple is hosting is the app.

It is not. The App Store rules only apply to hosting in the store. If you don't host the app in the store, the developer does not have to follow the rules for the App Store.

Except on iOS there is no way to get an app outside of the App Store.

It is more acceptable to customers (not developers) that Apple charge for digital goods and not physical goods. If Apple believed they had the power (long term) to charge for physical goods bought through Apple devices, they would probably do it.

So the justification is quite easy. Apple has the power to force the fee for digital goods. They do not have the power for physical goods and services.

The question becomes how does one define a digital good? Is it only something consumed on a computer/tablet/phone? To me with Uber you’re not buying a physical good. You’re not buying a car, you’re buying a service you use for someone to get you from point A to point B. And like I said above if Apple could get away with charging 30% on every Uber transaction I guarantee you they would.

 

[StyxMaker]

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.

You ‘think’ that’s enough to pay for the services.

 

[Rogifan]

Why should a store have to communicate a rationale for its rules or its pricing?

Apple does not have to justify it rules. They exist because Apple wants those rules, usually for maximising profit long term.

But the justification is very easy: We provide access to customers who are willing to pay. If you make money, we take a cut. We are a business and we want to make a lot of money for our shareholders.

They may have to justify it to the EU.

 

[jimbobb24]

Apple invents App Store. App makers make billions and billions. Consumers love it. Some apps don’t make as much as they want. Tell teacher to investigate. Spotify motivations are way too transparent.
[doublepost=1557185453][/doublepost]

Finally someone who understands the ACTUAL problem. The problem isn’t Apple charging some fees for their service (in app purchases), the problem is that Apple FORCES DEVELOPERS TO USE IN APP PURCHASES. Their guidelines forbid developers from even LINKING to an webpage that has payment in it. Me as a developer can’t put a button linking to an online subscription page. Netflix can’t put a link, Spotify can’t put a link, no developer can put a link.

Because every developer would have a free app that linked to a page where Apple got nothing. This is obvious. It works as it is. Spotify can advertise that people should sign up at the webpage. No one is stopping them.

 

[Rogifan]

Why wouldn’t they?

Apple runs a store that sells digital goods, and they charge a fee for selling those goods, whether as an initial app purchase itself, or an in-app purchase of other digital goods.

And the only reason you can say Apple sells digital goods (outside of the initial app purchase for paid apps) is because Apple doesn’t offer any way for those digital goods to be be purchased in-app outside of iTunes billing. Which goes back to Apple’s arbitrary distinction that the “tax” only applies to digital goods (how Apple classified them).

 

[1345873]

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

Without source this seems fake news

 

[koruki]

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%.

the 30% has been there since day one of the app store and years before Spotify existed. If you are so unhappy about how your money is being split then go to Android

 

[Ethosik]

The people that are for Spotify to win here: Are you guys not thinking about the consequences?

Think for a moment as to what will happen if Spotify can avoid the 30% fee. Other developers would do the EXACT same thing. Instead of spending money getting gold tokens with in-app purchases, just have users subscribe to your app for a monthly fee and get tokens every month.

If it is just Spotify that gets a pass, why would they be so special and I won't be as a developer?

 

[0947347]

You seem to be having trouble being able to post? Because this one makes zero sense with no paragraphs or punctuations?
And no, you still failed to see my point, but I don’t like talking to people who find it fun to use disabilities to insult others, not sure what else you call being deaf? Perhaps in your little world it means something else, I mean you’ve utterly failed to get the point of my posts..

Seems like you have a serious problem not only with comprehension, but also sight (hence the screenshot).

“if you don’t see it you must be blind” does NOT mean you are insulting blind people or making fun of disabilities.
FUN FACT - I was a caregiver for people with disabilities for over 10 years, and if I made a remark like you did, I have been told by many “stop f@cking patronizing me”
so that was fun.

if you get wind up over a quite usual language expression, you are in for some challenges in this life. Would love to waste my time explaining to you, but obviously, doesn’t seem to work for you, at least not in English. Maybe browse a dictionary for the word SARCASM, that may help. Or, even better, see British classic comedy, like Blackadder, Fawlty Towers, Red Dwarf.

And back to the original talk.
There are other apps, which have in app subscription, because the developers don’t mind paying. Spotify does mind paying (that includes paying to the artists, yet they throw free google homes at people, so obviously they have money to waste) and that is where the problem arises. Spotify is not excluded in anything, they just don’t want to pay for things (like in app purchases mechanism)

And as for our conversation, you say “you are wrong” and I say “you are wrong. So basically we are ending this up in an agreement. Cheerio

 

[Ethosik]

Sorry, but their argument, and theirs, is the absolute worst.

You know all those gift cards in physical stores, often that can be had for less than the face value?

Yeah... they pay Blackhawk Networks 20% of the loaded value to sell those. Are they next? Or does Spotify’s business model just suck? They can’t afford to offer the free tier, that’s their problem. Not because they have to pay Apple 15%.
[doublepost=1557152711][/doublepost]

The difference is Apple is processing the sale and payment of the monthly recurring charge at their cost with their Merchant Services account. They’re the ones selling the subscription, collecting the payment, and paying the transaction fee to the payment network.

Uber and Lyft are charging for a service rendered in their own app, with their own Merchant Services account. Uber and Lyft are the ones selling the service, collecting the payment, and paying the transaction fee to the network.

Also, I have never been able to use my iTunes cards for Uber or Lyft. For other apps and their purchases, I can since it goes through iTunes payment processing.

 

[LovingTeddy]

It has to be enforceable, has a certain form of fairness as seen by users (not developers) and it has to make Apple a lot of money.

Taking money for physical things and things happening outside the iOS ecosystem would not be acceptable to Apple's customers.



It is Apple as the owner who should decide. If they want it to be free that's fine. If Apple wants the store to be expensive, that's also fine. If they want to charge only under certain circumstances, that's fine too.

Again, enforceability and acceptance is important. Taking money only when the developer is making money is easier to accept both for customers and developers.

Also a certain amount of free apps to increase the value of the ecosystem and increases the likelihood for customers to buy hardware.



Let's say your friend says that a store in town sells a great brand of apples. You go to that store and buys apple. Is that store really acquiring you as a customer? Shouldn't the apple producer or your friend get all the money?

That is the point of owning a store. It doesn't matter how you got there, the store owner wants the money anyway. If you don't like the store, you can go elsewhere. Like using a different kind of device.



Apple would loose billions of dollars each quarter. Most app developers, except very small one, would not include Apple billing.

Think about doing this in any kind of store. You go to a store, and there is a way not to pay the store to get the goods. It sounds quite stupid for the store owner to allow something like this.



It is not. The App Store rules only apply to hosting in the store. If you don't host the app in the store, the developer does not have to follow the rules for the App Store.
[doublepost=1557183343][/doublepost]

The store is Apple's property and they should be able to make the rules however they see fit, yes even in the EU. Even if it hurts competition and developers and users. And especially if there are alternatives available for consumers.
[doublepost=1557183893][/doublepost]

It is more acceptable to customers (not developers) that Apple charge for digital goods and not physical goods. If Apple believed they had the power (long term) to charge for physical goods bought through Apple devices, they would probably do it.

So the justification is quite easy. Apple has the power to force the fee for digital goods. They do not have the power for physical goods and services.

Why should customers have to pay 30% more on iOS compare with Android? Ultimately is the iOS users pay for the cut. In the end, i will just subscribe on my Android phone and then log in with my iPhone. I will never pay more for subscription than i should be.
[doublepost=1557187463][/doublepost]

The people that are for Spotify to win here: Are you guys not thinking about the consequences?

Think for a moment as to what will happen if Spotify can avoid the 30% fee. Other developers would do the EXACT same thing. Instead of spending money getting gold tokens with in-app purchases, just have users subscribe to your app for a monthly fee and get tokens every month.

If it is just Spotify that gets a pass, why would they be so special and I won't be as a developer?

That is great. Get ride of 30% cut and customer will be better off. The last thing I care is about Apple’s ability to make even more money by ripping others off.
[doublepost=1557187604][/doublepost]

the 30% has been there since day one of the app store and years before Spotify existed. If you are so unhappy about how your money is being split then go to Android

Exactly. That is what I did. Have all the subscription done by either on Android phone or website. Definitely will not pay through Apple. I am willing to spend money for iPhone, iPad and pay for software, but I am not willing to spend more than I have to. Some of app developer charges more on iPhone than Android and it makes no sense.

 

[Ethosik]

That is great. Get ride of 30% cut and customer will be better off. The last thing I care is about Apple’s ability to make even more money by ripping others off.

Why aren't Microsoft, Sony and Nintendo taken to court by not allowing digital games to be distributed from other stores or even developer's websites?

 

[123]

Amazon assuredly gets a cut from sales on their websites, even if the seller fulfills the order.

Sorry if I wasn't clear. I wasn't discussing Amazon's cut, I was discussing Apple not getting a cut from Amazon sales through the Amazon app. In response to those who think Apple is entitled to charging a fortune just for running the App Store. Amazon makes even more money with their app yet doesn't have to pay anything. The distinction between physical goods and virtual goods provided outside of Apple's services is arbitrary and so is the recurring 15/30% cut.

Regarding Amazon's cut: first of all, it is a lot lower. And contrary to the App Store nobody is forced to sell through them. You can create your own webshop with the same or better user experience.

 

[PickUrPoison]

If a reason Apple decides to charge only sellers of digital goods is to hurt competition in a market in which they also compete then they have no right to do so. The issue is not it being acceptable to charge fees for some products and not others, it is whether doing so harms competition. Apple is going to have to make an argument that their decision to only apply the restrictive payment terms to sellers of digital items is based on a rational, non-discriminatory reason. The fact that some digital sellers don't compete with Apple is not relevant, they are just collateral damage from policies that appear designed to benefit Apple at the expense of their competitors for certain products like music, movies, and eBooks.

Unfortunately antitrust attorneys who understand EU law are few and far between here on MR, and I’ve yet to see any informed analysis of what Apple is going to have to show to defeat Spotify’s claims, if anything.

Perhaps you have a link?

 

[Ethosik]

I have seen nobody give a good reason why payment for a "recurring digital subscription" or a "digital item" should be treated any differently than payment for a service or a physical good.

Uber doesn't pay the "tax" yet still has access to iPhone users and Apple's platform. You again differentiate on a "recurring digital subscription" yet there is no good reason why Apple should make such a distinction.

I don't understand the curation aspect of your statement. How does preventing Spotify from using its own payment service in-app do anything to protect or enhance the user experience more than compared to a seller of services or physical goods? I do like Apple's review of apps to ensure they do nothing nefarious and to quickly remove apps that don't give the results promised, but as far as the payments go any seller can defraud the user regardless if what they are paying for is digital, physical, or a service.

Because I cannot complain to Apple about my ride being horrible. Or Amazon giving me the wrong clothes or something. I cannot contact Apple to challenge my payment.

I can contact Apple if I am not satisfied with an app purchase or an in-app purchase. I have done so before and received refunds.

Physical and digital goods are ENTIRELY separate. Would Apple then be in charge telling me how to ship my defective product back?

 

[jlc1978]

Sorry if I wasn't clear. I wasn't discussing Amazon's cut, I was discussing Apple not getting a cut from Amazon sales through the Amazon app. In response to those who think Apple is entitled to charging a fortune just for running the App Store.

Fair enough

Amazon makes even more money with their app yet doesn't have to pay anything. The distinction between physical goods and virtual goods provided outside of Apple's services is arbitrary and so is the recurring 15/30% cut.

Apple has decided goods delivered independent of the App do not incur a fee while those that use the app to deliver them incur a fee when you purchase them through the app. Some developers chose to allow in app purchases and others do not; even if they are the same class of goods. It really isn't an arbitrary distinction but rather one based on what is delivered and how.

As for Apple's cut, they charge what the market will bear to maximize revenue; as does any smart company. Ultimately, that is why they exist - to maximize the shareholder's return.

Regarding Amazon's cut: first of all, it is a lot lower. And contrary to the App Store nobody is forced to sell through them. You can create your own webshop with the same or better user experience.

Except you don't get access to Amazon's customer base and have to build out an infrastructure and maintain it.

No one is forcing anyone to develop for the iPhone, which makes the whole "Apple forces developers to use the App Store" moot. You don't want to pay, don't develop an iPhone app. It really is that simple. Developers want access to the iPhones customer base, Apple's fees are the price for that access; just as Amazon's are for its customer base.