EU to Investigate Apple Over Spotify's Antitrust Complaint

[Classie]

You, Sir, have hit the nail on the head! Spotify has a way round this but it wants the convenience of doing it the way it wants to do it. As you suggested this is how it could work from Spotify's perspective:

1) Create a free app (Done)
2) Offer a free tier (Done)
3) Require the user to create an account/login using their email in order to be able to use that free tier (Done and that's allowable by Apple)
4) Either during the initial on-boarding/welcome process or perhaps in the coming week or two, send an automated email to the free tier users informing them about the paid subscriptions and link to wherever you choose

Seems to me that would do the job! So why don't they do it that way? I'm guessing that the conversion rates are higher for offering direct In-App subscriptions so it seems to me that they just want to benefit off of the impulsivity of the app users rather than actually having to put in the work to build a relationship with their customers and actually show the value and benefits of signing up.

Exactly! Thanks for elaborating on my comment.

 

[ROGmaster]

May be because other app makers don’t face a first party competition from Apple

Bingo.
Spotify's argument mainly revolves around this idea. There are high chances the EU commission will force Apple to allow Spotify to post withing their app a link to their website's payment section.

 

[Rogifan]

I think Apple taking a cut of other people’s subscription revenues could come to an end. Or at least they might be forced to other payment options in-app or a re-direct to the web where people can sign up. Of course Apple will argue they deserve the cut because they’re the ones offering up/acquiring the customer. I think it’s bogus. How many people and downloading and signing up for Spotify because of anything Apple is doing? I’d say very few. I’d say the same with Netflix, HBO etc.

The new Apple TV service is based off of this subscription cut model. I wonder what Apple’s plan B would be if they have to abandon it. Do they have enough original content or content from others to charge for it?

 

[1050792]

People enjoying their lives outside, and here people fighting over which company has the bigger D.

 

[2010mini]

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.

No one is forced to use in-app payment. Netflix doesn’t have a link and it is STILL the most popular streaming service and is not bothered by not having a payment link. A lot of other developers don’t use Apple’s in-app purchase and still get customers.
What’s the issue? Do you believe customers are that stupid that they can’t close the app and open your webpage to signup? Seriously???? How lazy do you think people are?

Spotify wants the benefit of being in the most popular App Store and not pay anything. Guess what???
THEY ACTUALLY CAN. All they have to do is turn off their in-app purchase option. Problem solved.

No other online or brick and mortar store gives away retail space for free. Amazon competes with companies that sell in their store and still charges a percentage. Are they being unfair?

 

[Piggie]

Hmmm... sounds like exactly what they did, and then some, for most of the 90’s and 00’s. Maybe you’re too young to know. Apple’s tactics are nothing compared to some of the crap MS pulled back then.

Oh indeed I recall what you are saying.
What's irking people a bit I feel is that if Microsoft did 1/10th of what Apple are doing they get ripped to shreads

Hell Apple does not even allow you to change the default web browser yet do they on iOS devices?

Why not do what they did with Msoft.
When you start an iPhone, iPad, iMac etc up for the 1st time, you legally need to have a screen showing you wish web browser to pick.
That's what Msoft had to do, so why not same rule for Apple?

I don't mind what rules are in place as long as they apply to all.

Apple are getting away with a hell of a lot right now, simply becasue the USA are protecting them as it's their love-child company.

 

[Defoler]

Just to be clear.

Apple takes 30% of the 1st year of an annual subscription. In subsequent years it is 15%.

Yup. A lot of people throw here 30% or even 50% without proof and out of their arse.
Apple stated already that spotify is paying 15% like every app that is over a year old.

I think that there are several main considerations here:

1. The cost of running the App Store is irrelevant to this debate, as others are allowed to add their own payment systems in the app — Uber, Amazon Prime — so Apple decides what is allowed and what not, which is not a transparent process
2. Apple promotes its own service in ways that competition cannot — shameless notifications for Apple Music for example that are not allowed by others because they violate App Store rules
3. Apple gives its own services access to APIs and hardware that 3rd parties cannot have, which does create an unfair advantage
4. The App Store does have a monopoly on iOS, because nobody can create an alternative app store because nobody has access to certain APIs. The only way is to do this on another platform, which still means that Apple has a monopoly on iOS
5. Apple can change the rules for number 1,2, 3 and 4 at will, without any means to appeal. If Apple decides tomorrow that ride sharing services need to pay Apple Tax, there is nothing they can do (except appeal with the EU maybe)

I personally think tech companies have way too much power, and should be regulated just like any other business.

There is a lot of misconception here.

1. Apple are running a huge team who evaluate every single app that goes through their system. Unlike google (who also take a cut), apple make sure every apple falls into a standard, including not taking data which doesn't belong to it, do what it says and doesn't include any malware or hidden data transfer. So it cost them a lot of money to do it.
2. Apple promote their own service. Just like google promotes their own services. They have services. They have a right to promote them. They do not hide spotify. If you search for music in the app store, you will find spotify right there. And just like spotify are making a lot of noise about it, because they use that PR to pull more subscriptions to them.
3. Apple's API is irrelevent. It doesn't hinder other apps, but it also adds security from API that can be harmful. Spotify can run just fine. It doesn't need special API to play music right?
4. This is just about access. Apple want to control what runs on their OS. Considering iOS is less than 20% of the market, how are they a monopoly? And google app store, while not alone, is controlling 80% of the android market. How is it not a monoploy?
5. Same can google and every other app stores. That is so irrelevent it makes me wonder if you put it here because you needed to make it long, and just added extras to pump your ego.

 

[apolloa]

You mean, you don’t want to sign up for free first then? Usually people sign for free first, to test it. And if you do, don’t worry, you will be constantly reminded to subscribe via webpage, through lovely ads, every few minutes.

IF you ever visit the Spotify website that is? Rather then use an app like advertised.. and not use any websites. You are defending the indefensible here..

 

[Sciomar]

People enjoying their lives outside, and here people fighting over which company has the bigger D.

It's 2019, I'm enjoying my life outside and posting on a forum at the same time! What crazy shenanigans!

 

[0947347]

So if your a new user, download the Spotify app, how exactly is Spotify going to ‘ask you to subscribe via the website’?

Like I did? Sign for free, test it, and if you like it, sign from webpage. Don’t worry, if you use longer than 5 minutes, you will be told by ads, to subscribe on Spotify webpage.

Don’t worry, you cannot miss those ads, unless you are deaf, in which case Spotify may not be the best app to pick

 

[Kabeyun]

I think that there are several main considerations here:

1. The cost of running the App Store is irrelevant to this debate, as others are allowed to add their own payment systems in the app — Uber, Amazon Prime — so Apple decides what is allowed and what not, which is not a transparent process
2. Apple promotes its own service in ways that competition cannot — shameless notifications for Apple Music for example that are not allowed by others because they violate App Store rules
3. Apple gives its own services access to APIs and hardware that 3rd parties cannot have, which does create an unfair advantage
4. The App Store does have a monopoly on iOS, because nobody can create an alternative app store because nobody has access to certain APIs. The only way is to do this on another platform, which still means that Apple has a monopoly on iOS
5. Apple can change the rules for number 1,2, 3 and 4 at will, without any means to appeal. If Apple decides tomorrow that ride sharing services need to pay Apple Tax, there is nothing they can do (except appeal with the EU maybe)

I personally think tech companies have way too much power, and should be regulated just like any other business.

Apple’s control of the App Store is one of its strongest competitive advantages. I want nothing to do with the Wild West of Google Play.

 

[Futurix]

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.

This made me LOL. Do you really think $100 a year is enough to service millions of app downloads and everything that’s related to in-app purchases (credit card fees, fraud protection, handling of vouchers and gift cards, chargebacks, refunds, taxes in 200+ territories, handling of VAT, etc) ??

Kind in mind that Spotify is top 10 ‘free’ app in App Store.

 

[0947347]

IF you ever visit the Spotify website that is? Rather then use an app like advertised.. and not use any websites. You are defending the indefensible here..

?

1) Download app from App Store, you are welcomed by 3 options
- SIGN FOR FREE
- CONTINUE WITH FACEBOOK
- LOG IN

2) Sign for free
3) Test if you like
4) Every few minutes you will be asked by an ad, to subscribe
5) visit the advertised webpage and subscribe there
6) pat yourself on a shoulder, for going through a horrendous ordeal. You deserve a nice cup of tea now, maybe rest of the week off.

Remark: sarcasm (step 6) is optional

 

[Rogifan]

Are you saying sales on the App Store should be free? Apple deserves nothing? Would that apply to all vendors, or just Spotify?

There are very few stores that you can pay a flat $100/yr from and sell all the product you want. eBay takes a cut, Amazon does also. Google Play store and all the game console stores, too. Valve charges 30% for Steam as well.

Their competitor (Apple) doesn’t pay $0. Apple spent and spends $billions setting up and maintaining the platform. You really actually think $36/year (or half that when it goes down to the 15%) per subscription is too much to ask to get some of that back?

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

 

[H3LL5P4WN]

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%.

Yeah? And I like the musicians I like to be able to turn just a bit of a profit in order to keep on making music.

Spotify is trash.

 

[nwcs]

Ah Monday morning... Must mean it’s time for another round of MacRumors Monday Morning CEO time!

 

[ipponrg]

Apple are running a huge team who evaluate every single app that goes through their system. Unlike google (who also take a cut), apple make sure every apple falls into a standard, including not taking data which doesn't belong to it, do what it says and doesn't include any malware or hidden data transfer. So it cost them a lot of money to do it.

They apparently missed the mark on several apps then, including those apps that were used for parental controls recently. A large team indeed.

 

[decafjava]

Yeah? And I like the musicians I like to be able to turn just a bit of a profit in order to keep on making music.

Spotify is trash.

This, I can see a lot Apple has done wrong lately but can't in good faith support Spotify here.

 

[Intellectua1]

This is a case I want Apple to lose because I feel it'll open up a few other lawsuits that I want Apple to lose as well, then having an iPhone 100% of the time won't be as painful.

 

[MikeNielsen]

If Apple were really playing unfair against all competitors, how come Deezer has both Apple Watch app, Siri Shortcuts and you can buy subscriptions in their app (redirecting to their own payment site)? Could it be that Spotify is somehow only telling their side of this story?

 

[nburwell]

I'm certainly not taking sides here. But I'm very curious to see how this ultimately plays out. I'll be following this story closely.

 

[FaustsHausUK]

It doesn’t matter who wins, musicians and songwriters are still getting the shaft.

 

[H3LL5P4WN]

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?

They're already going that route. And I'm glad. Maybe one day, between the Microsoft Store and Steam, Windows might eventually get to the gate outside the ballpark called secure.

Then again, that would also put me out of a job. Hmm.

 

[mdnz]

This made me LOL. Do you really think $100 a year is enough to service millions of app downloads and everything that’s related to in-app purchases (credit card fees, fraud protection, handling of vouchers and gift cards, chargebacks, refunds, taxes in 200+ territories, handling of VAT, etc) ??

Kind in mind that Spotify is top 10 ‘free’ app in App Store.

Yes I'm pretty sure, unless you're suggesting that costs a couple of billion per year? Because I highly doubt that. Note that most of the things you mentioned are already automated.

 

[Ma2k5]

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 the App Store.

Why doesn’t Spotify remove the ability to sign up through the App Store 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!

I think the issue is, if Spotify do not agree to allow payments via App Store (and subsequently Apple do not get a cut), they are not allowed to integrate it with HomePod/Siri/Apple Watch.