Spotify Accuses Apple of Using App Store Approval Process as a 'Weapon to Harm Competitors'

[newyorkone]

On a renewal - that's pretty much exactly all they do. Which is why after YEARS - they are now lowering it to 15%. Which is still quite high for a credit card transaction. Since you like to talk retail (vs online) - If retailers were charged 15% for their credit card transactions, no store would accept credit cards.

You just don't get it. What Apple and the App Store provides to developers isn't just credit card processing. That's just the tip of the iceberg. Servers, bandwidth, man-power to maintain the infrastructure, curation, security, and provide customer service, etc., and countless other costs that I can't think of or imagine. All of that costs money.

You want Apple to provide all of that for just the typical % cut of a credit card transaction???

 

[samcraig]

You just don't get it. What Apple and the App Store provides to developers isn't just credit card processing. That's just the tip of the iceberg. Servers, bandwidth, man-power to maintain the infrastructure, curation, security, and provide customer service, etc., and countless other costs that I can't think of or imagine. All of that costs money.

You want Apple to provide all of that for just the typical % cut of a credit card transaction???

No - you're the one who missed my point. It's all good.

 

[ArtOfWarfare]

Let me sell in your shop but I will charge my customers somewhere else, is this what they are asking or I am wrong?

The issue is Spotify has no choice but to sell in Apple's shop.

On Android, OS X, Windows, and Linux, you can buy your apps from anywhere. iOS is unique in that Apple forces developers to sell through the Apple store.

I'm thinking that I might start removing myself from Apple's user base. They're not offering products that are particularly competitive, magical, or reliable anymore. Instead, they seem to have gotten lazy and decided to start taking advantage of developers.

 

[waitandwait]

Why should it matter where the content is consumed given that Apple is not providing the bandwidth or content that is being consumed.

It shouldn't. That's an over-reach.

You don't get the point. Apple needs to pay their own engineers and staff to process the updates, maintain the app store, secure the store. You think all this is free? or you think content creation is everything about apps?

As a consumer, you have a choice. Don't use the iPhone if you feel so aggrieved about the Apple's policies.
As an app developer like Spotify, they have a choice. Don't release your app on iPhone if you feel so aggrieved about Apple's pricing.

There's nothing wrong with Apple's pricing and policies.

 

[EightBitJoe]

Sorry, Spotify, but if you don't like it, feel free to design your own phone and develop your own operating system.

This is the worst thing I've ever read in this ridiculous forum. Kid, that's an attitude right out of mid 90's Microsoft's playbook. It was wrong then, and wrong now. But, I guess it's "not monopolistic behavior when we do it" at Apple these days.

 

[bonaccij]

Just give me and the others who know the risks and how to avoid them the option to load software from wherever we want to. It's my device. I paid for it. I should be able to do with it as I please.

You might want to take a closer look at the agreement you signed when you bought your phone. Yes, you bought the hardware... But the OS that runs it, you are only leasing and are subject to Apple's rules.

 

[EightBitJoe]

You don't get the point. Apple needs to pay their own engineers and staff to process the updates, maintain the app store, secure the store. You think all this is free? or you think content creation is everything about apps?

As a consumer, you have a choice. Don't use the iPhone if you feel so aggrieved about the Apple's policies.
As an app developer like Spotify, they have a choice. Don't release your app on iPhone if you feel so aggrieved about Apple's pricing.

There's nothing wrong with Apple's pricing and policies.

Terribly sorry, but your perspective is overly simplistic -- the kind of outlook held by college freshmen idealists that have read too much Ayn Rand.

 

[samcraig]

You know what's interesting - and I know this is somewhat unrelated... but when Apple wanted to profit off of books - they insisted on taking a 30% cut. But in order for them to do that, they didn't want to diminish their profit - so they colluded to ensure that their profit was maintained as opposed to simply taking less. Many people had no issue with Apple wanting to make as much profit from their book sales as they wanted. Yet some here (not the same group, granted) are begrudging Spotify from wanting to keep as much profit as possible.

You need not respond pointing out the differences - as in, it's different because Apple has a marketplace and Spotify is a product. I know all that and didn't say it was the same scenario. Apple wants to maximize their profits wherever they can. That's business. But as a consumer (and I am sure many developers) don't have to like nor approve of all their methods to do so.

 

[sudo1996]

Btw. Since when is being on the AppStore a right?

Similar lawsuits have been made over software running on Windows, and Microsoft has lost.

 

[CWallace]

I would think the fact that they lowered the price is proof that they were charging too much for renewals?

That this reduction does not take effect until a year in, as opposed to immediately, seems to me more a reflection that the long-term costs of providing the services they do to vendors are low enough to support a reduced long-term fee.

Your nose is off if you think revenue and profit smell the same.

Apple kept $6 billion in revenue according to the article. You still need to subtract expenses, taxes and overhead before you start catching the scent of profit.

All true, however I expect App Store margins for Apple are probably quite robust.

The issue is Spotify has no choice but to sell in Apple's shop.

On Android, OS X, Windows, and Linux, you can buy your apps from anywhere. iOS is unique in that Apple forces developers to sell through the Apple store.

Not true. App vendors are free to not offer in-app purchasing and I believe Spotify themselves have now stopped it. So Spotify, Amazon, Comixology and others all sell directly from their websites and not through the App Store, thereby avoiding the 30% fee.

 

[macfacts]

Are you saying it be ok if I owned a store for your or someone else to expect to use my store to sell your product or services? Should a retailer be forced to sell a product that it doesn't want to? Can Babies'R Us be forced to sell adult porn magazines?

Read the Mac rumors summary. Spotify has no problem paying 30% to Apple if customers sign up thru the app store/iOS. Spotify wants to make a link in their app to let people know they can sign up thru the web instead. Apple won't let them advertise that in the Spotify app.

Spotify already pays the yearly dev fees to Apple for app distribution and user billing.

Spotify wants to use their own billing process so Apple doesn't get the 30%, which is allowed by Apple's rules. Only thing Apple's rules not allowing
is the link in the Spotify app letting people know.

 

[chiefsilverback]

I really don't get it....

Did Spotify really think Apple should spend millions of dollars designing a platform so that its competitors can use to make money without sharing profits to Apple? Have they all lost their minds?

As with others, I see both sides of the argument. Spotify can't expect to use the App Store for free, but at the same time Apple has come along and offered a competing product and they don't have to pay anyone 30%.

In theory the ultimate test here would be for Spotify to stop supporting iOS. If enough people switched to Android that it started to hurt Apple's bottom line then I'm sure you'd see them reconsider their pricing models. The risk for Spotify is that people like iOS more than Spotify and move on to a new service...

 

[LordVic]

Actually Walmart, as well as other retailers allow brands to set up stores within their store. It's why you see specific sections in stores like Tommy Hilfiger, Polo, Guess? Estée Lauder etc. That all have their respective branding and a lot of times the employees in those sections work for the brand, not the store. Those brands negotiate with the retail store on how much percentage of sales they get. It works for the because the retail store already has an established customer base.

Have never seen that at Walmart. Maybe US walmart and International Walmart operate different? Here in Canada, Walmart does NOT feature such smaller stores within their stores.

 

[Rigby]

So who maintain the app store? Who is approving the updates? Who is building the security around the app store?

Maybe you didn't know, but developers already pay an annual fee of $99 to be able to publish their apps on the app store. That's more than Apple gets from a full year of Spotify subription fees billed through iTunes.

 

[waitandwait]

Terribly sorry, but your perspective is overly simplistic -- the kind of outlook held by college freshmen idealists that have read too much Ayn Rand.

I bet you are not even working.

What's wrong with Apple's behaviour. They want to promote their Apple Music. That's nothing wrong. They build the phone, the software, the app store. They set the rules to their game.

If you want to play their game, follow their rules and build your business model around their rules.

If you want to think about things like "unfairness" "anticompetitive" and so aggrieved with the policies, work with their rivals, Android, then.

Apparently Spotify keeps making noises instead of making concrete headways to their business model says it all. Spotify knows that iPhone users pay for their services instead of streaming for free.

 

[newyorkone]

Once again - you cannot compare a physical store with a virtual one. Analogy fail.

Common sense and business sense fail.

There are physical servers (infrastructure) and bandwidth, and with that there is maintenance, curation, security, etc. that has to be provided by real people. Employees, that need to be paid. So you want Apple to provide all of that for FREE, and make nothing off of the apps?

 

[polbit]

As a consumer, explain to me please, why would I want to defend Apple here? Telling Spotify to withdraw the app? I'm sure it would be the same for Amazon Kindle then? Are some of you so blinded with Apple fanaticism?

I'm old enough to remember when IBM introduced the PS/2 computer line. With it, it introduced a new expansion card architecture called Micro Channel. It was much better technically than ISA, but it required computer makers to pay a royalty to IBM, vs the free nature of ISA. Well, guess what. That didn't go so well for IBM, and it was the moment when it lost the grip on the market. It had every right to create MC and charge others for it, just like the market had every right to react the way it did - create EISA.

I'm a consumer of Apple products. I care about their products. I don't give a rat's rear-end about Apple, just like Apple doesn't care about me, other than to take as much of my money as possible. I see nothing wrong with that, just the way things are. Difference now is, Apple is not in such a dominant position as it once was, and they are starting to play with fire. The choice of platforms for a growing number of people is now here.

 

[mildocjr]

Are you saying it be ok if I owned a store for your or someone else to expect to use my store to sell your product or services? Should a retailer be forced to sell a product that it doesn't want to? Can Babies'R Us be forced to sell adult porn magazines?

Baby's R US probably not, but these wedding stores could keep tapping old customers wallets if they did.

 

[samcraig]

I bet you are not even working.

What's wrong with Apple's behaviour. They want to promote their Apple Music. That's nothing wrong. They build the phone, the software, the app store. They set the rules to their game.

If you want to play their game, follow their rules and build your business model around their rules.

If you want to think about things like "unfairness" "anticompetitive" and so aggrieved with the policies, work with their rivals, Android, then.

Apparently Spotify keeps making noises instead of making concrete headways to their business model says it all. Spotify knows that iPhone users pay for their services instead of streaming for free.

The rules change and aren't consistent. That's an issue.

 

[BaldiMac]

All true, however I expect App Store margins for Apple are probably quite robust.

Define "quite robust."

 

[waitandwait]

Maybe you didn't know, but developers already pay an annual fee of $99 to be able to publish their apps on the app store. That's more than Apple gets from a full year of Spotify subription fees billed through iTunes.

There are many fees in Walmart too

Marketing fees, licensing fees, rental fees, blah blah. Spotify can choose to pay or choose not to pay, you know? They can choose whether to put their app in their app store too, you kow?

 

[kingtj]

That's not a sensible reply, IMO. Look, Apple designed a smartphone that's become an industry standard (to the point where the once dominant Blackberry phone is all but killed off, and your options for a cellphone realistically come down to "Android or Apple?"). The phone wouldn't be NEARLY as popular or useful as it is, if it wasn't for Apple allowing 3rd. parties to code apps that run on it.

The "App Store" is valuable to users (not just to Apple themselves) as long as what's posted up there has been reviewed and ensured safe and spyware/virus free. But when Apple started leveraging the "single point of software distribution" as a way to kill off anything it sees as too much competition, something is wrong.

People keep comparing this to owning a retail store and expecting them to let you put your stuff on their shelves, whether they like it or not. But that's not what's being proposed here! The terms of what Apple supposedly allows and doesn't allow are already published up-front. (We know, for example, the App Store will not sell any porn.)

This is about developers who offer apps that iPhone users want, and which would appear to be perfectly allowable in the App Store. Yet they get banned simply because Apple won't let them do any paid subscription things that it doesn't get a direct cut from. Even Microsoft, as huge as they are, had this fight with Apple when trying to offer iOS versions of Office 365 apps.

I think a more reasonable approach by Apple would be allowing "outside subscriptions" that can take place via the apps themselves, but maybe qualifying that with a few rules. EG. Require that "Apple Pay" be accepted as a form of payment for those subscription purchases. Or maybe even design things so developers wishing to do this have to pay a higher annual fee to get a developer's license that allows uploading that type of content?

Sorry, Spotify, but if you don't like it, feel free to design your own phone and develop your own operating system.

 

[waitandwait]

The rules change and aren't consistent. That's an issue.

You still cannot say why the rules are inconsistent.

 

[samcraig]

Common sense and business sense fail.

There are physical servers (infrastructure) and bandwidth, and with that there is maintenance, curation, security, etc. that has to be provided by real people. Employees, that need to be paid. So you want Apple to provide all of that for FREE, and make nothing off of the apps?

Straw man - never said that. You're the one with business sense if you think you can compare a physical store with a virtual one. Yes - there are expenses with a virtual one. However the analogies being used when referring to space/etc in one vs the other is not analogous. If you don't understand that - then there's little hope in having a debate with you.
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You still cannot say why the rules are inconsistent.

I gave an example. I can buy pizzas and order ubers and meals, etc through apps on the app store and Apple doesn't get a cent.

 

[waitandwait]

That's not a sensible reply, IMO. Look, Apple designed a smartphone that's become an industry standard (to the point where the once dominant Blackberry phone is all but killed off, and your options for a cellphone realistically come down to "Android or Apple?"). The phone wouldn't be NEARLY as popular or useful as it is, if it wasn't for Apple allowing 3rd. parties to code apps that run on it.

The "App Store" is valuable to users (not just to Apple themselves) as long as what's posted up there has been reviewed and ensured safe and spyware/virus free. But when Apple started leveraging the "single point of software distribution" as a way to kill off anything it sees as too much competition, something is wrong.

People keep comparing this to owning a retail store and expecting them to let you put your stuff on their shelves, whether they like it or not. But that's not what's being proposed here! The terms of what Apple supposedly allows and doesn't allow are already published up-front. (We know, for example, the App Store will not sell any porn.)

This is about developers who offer apps that iPhone users want, and which would appear to be perfectly allowable in the App Store. Yet they get banned simply because Apple won't let them do any paid subscription things that it doesn't get a direct cut from. Even Microsoft, as huge as they are, had this fight with Apple when trying to offer iOS versions of Office 365 apps.

I think a more reasonable approach by Apple would be allowing "outside subscriptions" that can take place via the apps themselves, but maybe qualifying that with a few rules. EG. Require that "Apple Pay" be accepted as a form of payment for those subscription purchases. Or maybe even design things so developers wishing to do this have to pay a higher annual fee to get a developer's license that allows uploading that type of content?

I think this link answers your question: http://fortune.com/2016/06/13/apple-has-paid-almost-50-billion-to-app-developers/