Spotify Executive Justifies Antitrust Pressure on Apple and Calls for Other App Store Payment Providers

[Rogifan]

You never went through why you think reader app category undermines Apple’s position ... rather than Spotify’s/Epic’s.

It undermines Apple’s position because it says eh we don’t actually need the 30% after all. Or worse if you’re big and powerful enough you can get away with not having to pay it. It undermines Tim Cook’s assertion that all developers are treated the same. It doesn’t undermine Spotify’s position if they’re speaking on behalf of developers and the principle in general and not themselves specifically.

 

[crazy dave]

It undermines Apple’s position because it says eh we don’t actually need the 30% after all. Or worse if you’re big and powerful enough you can get away with not having to pay it. It undermines Tim Cook’s assertion that all developers are treated the same. It doesn’t undermine Spotify’s position if they’re speaking on behalf of developers and the principle in general and not themselves specifically.

Funny, I would allege it proves the exact opposite of everything you just said. Here's why: All developers are treated the same under these rules - the principle that Apple follows is that if a customer doesn't spend money through the app and/or the service/item purchased doesn't involve the device, Apple doesn't get a cut.

Further it is Spotify's and Epic's position, not Apple's, that Apple is trying to squeeze 30% out of every developer and that this makes them abusive. In fact, Apple allows customers to spend money elsewhere and use it on their platform. You're right, they could be more restrictive and forbid this or charge developers to allow this - as Epic games admitted that some platforms do! However, the only requirement Apple makes to enable this is that you don't advertise or directly link to your own store. That's it. Since, by your own admission, Apple is not interested in squeezing out every 30% they can get, it undermines their argument that Apple is abusing their position to do so - especially relative to the rest of market place where Spotify and Epic already do business. Spotify and Epic don't want their own customers to be forbidden from accessing their purchases from elsewhere, they want Apple to allow their customers to do that AND for themselves to keep all the money from IAP. That's not speaking on behalf of all developers. I mean c'mon. Oh and in the case of Epic, they fully admitted that they absolutely would've taken a deal to benefit solely themselves which Apple didn't give them and that this about getting their store on iOS devices.

 

[bollman]

Funny, I would allege it proves the exact opposite of everything you just said. Here's why: All developers are treated the same under these rules - the principle that Apple follows is that if a customer doesn't spend money through the app and/or the service/item purchased doesn't involve the device, Apple doesn't get a cut.

That would probably hold, unless there are exceptions...

Why Amazon got out of the Apple App Store tax, and why other developers won’t

It’s leverage. The reason is leverage.

www.theverge.com

It is extremely difficult to side with Apple here since they move the goalposts all the time to make it look like they treat everyone the same, even if it's way too obvious they don't.

 

[crazy dave]

That would probably hold, unless there are exceptions...

Why Amazon got out of the Apple App Store tax, and why other developers won’t

It’s leverage. The reason is leverage.

www.theverge.com

It is extremely difficult to side with Apple here since they move the goalposts all the time to make it look like they treat everyone the same, even if it's way too obvious they don't.

Now *that* is a much better example of Apple not following its own principles when the competitor has leverage over Apple. As the article notes, it’s a smaller chink in the armor than it appears at first glance but I agree that it is one nonetheless. It is also probably exactly the deal Epic would’ve taken if they had been offered it. Which is why Sweeney was so salty. Nor did Spotify have any problems accepting a sweetheart deal from Sony for the PlayStation. To use your own emoji back at you: Fighting for all developers equally indeed. It’s hard to side with Spotify or Epic when they keep moving the goalposts of what’s acceptable. 😉

EDIT: And the main point still holds ... that reader and multi-platform apps and even exceptions like this are not exactly proof that Apple’s practices are *abusive* to their customers and developers. It’s hard to say that Apple not taking 30% every chance they get is proof that taking it when they do is abuse of their position. However this particular example does undercut that Apple treats everyone the same and would be ripe for regulation to come into play. But fundamentally what Spotify and Epic are asking for goes well beyond that and most definitely isn’t fairness amongst developers. Rather it is for Apple - not any console maker mind you (especially not ones they’ve inked deals for themselves with!) - be forbidden from running a walled garden and get a cut from purchases and IAP with no explanation as to why Apple and not console makers has to be so singled out.

 

[bookofxero]

I think the issue is, if a user subscribes to Spotify outside of the App Store they get the full $10 a month. If a user subscribes to Spotify within the App Store, Spotify only gets $7 a month while apple gets $3. If Spotify says "cost within App Store is $13 a month but cost when subscribing on our website $10 a month, they will get fined by apple. Which actually makes Apple Music cheaper than Spotify.

I could be mistaken, but Spotify's argument is the same as if a name brand OTC medication manufacturer were to complain that the store brand is not only less expensive, but also invites consumers to compare the ingredients.

 

[LiquidJay]

I do want alternatives. Why can’t we have choices?

but is an iPhone the only choice? I really do see the point of the argument ...but just get another phone. China/Huawei is developing their own OS also

 

[LiquidJay]

Hate Spotify all you want but he’s not wrong. Allow other payment options and then let Apple prove why 30% or 15% is justified. And no one can bring up privacy or security because Apple’s IAP only applies to digital goods. I can buy all kinds of physical goods in-app not using Apple’s IAP. I can also buy all kinds of physical and digital goods via the browser which also doesn’t use Apple’s IAP. Plus Apple created the reader app category so certain digital goods wouldn’t have to offer in-app purchasing using Apple’s payment system.

In the beginning of the App Store it was easier to argue Apple is brining customers to developers. Can we really say that now? Name the last non-Apple app you downloaded and use on a regular basis because of Apple promotion/marketing. Or that can only exist because of specific Apple technology. I can’t think of one. Also in 2008 Steve Jobs said the following about the App Store in a WSJ interview. Clearly Jobs wasn’t expecting the App Store to be a big profit center. That all changed with Cook and Schiller and once Apple’s hardware sales growth started to slow making the App Store (aka services) a big profit center was the goal.

View attachment 1785205

It is a fair argument....sorta. My one counter would be WHY companies target Apple so much, which is minority market share? It's not said but we all know it. Why do many companies covet the Apple customer? What is it about "them"? With that said ... the 30% is justified IMO.

Answer: They/We have $$$$. Curious why the obvious isn't stated in the media

If I bought a $1300 phone I guess I would want a piece of that action too lol

 

[Marshall73]

If Spotify can’t keep user data secure (hundreds of thousands of users data exposed in multiple breaches in 2020 alone) then why should they demand we trust them with it?

 

[Kyanar]

Serious question: is what he saying true, because I don’t remember it that way. I thought when the App Store launched, you had to use Apple’s payment. I know rules were created down the road to stop cross-promotion, but the fundamental was the same.

But maybe I have forgotten.

You have. The App Store launched in 2008, In-App Purchases were introduced in 2009 (at least for free apps - I cannot remember if paid apps supported IAP from day dot).

 

[Nuno Lopes]

I absolutely do not want other payment options in apps. I don’t want to give my payment info to every app under the sun and risk potential data leaks where my credit card number gets stolen. I trust Apple to keep my payment info secure.

Don’t understand your argument if for instance by default Apple Pay is required. It just a matter of you using Apple Pay / App Store Payments and who prefer otherwise go for other options … in the apps of their choice.

 

[Nuno Lopes]

It seems that everyone wants to skip over the fact that the underlying premise is false. Apple does NOT have a monopoly in any pre-apple definition of the term. There are many alternatives, Android being the most obvious and even larger market share than iOS/Apple.

I think you are skipping the fact that is not an alternative presented to Spotify but smartphone users. On the other hand, the relationship between preferring to buy an iPhone and preferring Apple Pay / App Store payment is thin if any.

 

[joecomo]

Speaking of Spotify - does the Apple Watch Offline functionality work for anyone on this forum?

I am beyond the App version that supports it officially - but I just don't get the
option to download anything to the watch.
Do they really have this feature?
Their website says nothing about it.

 

[Nuno Lopes]

One again, Spotify, Fortnight/Epic, ... don't have to be on iOS. There are literally billions of other devices out there on which to build a business.

They have to be where their customers are in the devices their customers prefer to use. Not doing this, would leave the door open to further competition attacks, especially in markets where iOS devices have 50% marketshare. As any, their choices are funneled by competition.

Now what you seam to be arguing is for practice where by choosing a device one choose digital services because of one reason or another … not against that. Still iOS as macOS where not presented to the market with such a premiss. Quite the opposite it was about getting the most apps / digital services out to the iPhone user. No only bring value to users, but to Apple devices as well as devs. Steve jobs presented the 30% markup the cost of running the App Store, meaning it was a cost centric markup no a profit centric.

 

[arobert3434]

I’m not sure I understand Spotify’s logic in that if other payment systems exist then still Apple will charge a cut on sales for access to the App Store much like you go to a clothing shop and the retailer has its cut. So might even end up being 30% cut plus Amex fees on top 🤣

Exactly. People complain about a 30% markup on apps at Apple yet happily pay 50% or what have you when buying other retail products. It's not about the payment processing (Amex already gets its cut if you set that as your Apple ID payment method), it's about the store the product is being sold in. I think the complainers' arguments would go a lot further if they focused on this angle (does this "store" really extend into the app itself or does it end after the download).

 

[SurferPup]

I absolutely do not want other payment options in apps. I don’t want to give my payment info to every app under the sun and risk potential data leaks where my credit card number gets stolen. I trust Apple to keep my payment info secure.

Well said. Exactly what I was thinking before I read your comment and I agree. I trust Apple inexplicably.

 

[bastoshaq]

Here we go again - for me the issue is not the 30%. Forget about that. Apple has to be paid for what it provides.
If Apple were to change the model and make IAP free, they would probably change their model to be something like "per X thousand IAPs, the publisher must pay Apple Y and if failure to pay, IAPs will stop".

The 30% is a representation of what Apple offers - the ability to quickly download an app into the pockets of a lot of people which could change a business really. So it makes sense that Apple gets something for it.

They already offer a "free" service/app as along as you do not use IAP.

Maybe the model needs to change but to think that these companies can get away with a free lunch is a bit naive IMO.

EDIT: typo in the "for me the issue is not the 30%"

 

[ReddJive]

Spotify makes a very strong argument here. Users should have a choice on payment methods.

If Android didn't exist, this would be a clear cut antitrust violation. But Android does, so it's not so clear cut, but the argument should be discussed and perhaps a Judge should rule on it.

No they really aren't making a strong argument. They significantly benefit under Apple's model. They are the number one music provider. If Android didn't exist another developer would have filled that gap. Besides how Apple manages the App Store is no different than how Google and Samsung manages theirs.

Plenty of competition out there.

 

[Unregistered 4U]

probably exactly the deal Epic would’ve taken if they had been offered it.

No, Epic’s end goal is to be able to have their own AppStore on Apple devices. Then, use that as a precedent to force their way onto other devices. They see a future where more and more big name applications are being distributed like Playstation’s App Store and the Xbox Store, Google’s store, Valve’s Steam and all of this means less of an opportunity for the Epic Store to exist.

 

[krewger]

Nothing stops users from paying Spotify directly. I have done so for years.

 

[I7guy]

But not all digital goods consumed on device.

Doesn't matter.

I can’t buy Kindle books in-app. I can’t sign up for Spotify or Netflix in-app.

Whether or not you can sign-up for a Netflix subscription in-app is a dev decision. Not an Aple decision.

And is Uber really a physical good? I’m not buying a car I’m buying a ride in one.

The ultimate use case is a physical ride. Just like airplane tickets.

Can one really say Apple is responsible for Spotify’s success but not Uber’s?

Apple wasn't responsible for Uber's success?

 

[Rogifan]

Whether or not you can sign-up for a Netflix subscription in-app is a dev decision. Not an Aple decision.

Apple created the reader app category specifically so a developer like Netflix could get around offering IAP. But why don’t they allow any app in this category? Why is it limited to specific types of apps? Tim Cook claims Apple treats all developers the same yet that’s clearly not the case.

The ultimate use case is a physical ride. Just like airplane tickets.

Apple wasn't responsible for Uber's success?

You can’t compare Uber to buying plane tickets. Uber didn’t exist before the smartphone and having GPS in your pocket. Like I said if Apple thought they could get away with taking a cut of every Uber ride booked they would. Heck Eddy Cue said Uber wouldn’t exist without Apple’s platform.

 

[I7guy]

Apple created the reader app category specifically so a developer like Netflix could get around offering IAP. But why don’t they allow any app in this category? Why is it limited to specific types of apps? Tim Cook claims Apple treats all developers the same yet that’s clearly not the case.

Business grow and evolve. The IOS platform has to move foward. IOS has to move forward, icloud has to move forward, the ios app store has to move forward. Apple treats all developers the same, taken at a black and white statement with no shades of grey of course it isn't true. You're biggest customers always get some special treatment, I don't know any business that doesn't work like that.

That doesn't mean all devs don't get to plead a case to do something specific.

You can’t compare Uber to buying plane tickets.

Absolutely can. In both cases rides are bought.

Uber didn’t exist before the smartphone and having GPS in your pocket. Like I said if Apple thought they could get away with taking a cut of every Uber ride booked they would. Heck Eddy Cue said Uber wouldn’t exist without Apple’s platform.

Ok. That's his take. I think we agree, that Apple in part is responsible for Ubers success.

View attachment 1785710

 

[PC_tech]

I absolutely do not want other payment options in apps. I don’t want to give my payment info to every app under the sun and risk potential data leaks where my credit card number gets stolen. I trust Apple to keep my payment info secure.

So you can't trust PayPal, MC, Visa etc? 🙄

 

[Krizoitz]

Tim Cook claims Apple treats all developers the same yet that’s clearly not the case.

Any developer can make an app that fits the category. So yes, it is the case.

 

[MacAddict1978]

This line of reasoning is much better than what Epic is spouting. Spotify is arguing for different payment systems on the App Store whereas Epic is essentially arguing for multiple app stores.

However, since you can no longer subscribe to Spotify through an in-app purchase (and haven't been able to for years), Spotify isn't paying the 15% commission on most Spotify users on iOS.

Spotify just wants it to be easier to have more paying iOS users without having to pay Apple anything to use the ecosystem.

Their argument is beyond valid.

Forget the developer.... Apple's screw up (and Googles for following suit) is saying, "you can't take your own payments for YOUR subscription if it's done on our hardware" The percentage is irrelevant.

It creates a horrible user experience or causes someone to charge IOS users more or take a loss on IOS users in order to compete. NONE of this happened until Apple launched their own music subscription service. They also make exceptions based upon the vendor. Macy's app? I can use any credit card I wish and pay and Macy's doesn't pay a fee to Apple. Why? Apple needs these types of apps and a large variety of others or no one would use IOS because it would be a hamstrung platform, but others they hamstring the developer.

The easiest solution is to simple change the model and to one regulators will accept (because Apple is getting a beat down globally).

1. Allow an app developer to take direct payments or use Apple's payment service
   1. Align the fee you charge to be in a world o reality... like the 5% that is charged by everyone but Apple/Google
2. Charge a reasonable fee to a developer for hosting on the app store. (X cents per download, X dollars for initial submission)

There are lots of things they good do that aren't anticompetitive and recoup operational costs plus some profit that follow standard business practices for merchants, goods, resale, etc. that have existed for 50+ years.

It's irritating as hell when you are in the Amazon app and want to buy a book but can't because that category is ruled by Apple because they also sell books and Amazon can't sell you that book unless they literally give the entire profit margin to Apple so they force you to use the Amazon website to purchase instead, which you can do on an i-device. But why should I have to?

Where they are most anticompetitive is where they have competing services. Their current format basically lets them not compete and profit as well as if they sold the item themselves, or they profit the same if a user uses the Apple service instead (movies, music, books, magazines, news, podcasts).

Steam is always an argument. Hosting and facilitating 50GB downloads and massive game updates plus server traffic is very different than hosting mostly small apps with mostly small update sizes that a developer is paying to host in a third party cloud outside of Apple than Steam or similar services.

It's not a matter of Epic or Spotify or whoever.... its the overarching business practices that only appholes defend as they tune out endless leaked emails from Apple executives conspiring to create what are the very definition of monopolist practices. This 11th hour small developer reduction in fees was just called out by a Federal Judge as BS and only done in response to global litigation and antitrust scrutiny which I applaud, because that's all it is.