Spotify Files Complaint Against Apple With European Regulators Over 'Unfair' App Store Practices

[Abazigal]

It seems only in USA Apple Music have a noticeable market,and that's because in US iPhones are generally more popular and Apple promote such services more.
still I don't have the exact statics but i doubt even in US,Apple Music has more subscribers than Spotify.

Well, we have this article to go by.

https://9to5mac.com/2018/07/06/apple-music-spotify-subscribers/

Key word is “paid subscribers” though.

 

[Ries]

Spotify made the choice to ask apple to handle a subscription - Spotify could ask their customers to pay outside of apple store and then log in using the app - that's what i do with other subscriptions.
When we make a purchase at amazing, it's not using apple to make the purchase - Match dot com offers discounts if you pay at their website and then we can log in via the app.

It's time for spotify to educate their staff so that they can educate their customers. Besides, everyone receives a cut for apps and services - just because stores have turned to virtual stores doesn't mean stores shouldn't make money. If a customer goes to best buy, do people really feel that Best Buy is not making money on software and services?

You are not allowed to offer any other means for buying digital goods then Apples in app purchase.

You can offer user to buy credits/subscription via your site only, but then you may not redirect the user to this page from you app. There should not be any option within the app that allows to user to buy digital goods via your website.

Doing that will get your app rejected.
[doublepost=1552511838][/doublepost]

Why is their behavior suspect? They have been consistent with their policy since subscriptions were created. They take a 30% from everyone no matter who you are. Apple has actually sweetened the deal since subscriptions were launched since they now cut their cut in half after year 1.

You're selling oranges in my market place and pay me 30% of your sales. Now suddenly I decide, hey, I'll sell oranges too. You think you have any chance against me?

 

[sidewinder3000]

Apple Music is great unless you actually have an offline itunes library with thousands and thousands of songs. Then it becomes a cluster**** of confusion. Spotify for the win.

How does Spotify reconcile your offline iTunes library?

 

[Baymowe335]

Spotify should quit crying and remember they are using Apple's dominance to reach more customers. If they are serious, they can pull their app.

Apple knows Spotify needs them, so they charge them for that.

Apple's Music service is a hobby and has over 50M subscribers and launched 7 years after Spotify. Sure, Spotify has more, but Spotify has nothing else. I'd tread lightly if I'm Spotify.

 

[mrow]

You're selling oranges in my market place and pay me 30% of your sales. Now suddenly I decide, hey, I'll sell oranges too. You think you have any chance against me?

How is that any different from Amazon or a grocery store selling their own brand products that compete with third party products?

To quote what someone else said on another message board about this same thing:

In another life I launched a national grocery item. The grocers, who "owned the platform", often charged slotting fees to brands like myself in order to get a spot on the shelves. They did not charge themselves this fee for their own in-house brands. Is that fair? Should non-in-house brands sue? Are we entitled to use their shelf space to sell our products to consumers?

 

[sidewinder3000]

Apple Music is superior on iOS, but Spotify still has a ton of better features.

Can you be more specific about those features?

 

[mrow]

How does Spotify reconcile your offline iTunes library?

I don’t know what this guy is going on about. I’ve got 14 years of iTunes library content that lives seamlessly with my Apple Music content.

 

[PlayUltimate]

You are not allowed to offer any other means for buying digital goods then Apples in app purchase.

You can offer user to buy credits/subscription via your site only, but then you may not redirect the user to this page from you app. There should not be any option within the app that allows to user to buy digital goods via your website.

Doing that will get your app rejected.
[doublepost=1552511838][/doublepost]

You're selling oranges in my market place and pay me 30% of your sales. Now suddenly I decide, hey, I'll sell oranges too. You think you have any chance against me?

Grocery stores (generics), Amazon Basics, Generic Drugs. . . . the competition you are speaking of happens ALL the time.

Further, if I was a retailer, why would I allow anyone to advertise, at my store, a different place to make the sale? The redirect is exactly that. . . it is the wholesaler telling the consumer to buy the product elsewhere. No retailer would nor should agree to that.

 

[sidewinder3000]

Apple charging the same percentage for one-time purchase and continual subscription based software models is unfair. If it can be proven that Apple created an advantage over competitor subscription pricing by the Apple payment collection system in the App Store, then I would believe it helps out many others and not just Spotify. I would believe that if sales of the subscription were limited or eliminated because of Apple's choice to only allow them through the App Store and not via the app, then this is a great argument. Especially, if it can be proven that this created an anti-competitive software model on the platform. I believe Apple has an argument about Qualcomm creating an anti-competitive pricing model for licensing and/or purchasing their technology. /s

Apple doesn’t charge the same for one-time and subscriptions. Subscriptions pay 30% the first year, and 15% every year after.
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I don’t know what this guy is going on about. I’ve got 14 years of iTunes library content that lives seamlessly with my Apple Music content.

Me too! That’s a keybreason I use AM.

I love when people blame companies for their own tech illiteracy.

 

[Abazigal]

Between Apple and Spotify, I would rather the market belong the Apple, for the simple reason that Spotify makes a poor gatekeeper. The rates they pay artists are downright abysmal, and they clearly have no interests in improving the status quo.

https://www.musicbusinessworldwide....al-against-royalty-rise-in-the-united-states/

https://twitter.com/zcichy/status/1105836659667554304
https://twitter.com/zcichy/status/1105838302446280705
https://twitter.com/zcichy/status/1105839558006992896
https://twitter.com/zcichy/status/1105850691346526210

And now they want to centralise podcasts and put it behind a paywall, as compared to Apple where it’s freely accessible to anyone?

Maybe music streaming services will never become profitable, and perhaps that’s for the best. Spotify is not the angel they are trying to portray themselves in the media as.

 

[dwaite]

Apple has nearly a monopoly on U.S. smartphone revenue (including actual purchases on Apps made by U.S. folks). Is there really anywhere for U.S. smartphone app developers to go other than iOS? I do think this is a real issue and I suspect it is getting worse as U.S. becomes even more entrenched in the iOS ecosystem.

I mean, they could go to Android - except Google Play charges the same percentage. So I don't see how apple having a monopoly of a made up vertical (US smartphone app purchase revenue) matters when the competitors have the same policy.

 

[dona83]

Apple wants commission for sales. Seems fair. I give my existing clients discounts of up to 20% for a year if they refer new clients to me, because for me to go out and get new clients costs about that if not more.

 

[whoisyourdaddy]

Apple doesn’t charge the same for one-time and subscriptions. Subscriptions pay 30% the first year, and 15% every year after.

Thanks for the correction. I never checked to determine if it was ever changed. I was aware that the percentage is the same, at least in the beginning. So, it's just the first year of the subscription based model and then the reduction. I suppose this is an incentive and deterrence. However, 15% of subscriptions does still seem a bit higher than I would expect. Although, this only accounts for a percentage of those subscribing who keep it into the 13th month and beyond. End your subscription, start another one at a later date, and I'm curious as to if this restarts the cycle which allows Apple to charge 30% again for another year. Multiply this by millions of users who start up and cancel subscriptions, then this can be quite a bit of revenue gained. This could perpetually grow to more than just the 30% for 12 months. The other problem not being addressed is the lack of developers being able to offer trials, promotional discounts for a period of time, and alternative means to easily pay for the subscription through the app. Developers can easily implement the ability for users to subscribe through the app and not the App Store. However, Apple will not allow this feature. I understand the position of Apple losing revenue from developers by curtailing it. But, it could be based upon gross usage of the platform and value to the developer. If the reasoning behind the percentage of sales is for payment processing and it is much more difficult on an Apple platform than others, then it unfairly causes user difficulty in having a choice which inhibits fair competition. Are AM subscribers being prohibited in the same manner on the other platforms it's launching on such as Google Home and Amazon Fire? Do you know if the 30% charge for in-app subscriptions is just for payment processing? I believe the complaint is not just by Spotify if you search around for other related news articles. They, above others, most likely had the resources to pursue it.

 

[Rogifan]

If Apple took a 30% cut of every (non digital) transaction made on an iOS app they wouldn't have anybody on the platform.

I’m not saying every transaction. But Uber and Lyft wouldn’t exist without the smartphone. Can the same be said about Spotify?

 

[philosopherdog]

Spotify has filed a complaint against Apple with the European Commission, accusing the iPhone maker of enforcing App Store rules that "purposely limit choice and stifle innovation at the expense of the user experience" and "acting as both a player and referee to deliberately disadvantage other app developers."

In a blog post, Spotify founder and CEO Daniel Ek took particular issue with Apple charging a 30 percent "tax" on App Store purchases. This results in Spotify charging existing subscribers $12.99 per month for its Premium plan via the App Store just to collect nearly the $9.99 per month it charges normally.

Ek believes this gives Apple an "unfair advantage," since Spotify is unable to fairly compete with Apple Music's standard $9.99 per month price within the App Store. This is a big deal given there are over a billion active iOS devices.

As an alternative, if Spotify chooses not to collect payments via the App Store, Ek notes that Apple "applies a series of technical and experience-limiting restrictions" on the company. Over time, this has also included "locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch."

Ek stresses that this is "not a Spotify-versus-Apple issue" and simply about seeking "the same fair rules for companies young and old, large and small."

Apps like Uber and Deliveroo, for example, are allowed to collect payments directly from customers since they offer "goods or services that will be consumed outside of the app," according to Apple's App Store guidelines. Unlike Spotify, this allows these apps to bypass Apple's 30 percent commission.

Ek summarized what he is asking for into three points:"First, apps should be able to compete fairly on the merits, and not based on who owns the App Store. We should all be subject to the same fair set of rules and restrictions--including Apple Music."
"Second, consumers should have a real choice of payment systems, and not be 'locked in' or forced to use systems with discriminatory tariffs such as Apple's."
"Finally, app stores should not be allowed to control the communications between services and users, including placing unfair restrictions on marketing and promotions that benefit consumers."Ek notes that Spotify tried "unsuccessfully" to resolve the issues directly with Apple, leading to its carefully considered complaint with the European Commission. Spotify is based in Stockholm, Sweden.

Spotify has launched a "Time To Play Fair" website and shared a companion video to inform customers about its complaint.

Article Link: Spotify Files Complaint Against Apple With European Regulators Over 'Unfair' App Store Practices

[doublepost=1552520785][/doublepost]so apple should just spend billions developing a thriving platform and then let companies that rip off artists just take all the cash and run! apple should be able to control their platform. they created the thing. spotify should shut the hell up and pay 30% and be happy they can access a billion customers. running an ad campaign to try to muck rake against apple im sure is not going to help their cause in the least. companies like amazon and spotify are the worst. 30% is more than fair.

 

[macfacts]

I'm dreaming of a future where apple is broken up. One company to sell hardware, the other to do services.
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Apple created the platform, so I do agree they deserve something from Spotify leveraging that platform.

There should not be any "restrictions" placed on Spotify, based on where people subscribe.

I do agree 30% is too high, even if it's only the first year.

Spotify isn't even arguing that 30% is too high. They just pass it on to the user. If you subscribe to Spotify thru apple, you (the user) are paying more than you would have if you signed up in safari at spotify's web site.

https://amp.thisisinsider.com/why-s...ition-complaint-about-apple-not-google-2019-3

 

[Madmic23]

The difference is Apple seem to make a distinction between payments for digital content / subscriptions vs physical goods / services as far as the in app purchase fee is concerned. Uber and Amazon apps provide physical products / services and so these don't count as "in app purchases" and so there is no requirement to pay the 30% whereas the kindle app and spotify are providing digital content which Apple does class as an In App Purchase and so these would get hit by the 30% fee. This is why amazon choose not to let you purchase books through the Kindle app to avoid this but instead make you purchase via the amazon web site and then download that purchase in the app.

I understand the distinction the rule makes between the two, but I don’t agree that it makes sense. If I purchase a Kindle book, or a Spotify subscription, I’m not limited to using those purchases on an Apple device. I could use an actual Kindle, an Android phone, a smart speaker, etc. The distinction should be for things that are actually stored on Apples servers.

 

[macfacts]

Between Apple and Spotify, I would rather the market belong the Apple, for the simple reason that Spotify makes a poor gatekeeper. The rates they pay artists are downright abysmal, and they clearly have no interests in improving the status quo.

https://www.musicbusinessworldwide....al-against-royalty-rise-in-the-united-states/
...

Your link says the Copyright Royalty Board (CRB) sets the rates streaming companies pay artists. How are Spotify's payments "down right abysmal" when apple currently pays the same rate set by the CRB.

 

[Abazigal]

Your link says the Copyright Royalty Board (CRB) sets the rates streaming companies pay artists. How are Spotify's payments "down right abysmal" when apple currently pays the same rate set by the CRB.

Apple Music plays a better rate than spotify ($.0064 vs $.0038), and is currently the only company not contesting a proposal to increase music streaming payout rates.

https://9to5mac.com/2019/03/07/streaming-apple-music-songwriter-change/amp/

Spotify is not the ‘David’ in this tale of woe. Neither are angels but I still find myself inclined to support Apple because I don’t see Spotify ever being in a position to fight for artistes’ rights the same way Apple (still) might.

 

[Dahl]

I personally find Spotify much better than AM. AM is fine if your into rap and hip hop perhaps, but I find music discovery with AM to be terrible. Although I have a subscription to AM, I find I still go back to Spotify for 95% of my music. Siri on HomePod can never find music on AM that I ask for, even though I know its in my AM library. So, I return to Spotify, and stream it to the HomePod.

I hope Spotify wins this case.


YMMV

I'm the opposite. I'm not a hip hop or rap fan and maybe Apple Music features that a bit too much, but that's what is popular.

The "For You" section on Apple Music is brilliant, so good that I rarely use Spotify anymore. I consider myself an advanced music fan and the number of new (and old overlooked) artists Apple is finding for me based on my listenings habits are outstanding. Apple Music also has a larger catalog, something that shows when you go deep in your music exploration. I do wish Apple Music was a bit more social though, both Ping and Connect were never promoted enough.

 

[msp3]

Yes, because Spotify is such a model of honest business practices like cheating musicians and paying those not cheated next to nothing while it rakes in millions- oh wait...

 

[Abazigal]

Yes, because Spotify is such a model of honest business practices like cheating musicians and paying those not cheated next to nothing while it rakes in millions- oh wait...

To be fair, Spotify still isn’t profitable.

Maybe that’s just the natural order of things. Streaming music as a business model may never be profitable, and Spotify is destined to either go out of business or (more likely) either merge with Netflix or be acquired by another company like Microsoft or Amazon.

 

[341328]

The App Store is barely 5% of Apple revenues, and Apple was around and successful well before the App Store existed. And there are also tens of thousands of people working at Apple are at least partially responsible for making the App Store a reality.

So no, developers are not the ones who made Apple what they are today.

The iPhone accounts for MOST of Apple's revenue... and developers helped iOS considerably.

 

[Gasu E.]

You’re right, Apple doesn’t allow other stores. Apple also doesn’t have a monopoly on smart phones. If Spotify doesn’t like Apple’s terms they can refuse to support Apple’s platforms and say you must use Android to access our service.

Duopolies (in this case iOS and Android app stores) certainly are subject to anti-trust laws. Duopolies can very easily exhibit monopolistic behavior.
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Point is, Apple has absolutely zero incentive to agree to those terms. They are the ones who hold the power in this relationship, not Netflix or Spotify.

Well, now, apparently the EU holds even more power than Apple in this relationship.

 

[DeepIn2U]

Apple should allow subscriptions purchased within the app - not using Apple's payment infrastructure

Or,

Allow devs to give a link within their App to the subscription web page.

Let the consumer decide.

Better still allow iOS users to CHOOSE Apple Music, Spotify, or a competitor to be he default music player ...you know like they once did with Microsoft a Internet Explorer back in early OS X days when they still shipped Netscape and Jobs stayed Apple believed in “choice”. That worked perfectly since Netscape died but the Gecko engine lives on and Safari was born. OS X allows for Chrome or Firefox to be the default browser. Should Spotify try something shady then they can pull it or disable it.