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

[omihek]

But if you want to sell your products through a different channel than Ebay, YOU are allowed to do that. Any apps on IOS must be both approved and sold through Apple. I have an idea, let's encourage Ebay to first review and approve your diesel parts to be sold on their network before you are allowed to sell on Ebay ... how would you like them Apples.

Ummm... did you even read what they wrote? "Ebay is one of many outlets that we use to sell these parts online." See that? One of many. And Ebay does have policies on what you can and cannot sell on their website.

Ebay doesn't forbid you from selling products through a different channel, and neither does Apple. Last time I checked, Spotify is on Android too. Apple doesn't forbid developers from making an Android version, Windows version, Blackberry, Firefox OS, <your preferred OS here> version either. That's all up to Spotify. Spotify is basically saying, "Apple should do all the hard work spending years and billions of dollars setting up a successful app ecosystem and then let us use that ecosystem for free."

 

[jimbobb24]

I use Sporify on my iPhone and iPad. I downloaded the app. I started using the free version. The ads became annoying and they offered me a starter deal and I became a fan and had to pay. So I went to their website and signed up. It was easy and painless. Spotify cannot link to their webpage (is that correct) but they can tell you it exists.

 

[truthertech]

This is an incredibly long thread that ultimately boils down to 2 diametrically opposed viewpoints that have existed for centuries without hope for a middle ground:

- If a company builds a successful model then it has earned any profits it pulls in, and there is no ethical reason to restrict any of its business practices since the invisible hand will correct, and competition will balance the scales

- If a company has established a monopoly-level control of a market then it has tremendous power to prevent any competition from gaining a foothold, and thus breaks the possibility of any future competition, so there must be balances in the system, possibly through regulation, to assure a level of competition continues to exist.

As utterly pro-Apple as I am, I am very much in the second camp, looking back historically to why monopoly trade laws were put in place in the first place.

But nothing I say will sway a fervent libertarian/objectivist, and vice versa. So the dance of politics continues to try to find some kind of compromise in our system of self-governance.

I take it that you are not an anti-trust specialist, but a couple of quick questions:

1) How can a company that has the minority of users on its platform have "monopoly level control?"

2) Spotify justifiabiy brags about how they are by far the largest music store, have a 100 million users, and Apple only has 15 million. How does that translate to your claim that Apple can prevent "any competition from gaining a foothold?" Wouldn't that be a little bit difficult to explain under your theory?

 

[Ries]

I'm not clouding the issue. Plenty of people have gotten Spotify through the web and Android devices. When they get it through iOS, Apple deserves a cut because they have the platform that connected them to the customer.

Once again, this is no different than me selling on Ebay. I also sell through my websites and over the phone but when Ebay connects me to a customer they take a cut (and deservedly so).

I paid for my phone, why does Apple get a say in who i pay or what i run on it?

 

[nicmart]

Define "quite robust."

You play games. I posted the data and you know it. In 2015, Apple had $20 billion in app store revenue and kept $6 billion. Now, I gave you the source so why don't you get serious? Why are you here if not to contribute meaningfully to the discussion? Why don't you post a link to you alleged analysts who claim Apple is making no money on the app store? Who claims that?

 

[calzon65]

I'm not clouding the issue. Plenty of people have gotten Spotify through the web and Android devices. When they get it through iOS, Apple deserves a cut because they have the platform that connected them to the customer.

Once again, this is no different than me selling on Ebay. I also sell through my websites and over the phone but when Ebay connects me to a customer they take a cut (and deservedly so).

If you want to sell a product through Apple store, sure Apple should get a cut, I didn't say Apple should not, but companies also want to sell through their own channels, their own websites, but Apple refuses to allow that. Apple demands that any product that runs on the iPhone/iPad must pay a "toll" to Apple and get their permission.

 

[newyorkone]

Spotify already pays yearly developer fees to Apple, those fees cover app distribution and customer billing.Apple doesn't pay for the servers Spotify uses to stream music.

Are you ok with Walmart demanding 30% from Apple for selling gift cards that let people buy stuff from Apple's app store?

I'm talking about the App Store infrastructure, and if you think a $99 developer fee covers the cost for that, then I have a bridge to sell you. I know the service itself is via Spotify's servers.

Are you OK with maintaining a store, paying for all the costs to keep it running, and then letting everyone sell their apps for free, and subsequently selling subscriptions outside so that that you effectively make NOTHING. Clueless...

 

[waitandwait]

I paid for my phone, why does Apple get a say in who i pay or what i run on it?

Apple make us pay for their phones with conditions. Just like terms and conditions of many other products you bought.

You can choose not to buy Apple, you know?

 

[truthertech]

That's exactly 30%.

Actually, Apple has paid $50 billion to App developers, per the last WWDC.

 

[calzon65]

I paid for my phone, why does Apple get a say in who i pay or what i run on it?

Thank goodness ... someone finally get's it!!!

Ries you are right, YOU paid Apple for that iPhone, that is YOUR iPhone, and if you want to purchase software or services from someone you should be allowed to do that, but Apple refuses to allow that even though you already paid Apple for that product.

People here keep saying Apple should be allowed to get a commission for products sold through their store, that is reasonable. But Apple has created a closed market, they are restraining trade by forcing every single app product/service vendor to go "through them".

 

[nicmart]

2) Spotify justifiabiy brags about how they are by far the largest music store, have a 100 million users, and Apple only has 15 million. How does that translate to your claim that Apple can prevent "any competition from gaining a foothold?" Wouldn't that be a little bit difficult to explain under your theory?

Source please. According to the NY Times, Spotify had 30 million paying users as of March 2016.

 

[waitandwait]

Thank goodness ... someone finally get's it!!!

Ries you are right, YOU paid Apple for that iPhone, that is YOUR iPhone, and if you want to purchase software or services from someone you should be allowed to do that, but Apple refuses to allow that even though you already paid Apple for that product.

People here keep saying Apple should be allowed to get a commission for products sold through their store, that is reasonable. But Apple has created a closed market, they are restraining trade by forcing every single app product/service vendor to go "through them".

So many idealists. Not that Apple is morally right, but there's terms and conditions for EVERYTHING you buy. Same for Android phones.

But you have a choice to support trade restraining/open or closed market by not buying iPhones.

 

[ScoobyMcDoo]

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.

I know that. I know it is the agreement. The point is I don't like the agreement and because of that, I may choose another brand of phone next time I buy one. Maybe I'm the only one, but I doubt it.

 

[waitandwait]

Source please. According to the NY Times, Spotify had 30 million paying users as of March 2016.

http://www.telegraph.co.uk/technology/2016/06/20/spotify-crosses-100m-users/

 

[Applefan4]

Spotify rips off artists so bad it should be criminal - they can dish it out but they can't take it.

Oh no, not the poor artists. I guess they'll just have to have one less mansion and private jet. So sad.

As far as Apple goes, the move is completely scummy. I don't care about their disputes - all I know is that I got Spotify premium through my carrier and if it gets removed from AppStore, it will cause people to remove themselves from Apple ecosystem

 

[Gary03mw]

If you want to sell a product through Apple store, sure Apple should get a cut, I didn't say Apple should not, but companies also want to sell through their own channels, their own websites, but Apple refuses to allow that. Apple demands that any product that runs on the iPhone/iPad must pay a "toll" to Apple and get their permission.

What "own" channels? Spotify has it's own channels. Those channels can be reached by accessing the website using a browser. Those channels can be reached using Android, Windows, Macs, or almost any device. They already have their "own" channels.

This is about them using a storefront created by Apple where Apple has aggregated millions of customers and not wanting to pay Apple for that. This would be me putting links to my website all over my Ebay listings. Ebay is not okay with that.

 

[truthertech]

Apple make us pay for their phones with conditions. Just like terms and conditions of many other products you bought.

You can choose not to buy Apple, you know?

It will in the long run backfire on Apple since companies won't put their app on iOS.

It will in the long run backfire on Apple since companies won't put their app on iOS.

Aren't you forgetting about the billions Apple has already put in the pockets of App developers? There are hundreds of thousands of people worldwide who have registered as Apple developers for the App store, when will the backfire start?

 

[CWallace]

If you want to sell a product through Apple store, sure Apple should get a cut, I didn't say Apple should not, but companies also want to sell through their own channels, their own websites, but Apple refuses to allow that. Apple demands that any product that runs on the iPhone/iPad must pay a "toll" to Apple and get their permission.

This is not true. Spotify themselves do not appear to offer an in-app purchase option anymore. Their instructions point you to their webpage to sign up: https://support.spotify.com/us/acco...ptions/how-do-i-upgrade-from-free-to-premium/

When Amazon bought Comixology, they removed the in-app purchase option. So you must go to Comixology's website to buy content before you can view it on your iOS device. Amazon does the same with Kindle Books and Amazon Videos and Music.

Actually, Apple has paid $50 billion to App developers, per the last WWDC.

That is an aggregate figure since the App Store's creation. The numbers being discussed ($20 billion revenue and $6 billion in collected fees) are for the 2015 Fiscal Year.

http://www.telegraph.co.uk/technology/2016/06/20/spotify-crosses-100m-users/

That article states 100 million total users, of which 30% - 30 million - pay for the service. Exactly the number New York Times reported as paying for the service.

 

[omihek]

If this was microsoft, you all be weaponised and screaming murder death kill.

Oh, you wan't another browser than edge? Well though luck, make your own OS or use linux.
MS must have a 30% cut on all applications running on windows?
Ohhh, look MS Music! iTunes is now banned.

It's actually more like Microsoft getting money from companies like Dell, HP, and others that use Windows on the machines they sell. When Dell sells a laptop running Windows, Microsoft gets their cut. That's how it's always been and no one is complaining about that.

What Spotify is doing would be like Dell wanting to sell millions of computers running Windows without giving any of that money to Microsoft. Is that fair to Microsoft?

 

[calzon65]

So many idealists. Not that Apple is morally right, but there's terms and conditions for EVERYTHING you buy. Same for Android phones.

But you have a choice to support trade restraining/open or closed market by not buying iPhones.

You are correct in with your statement, there were terms and conditions of the purchase, but sometimes the US courts consider some terms and conditions at time of purchase, even if accepted by the consumer, to be onerous and unenforceable.

The bigger Apple grows, the more of a "monolopy" they create with IOS and the more the US Government, politicians and consumer groups will begin to shine a spotlight on Apple's IOS "terms and conditions".

 

[QCassidy352]

This is really simple. If the App Store and its rules are so evil, remove your app and refuse to participate. Unless and until Apple is able to force competitors to place apps in the App Store, I have zero sympathy for Spotify's position here.

 

[newyorkone]

Outside of credit card processing is there something unique Apple provides for subscription services like Spotify vs. free apps like CNN? All the stuff you mentioned applies to all apps, not just paid or subscription apps. So going by your logic there should be no free apps in the App Store because all of the infrastructure Apple provides costs money. Is none of that cost built into the price of an iPhone?

That is NOT what I said, and clearly basic logic escapes you. Apple has set up an App Store with rules for subscriptions, additional in-app purchases, and the reason they did that is in order to recoup some of the cost to maintain the infrastructure of the App Store. That's the way Apple designed it. If you are just providing free apps without additional in-app purchases or subscriptions, then that profit sharing scenario does not apply to you. The free app developers make money in other ways -ads, click-throughs, affiliate linking, etc. If you are providing apps with IAP's and subscriptions, then that's where you are required by the rules to pay a % to Apple.

If you don't like that structure, you can leave. But it is fair and it does make sense. Just not to people who expect everything while giving nothing.

 

[nicmart]

There is no way that Walmart is not making any money off those gift cards. They either get a commission of each card sold or get it cheaper than the face value and make a couple of bucks per card.

And Walmart has about a 3% profit margin.

 

[truthertech]

I paid for my phone, why does Apple get a say in who i pay or what i run on it?

Think for a moment and it will come to you. Does your phone run Windows or Android ? Why does Apple "get a say" in that?

 

[friedmud]

I've never used the app to buy subscriptions. I always went to the website.

is using the app to purchase a subscription really necessary?

I originally signed up with Spotify through the app. Why? Because I wasn't sure if I really wanted it and all I needed to do was put my thumb on my phone to start the first month of service and I knew I could cancel easily directly from the phone if it's not what I wanted. $13 vs $10 was worth it for the utility.

I ended up really liking Spotify (still do) and wanted to sign my wife up. At this point I trusted Spotify enough and was invested enough to sign up with them directly. I cancelled my subscription through Apple and signed up for a family plan from Spotify directly on their website. Everything went smoothly.

This is exactly why Apple charges for subscriptions: they bring a VALUEABLE service... as a billing intermediary who already has millions of credit cards (and fingerprints) on file to make signing up (and cancelling) as simple as possible, it brings more people to services like this.

Now: what can be debated is the cut that Apple should take for this service. Obviously, 30% is too high (many are complaining, not just Spotify). Apple is already moving to 30% for first year 15% after that... but Spotify is still complaining. I'm not sure what the right amount is... but I'm confident the market will work it out (you can already see the market working by Apple's recent change to 30/15%).