FTC Looking Into App Store Rules Regarding Subscription Services

[Toltepeceno]

Don't assume Apple won't do it because they're Apple, and are somehow "better" than MS. Recent history has proven they can play just as dirty.

I never have, but you probably meant that as a general statement.

When you get right down to it, all big businesses will do anything and everything for their bottom line.

Exactly. I have an iphone, mac, ipad and atv but I don't get the defense of apple (a billion dollar company) in all cases, especially when nothing is happening yet, over the small guys trying to make a living. I'll support the small guy any day as long as they are doing their job.

Some people buy an apple product and think they have a new member of the family. In reality apple only cares about the money. It makes no sense.

 

[Renzatic]

I never have, but you probably meant that as a general statement.

I did. I was using the royal "you all".

 

[gnasher729]

$3 on $10 retail cost is the extent of profit being made.. they can't operate as a business under the notion "it's cool..we'll just make no profit."

To clarify a bit: If you buy my app on the app store, there is zero cost involved for me with this. Apple deducts VAT (unfortunately), deducts its cut, and the rest is in my bank account. For Spotify, if you subscribe to their service, there is cost involved for them. Every time you play a song through your Spotify subscription, they have to pay a certain amount of money to the copyright holder. If a $10 subscription costs them $7 in fees for the songs that you play, then Apple taking its cut is fatal for their business model.

That is just as explanation. Fact is that putting apps on the store where every sale costs you money is not as good as apps where every sale is purely money in your pocket.

They are when their whole purpose is to poach iOS users to a different ecosystem.

That's completely unrelated. If I published a book with photos from a museum, and had to pay license fees to the museum, then I would have the same problem if I turn my book into an app. Selling through the App Store is inefficient if you have to pay money to some third party for every sale.

 

[geoff-codes]

But wouldn't this be the death knell for Apple's markup of *any app at all*? Since there's no mechanism to sell App Store upgrades, "purchasing" an app is effectively buying a lifetime subscription to that app. What would be the criteria for distinguishing a "subscription" from any other in-app purchase?

 

[garya73]

The Apple ecosystem is practically airtight. With Android you have countless developers releasing nightly versions of operating systems, multiple app stores and the ability to install apps from outside those app stores. On the other hand, Apple has almost total control over their operating system (except for jailbreaking, which technically isn't allowed) and only one app store. Many people may not realize they can go to Spotify directly and subscribe and still keep their iOS device's subscription active. Especially since Apple forbids the services to put any links on the app pages.

Apple is simply acting as a pass-through in the subscriptions. They aren't doing a whole lot to justify the 30% cut, unlike with app sales where Apple is actively doing things (reviewing apps, hosting, etc). It's Apple's choice to have free apps - they could require that all developers charge 99 cents or more for apps.

In-app purchases and subscriptions are a goldmine. Just look at how much the top freemium games earn.

 

[flat five]

I agree that it's an unfair advantage, just not an illegal one.

Doesn't Google Play Store levy the same 30% cut too? Google has its own music streaming service as well. How come Spotify isn't suing Google as well?

Because the iOS platform is the more lucrative one and that's where Spotify has the most to lose. It's just another day in the cutthroat world of business.

spotify isn't suing apple.. nor are they suing google.

spotify is one of the highest grossing apps out there.. like #1 or close to it.. they made a somewhat desperate move to say 'hey, our product is 9.99 too'..

the ftc came in independently of that upon seeing this move by spotify but not because spotify called the cops on apple..

if they change online application sales regulations, these rules will likely apply to google's store as well.

 

[Abazigal]

I never have, but you probably meant that as a general statement.

Exactly. I have an iphone, mac, ipad and atv but I don't get the defense of apple (a billion dollar company) in all cases, especially when nothing is happening yet, over the small guys trying to make a living. I'll support the small guy any day as long as they are doing their job.

Some people buy an apple product and think they have a new member of the family. In reality apple only cares about the money. It makes no sense.

I don't think I am defending Apple so much as I am simply offering my honest assessment of the situation. I will favour neither the huge corporation or the "small guy", I simply call it as I see it. Just because I feel that Apple is doing nothing wrong in this scenario doesn't mean I am blindly supporting Apple. It just means precisely that - that I don't think Apple is in the wrong here.

Does it suck for Spotify. Sure. But I don't see how Spotify is being the "small guy" (an irony here, considering that Spotify has been in the industry long before Apple Music, and given how they like to boast that they have tens of millions of subscribers) here.

spotify isn't suing apple.. nor are they suing google.

spotify is one of the highest grossing apps out there.. like #1 or close to it.. they made a somewhat desperate move to say 'hey, our product is 9.99 too'..

the ftc came in independently of that upon seeing this move by spotify but not because spotify called the cops on apple..

if they change online application sales regulations, these rules will likely apply to google's store as well.

There's no smoke without fire. That the FTC decided to look into this matter just as Spotify is railing against Apple's "unfair app store practices" sounds too much of a coincidence to me. It's all politics and money at play here, and Spotify is certainly no angel here either.

Guess being big brings along with it its own share of problems for Apple.

 

[bbeagle]

Who's getting rich in the App Store?

Obviously not Apple, because they're ALREADY rich. *drum cymbal ring*

The developers, silly.

 

[ThisIsNotMe]

Google get scrutinized.

Nope. Try again. I guess that is what have your chairman a a senior white house advisor buys.

 

[flat five]

There's no smoke without fire. That the FTC decided to look into this matter just as Spotify is railing against Apple's "unfair app store practices" sounds too much of a coincidence to me. It's all politics and money at play here, and Spotify is certainly no angel here either.

oh.. right.. i don't think it's pure coincidence.. i believe the ftc is involved because of spotify's recent actions.
my point is that the ftc isn't investigating apple on spotify's behalf.. it's possible nothing changes or spotify takes a hit due to ftc involvement..
or even more to the point.. spotify is not currently suing apple. that's the bit of your post i was meaning to respond to.

 

[ke-iron]

Get the eff outta here. No one is forcing anyone to use the app store as their market for distribution or connection to the world. There are plenty other alternative ways to advertise or sell your music or content. How convenient for investigations to begin now that Apple have their own music streaming service. What a bunch of effin haters.

 

[Kabeyun]

Who's getting rich in the App Store?

Supercell makes something like $4 million per day.

Sure they're at the top, but their success isn't a unique story even if their degree of success may be.

The antitrust concerns stem from certain App Store restrictions placed on streaming companies, which include a prohibition that the company is on other platforms"

I'm positive on Apple, but someone with a brain please explain how this term can possibly be Kosher. These kinds of MFN clauses smell awfully anticompetitive.

And before someone jumps down my throat about it (which can happen around here) it's not just my opinion.

 

[Arndroid]

Who's getting rich in the App Store?

Well the creators of Instagram made a billion dollars, made possible because of apple. The sweet part is they never gave apple a single penny ever?

I guess people forget how many actual free apps apple supports and enable that generate no revenue for them.

 

[Arndroid]

That's not the issue. A retail store has also became a competitor in this case. They sell at wholesale

Incorrect. Spotify has chosen to set their wholesale price and the price they sell directly to consumers at the same price point. That is on them not anyone else.

 

[cmaier]

But Apple can't prevent Spotify sending people an email directing them to their website to subscribe.

Didn't say they could. They can do whatever they want as long as they don't do it from within the app they try to distribute through Apple's app store.

 

[Trius]

All they got to do is put a notice in their app description in iTunes that they need to go to spotify.com to sign up. Or, say that subscription required in order to use the app. Not hard to do....well, maybe it is for spotify & Deezer.

Will cause app rejection.

Don't' think that's a problem. They just can't have a direct link to their site from the app.

 

[Tech198]

so, Spotify doesn't like what Apple is doing.... They can't control what their customers do, anymore can Apple control me

 

[inscrewtable]

You surely missed to put the sarcasm tag, because it is sarcasm, isn't?

You know I had no idea that Spotify added the Apple percentage. Now that I do I'm even more mystified, WTF would anyone in their right mind pay extra to sign up in the App. If people are that thick then it's up to Spotify to clue them in with proper advertising. Or if they still can't get through to people then don't put the app in the store. However they can't have it both ways, they want to put the app in the App store because more people will see it and sign up, but they want to tell people in the app not to sign up but go elsewhere.

 

[Piggie]

Is this type of thing going to hit Apple more and more?

It's funny. People here wish Apple to grow and grow and be the leader (PC's should rot in hell) Then get upset when this happens.

How about Apple being told they need to bundle alternate web browsers in iOS products?

Whilst Apple are still small and insignificant (yes they still are) in the real computing market, they can carry on as they wish, but trust me, the bigger they get, the more people will notice things they do that are not beneficial for the population as a whole.

Also, I know this irks some, but people who look after the country, will look out for the people who live in the country, and protect them from business at time.

 

[MacrumoursUser]

Is this type of thing going to hit Apple more and more?

It's funny. People here wish Apple to grow and grow and be the leader (PC's should rot in hell) Then get upset when this happens.

How about Apple being told they need to bundle alternate web browsers in iOS products?

Whilst Apple are still small and insignificant (yes they still are) in the real computing market, they can carry on as they wish, but trust me, the bigger they get, the more people will notice things they do that are not beneficial for the population as a whole.

Also, I know this irks some, but people who look after the country, will look out for the people who live in the country, and protect them from business at time.

Have you heard of the Umbrella Corporation by any chance?

 

[macs4nw]

They just noticed this?

Clever double speak (if that was your intention) but this time it's the FTC, and not the DOJ, and agreed, I also wonder about the timing.

 

[diipii]

On Wednesday, Spotify sent emails to subscribers asking them to cancel their App Store subscriptions to the service to resubscribe on the web to avoid a $3 surcharge because of Apple's App Store policies. The Federal Trade Commission is now looking into Apple's policies, which include a 30 percent fee that it collects on all app and subscription revenue routed through the App Store, reports Reuters.
The antitrust concerns stem from certain App Store restrictions placed on streaming companies, which include a prohibition that the company is on other platforms, a ban on advertising how users can subscribe on a company's website and the ban on links to the company's website. While users can still subscribe to the service of their choice outside of the App Store, avoiding the 30 percent fee for the respective companies, sources tell Reuters that many users do not realize its an option.

That 30 percent fee reduces margins for those streaming companies in an industry with already thin margins and makes it difficult for them to compete, Deezer CEO Tyler Goldman tells the news organization. The news also comes after the FTC and other government bodies began looking into Apple's efforts to set up deals with music labels.

While the FTC is looking into the App Store rules, there's no guarantee they launch a formal investigation as antitrust lawyers that spoke to Reuters were split on whether Apple is breaking the law. This isn't the first time Apple has gotten in trouble for its 30 percent subscription cut, as it landed in hot water with the Department of Justice during the e-book price fixing case. In June, it was reported that Apple was considering changing the 30 percent cut for media apps like Netflix, Hulu, Spotify and more.

Article Link: FTC Looking Into App Store Rules Regarding Subscription Services

Apple, smoke, fire and so it goes, on and on.

 

[s2mikey]

If Microsoft did this...oh boy.... The fairness police would have been in out with riot gear ready to go. Reminds me of the Internet Explorer thing from years back. Might not be the same thing but it reeks of it nonetheless.

Apple. They're getting too big for their own good. Or the consumers good.

 

[Mackker]

So to get this straight:
1. Spotify and others are businesses which make money by providing services dependant on another business (Apple).
2. Spotify and others are not content with the rules and incentives of the other business (Apple).

Let's make an analogy:
1. An individual sells a house.
2. That individual works with a real estate agency to help sell that house without any exclusivity contract.
3. The individual knows from the very beginning that the real estate agency takes a 30% commission from the price of the house and he's OK with it and wants to work with the agency.
4. The real estate agency starts a child company that develops houses in the same area of the individual and selling them at approx. the same price as the individual.
5. After the individual learns what the real estate agency does, he gets angry because he couldn't sell its house for the same profit margin the real estate agency does.
6. The individual is angry but he doesn't want to work with another real estate agency or sell the house on its own even though he's not legally tied with an exclusivity contract.
7. He calls in FTC because he's a loser and scumbag.

Does that sound like fair-play?

Spotify: F** you! Hope you crash & burn!

 

[mojolicious]

7. He calls in FTC because he's a loser and scumbag.

Spotify: F** you! Hope you crash & burn!

Haven't read the whole thread so it's possible that further info has been posted, but there's nothing in the Reuters link in the first post to suggest that Spotify requested an investigation.