Senator Elizabeth Warren Accuses Apple of Trying to 'Snuff Out Competition,' Spotify Agrees

[robeddie]

Oh, I guess Elizabeth Warren believes that coming up with the idea of the App store, then building and supporting the infrastructure, developing the SDK, providing all of the developer support to millions of developers, creating and maintaining the financial payment infrastructure, advertising for developers, creating and maintaining the ecosystem where their apps run, etc. is just something Apple should do for free?

All that offers a justification for the 30% cut (though we could all debate about what amount is actually fair - is it 15%? Or what if it was 60%, would you still defend apple?)...

.... but how does it justify squashing their right to mention a cheaper avenue to obtain the same stuff? Again, we're this a Target store, that would be one thing, but now that Apple also scares new computer buyers away from getting software from outside the app store by having it set up automatically to not open packages from 'outside developers', they are seemingly trying to keep less savvy computer users in the dark.

 

[thekeyring]

But Spotify has a ton of members and isn't losing money because of the 30% cut Apple gives it... It's losing money because of royalties.
[doublepost=1467282758][/doublepost]This is so stupid... I had to come back and post again.

What about Netflix? Apple isn't trying to discourage them even though people might stream from Netflix instead of buying from iTunes. They actively encourage Netflix on the Apple TV.

What about Snapchat and WhatsApp competing with iMessage? With iOS 10 calls from WhatsApp appear like normal phone calls... Again: encouraging third party apps.

Just because Apple took an interest in music streaming and decided to *continue competing* in the music business, moving on from iTunes, they're a monopoly?
[doublepost=1467282898][/doublepost]

The filth this woman speaks. Apple had the same pricing structure before and after they introduced Apple Music. You cannot blame Apple, Google or Amazon because the competition is dying. They competition is dying because people don't choose them. I don't want Spotify I want Apple Music.

What's more crazy about Spotify jumping in to moan is that a shitton of people *have* chosen them and they're still not making any money.

 

[Ries]

But Spotify has a ton of members and isn't losing money because of the 30% cut Apple gives it... It's losing money because of royalties.
[doublepost=1467282758][/doublepost]This is so stupid... I had to come back and post again.

What about Netflix? Apple isn't trying to discourage them even though people might stream from Netflix instead of buying from iTunes. They actively encourage Netflix on the Apple TV.

What about Snapchat and WhatsApp competing with iMessage? With iOS 10 calls from WhatsApp appear like normal phone calls... Again: encouraging third party apps.

Just because Apple took an interest in music streaming and decided to *continue competing* in the music business, moving on from iTunes, they're a monopoly?
[doublepost=1467282898][/doublepost]

What's more crazy about Spotify jumping in to moan is that a shitton of people *have* chosen them and they're still not making any money.

Fact is they can't compete against Apple on iOS, nobody can unless their product is free. Apple can offer thier product 30% cheaper before they even come close to being on the same level. The Apple defence force is basicly cheering for being ripped off by Apple themselves. Unless you're a shareholder, you should be supporting this.

 

[barmann]

.... I realize big companies can collude to make it harder for new competitors but even then, a smart competitor can undermine them with great ideas and move faster to compete. At one point, all three of the companies in question were underdogs in their particular market and did exactly that. It doesn't need to be easy, just possible.

A monopoly should not be possible, easy or not .

In the US, no company can compete with Apple, Amazon, Google, Microsoft, or even Facebook in their field .
As a large part of the world tolerates US business standards, this is a global issue .

The big cats in the internet related business just buy up possible competitors, or render them powerless with the weight of their market presence . A free and balanced market is the worst thing that could happen to them .

There havn't been any underdogs in this business for many years, and Apple is one of the companies who try very hard to keep it that way .

Big corporations are inherently anti-competition, pro-monopoly and anti-consumer .
That's why regulations are so important - governments might look suspicious at times, but it's big business that's always out there to get you, by definition .

 

[apolloa]

What an idiot! Another case of a dumb politician sticking their nose into something they are clueless about!

I'm afraid you and the 70 odd members who up voted your comment are the clueless ones.
Then again perhaos you don't believe in competition and a capitalist world and instead really only want one corporation to control everything including price?

 

[Studioman]

Tell me, how does Apple taking a cut off subscription fees, raising the price of these services on Apple devices, benefit you?

I have no problem with Apple taking a cut off sales from their App Store, but this has always been a bridge too far to me.

If these companies bring in their own subscribers from their own marketing efforts they get to use Apple's platform for free. Apple doesn't have to process subscriptions at all. They could just offer it for their own services and let companies like Spotify do their own. That would solve that problem. Spotify's growth would stall and they would be out of business by next year. Bring your own customers and there is no fee. Use Apple's customers pay the fee.

 

[cmChimera]

Why in the world should Apple be able to impose any tax on a subscriber?

They don't. The end user wouldn't know the difference unless the app developer chooses to charge more than usual.

What about the Netflix in my TV? My BD player? The Spotify in my AVR? Should those manufacturers also collect a monthly tax?

Do they provide a payments platform? Do they provide bandwidth for downloads? Do they advertise for the developer's app? Provide a huge customer base? Do they allow the app developer to provide critical feature updates to improve their app and provide the bandwidth for downloading said updates. What about an OS that notifies users of those updates? If so, those manufacturers should probably take a cut. Apple does a good bit for app developers. While their prices could be debated, I don't agree that they should take nothing from developers.

 

[apolloa]

It's possible that Apple's prices are too high, but they're taking steps to remedy that. To say that Spotify shouldn't have to pay for access to the App Store and to Apple's customer base seems a little heavy handed.

May just be me, but when your product has a significant portion of the market place, and it's manufacture releases a competing product to other existing services on its platform, and then undercuts those competing products on price AND demands a 30% take of every single sale made through their competitors products, it could be seen as anti competitive...
[doublepost=1467286538][/doublepost]

But Spotify has a ton of members and isn't losing money because of the 30% cut Apple gives it... It's losing money because of royalties.
[doublepost=1467282758][/doublepost]This is so stupid... I had to come back and post again.

What about Netflix? Apple isn't trying to discourage them even though people might stream from Netflix instead of buying from iTunes. They actively encourage Netflix on the Apple TV.

What about Snapchat and WhatsApp competing with iMessage? With iOS 10 calls from WhatsApp appear like normal phone calls... Again: encouraging third party apps.

Just because Apple took an interest in music streaming and decided to *continue competing* in the music business, moving on from iTunes, they're a monopoly?
[doublepost=1467282898][/doublepost]

What's more crazy about Spotify jumping in to moan is that a shitton of people *have* chosen them and they're still not making any money.

Netflix is a poor example to use, you subscribe to a package and that's it for payment, you can't buy films from them.
You can from Amazon and that's why on their iOS app you cannot buy anything from them, and Apple made them change the app when they made it go outside the Apple Eco system for purchases.
It's the same with the Sky apps in the UK, they refuse to give Apple, a direct competitor to their business, 30% of their sales intake and thus you cannot buy a thing in their apps on iOS.

On Android you can so I guess they have different rules or regulations, something that makes it different to Apple.

Apples policies annoy me, their interface is better and apps work better on iOS, but their regulations and rules make some apps and services on their platform a bit anti consumer, but a big plus for Apple.

Even though the rules and regulations of Apple are well known, when they force a service to offer different experiences on iOS to Android I raise my eyebrows.

 

[drumcat]

Holy crap.

I'm not American, but the comments section of most threads on Mac Rumors is usually about 98% pro-democrat.

The last week or so has been extremely anti-Warren, and very anti-Hillary.

What Happened?

Hillary is running against a baboon. This doesn't mean Hillary is good. It's the fact that rational people have a 1-party system in America, and that's Hillary's flavor of things. She's a career liar, committed securities fraud, failed to implement medical reform as First Lady (still don't get that), and is a patsy for big business donations. Unfortunately, she's the one we get, unless you want a baboon.

That doesn't mean anyone is happy about it.
[doublepost=1467287556][/doublepost]

I can't walk into Walmart, and leave a bunch of my products at their warehouse and expect them to stock it, stick it on the shelves, promote it with advertising in store, process the sales at the checkout, and all the staff associated with managing this all completely free so why should Apple on the App Store?

That said however, the 30% cut for subscriptions is too high and I applaud Apple for reducing it after 1 year, but really it should just be less from the start.

I think you make too much money. You should ask your boss for a pay cut. It really should have just been less from the start.
[doublepost=1467287982][/doublepost]

May just be me, but when your product has a significant portion of the market place, and it's manufacture releases a competing product to other existing services on its platform, and then undercuts those competing products on price AND demands a 30% take of every single sale made through their competitors products, it could be seen as anti competitive...

It's just you. They offer a platform. They make a commission. That commission is whatever they set.

Unless you think 30% is immoral. If that's the case, what is moral? You could say 1%, and someone would complain that they shouldn't take anything. When you get into the business of moral pricing, you skew the market unfairly.

iPhones are significant, but are not even a majority.
A competing product of Apple's is cheaper... but Spotify has 7x the subscribers, so why is that relevant?
They do not *demand*. There are terms of service. If Spotify doesn't like it, they can leave Apple's platform. But the platform is ultimately fair; they aren't negotiating individual deals. It's 30%, and 15% thereafter. That's the recuperative costs of, you know, paying devs to write iOS.

Why do people have a problem with fair systems? They have choice, there is no monopoly, and there is no binding deal that says they have to be there.

 

[Thunderhawks]

Does anybody really think it is any business' job to nurture a competitor, so we can all have choices ?

Consumers vote with their wallets. Product sucks, they do not re-peat buy it. Product good, they buy it and the companies make a profit, which they will re-invest.

And, potentially going into a certain field to take on market leaders requires a well thought out plan and a BETTER product, not a me too solution.
If in the end you can't make money, you fold.

Governments stepping in usually make a mess of markets.

Finally, let's not forget that Apple once was a start up and competitor going up against Microsoft. Nobody was crying then.

 

[Chupa Chupa]

But Spotify has a ton of members and isn't losing money because of the 30% cut Apple gives it... It's losing money because of royalties.
[doublepost=1467282758][/doublepost]This is so stupid... I had to come back and post again.

This is the nub of why Warren is so ignorant on this issue. Spotify's business doesn't depend on iTMS, it's enhanced by it. iTunes is just one of multiple venues Spotify can and does sell it's product. It elects to sell subscriptions on iTMS, and it's the consumer that pays the extra 30% fee, not Spotify, either out of convenience or stupidity.

I wonder if Warren has the same concern with pricing at venues that clearly have "captured audiences" like publicly owned airports, stadiums, and convention centers? A single bottle of water at a Costco vending machine cost under $1. That same bottle of water at the airport is $4. A can of Bud at a convenience store is $2. That same can at a public stadium is $7-10. And in these cases the consumer has no other option since water can't be brought past security and beer can't be brought into a stadium. Very different than the Spotify consumer who can buy their subscription direct for $3 less or a number of other places. Paying the iTunes price of $13 is purely another choice, if more expensive.

 

[AbSoluTc]

Wonder who is funding her rant. People like this don't all of a sudden have a problem like this. Someone is whispering sweet nothings into her ear. Senators of all people have no clue how technology works. This reeks of BS.

 

[Chupa Chupa]

Wonder who is funding her rant. People like this don't all of a sudden have a problem like this. Someone is whispering sweet nothings into her ear. Senators of all people have no clue how technology works. This reeks of BS.

Yup. Mentioned similar earlier. Recalls the time former senator Steven's explained the Internet as a "series of tubes." Of course, the issue here isn't about tech, but free markets, something Warren also doesn't understand.

 

[itguy06]

Hillary is running against a baboon. This doesn't mean Hillary is good. It's the fact that rational people have a 1-party system in America, and that's Hillary's flavor of things. She's a career liar, committed securities fraud, failed to implement medical reform as First Lady (still don't get that), and is a patsy for big business donations. Unfortunately, she's the one we get, unless you want a baboon.

That doesn't mean anyone is happy about it.

I'll take the baboon over the crook any day. And the Nutjob Sanders isn't much better.

We really need a strong 3rd party candidate and until we have that it will be business as usual.

 

[PBRsg]

I don't know if there's a politician more annoying than this woman.

There is: Dianne Feinstein.

 

[DakotaGuy]

There is: Dianne Feinstein.

Ok you win, but this lady comes in a close second.

One thing they do have in common is they both love to jump into issues they are clueless on. Warren talking about this is a lot like Feinstein going on about "big clips and large velocity bullets." I'm guessing both have had blinker fluid issues on their cars.

If your going to tackle something you think is an issue then you better do some research before you pretend to be an expert on a topic. Warren is about as much of an expert on this as she is Native American culture.

 

[MillieWales]

?.....It's one thing to take the cut, but to forbid the service to notify customers of cheaper options that are available elsewhere...
And yes, to hinder competitors by locking down APIs...

Especially the latter is EXACTLY what we had been complaining about in the late 90s when Apple was the one liberating us from Microsoft and all evil IBM before in the 80s.

So to follow that through, surely Spotify needs to tell people about all the competitors and their price plans of music can be found cheaper elsewhere?

Apple are helping Spotify and giving them a service, Spotify don't want to pay for that service. If Apple was stopping them from being on the App Store or having an app at all and just promoting their service I'd be in full agreement with you, but I feel you have missed the point. Spotify simply don't want to pay Apple. Why would Apple give free support and publicity to a competitor? What next, go in to your local VW dealership and they say 'before you buy this I really think you need to go and see what Flrd have to offer, their cars are cheaper'? In a supermarket should they say 'don't buy these cakes here, you can find the, cheaper at our competitors'?

It is really nothing like what Microsoft were doing, MS were not letting competitors near their computers and shipped them with no choices. They didn't have the competition as a downloadable option where they took a small percentage of the price if you paid. Unless your definition of 'EXACTLY' is very different to the dictionary's...

 

[MacDarcy]

I find this funny. I've been buying Apple products since before it was "cool". Before the iPhone, iPod & imac. But you know what? I NEVER listen to Apple Music. EVER. I ALWAYS use either Spotify or Pandora. Love Apple, but for whatever reason, their music streaming service just doesn't do it for me. It leaves me cold. That's why I laughed when Apple announced the other day that it was gonna try to make Its music streaming service more like MTV of the early 80s. Lol. Maybe they're trying to appeal to my sense of nostalgia. I dunno. Nostalgia is good an all, but I just don't think this is gonna work the way they hope.

 

[merkinmuffley]

Hugging Hillary appears to have derailed her thought processes. She should know better and stay clear of that monster.

 

[Brian Y]

I don't see why Spotify feels it deserves special rules.

So they charge $10 themselves, vs $13 via iTunes. They can't really say that it causes a loss in sales, since if anybody knew the price difference they'd buy through the website.

Then if spotify processes payments itself it has more costs compared to iTunes where it just gets a straight $9.10 (I'm excluding taxes etc here, just purely payment details). There's the credit card fees, which can be as high as 3.5% for some providers. That's down to $9.65. Then there's the merchant account fee, which for WorldPay (first one that came to mind) is 2.75%. Now we're at 9.38. That's only 28c difference. I'm sure if you worked out the per-transaction cost of things like designing the payment system, infrastructure, maintenance of your gateway to the merchant, dealing with (and paying for) chargebacks, etc, you could find that 28c.

Also, I'd bet that the number of people who buy through iTunes is tiny compared to people who pay via Spotify themselves. If it's more than 0.25% I'd be very surprised.

Plus, students can purchase the service for £4.99, so if they can still be profitable at 50%, I don't see why they can't be profitable at 97.2%.

 

[Chupa Chupa]

We really need a strong 3rd party candidate and until we have that it will be business as usual.

I'm not sure what 3rd party has to do with it. That is no elixir. How many "anti-establishment" mid-term elections have we had where candidates were elected because they campaigned on "cleaning up the system," only to be co-opted by it minutes after being sworn in. Remember Sanders was elected as an Independent but caucused with the Democrats. His voting record is not "independent."

And 3rd party president would still have to deal with Congress. The politicization and polarization there isn't going away because a party agnostic is in the WH. It's likely to become even more entrenched with expanded name calling, misleading memes, and half-truth narratives.

Truly, until there is a Constitutionally mandated total "terms served" limit per legislator as there is for president, a long term ban on "revolving door" activities, not just official lobbying, and removing the fixed, unelected, bureaucracy's illegitimate powers, nothing is changing. Both parties feed off of corporate cronyism. The only way to diminish that is by not incentivizing long stays in D.C.

 

[rdlink]

All that offers a justification for the 30% cut (though we could all debate about what amount is actually fair - is it 15%? Or what if it was 60%, would you still defend apple?)...

.... but how does it justify squashing their right to mention a cheaper avenue to obtain the same stuff? Again, we're this a Target store, that would be one thing, but now that Apple also scares new computer buyers away from getting software from outside the app store by having it set up automatically to not open packages from 'outside developers', they are seemingly trying to keep less savvy computer users in the dark.

LOL. You've obviously never worked in IT security. If you're going to rant about something the least you could do is be accurate. It's not "outside" developers that MacOS blocks from automatically opening. It's unknown developers. All that a developer needs to do to not have their app blocked is to obtain a (free) unique identifier for their app from Apple. You're trying to take a safety feature and turn it into Apple being a bad guy. The internet is chock full of malicious apps, and Gatekeeper is a way to protect the millions of users who could unknowingly infect their machines without it.

What I am defending is not amounts. I wouldn't care if it was 15%, 60%, 1% or whatever. Apple set up a store and the ecosystem. They told everyone the rules going in. People and companies decided, after reading the rules that they wanted to play in Apple's sandbox. Then they complain about it after they get in. That's childish and unfair. Apple's cut of the software price has never increased. Their policies on whether a developer could advertise a workaround has never wavered.

Imagine if every subscription developer who is using Apple's ecosystem to create free to download apps that include an ongoing subscription were to put a link in the app that bypassed Apple. Apple would then be providing the infrastructure and ecosystem for free. How is that fair to them?

If developers, including Spotify don't like Apple's terms they are free to remove their apps from the App store, and develop their own ecosystem. The thing that cracks me up is that it's lost on all of you "genius" business majors that if it weren't for Apple and the App store it's likely that companies like Spotify wouldn't even exist.

 

[convergent]

Apple does indeed have a monopoly. They control 100% what software can be installed on my iPhone. That is a monopoly. For the Mac/OSX, they do not control it. In that case, they do have an App Store, but customers are free to install apps on their own. The App Store itself is not the violation. The violation is that they are competing by selling their own software on the same platform, which gives them an unfair advantage.

Suggesting that someone can buy a different phone is irrelevant. You don't have to get your power from the power company. You can buy a generator, or fit your home with solar panels, etc.

You do not have to have 100% control of the market to be in violation of anti-trust laws. You just have to have too large of an influence on the market which gives you an unfair advantage and hurts competition. That is indeed what Apple has.

That's not a monopoly, and you can use apps from the App Store that require a subscription through other channels. I use Netflix, Amazon, Hulu, and MLB.tv, and I don't subscribe to any of them through the App store... I subscribe through each company on their own website. And Amazon's product is competing with Apples. the same as Spotify competes with Apple. The bottom line is that again a political hack thinks that consumers are too stupid to figure out that they can buy something from another source for less. Its Apples store so they get to set the rules. The developer is getting customers brought to them that they didn't acquire on their own.... they came into Apple's store. If Spotify doesn't want to participate in the store, they don't have to. if Apple had some stranglehold on smartphone marketshare, then it might be considered a monopoly, but they don't.

I'm reminded of the Microsoft situation with web browsers being pushed out of the market. They had/have a dominant market position with Windows, and they were giving away their browser AND integrating it to such a degree that it made it difficult for other offerings to succeed. The iPhone has about 20% of the install base ( http://www.statista.com/statistics/385001/smartphone-worldwide-installed-base-operating-systems/ ). Microsoft Windows has 85% of the desktop install base used for browsing ( https://en.wikipedia.org/wiki/Usage_share_of_operating_systems ), yet the government didn't stop them from giving away their browser. It changed the model of competition, but competition persists.

I would love for Apple to create more options for developers... such as free trials and paid upgrades. It wouldn't help Spotify, but would help app developers and consumers. But I recognize its up to Apple if they want to offer these things. Its not up to the government to step in and force a company to offer something. I don't particularly care for subscriptions at all, but find myself with several now. But the convenience of Apple Music for me and my family has proven to make it worthwhile because of its integration into the Apple ecosystem... i.e., things like using Siri in CarPlay and controlling playback with my Apple Watch.

Apple had a more dominant position with music and the iPod than they do with the App Store and apps, yet it still wasn't a monopoly. Along came Spotify to disrupt their music download business model. Apple has now jumped into streaming and is altering the streaming model. But the reality is that Spotify has enough name recognition that they will do fine.

 

[smacrumon]

Um, well Elizabeth Warren does have a point. Apple runs parts of its business in a completely anticompetitive manner. Those aspects need to be investigated and if supported by evidence, then prosecuted appropriately. Apple isn't above the law.
Side note, personal attacks on Elizabeth Warren aren't arguments.

 

[WinstonRumfoord]

Fact is they can't compete against Apple on iOS, nobody can unless their product is free. Apple can offer thier product 30% cheaper before they even come close to being on the same level. The Apple defence force is basicly cheering for being ripped off by Apple themselves. Unless you're a shareholder, you should be supporting this.

Unless you like free markets and free people, you should be supporting this.

ftfy!