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

[gotluck]

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?

Microsoft should have been allowed to say that in response to the ie crap that pales in comparison to what Apple does

Apple may not have a monopoly on market share but they do on profits in this sector

 

[calzon65]

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.

But IOS owners are forbidden from purchasing Spotify from Spotify's channels ... stick to the subject at hand. We don't care and it's not relevant to this debate that Android users can purchase directly from Spotify, this is an IOS, Apple store debate.

 

[Zirel]

This is the most ridiculous pro-apple response regarding this dispute. Why people continue to repeat it is beyond me.

Because it's true.

Apple maintains their AppStore. The rules are very clear from the very beginning:

1. It's a store. It's private property, and costs money to run it.

2. Apple owns it. You are there if they allow you, and under their conditions.

You can't force Walmart to sell your product. Specially if said product is going to be free at the store, and then tell costumers to go shop for the essential elsewhere!

 

[waitandwait]

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".

Apple is so small when you compare with Android, fyi.

 

[Ries]

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?

I paid for iOS too, i don't see any difference. And no, that is not what is happing. Spotify wants to install an App on my phone, they don't care how, they would be perfectly fine doing it with out Apple, but they can't.

 

[RedWing512]

For those still on Spotify's side, here's an example of what they want to do. For the sake of the example let's say Spotify sells headphones in the Apple Stores. This would be like Spotify going into the Apple Store and removing all the Spotify products from the shelf and replacing them with a sign that said, "Looking for the SpotifearPods?! Head over to our website Spotify.com to purchase them there."

I wonder how long Apple would let the sign sit there before taking it down. Spotify is using precious App Store "shelf space", from which they are reaping ma$$ive benefit$. But Apple won't let them advertise a different store on Apple's shelf. Oh the horror.

Hey Spotify how about I host my music on your streaming service but you don't get any of that money? Sounds fair, right?

Facepalm.

Spotify has every right to use that "shelf space" to advertise their product. They're trying to sell a service and turn a profit on that service. Due to the makeup of the mobile landscape, their only choice if they want their product to succeed is to have it on the App Store. There's no sideloading. There's no alternative shop. And unfortunately, due to Apple's 30% cut, they are unable to make the same kind of profit on one sale that Apple does with their similar service.

Now, I know that some of you will say, "Just don't sell on the App Store, then." Unfortunately, it's not that cut-and-dry. Mobile is huge, and there are few people that will take the time to get on a computer just so they can purchase an app subscription. If the option is not there on their phone, they just won't bother. Not to mention, removing themselves from one of the most popular mobile platforms is a very risky move--there's absolutely no guarantee that people would switch to Android for just one app.

Now, here's the thing that I don't understand--Spotify is trying to sell access to their service, not the app, so why should that be governed by Apple? I could understand if they were selling the actual app, but they are not.

Also, for those talking about Apple's 30% cut going towards overhead, what the hell is the $99 they charge for the Developer Program put towards, if not that?

 

[Gary03mw]

That's a one time sale. I think everybody understand and is comfortable with that. The issue is that Apple continues to take a monthly cut for a subscription when they are no longer involved in the transaction. It would be like you selling an item on eBay that required a monthly service fee...and eBay taking a cut. The App Store isn't involved in the purchase after the initial sale, so they shouldn't get a cut.

This is especially true when Apple offers a competing product.

I'm pro business. But I also agree with that competition should be fair. I think a lot of people cut Apple a break because they love their toys. People on here go crazy when AT&T or Verizon raise add a $5 fee - but will go to the mat for Apple to skim 30% on monthly sub fees.

That's understandable... Subscriptions could be debated. At the same time we have been in business for many years and some customers repeatedly use Ebay to make purchases and Ebay always takes their cut. Most long term customers eventually call us and then move to our other, cheaper, outlets. Repeated purchases aren't a subscription per se, but it's the closest comparison I can personally make. Spotify does the same in trying to migrate their customers to better pricing. Which is fine to me, but we can't put links on our ebay listings or our website on our images or anything. Basically I don't see a problem with Spotify trying to help their long time customers but putting a link in the spotify app to sign up elsewhere seems to me a lot like me linking out to my personal website from Ebay.

 

[8281]

Apple runs parts of its business in a completely anticompetitive manner. Freezing competitors out is a case in point, so is an elaborate list of exotic approval rules. Those aspects need to be investigated and if supported by evidence, then prosecuted appropriately. Apple isn't above the law.

Refreshing to see a comment that doesn't kowtow to Apple.

 

[waitandwait]

Facepalm.

Spotify has every right to use that "shelf space" to advertise their product. They're trying to sell a service and turn a profit on that service. Due to the makeup of the mobile landscape, their only choice if they want their product to succeed is to have it on the App Store. There's no sideloading. There's no alternative shop. And unfortunately, due to Apple's 30% cut, they are unable to make the same kind of profit on one sale that Apple does with their similar service.

Now, I know that some of you will say, "Just don't sell on the App Store, then." Unfortunately, it's not that cut-and-dry. Mobile is huge, and there are few people that will take the time to get on a computer just so they can purchase an app subscription. If the option is not there on their phone, they just won't bother. Not to mention, removing themselves from one of the most popular mobile platforms is a very risky move--there's absolutely no guarantee that people would switch to Android for just one app.

Now, here's the thing that I don't understand--Spotify is trying to sell access to their service, not the app, so why should that be governed by Apple? I could understand if they were selling the actual app, but they are not.

Also, for those talking about Apple's 30% cut going towards overhead, what the hell is the $99 they charge for the Developer Program put towards, if not that?

Do you even know what's wrong with Spotify? Do you mean Apple should bend their backs just to clear the mess Spotify create for themselves?

https://www.theguardian.com/technol...-financial-results-streaming-music-profitable

 

[calzon65]

I paid for iOS too, i don't see any difference. And no, that is not what is happing. Spotify wants to install an App on my phone, they don't care how, they would be perfectly fine doing it with out Apple, but they can't.

Again well said Ries, you get it.

This constant drowning on and on about Apple creating a valuable distribution market through the Apple store is tedious. We know the Apple store has value and like eBay, if developers want to use the Apple sure, use it and pay the commission, that's all very fair, but some developers want to sell their IOS products/service through other channels, THEY CAN'T.

 

[nicmart]

Wow. Just jump to the personal attacks. Don't bother with math or anything.

How much would a sentient being expect to pay in expenses, taxes and overhead for the App store last year?

$400-500 million transaction fees
$1-2 billion in data center expansion
Personnel
Bandwidth, connection and hosting
25% effective tax rate

I could see Apple making 2-3 billion in profit on the App Store on $20 billion in revenue. 10-15% marign. Right in line with what I suggested assuming smaller revenue splits on the rest of the iTunes Store categories.

Again, you provide nothing like a source. You started off by falsely claiming that Apple makes no profit on the app store. Now you are offering modified fantasies (without admitting that you were wrong). Provide a source for any of those expenses. The claim that Apple has to spend up to $2 billion on data expansion to support the app store is specious. You keep posting, and posts continue to lack any evidence. I will repeat that your first post on the subject was totally debunked.

Apple doesn't pay a 25% tax rate. It is estimated (by Forbes, for instance), to be under 10%.

 

[usarioclave]

so is Spotify colluding with Warren?

 

[friedmud]

But IOS owners are forbidden from purchasing Spotify from Spotify's channels ... stick to the subject at hand. We don't care and it's not relevant to this debate that Android users can purchase directly from Spotify, this is an IOS, Apple store debate.

No. Spotify is forbidden from directly linking to those other channels... iOS owners can definitely get a message from the Spotify App that says "You must sign up to use this app" and people can use their browser (on their phones no less!) and sign up for Spotify.

 

[RedWing512]

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?

Seriously. Stop talking. The more you talk, the less educated you look.

IIRC, many PC manufacturers like Dell did complain a while ago to Microsoft about the fee for Windows costing too much. As a result, Microsoft lowered the fee, and as far as I know, everyone has been happy ever since.

And this scenario is a bit different, as Microsoft is pretty much a software-driven company. Sure, they sell some Surfaces here, and a few Xboxes there, but a lot of their profit in the past has come from software, so they can't just simply hand it out to the OEMs for free (and the main reason why the free period for Windows 10 is ending soon).

 

[nicmart]

It's a shame that there is not at least one good non-Apple alternative to the app store. Either the economies of scale are not there or sufficient motive doesn't exist.

 

[newyorkone]

Facepalm.

Spotify has every right to use that "shelf space" to advertise their product. They're trying to sell a service and turn a profit on that service. Due to the makeup of the mobile landscape, their only choice if they want their product to succeed is to have it on the App Store. There's no sideloading. There's no alternative shop. And unfortunately, due to Apple's 30% cut, they are unable to make the same kind of profit on one sale that Apple does with their similar service.

Now, I know that some of you will say, "Just don't sell on the App Store, then." Unfortunately, it's not that cut-and-dry. Mobile is huge, and there are few people that will take the time to get on a computer just so they can purchase an app subscription. If the option is not there on their phone, they just won't bother. Not to mention, removing themselves from one of the most popular mobile platforms is a very risky move--there's absolutely no guarantee that people would switch to Android for just one app.

Now, here's the thing that I don't understand--Spotify is trying to sell access to their service, not the app, so why should that be governed by Apple? I could understand if they were selling the actual app, but they are not.

Also, for those talking about Apple's 30% cut going towards overhead, what the hell is the $99 they charge for the Developer Program put towards, if not that?

Facepalm.

You think the $99 developer program covers the cost for the infrastructure of the App Store??? There's also the infrastructure of the Apple Developer program that is completely separate, the main element of which is the swift development platform itself. I doubt the $99 even covers that.

 

[Gary03mw]

But IOS owners are forbidden from purchasing Spotify from Spotify's channels ... stick to the subject at hand. We don't care and it's not relevant to this debate that Android users can purchase directly from Spotify, this is an IOS, Apple store debate.

No, they aren't. An iPhone user can sign up through the web or on any computer they have.

 

[omihek]

You are not acknowledging that Apple refuses to allow anyone to sell or distribute any IOS app they don't approve, so the ONLY way to sell a product/service to an iPhone owner is to first get permission from Apple then sell through their so-called "store". This a lot more than an argument about shelf space, vendors don't have any other outlet to sell IOS apps because Apple forces all product/service sales through them. Vendors don't have a choice to choose a different "store" to sell through.

I think you are confused. Spotify DOES sell their product through other channels. Just checked their website. Here's all the playing options they have listed. Mobile (which I assume means iOS AND Android), Computer, Tablet, Car, Speaker, PlayStation, TV, Android Wear, Web Player.

And of course Apple doesn't allow apps they don't approve. Can I just go into an Apple Store and throw some wires on the shelf and call it EarPods 2? Nope I don't think Apple would approve that, because it isn't up to their standards and policies.

Now let's bring the spotlight back to Spotify. Is it possible that Spotify has policies on what music they host on their service? Or can I just clip some audio files together and call it music and they would absolutely HAVE to host it? And I'm guessing Spotify also has policies on how much money they take from the artist in return for using Spotify's streaming service, am I right? And if an artist doesn't agree with Spotify's policies then guess what? They don't have to host their music on Spotify.

Spotify wants their cake and Apple's cake and everyone else's too.

 

[Ries]

Because it's true.

Apple maintains their AppStore. The rules are very clear from the very beginning:

1. It's a store. It's private property, and costs money to run it.

2. Apple owns it. You are there if they allow you, and under their conditions.

You can't force Walmart to sell your product. Specially if said product is going to be free at the store, and then tell costumers to go shop for the essential elsewhere!

That doesn't mean Apple gets to do what they what. You don't have to be a monopoly to be found guilty of Anti-competitive practices. Since Apple and Spotity properly have the same deal with the music industry, Apple could be seen as doing dumping or predatory pricing by adding the 30% tax to the competition.

 

[macfacts]

I have a product to sell, so can I use your house as my store but not pay you anything for it?

Spotify already pays their yearly developer fees to Apple. That covers app distribution and customer billing. That developer fee doesn't cover that streaming servers used to send music. Spotify pays for that. If Apple paid for the streaming servers then the 30% cut on subscriptions would be reasonable.

Spotify wants to put an ad in their app that sends them to the web to sign up instead of signing up in app. That is against the rules for Apple's app store. Most people aren't saying Apple can't do that, just that they are *******s for doing it.

 

[skit911]

Uh, and what did you just do?

Good thing is, you didn't say I was wrong ;-)

I was actually making a worthwhile comment and happened to see your useless one, decided to double down. But you are wrong.

 

[lordofthereef]

The sentiment in the thread seems to be resoundingly against Spotify, but I have honestly wondered for a long time now how it is not anticompetitive for Apple to disallow other stores access (this isn't just Apple, see Xbox Live store or Sony's Playstation digital offerings).

 

[BB8]

You people have got to stop making the same tired arguments about the "cost" to run the app store. That's not what this is about. If it were, Spotify would be allowed to open a subscription page through the Safari View Controller and that would be the end of it.

 

[lordofthereef]

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?

The bigger issue here is that I cannot sell my wares outside of the Apple store for Apple devices. This issue was literally unheard of (on a giant scale like this) until modern smart phones and gaming systems came to be.

There was a time when if you did this on PC or Mac (they still don't), the public outcry alone was enough to stop it. It will be interesting to see what, if anything, becomes of this.

 

[kemal]

But hasn't Apple always rejected programs that use a system that circumvents in-app purchases?