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

[MyopicPaideia]

What platform? Repeating the same silly argument doesn't make it any more valid. If Spotify works in a browser then I'm not sure Apple is really providing anything of value, platform-wise, since browser-based content delivery isn't tolled, shouldn't be, and frankly would be difficult if not impossible to toll anyway.

If this were true, then there wouldn't even be the argument at all. Spotify could abandon iOS and not lose any customers. It would be interesting to see what percentage of its paying customers use it primarily on iOS as opposed to any other platform/OS. The reason there is an argument is because Apple's platform does in fact provide far more value than any other - a fact all developers recognise - simply by providing them access to the most purchase-willing customer demographic of any other platform on the planet. I've always found the logic a bit flawed with the antitrust concepts. Apple never changed its rules, but now that they are so huge it is suddenly anti-competitive, or at least being suggested as such by developers with services that compete directly with Apple. Strange we haven't heard anything from those that don't.
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If you sell your cars in my showroom, the customers can only purchase fuel from my gas station.

Please explain that one. What is the fuel supposed to be? The car is the subscription payment - is the fuel something else one has to pay Spotify for? The app is not the car, it is the showroom inside the mall for a SAAS like Spotify.

 

[Zirel]

I have applauded and been the fan person for many Apple initiatives

Really that I'm reading this???

Look, if you have been a fan of Apple, you shouldn't have been, they are a company. They do company things.

 

[BvizioN]

If you sell your cars in my showroom, the customers can only purchase fuel from my gas station.

Sorry but I think that's a very stupid analogy. First of all, you are not giving the car for free and even if you did, you still have to pay the showroom for hosting you. There really is no such thing as free when you think about it.

 

[Silver78]

Apple should be focusing its efforts on removing highly addictive excessive in-app purchasing pseudo-gambling designed apps from the App Store. They are the bane of the App Store and much a bigger problem than anything Spotify might or might not be doing.

yes....freemium ruins the gaming industry...hollows out games.

apple and spotify need each other... if no spitify on iphone i would not own an iphone.'

what would apple do if major apps worked together and got banned from app store..just for a short while ....a sort of strike. They would be forced to not be so greedy and try to monopolize music on apple devices.
Because they have... imagine all the years of ipod and all the troubble to easily add music to it.

 

[smacrumon]

Really that I'm reading this???

Look, if you have been a fan of Apple, you shouldn't have been, they are a company. They do company things.

Your responses make little sense. My fault for attempting to respond to you.

 

[Silver78]

I hope with new ios 10 apple will give me option to delete itunes store...like a peoples vote.

Apple music and radio should be a seperate app from music app....so I can delete it.

my freedom is left only a small icon in lower left corner of music app "my music" ....the rest is spam to me.

my phone functions as walkman...not an ipod.

also steve jobs destroyed the freedom of choosing own ringtone... went to war with ringtonebusiness and won....destroyed the business along with it.
yes you can make your own ringtone with rockband.....today .....but there is complications with that

 

[ds2000]

This is crap. Without the iPhone, spotify is a fraction the size they are now. Apple is not causing them grave harm.... Apple made them rich. If they don't like the terms, go develop the SpotifyPhone.

Probably already been said, the other phones have all caught up, if Apple were to lose Spotify and other services I'd be ditching my iPhone as I can get something nearly as good else where. We have choice now which wasn't there previously, apple need to keep offering all they can.

 

[oldmacs]

Apple music and radio should be a seperate app from music app....so I can delete it.

I wish you could FULLY turn Apple music off and re-instate Artists, Albums, Songs, etc on the bottom menu. I have no interest in Apple Music.

 

[D-Dave]

[...]
Apple isn't saying Spotify can't be on the store, or their apps can't run on their devices, or that they can't charge, just that if they do they will take a cut. It's not freezing them out at all, that would be saying "Your app is not welcome on our store".
[...]
Trust me of Apple blocked Spotify from iOS or didn't let them sell the apps then I would be saying it's disgusting and they should be stopped, but I'm pretty sure that's not what's happening.
[...]

If you read the article...you would realize that the complain that spotify makes is EXACTLY that apple is abusing the approval process of a new version (without in app sale option) and also demands that the spotify app may not advertise the own product...
That is pretty much "your app is not welcome here" and "how dare you try to convince that your product is good and affordable"
Taking into account that apple does indeed have full control over it's ecosystem and a considerable marketshare this is almost the standard definition of anti-competitive behaviour...

 

[akash.nu]

Wearing Spotify hat:
After initial App download, Apple isn't involved in the Spotify application or delivery of streaming music. Why should they continue to require 30% of each and every months subscription fee? Apple is not involved in the delivery of content. Its not their network or bandwitdh and its no longer using the App store. Why should Spotify be required to continued to pay 30% of every single user's months subscriptions? Especially since with 30% taken off the top by Apple, There is absolutely no way of staying competitive in the streaming industry when Apple's own music streaming service isn't subjected to a 30% and can afford the 9.99 pricepoint

Ermm... Because they're still using the platform to reach out to new and existing customers?! It's more like paying rent for your shop within a shopping mall.

If they were not bothered about that then they can just discontinue the app on the AppStore and existing users will still be able to download the app from the "Purchased" section. But then they will fail to acquire new users.

 

[akash.nu]

I don't know why Spotify is throwing a fit now all of a sudden. The IAP cut going to Apple has remained unchanged since its inception. Apple is now, with iOS 10, throwing a bone to developers to take less of a cut on subscriptions after the first year.

I can appreciate that Spotify is trying to make enough noise to try to cause Apple to change the IAP system to be in their favor, I guess; but if they aren't successful, they just need to remove the IAP option from the Spotify app and call it a day.

I buy Kindle books on my iPhone/iPad a few times a year. Is it a pain to have to launch Safari and purchase a book that way? Yeah, but I do it because I prefer reading e-books on the Kindle platform. If anyone should be throwing a fit about IAP cuts, it's Amazon because their customers have to interact with the Amazon website every...single...time...they want to buy a digital download thanks to Amazon wanting to circumvent giving Apple a cut of IAP revenue. All Spotify has to do is tell people that they have to sign up via their website, the subscription will auto-renew, and the customer can go back to the Spotify app and sign in. How difficult is that?!

By kindle platform do you mean the Kindle device or the iOS app?! Because you can directly buy books on the Kindle devices.

 

[akash.nu]

I wrote this in another thread yesterday, but I think it illustrates why what Apple is doing with Spotify is patently unfair and anti-competitive:

Imagine this:

• A landlord owns a strip mall and leases one store to a store owner that wants to sell widgets, where the store owner has to give the landlord 30% of all sales. The widget factory charges $1.
• Scenario 1: The store owner marks the widgets up to $2.50, where $0.75 (30%) goes to the landlord and $0.75 is net profit to the store owner.
  • This is fine.
• Scenario 2: The landlord opens up his own store right next door to the store owner and sells the same widgets for $1.75. The landlord still makes $0.75 from each widget sold.
  • This is now not fine. It is mathematically impossible for the store owner to compete with the landlord. If the landlord charges less than $1.43 for the widgets, the store owner cannot possibly make money under the circumstances.
  • It doesn't matter to the landlord if the store owner goes out of business. If either the store owner or the landlord make a widget sale, it's all the same to the landlord.
  • By acting as both a store and landlord, he has an unfair advantage. Typically, tenants of malls write language into their leases that prohibit the landlord from doing this. They can do this because there are thousands of commercial areas in the U.S. There are only 2 "digital" commercial areas of any value, and they don't negotiate. Instead, they offer unreasonable contracts of adhesion.

That's a brilliant analogy I must say.

 

[akash.nu]

I'm willing to bet Spotify would be happy hosting their app themselves and having users bypass Apples servers to save Apple the bandwidth, if that would mean they could sell their product without giving away a cut. The problem here is that Apple doesn't allow side loading applications in any way that makes the process usable for end users.

Yes because most users aren't tech savvy and that opens up security issues. Hell, even tech savvy people believe in **** like "copy & paste this **** on your status so that Facebook can't use your image for marketing purposes" BS.

 

[akash.nu]

I believe that Apple is unreasonable. 30% is a very significant cut. I understand that Apple must finance the App Store too, but the flat 30% rate is neither fair nor justified to developers, particularly when they force developers to use this transaction mechanism, and it also punishes oblivious customers who are not aware of this and purchase in the App Store. The 15% reduction after a year is a pitiful compensation and only rubs developers’ noses in it further. It is a dickish policy and Apple should stop doing it.

A business is free to charge any such percentage if one is going to use their platform or service. If you don't like it you can start developing for Android, and By the way, it has been proven that developers make even less money on Android and Google takes a cut of IAP as well.

 

[OtherJesus]

What's next? TV networks sued by makers of products for charging to airing their products ads?

 

[femike]

Spotify should just remove their weblink, simple. I'm sure most Spotify users who want to subscribe have some got brain cells to go to the web to sign up? Whats the problem? Apple has written the requirements, Spotify knows it too.
I prefer to sign up thru the Apple Store because I don't have to give my details to others, Apple takes care of that, and its easy to cancel/renew subscriptions, its all in one place. However, 30% cut is too high for all apps. It should be at most 15%.

 

[D-Dave]

when i go to wallmart to buy something should i be allowed to bypass their markup?

While all those analogys to physical market places are flawed as not being applicable in most aspects to digital market places, this argument is just plain wrong.

As a developer I pay a yearly fee to have my app in the app store...this would be the equivalent of renting space within someones mall / market place and share the advertisement and publicity of the place. (or abstract: I pay a fee to gain the right to offer a product...no matter if the product generates any revenue or not)
So those 30% apple is asking on top of this consist of:
a) a fee for transactions ... which is obviously fair, but usualy amounts to only a range between 1.5% (Direct Credit Card charge) to 3% (Full Service Payment Provider)
b) a share of the sales ... which would amount to something above 25% ... and this something that is not too common outside the world of protection money ... or taxes.

BTW...this whole discussion is greatly off topic as the article is about the approval process being used to shut out an app that has the in-app-purchase option removed...
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Windows has a phone?

Actualy some very good ones but to prove votdfak's point, if you want functionality beyond the core apps it still does not look nearly as good as android or ios...sadly...as I like the dark theme and the general feel and core functionality of mobile windows a lot.

 

[samcraig]

Does Apple demand different terms from it's competitors in the App Store than it asks from apps that it doesn't compete with?

Seems like the answer is "No" to me.

But they do. Dominos, Uber and other brands don't have to pay for purchases made through their app.

 

[Merode]

It's surprising how people are deluded and will accept anything Apple does even if it's not profitable for them. Don't get me wrong - I also use Apple products but Apple is absolutely wrong here.

1. Spotify needs Apple as much as Apple needs Spotify. AppStore wasn't created just to take money from developers but to also encourage them to develop for iOS so people would come to iOS for apps. Both parties benefit from this.
2. It's reasonable that Apple takes cut from every app sold through AppStore. It's even reasonable that Apple takes some cut (although 30% is too much in recurring payments) from subscriptions. Assuming they HANDLE AND TAKE CARE of all payment infrastructure.
3. It's absolutely ridiculous that app cannot advertise reduced prices on its website. It's absolutely ridiculous that app cannot say "Hey, please subscribe on our website".
4. It's ridiculous that Apple can block app updates for reasons from point 3. It's causing losses for their competition and Spotify is right Apple is hurting them by refusing this app update. The reason is - on any other platform you can install whatever app you want outside of AppStore (Mac, Android and so on). iPhone is the only device that requires all apps to be installed via AppStore - it should be possible to download binary and install via iTunes. Of course it means less $$$ for Apple so it will never happen.

Afterthoughts, I would never buy another iPhone if it didn't have Spotify. In my personal opinion Spotify is the best streaming service and Apple Music is still not so good. If I had to find analogy, I'd say Apple Music is Zune and Spotify is iPod. Even if Apple Music becomes as good - why should I switch after using Spotify for years?

Some people are die hard Apple fans and will buy and defend anything made or done by Apple. Of course it's *Mac*Rumors, so there are going to be a lot of them here. I wish these people started thinking and maybe even read whole news before posting.

 

[true god]

Apple's greed has no limits. Sell/destroy your iToys. Go Apple free now!

 

[Col4bin]

Don't worry Spotify, that psychopath Elizabeth Warren's got your back!

 

[brendu]

So Apple should give companies access to their customers, house the infrastructure for apps as well as support for free?

They do for millions of apps already.

 

[mantan]

While all those analogys to physical market places are flawed as not being applicable in most aspects to digital market places, this argument is just plain wrong.

As a developer I pay a yearly fee to have my app in the app store...this would be the equivalent of renting space within someones mall / market place and share the advertisement and publicity of the place. (or abstract: I pay a fee to gain the right to offer a product...no matter if the product generates any revenue or not)
So those 30% apple is asking on top of this consist of:
a) a fee for transactions ... which is obviously fair, but usualy amounts to only a range between 1.5% (Direct Credit Card charge) to 3% (Full Service Payment Provider)
b) a share of the sales ... which would amount to something above 25% ... and this something that is not too common outside the world of protection money ... or taxes.

BTW...this whole discussion is greatly off topic as the article is about the approval process being used to shut out an app that has the in-app-purchase option removed...
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Actualy some very good ones but to prove votdfak's point, if you want functionality beyond the core apps it still does not look nearly as good as android or ios...sadly...as I like the dark theme and the general feel and core functionality of mobile windows a lot.

The protection money reference is spot on. That's what I think of when people have said that Apple decided to reduce the fee for recurring subscriptions from 30% to 15% after 12 months. How generous. It's like the mafia movie guy telling the store clerk they only need to pay $15% for protection when the whole thing is a racket. I think ultimately this is where middle ground could be found. 30% of the initial purchase a short time frame (90 days) and 15% afterward.

Paying 30% for a service fee for recurring subscriptions AFTER the initial sale is ridiculous. Neither the App Store's marketing cost or Apple's overhead make that a reasonable margin in any other business. This is especially true when Apple released a competing streaming music product....that's when things started drifting into unfair business practices.

 

[BaldiMac]

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.

Again. That's $6 billion in revenue, not profit.

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?

I posted numbers. Do you disagree with any of them?

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?

Nobody claims that. I don't claim that. I said that the estimates that I have seen indicate single digit profit margin for the entire iTunes Store. I can't immediately find the reports that I've read. Some are probably paywalled.

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.

1. It is well known that credit card companies charge 2-2.5% per transaction give or take. Hence the $400-500 million.
2. Data Centers:
Apple To Build $1 Billion Data Center In Reno
Apple to Invest €1.7 Billion in New European Data Centres
Maiden, NC now home to $1 billion Apple data center

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

Apple's effective tax rate is around 25%. It's part of their financial statements.

I have now provided numbers and sources. Can you admit that you were wrong?

 

[samcraig]

Apple's effective tax rate is around 25%. It's part of their financial statements.

I have now provided numbers and sources. Can you admit that you were wrong?

But that's not the full story. Perhaps in the US - but of their overall revenue? http://thinkprogress.org/economy/2015/12/21/3734218/apple-taxes-tim-cook/