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

[mrow]

There is only one app store people can use with the iPhone though. The 30% fee seemed justifiable up until the point they released a product at a price that was literally their competitor's price minus the app store fee. Contrast this to supermarkets, where they purchase product from vendors and then mark it up for a profit. It is not anti-competitive for supermarkets to have generics, because a) there are other supermarkets to buy food from, and b) they are purchasing the product from vendors in the first place and thus taking on risk.

The other supermarkets in your analogy would be other platforms, like Android, not other app stores. A manufacturer can refuse to sell their products to a supermarket because the supermarket demands too low of a wholesale price. And a supermarket can say we’re only going to sell your products if we can’t get this amount of commission, take it or leave it. In your supermarket analogy what Spotify is saying is ‘we went to sell our products in your super market, but we don’t want to pay you anything for the privilege. We think we should be allowed to force your supermarket to allow us to set up our own booth inside your super market and then give you nothing. And if we can’t set up our own booth, we should at least be allowed to post signs in your supermarket saying don’t buy our products here for a markup, by them directly from us for a discount. ‘

 

[YaBe]

There is an easy fix for Spotify. Make their app available in their own App Store that they run and develop.

May be they would, if Apple allowed it.... but as far as I am ware no other store is avaiable on iOS....

So unless Apple allows you to run your OWN store inside the iOS ecosystem, you do not have a point...

 

[dumastudetto]

As you stated that is your opinion, but as a person who lives in the Apple eco-system I can tell you, in my opinion, Spotify is far superior. Living in SoCal I know many people in the music industry and they prefer Spotify. Apple couldn't curate a decent playlist without a bunch of corproate garbage. Apple Music is bloated with endless crap. I hop on Spotify I get great curated playlist and I create my own. In most cases, too much is too intrusive.

Correct - people can obviously disagree with me, but I hope most loyal Apple fans share similar sentiments to mine.

 

[KrispE00]

Spotify is the better product and experience. Apple is crippling the iPhone experience (preventing Siri integration etc) to keep Apple Music in the game.

Without an upload/match feature, Spotify can’t even be considered in the same league as Apple Music.

 

[Ries]

They’re not unfair practices. They own the store - they make the rules.

And yes, Spotify IS whining. Daniel Ek is the biggest whiner in tech, besides Linus Torvalds.

Microsoft own their OS, they make the rules, if they want to ban mac stuff they should be allowed to. Try asking them how just bundling internet explorer went for them.

 

[jonnyb098]

I can see it only being a matter of time that Apple are forced, kicking and screaming to allow people to download apps from other stores.
Be it next year, in 5 years, in 20 years. I'm sure it will happen.

And if that happens, you would then have tons of rogue apps that Apple has ZERO way of vetting for security, compatibility, etc etc. Theres a reason the iPhone and Apple are huge. Yes they tightly control things but that control leads to a far superior product for THE AVERAGE CONSUMER (spare me the android geekery please).

 

[whoisyourdaddy]

I hope most loyal Apple fans share similar sentiments to mine.

This thought process is pathetic but you've got plenty of company on this and similar forums.

 

[ColdShadow]

Of course, the Apple store is rigged. But Tim Apple owns the hardware, the OS, the content and the infrastructure. He calls the shots. If you don't like it go someplace else. Oh right.

All true,except that over confident,fanboyish “oh right” part..you forgot how many android devices are out there the flagship premium obes specially are kicking new iPhones ass and that Spotify is actually more used than Apple Music.

 

[Heineken]

Spotify has more paid subscribers than Apple Music. This is a well known fact.

If Apple were to cancel all subscription payments paid via the App Store, they would be open to class action lawsuits and a host of other legal issues.

Spotify has a point here.
Apple is not only the owner of the App Store, they are also a competitor offering the exact same type of service.
Having a built in 30% “fee” is the epitome of an unfair advantage.
They are simply acting as a card processor in the transaction. The average processing fee is 5% or less literally everywhere else.
That would be fair.

App Store gave Spotify a way to reach millions of customer. How the **** is it unfair?

 

[eveluvsrainbows]

They’re not unfair practices. They own the store - they make the rules.

And yes, Spotify IS whining. Daniel Ek is the biggest whiner in tech, besides Linus Torvalds.

They might make the rules but they're BS. Apple's more than big enough now to where they shouldn't be allowed to still make money on an app that was first published in the Store almost a decade ago. Uber and Deliveroo are exempt from this (as stated in Ek's blog post), so why shouldn't others?

 

[oneMadRssn]

Not to mention that ONE of the primary reasons Apple created the app store to begin with was to be able to control the experience for the purposes of security, elimination of viruses and evilness, etc.

But they're not even that good at this ...

https://www.macrumors.com/2019/02/06/iphone-apps-screen-recordings-analytics/

https://www.macrumors.com/2019/02/12/adult-gambling-apps-abuse-apple-enterprise-program/

https://www.macrumors.com/2019/02/22/ios-apps-sending-private-data-to-facebook/

If Apple isn't succeeding at one of the primary reasons for having created the app store, what's the point of punishing consumers through all this anticompetitive behavior?

 

[gnipgnop]

The other supermarkets in your analogy would be other platforms, like Android.

I'm not sure supermarkets are really the equivalent of a platform due to the fact that customers typically have the choice of more than one supermarket to shop within. The town that you live in is probably closer to being a platform than the individual brick/mortar stores that are located in that town.

 

[Abazigal]

So it looks like you don't understand much about this situation. Spotify isn't whining, they filed a complaint because Apple has unfair practices. Google does too. Apple and Google shouldn't be charging a 30% cut on purchases for their own benefit. It's wrong and it makes developers LOSE money, not gain it. And if Spotify tries to bypass the App Store for sales, they end up getting gimped by Apple. So I'd suggest you MASSIVELY re-consider your decision.

EDIT: Also, cancelling your subscription over an article you read on the internet? Get real.

Developers are free to not release their apps in the App Store, just as they are free to not work as developers. Then they get to keep 100% of nothing rather than 70% of whatever it is they are going to earn.

For the record, I agree that 30% is too steep relative to the benefit Spotify is getting from the App Store. While I believe the cut drops to 15% in the 2nd year, I still feel a more reasonable rate would be 30% in the first year (to account for the role that the App Store plays with discovery), 15% in the 2nd year, and perhaps a token 5% in all subsequent years just to cover the costs of payment processing. Maybe even 5% from the 2nd year onwards.

That said, what a company ought to do is often very different from what it has to do under the law. Apple, like any other company, charges what it believes it can get away with. So when people say that 30% is excessive, I guess I will just say "excessive relative to what?" Your feelings?

 

[eveluvsrainbows]

App Store gave Spotify a way to reach millions of customer. How the **** is it unfair?

Apple charges $99/year to keep hosting your app in the App Store. Then they throw a 30% tax on all IAPs on top of that. That's not what I call fair. E.g. Google only charges a $25 one time fee to be a Google Play developer, but then throw a 30% cut on IAPs. Not as fair as I'd like it to be, but more fair than Apple honestly.

 

[Heineken]

Apple charges $99/year to keep hosting your app in the App Store. Then they throw a 30% tax on all IAPs on top of that. That's not what I call fair. E.g. Google only charges a $25 one time fee to be a Google Play developer, but then throw a 30% cut on IAPs. Not as fair as I'd like it to be, but more fair than Apple honestly.

Did you count all the data mining too? How much is that worth?

 

[oneMadRssn]

Everyone has to pay 30%, not only Spotify. It's literally the same rule for everybody. But sure, Apple can pay itself 30% of the Apple Music revenue
If you want your service to be on iOS you have to play by App Store rules. It's just that simple. If they don't like it they should become an Android exclusive or just stop offering the subscription via IAP - I personally wouldn't care.

Let's say a Content Owners charges $2.50 to anyone who wants to offer it for download, and both Apple and Competitor offer it to download. Apple sets the price at $3. If Competitor sets the price at $3, it has to pay Apple $1, and thus only gets $2. Thus, at the $3 price point, Competitor loses $0.50 per download AND Apple makes $1 for each of Competitor's downloads, and Apple makes $0.50 for each of Apple's downloads. Competitor can't price it higher than Apple, because they would lose customers.

Apple built an amazing app store and they pretty much own half of a duopoly on app stores. Now they're abusing the their market position to unfairly advantage themselves in a completely different market: streaming music. This is classic abuse and antitrust.

 

[jglavin]

Should Amazon also be banned from selling their first party Amazon Basics brand products if they compete with a third party product that is also sold on Amazon? What is the difference?

In some folks' opinion, yes, Amazon should be banned from selling first-party products that compete with third-party products. Some will argue that "My game, my rules" is all fine and good, until you get to the size of Apple or Amazon.

This issue is shaping up to be one of the key debates in US politics over the next few years, and maybe globally as well. Are Amazon, Apple, Google, Facebook the railroad barons of the internet age?

 

[Biu_miu]

Really fun seeing people defending Apple with the same arguments, that were used against them in cases, where roles were reversed.
*Spotify revenue limited by some rules*- PFFT! So? This is AppStore, owned by Apple, they can make any rules they want and charge whatever they want, why should they allow just any company make millions in their own marketplace? Apple makes rules and you have to obey them! Don't like it? Go sell it somewhere else! Oh wait...hmmm! *insert sassy snaps*
*iPhone revenue limited by some rules* - OMG!!They can't do that! This is not fair! This is politics, they are only doing this to defend their own and making it harder for Apple by forcing taxes and forbidding to open shops!! YOU HAVE TO OPEN MARKET ALL SHOULD HAVE EQUAL RULES WHAT IS THIS!!!STEVE WOULDT NOT ALLOW THIS!!OTHER COMPANIES JUST TRY MONEYGRAB FROM APPLE!!11!!!!

Not that I care about Apple Music or Spotify having 2 000 000 000 subscribers or 20 subscribers. Spotify should shut their mouths about "fair", knowing how much they pay artists for streams. Not talking about Justin Timberlake and T.Swift, they would be multimillionaires in any case.

But the double standarts in comments are just phenomenal

 

[JayBlueBird92]

Whiney little pricks.

 

[Abazigal]

All true,except that over confident,fanboyish “oh right” part..you forgot how many android devices are out there the flagship premium obes specially are kicking new iPhones ass and that Spotify is actually more used than Apple Music.

It's a lot more complicated than that.

What I am observing is that Apple Music numbers seem to be higher in countries where the iPhone has higher market share, namely the US, where Apple Music seemed to get higher streaming numbers on new songs compared to Spotify.

On the other hand, Spotify seems to enjoy greater market share in countries where Apple doesn't have much market share in, such as Latin America and Brazil, where purchasing power is weaker.

Also, spotify is preinstalling their app on so many devices and offering so many discounted promotions that their paid subscriber numbers is all but meaningless now. If someone is paying $1 for 3 months of spotify, he effectively counts as a paid subscriber, but in terms of revenue, he is closer to someone on the free tier, in that he is actually costing Spotify money rather than contributing to its bottom line.

This also explains the difference in dynamics between Apple Music and spotify users. Apple Music subscribers are most likely iPhone users who will eventually end up paying the full subscription fee, because of their spending power.

https://s22.q4cdn.com/540910603/fil...rterly/2018/q4/Shareholder-Letter-Q4-2018.pdf

Conversely, if you look at Spotify's earning reports, while their subscriber numbers increased, their ARPU actually fell. Spotify’s next marginal customer is different than Apple Music’s next marginal customer, especially if their main avenue for growth is by expanding to regions where consumers have lesser purchasing power.

So in conclusion, Spotify seems to still be having a problem with being profitable, and this doesn't look like it's going to improve anytime soon.

 

[guzhogi]

I could understand Apple getting a certain amount from the sale of apps. Apple helps in the distribution of the apps. Apple has the servers & storage, the electricity for those servers, and the internet connection to push out those apps. I don't know how Apple's 30% cut compares to the developers hosting the app themselves. However, for in-app purchases that doesn't need Apple to distribute, why does Apple need a cut?

Correct me if I'm wrong, but doesn't Apple also have "Favored Nation" status built into the contracts? Basically meaning if the developer sells the same app elsewhere, the app on the App Store has to be the same or lower price. Kinda sucks for the developer.

 

[mrow]

I'm not sure supermarkets are really the equivalent of a platform due to the fact that customers typically have the choice of more than one supermarket to shop within. The town that you live in is probably closer to being a platform than the individual brick/mortar stores that are located in that town.

Consumers do have a choice of more than one platform(supermarket). If people are pissed off that they have to pay $12.99 on Apple’s platform they can buy an Android phone and subscribe to it there for $9.99. If supermarket A is selling milk for $1.30 and supermarket B is selling it for $1 the answer isn’t that you force supermarket A to also sell it for less because you happen to like supermarket A more.

 

[wigby]

Uh... you have that completely backwards. The best thing we can do is boycott Apple's products. We didn't accept this crap from Microsoft in the 90s - we're not accepting it from Apple today.

How is boycotting your own phone's maker going to help you or Spotify? People who agree with Spotify should simply cancel their in app subscriptions and resubscribe to Spotify outside of the App store. That is also what Spotify should be urging everyone to do in this video instead of trying to leverage the EU's anti-monopoly sensibilities. But Spotify knows they have a good chance of winning more money than they were promised when they signed an agreement with Apple. So instead of encouraging users to fight using their purchasing power and the free market, Spotify is content with dragging businesses through courts to prop up a business that they knew would never be profitable.

 

[Jsameds]

May be they would, if Apple allowed it.... but as far as I am ware no other store is avaiable on iOS....

So unless Apple allows you to run your OWN store inside the iOS ecosystem, you do not have a point...

I think he's saying if Spotify want a level playing field then they should make their own hardware, infrastructure, ecosystem and mobile OS with an App Store, as this is what they are expecting Apple to provide for them for next to nothing.

 

[Oohara]

Daniel Ek and Spotify have no business even using the word "fair". Their business from the beginning has been based on ripping off the very musicians that provide them with the product they sell, and it's only getting worse:

https://www.musicbusinessworldwide....U0fkiDFyc4joomV4VyhCetZHcxaLVvi9i8S6k6zavdGxk

I've cancelled my Spotify subscription but I'm staying with Apple Music. I hope Tim goes right ahead and kicks them out of his App Store.