Spotify Legal Chief: 'Apple's Ability to Strangle its Competitors is Unprecedented'

[StefDeLux]

Obviously, yes. It’s not like they can easily replicate the iPhone success. Nobody has And that’s the entire point.
I don’t think Epic has a particular good case as Apple is not a game developer. Spotify on the other hand is forced to fork over 30% of their revenue to their direct competitor, or disable in-app subscriptions.

The iPhone has between 15 and 20% of the global market, that is hardly a monopolistic position. Apple Music is #2 in a market where there are many significant players and 3 large ones. Also very far from even a dominant position.

Spotify would have a case if the iPhone had like 80 or 90% of the mobile phones market. Then they could argue that the only way for them to do business would be through the iPhone. But that is just not the case at all.

 

[nubtrix]

Again, should Best Buy allow free items to exist on their shelves, advertised by them, traffic created by them, etc. with a label on the item that says pay for activation at www.websitex.com?

Even if its not free, if the item has a price tag of $19.99 but a sticker on it says "or pay for me at www.websitex.com and pay only $14.99" no retailer on the planet would allow that.

Best Buy doesn't charge you to enter the store and doesn't make competing products. They might have stuff labeled as Best Buy (I live in a different country so no idea) but labeled and made are different. Those labels are from 3rd party suppliers that are relabeled... So your argument is unfair and wrong.

 

[waquzy]

Is there anything stopping Spotify launching their own mobile phone?

At the end of the day, Spotify is just an app, nothing less nothing more! They are irrelevant in the bigger scheme of things.

 

[ani4ani]

That is wrong. In the age of the internet there is no excuse to claim you are uninformed. People need to do their research and they would figure out how to pay for things. Fact is though it is easier safer and requires less details to be given to companies doing it through Apple.

Like the 100's of 1000's [if not millions] who bought AirPods, Maxes or Homepods only to relaise they were never and can never recieve lossless audio and now crying foul this week; yep they all did their research cus its all on the internet.

 

[quarkysg]

By many legal definitions, Apple is a monopoly. e.g. the UK legal defintion of a monopoly is any business with a 25% market share. It is clear folks around here think a monopoly is someone with > 50% share, which is not the case; it is rather moot however, in that Apple has 100% share of the distribution of iOS apps plus 100% share of payment systems of said apps. Even by the incorrect definition of a monopoly, in some countries Apple does have a > 50% share in any event, e.g. the US.

I've been trying to find out if the UK competition law did state that 25% or more constitute a monopoly, but I couldn't find such a definition. It always point back to some arcane rules set in the 1600s IIRC. Maybe my internet skills are no good. Do you mind providing a link? IMHO, it's quite ridiculous to claim monopoly when you only have a quarter of the market share.

In any case, it has been pointed out numerous times that a monopoly is not illegal right, unless it has been abused.

Also, claiming that Apple has 100% monopoly over everything iOS is ridiculous. Of course they do. They build and maintain the whole widget. What is wrong with this?

 

[quarkysg]

Like the 100's of 1000's [if not millions] who bought AirPods, Maxes or Homepods only to relaise they were never and can never recieve lossless audio and now crying foul this week; yep they all did their research cus its all on the internet.

Was such products originally advertised as supporting lossless audio? Don't think so right? Is this a problem?

 

[Freimuts]

Apple should code a special sandbox for these apps on iOS, sandbox that basically would run like virtual machine- no UI, no APIs, expose sensors and IO as devices, provide only the open-source APIs they use, want it - code it, I would bet Spotify will stick with default/current sandbox.

As a developer Spotifys' claims are dumb, Apple has to invest a lot of money in OS development, not the phone, but the APIs, languages, features, etc..

And I can tell easily why it is forbidden to direct users to payment outside (and it makes sense) - everyone would do it, and then you have app X data breach, card info leaked, app Y randomly opens shady "paypal payment form", then "IRS" calls and they have a refund - just pay through iPhone. It would be chaos, and honestly Spotify when developing app didn't know there is a fee? Netflix is fine, disable signup and people will find a way, but Spotify wants it all, for free.

 

[ani4ani]

I've been trying to find out if the UK competition law did state that 25% or more constitute a monopoly, but I couldn't find such a definition. It always point back to some arcane rules set in the 1600s IIRC. Maybe my internet skills are no good. Do you mind providing a link? IMHO, it's quite ridiculous to claim monopoly when you only have a quarter of the market share.

In any case, it has been pointed out numerous times that a monopoly is not illegal right, unless it has been abused.

Also, claiming that Apple has 100% monopoly over everything iOS is ridiculous. Of course they do. They build and maintain the whole widget. What is wrong with this?

You're right, there is nothing illegal about being a monopoly; often monopolies occur by accident, e.g. a competitor goes out of business leaving the market to you; it is whether a business abuses it position as a result. That is the debate raging at the moment, clearly in Apples case, there is a strong opinion around the world [given the ever increasing number of investigations and lawsuits ongoing] that Apple maybe doing so - time will tell utlimately if they are /were.

As for the 25% argument, well if you hold 25% and the next 500 biggest hold <1% each, then clearly you hold a dominant position and it's open for abuse against the "small fry" Now that there are essentially only 2 mobile platforms, and depending on Geography each one has > 50% share, by even the lowest definition, either can be a monopoly...or more intrestingly could be accused of acting as a Cartel; though that is unlikely as it is obvious that they really compete against eash other.

I find it interesting those defending Apple's posiiton as they seem to have forgot when Apple launched their fledgling iBooks, they set about working directly with the publishers to price fix against the Monopoly called Amazon back in the day....though even now Amazon does not have a monopoly of ebook sales [though by far the largest, and clearly can and so act as such]

 

[Freimuts]

I’m guessing that 30% and the chip shortage to name a few. But who knows.

They will most likely accuse Apple of monopoly for not sharing the A-series chips schematics with them for free. That what you get from socialist company.

 

[Freimuts]

BestBuy has a store. You can choose to go to the store, or not go to the store. Not going to BestBuy's store has no effect on any other store you choose to go to.

Yet Apple says its our store or no store. Now normally I would say this is no different than buying a console game. Microsoft isn't going to let you use Sony Playstation games on its Xbox. But there is a catch here. You access Apple's store through the airwaves. And the people, through their elected representative, have decided that the airwaves are owned by the people. So since the airwaves are owned by the people, the people, through their elected representatives are free to set conditions on their use.

So where Apple is free to say my house (iPhone), my rules. The FCC is free to say my house (the airwaves), my rules.

If Apple doesn't like it, then they are free to design a device that doesn't use the airwaves.

But you can choose to buy HTC, Samsung, LG, Google and lots of other brands if you don't want the apple store, it is no secret that gets revealed after you purchase device, so when buying you know it will be AppStore, no Play Store, no Kindle Store...

 

[StefDeLux]

You will when Apple takes over everything and you have zero choice. How will you feel then?

Not even close to be happening.

 

[StefDeLux]

Until Spotify start to pay artists fairly, they should probably wind their necks in.

They can't because they do not create enough value to even be profitable. Spotify killed the recorded music business. With the consequence of concert tickets prices going through the roof.

 

[threesixty360]

I don't think that's the point. Point is that Apple is using it's position to create services that are in direct competition what's already in their App Store. If Apple Music comes preinstalled with 1 year trial they are already abusing their position in order to gain customers.

But supermarkets do that all the time!
You can buy bread from a special bread company or buy bread made by the supermarket itself. Both sit side by side in the store. Do you think it isn't cheaper for the supermarket to make bread and put it on their shelves than the specialist product? no of course not!

But the specialist product needs to have something different (taste, price) or whatever to differentiate it from the store product. If I cant do that then it shouldn't be in business or at least dont sell it at that store.

And no, apple isn't the only store in town because there are billions (80%) of the world using non apple stuff.

 

[unchecked]

So the problem is Apple is not on the same playing field. Then wouldn’t the solution will be to charge themselves the same as they would charge other partners. Now everyone is on the same playing field. The Music department has to pay the App Store department.

Sure it’s absurd, but like that there’s no preference to any party.

 

[threesixty360]

Well, realistically, they’re one of the two major mobile platforms.

Also, honest question: is Spotify one of the apps that Apple won’t allow to advertise, after downloading the app, that subscriptions can be purchased outside of the App Store? I honestly don’t know the answer to this, so I’m asking.

Lastly, I hate having to go to the Amazon website on my iPhone or iPad to buy a book or rent a movie. You can’t even use the Amazon app to do so! Does Apple get a cut of stuff I order thro the Amazon app? Why are books and movies different? I’m really surprised that both sides have never come to an agreement about this, especially since it’s been doable on Android for as long as I can remember.

Apple is not a charity. They're not a government, they are a business. They dont have to be necessarily fair or even explain themselves. They make rules based on what creates value for their shareholders. That is their legal obligation.

So they deem digital goods to be different to physical goods. Thats their call. They built the platform to make money not to give people a warm fuzzy feeling. The only law they could be breaking is if they were the only product or platform in town (i.e. Windows which had 95% of the computer market). But they dont have that. So there is nothing to see.

 

[threesixty360]

Those supposed billions that you talk about came from you and I spending our money on iPhones. There is a monopoly and the US Government has stated so already. It's a question of what remedies are going to be put in place.

Yes, I spent money and they gave me a product. Is that not capitalism? Does your work get to tell you what you do in your home because they paid you to do some work for them??

The US government have not stated there is a monopoly. How could they? Apple is 50% of the market in the USA and 20% worldwide. Unless there is no reasonable alternative to Apple (Samsung, LG, Sony, OnePlus etc...) then the world monopoly doesnt make sense.

And can you be a monopoly on the platform you created? If so then hello Sony, Xbox, Nintendo.. you've got some massive problems ahead.. Also, should anyone who makes ANY device that could potentially have installable software / updates open that to ANY third party App Store of whatever by law?

People need to think through what they are asking for..

 

[jamcgahey]

Think about the App Store like a really nice shopping mall. Businesses pay rent, but they don't pay a percentage of their sales. Seems like Apple needs to offer some additional business models for in app purchase instead of taking 30% cut.

For example, someone downloads Spotify for free on the App Store. Spotify pays apple $1 for the download to a new potential paying customer to cover the hosting, financial transaction, app review, etc. If they subscribe to a monthly in app purchase, take 30% the first month, and then 30% once a year....

Depends on where you are from. Here in Old Port, Maine it is not uncommon for renters to charge a base amount for rent for businesses with a clause stating that will take a percentage of profits instead once that percentage exceeds the base monthly rent. To be clear...they won't take both. Wrong? Idk maybe. But an argument can be made that without that location/building that business may not be as successful as it really is.

 

[jamcgahey]

Spotify: I'd love to have the choice of whether or not to use your app, but your stranglehold and exclusivity buyout on some (Rogan) of my favorite podcasts require that I keep you on my phone. Not saying it was legal/illegal or the right/wrong thing to do, but they are playing their own game to get their own special advantages to make more money. Because that's what it's all about and that's all Apple is doing. Spotify just grumpy cause Apple has the upper hand.

 

[R2FX]

As you are undoubtedly aware, when using Spotify or Apple Music one can ignore the algorithms and colourful noise and strictly save and play the albums one wishes to. But I take your points.

true but why would I pay for music I already own? only value I see in streaming is discovery of new things and despite using it 2x during free trial I still end up discovering more music by listening to podcasts

I’m not interested in the musical history of internet music to be honest. We all used Winamp, lastFM, Diamond etc and all these predated Apple and Spotify. I am talking about two companies as detailed in this thread and how their products have developed in the modern era.

I was one of those people once upon a time who stored 20k songs on iTunes and bought CD’s but those days are gone for me. I don’t want to store even more cd’s than I already have much of which my wife is pressuring me to get rid of as I have about 10k of them in boxes in our garage. The best thing I ever did was start using a streaming service. No hassle, dealing with iTunes bugs losing your music etc and the last 6 years iTunes free have been great. More space on my iPhone too and less space on a cloud being paid for. I don’t know many using iTunes these days apart from guy I work with. It’s an unnecessary evil IMHO.

Paying for something you already have sounds bit bizzare to me... maybe I'm really niche, but I work in strange places where streaming over cellular is not always possible so I'd end up anyway downloading things. Each to its own I guess.

as for Spotify I can't stand their whining - they have more customers, free tier but because they can't create other revenue streams they decided to push for free lunch. Some of my iPhone friends are real Spotify zealots and would never change and I'd imagine Spotify would always keep big base. Would be nicer if they could innovate instead of complain to regulators so Apple would be also motivated not to fall asleep.

 

[IceStormNG]

Spotify: I'd love to have the choice of whether or not to use your app, but your stranglehold and exclusivity buyout on some (Rogan) of my favorite podcasts require that I keep you on my phone. Not saying it was legal/illegal or the right/wrong thing to do, but they are playing their own game to get their own special advantages to make more money. Because that's what it's all about and that's all Apple is doing. Spotify just grumpy cause Apple has the upper hand.

This. They all just want one thing: Money.

If it was the other way round, Spotify would do the same. (Almost) Every company would do the same. They're responsible to squeeze as much money out of it as possible for their shareholders.

That's how business works. If you have the upper hand, you use that to milk as much as legally allowed. If you're at the lower end, you complain about how unfair it is.
Yeah. Life has never been fair and will never be.

Most Spotify users are probably free-tier. I doubt they bring in as much money through ads as the paying customers do. That's Spotify's fault though for offering that. You cannot offer stuff for free and complain that nobody is paying.

 

[AdonisSMU]

I can agree that apple has the right to its cut on payments done through App Store, but apple not allowing Spotify to direct people to its website seems shady

I agree.

 

[AdonisSMU]

Interesting analogy. To me the difference here is that people are specifically searching for Spotify and the only place they can get it is the App Store (Best Buy). I would assume that Spotify doesn’t benefit that much from any App Store advertising. With most Beat Buy stocked products there are other places to get it from, so it’s in Best Buy’s interest to win the sale from their store - hence we don’t see practices like the one described.

They dont now but they did benefit from being featured at Apple events more than any other single company. Spotify just priced the product too low.

I agree there should be a rules change but I dont know what the change should because people abused the “free app” privilege. Everyone wants the app store but doesnt want to pay to keep it running. 🤷🏾‍♂️🤦🏾‍♂️

Im sure Apple wasn’t thinking big huge companies using all the bandwidth from downloads would literally circumvent the payment processing and abuse the rules just to save a nickel. I love how these companies want to be the victim when they are really just being greedy.

 

[quarkysg]

Everyone wants the app store but doesnt want to pay to keep it running.

I would think many developers are quite happy with the iOS App Store. I think it’s only those big corporate types that think they are entitled to the iOS App Store without paying, crying monopoly to the authorities.

 

[xyz01]

Offering lossless music and Dolby Atmos to all customers in the standard tier instead of up-charging is innovation.

It’s the same as any other product or service in the tech sector where prices come down and features improve as it’s feasible to do so.

Lossless streaming is really a matter of server space and bandwidth. Once that’s figured out and assuming the cost is minimal then Apple can charge whatever price point they want.

Additionally Amazon Music HD was already pushing subscription prices down at $14.99/month.

The major component of pricing a music service is not the apps, the bandwidth or the servers: It's the price of the music paid to the record companies (which will then pay a small amount of that to the artists).

Back when the first lossless service I can recall launched - Wimp HiFi (Wimp was later rebranded Tidal) - the articles about it mentioned that the price Wimp had to pay for lossless was about double the normal rate of the music. If Apple can do this for lossless music at the same price, this must have changed... which is great.

Dolby Atmos is more of a gimmic than actually useful, there's not a lot of music recorded in this format. It has great potential, though - I have some really good SACDs with Jazz mixed into 5.1 (which is 3.1 in practice).

 

[deeddawg]

Business 101 - when you choose to put your product on someone else's platform/playing-field, you make yourself vulnerable.