Spotify on Apple's Response to App Store Dispute: 'Every Monopolist Will Suggest They Have Done Nothing Wrong'

[shaunp]

There are alternatives to App Store. Google


So you want Apple to pay themselves 30% for a first year and then 15% after that, then.

Apple pays artist more. If they would pay those 15% to the actual artist, would you sleep better?

If you go, let’s say Costco,
they sell regular brands and their own Kirkland (or what the name was).
Some people buy it, because it is cheaper, other people don’t buy it because it taste like sh;t. But a customer has got a choice this way. It’s on you what do you choose.
And, of course they will not charge themselves extra and cut their own branch under their own feet

Eh? Go back and read it again....

 

[gnasher729]

Spotify or any other dev has no other alternative to publish their App for iOS users besides the App Store. They also have no other alternative to offer payments within App besides being taxed with high Apple taxes.

They are able to offer payments outside the app without any problems, so what you are claiming is highly disingenuous. If they want advertisements, you can advertise anywhere on the internet. Give some money to MacRumors for some ads, what about that?

 

[fmillion]

This is not something Apple just pulled out of thin air today.. They've always had rules,, took 30% away..

How would you feel if someone makes rules, then we come along *later* and say it should be changed because we don't like it?

That's what SPotify's trying to do.

Yeah, you do realize rules change over time, right? Rules often need to be re-evaluated and adjusted. It's part of progress.

If we said "rules are rules, they should never be challenged or changed or revised or even evaluated, they should just be followed and everyone should shut up and deal", let's see... We'd still have legal slavery, legal or even enforced segregation, women still wouldn't be able to vote, the voting age would still be 21 while the draft age would be 18... All of those things were situations where "The rule was always there" at the time. And yes, someone is going to try to say "it's government, it's not the same as a private company", but unless there was a rule forbidding you from moving to another country, couldn't you make the same logical argument (you don't like the country's rules, move to another one or form your own country)?

Apple is the company who once had an ad campaign saying that the ones who dare to be different, the ones who dare to challenge the status quo, are the true heroes. Sorry, Apple, but you are not the only entity that is able to challenge things.

 

[ROGmaster]

Apple created the market...people should build their own market if they dont want to play...

Or maybe Apple should create their own countries and sell their phones there, do whatever they want.
What's mind blowing is how every apple defender in this thread ignores the simple fact the the one party that holds the final decision, that has the last word is the EU Commission. If the EU Commission says that Apple can't do whatever they want on their platform then the only solution for Apple to have it their way is to exist the EU market. Would they be willing to do something like that?

 

[Awesom-0]

Apple and Sony do the same exact thing. You are mischaracterizing them as different.

You claim Apple MUST have alternate app stores, when Sony does not.

The reality is that the console business (Nintendo, Microsoft, Sony) is locked down and controlled in exactly the same way as Apples App store.

Claiming otherwise is arguing in bad faith.

Also any kind of Ruling that Apple must allow third party App stores, should logically be applied to the gaming console market as well, likely destroying the game console business.

Since people keep talking about consoles being locked down. Not exactly true on Xbox. You can unlock it for $20 and it was free to do so in the past. Then you can install anything you want.

 

[Abazigal]

Or maybe Apple should create their own countries and sell their phones there, do whatever they want.
What's mind blowing is how every apple defender in this thread ignores the simple fact the the one party that holds the final decision, that has the last word is the EU Commission. If the EU Commission says that Apple can't do whatever they want on their platform then the only solution for Apple to have it their way is to exist the EU market. Would they be willing to do something like that?

Perhaps Apple (and every other company who has been handled an unfavourable lawsuit ruling by the EU) should do precisely just that. Let’s see how the various European countries will fare once they effectively no longer exist with regards to google search results.

 

[fmillion]

Apple’s 15% to 30% for creating the platform and only charging for paid apps is nothing by comparison. And Apple does not even require it as Spotify could launch to a login screen and give ZERO to Apple as a free app.

I am pretty sure the policies say that if you "should" be using Apple payment processing, and you choose not to, you're not even allowed to provide any mechanism in-app to get the user to your own payment system. Therefore, you can't have a Web page open in your app to do payments, you can't have a "click to launch Safari and pay" link, and you can't even have a URL to copy/paste into Safari.

Basically Apple is using UX against the competition. Of course Spotify can (and does) charge people outside their iOS app and gets to keep 100%. Apple is just making the UX for that scenario difficult.

Here's an interesting thing to consider. Let's look at the possible options Apple has/had to deal with subscription apps:

1) "If your app provides paid services to iOS users, you have no choice - you MUST USE Apple's payment system. You're not allowed to let people sign up outside of the app. Or at least if they do, then they cannot be allowed to use the iOS version of the app." (Didn't Sony do something like this?) This to me would actually give a much stronger argument to an antitrust case.

2) "If your app provides services to iOS users, and the users want to pay within the app, they have to use the Apple payment system." This is Apple's current approach.

3) "If your app wants to use the Apple payment platform (IAP/IAS), you have to pay 30%, but if you're willing to set up your own platform you can use it in the app. You just have to build your own UX and your own payment engine. We won't let you use the Apple payment UI platform." This is what I think most people want.

Options 1 and 3 are sort of the reasonable extremes for Apple's policy. Notice how #2 is right in the middle. By not taking either extremist position, Apple probably sees it as a compromise - we're not forcing you to use our platform, but we're going to make it bad UX if you choose not to. Also, It also feels like it's just enough to satisfy the idea of "not anticompetitive", because the issue here is one of UX, not one of force. So what it ultimately comes down to is Apple knows people like good seamless UX, and is requiring you to use their platform and pay their tax to benefit from their UX.

 

[JetTester]

As a general thing, I like Apple, and especially their hardware products. But they do their business as a monopolist would, and need to be held to the same standards every other company is.

 

[ROGmaster]

Perhaps Apple (and every other company who has been handled an unfavourable lawsuit ruling by the EU) should do precisely just that. Let’s see how the various European countries will fare once they effectively no longer exist with regards to google search results.

LoL so now Google is GOOD when it can be used like leverage in a pro-apple argument? And you are advising Apple and other companies to act like crybabies? You are extremely amusing.
Anyway If Apple would leave EU I would say most European smartphone users would be fine. We are just talking about a bunch phones.

 

[Bytor65]

Since people keep talking about consoles being locked down. Not exactly true on Xbox. You can unlock it for $20 and it was free to do so in the past. Then you can install anything you want.

Citation needed.

 

[KennethS]

Anyway If Apple would leave EU I would say most European smartphone users would be fine. We are just talking about a bunch phones.

I totally agree. Yet Spotify is arguing before the EU courts that Apple is abusing a dominant position....

 

[FaustsHausUK]

It's weird how the Spotifys of the world love to tout their market dominance and usage figures until they want to paint Apple as a monopoly. Then suddenly it's "poor little us, we're so smöl, we can't compete with the big, bad monster!"

My personal opinions on streaming aside (clue: they're negative), Spotify are a terrible company. They display a stunning amount of animosity towards everyone that enables their business - songwriters, musicians, platform holders.

 

[Substance90]

Exactly. Just like McDonald’s is a monopolist. Burger King has been trying for years to get McDonald’s to sell whoppers and McDonald’s refuses.

And what about the customers’ freedom to choose tacos? Why won’t mcdonald’s allow Taco Bell to sell gorditas in mcdonald’s?

It’s ridiculous. Such an obvious monopoly.

Bad comparison. I don't know McDonald's marketshare worldwide but they definitely aren't a monopoly. iOS and Android on the other hand are duopolies, which is almost as bad as a monopoly.

 

[jlc1978]

Nobody is saying the App Store constitutes a monopoly, but the way Apple is doing business in different ways to different developers. While Uber is able to have in-app transactions free of Apple Tax, Spotify can't because it's a direct competitor to Apple Music, in which Apple doesn't follow their own rules to force their music streaming app into people's throats. That's monopoly.

Apple doesn't process payments for Uber but does for Spotify as an in app purchase. Apple doesn't charge sellers of tangible goods and services a cut. Netflix has an app but I can use it without paying in iTunes, all you need to do is subscribe via the web; so Netflix doesn't give Apple a cut from that. Spotify wants a special deal where Apple handles payment but gets nothing in return while hosting the app.
[doublepost=1552922425][/doublepost]

Bad comparison. I don't know McDonald's marketshare worldwide but they definitely aren't a monopoly. iOS and Android on the other hand are duopolies, which is almost as bad as a monopoly.

Only if they act in concert, which doesn't seem to be the case with iOS and Android. I'd hesitate to call them a duopoly because Android is partially open source and forks such as Amazon's Fire OS.

 

[PlayUltimate]

This seems to be the bottom line: Apple designs the iPhone. Apple developed the tools to create apps for the iOS App Store that will work on the iPhone designed by Apple. Apple curates the items that will be on display in its store. Apple has specific rules that will enable an item to be in that store. Apple has specific prices that it charges when sales are made in its store. The rules apply equally to all items in the store.
Spotify and others do not like this situation nor the rules. Spotify cannot change the rules. Therefore they are complaining to a government to force Apple to change the rules.

(Assuming the rules are not applied arbitrarily, I'm not sure if Apple would be considered monopolistic. Albeit they are quite controlling of their marketplace/platform)

 

[macfacts]

Exactly. Just like McDonald’s is a monopolist. Burger King has been trying for years to get McDonald’s to sell whoppers and McDonald’s refuses.

And what about the customers’ freedom to choose tacos? Why won’t mcdonald’s allow Taco Bell to sell gorditas in mcdonald’s?

It’s ridiculous. Such an obvious monopoly.

No one has argued that the iOS app store should have no approval process.

 

[oneMadRssn]

This seems to be the bottom line: Apple designs the iPhone. Apple developed the tools to create apps for the iOS App Store that will work on the iPhone designed by Apple. Apple curates the items that will be on display in its store. Apple has specific rules that will enable an item to be in that store. Apple has specific prices that it charges when sales are made in its store. The rules apply equally to all items in the store.
Spotify and others do not like this situation nor the rules. Spotify cannot change the rules. Therefore they are complaining to a government to force Apple to change the rules.

(Assuming the rules are not applied arbitrarily, I'm not sure if Apple would be considered monopolistic. Albeit they are quite controlling of their marketplace/platform)

This type of response is exemplary of totally misunderstanding the problem.

The problem isn't the app store, and sweat-of-the-brow has nothing to do with anything here.

The problem is twofold: (1) the App Store is half of a very powerful duopoly that must be used to distribute mobile software, there is no way around it, no choice, and (2) Apple competed on their own App Store with third parties, but Apple bends the rules such that they have a distinct advantage over third parties on the App Store. On their own, (1) or (2) aren't problems. It's only a problem when you get (1) and (2) together at the same time. Thus, Apple uses their platform (App Store) to unfairly advantage their other business (Apple Music).

It's akin to Rockefeller: He bought the railroad companies so that only he would control distribution of oil. At the time, rail was pretty much the only way to distribute oil. His oil was then distributed nearly for free, while he charged competing oil companies a huge premium to distribute. The other companies couldn't compete, because their oil was always more expensive than his due to how much he charged them for distribution. Thus, he used his monopoly platform (railroads) to unfairly advantage his other business (oil).

 

[solodogg]

Take off the tin hat - Isn’t Spotify a Swedish company?

WTF does my comment have to do with a tin hat, or is that the only pun you could think of?

Isn’t Apple an American company? Isn’t Spotify listed on the NYSE, and has offices in MANY countries? Funny how a European company wants to do business with an American company and make American profits, but hide behind convenient European laws that provide them better protections when they don’t get their way...

 

[0837990]

Don’t know why in cases like this Apple doesn’t say, you know what Spotify, thank you for your business, we have decided to move in a different direction with music services and no longer can accommodate your app on the iOS platform.

Leave it at that. Then Spotify could see if the 30% was worth it or not.

That would only result in a lot of customers leaving the iOS platform. You do realize that the platform (OS) is less important to most people than having the products and services they are familiar with?

Let me put it a different way: if Adobe stopped offering its Creative Suite applications on the Mac, people would change to windows to be able to keep using it. Most would not start looking at Pixelmator and all other alternatives to the Adobe suite.

The applications and services matter more than the platform itself for most consumers.
[doublepost=1552927178][/doublepost]

Or maybe Apple should create their own countries and sell their phones there, do whatever they want.
What's mind blowing is how every apple defender in this thread ignores the simple fact the the one party that holds the final decision, that has the last word is the EU Commission. If the EU Commission says that Apple can't do whatever they want on their platform then the only solution for Apple to have it their way is to exist the EU market. Would they be willing to do something like that?

It would be highly stupid of Apple to exit the EU market. Considering that Europe has about 742 million citizens (10% of the world population), which is over double the amount of citizens in the US (4% of the world population, 324 million). That's over double the amount of potential customers.

I think Apple's investors and stockholders would think it would be quite a stupid idea to pull out of a twice as big market as their own home market.

 

[jlc1978]

This type of response is exemplary of totally misunderstanding the problem.

The problem isn't the app store, and sweat-of-the-brow has nothing to do with anything here.

The problem is twofold: (1) the App Store is half of a very powerful duopoly that must be used to distribute mobile software, there is no way around it, no choice, and (2) Apple competed on their own App Store with third parties, but Apple bends the rules such that they have a distinct advantage over third parties on the App Store. On their own, (1) or (2) aren't problems. It's only a problem when you get (1) and (2) together at the same time. Thus, Apple uses their platform (App Store) to unfairly advantage their other business (Apple Music).

It's akin to Rockefeller: He bought the railroad companies so that only he would control distribution of oil. At the time, rail was pretty much the only way to distribute oil. His oil was then distributed nearly for free, while he charged competing oil companies a huge premium to distribute. The other companies couldn't compete, because their oil was always more expensive than his due to how much he charged them for distribution. Thus, he used his monopoly platform (railroads) to unfairly advantage his other business (oil).

You are incorrect on several issues.
1. Apple provides access on a discriminatory basis to all developer as as long as they follow the rules. Apple allows competitors access and will host for free as long as they do not offer ion app sales; if the do they take a 30% then 15% cut (after year 1). Spotify is free to only offer subscriptions via the web and not offer in app purchases, such as Netflix does and then Apple gets no cut. if anything, Apple gives Spotify an advantage since they cover the hosting costs for the app and advertise it as a top app; even though it competes with their own product.

2. Your Standard Oil / railroad example is wrong because, where it to have operated as the app store JDR would have allowed anyone to run their trains for free over his railroad as long as they meet his standards or delivered the oil for free if they arranged payment outside of the railroad. He'd only charge if he had to collect for the shipment.

Spotify wants Apple to deliver it for free, collect payments and not charge a cent for so doing. We can disagree over what is a reasonable cut, and I think 30-/15 is pretty good considering what the alternatives are; but it is not unreasonable for Apple to charge for using it's services.

 

[zarmanto]

... This is evident in Apple's belief that Spotify's users on iOS are Apple customers and not Spotify customers, which goes to the very heart of the issue with Apple. ...

Do what, now? I'm just... but that's not... and you just said... aaarrrrrggg!!

Okay... controlled breathing... (deep sigh)

So, Spotify: if you please, can you identify for us just one actual iOS user of Spotify (or, for that matter, any other iOS app) who is not also an Apple customer?

Just one.

... Anytime now.

... We're all waiting with baited breath.

... Hello? Is this thing on?



For the two or three of you who may have somehow missed this detail: iOS is itself an Apple software product, and only runs on Apple hardware products. If you're an iOS user, you are by definition an Apple customer, and Apple's characterization of these users as their customers is perfectly legitimate and unarguably factual.

Furthermore, it's important to keep in mind that Spotify's complaint does not apply to all Spotify users... because if a Spotify account holder purchased their subscription by way of any non-Apple device, or even by way of a web-browser, than none of that account's revenue ever goes to Apple -- even if they use that account on an iOS device after subscribing. Thus, Apple clearly does not wield any actual monopoly power, even within the context of only iOS users.

Spotify is blatantly and intentionally trying to obfuscate the facts, in order to make their antitrust accusations sound vaguely legitimate; we can only pray that the European court recognizes their bizarre double-speak for what it truly is.

 

[jlc1978]

That would only result in a lot of customers leaving the iOS platform. You do realize that the platform (OS) is less important to most people than having the products and services they are familiar with?.

I doubt it would have much of an impact given the wealth of other apps on iOS that people use; more likely is Spotify users going to a different streaming service.

Let me put it a different way: if Adobe stopped offering its Creative Suite applications on the Mac, people would change to windows to be able to keep using it. Most would not start looking at Pixelmator and all other alternatives to the Adobe suite.

Perhaps, but the percentage of people who actually need and use CS are probably a tiny fraction of al iOS users.

The applications and services matter more than the platform itself for most consumers.

True, but iOS offers a broad array of services that users want and so the loss of one or two would be of minimal impact. I doubt Apple would boot Spotify and Spotify isn't exiting iOS.

[doublepost=1552927178][/doublepost]

It would be highly stupid of Apple to exit the EU market. Considering that Europe has about 742 million citizens (10% of the world population), which is over double the amount of citizens in the US (4% of the world population, 324 million). That's over double the amount of potential customers.

I agree. There is no way Apple will exit it or China or any other major market. that would be stupid, especially since there are many ways for a company with Apple's clout and money to influence policy.

 

[senttoschool]

This seems to be the bottom line: Apple designs the iPhone. Apple developed the tools to create apps for the iOS App Store that will work on the iPhone designed by Apple. Apple curates the items that will be on display in its store. Apple has specific rules that will enable an item to be in that store. Apple has specific prices that it charges when sales are made in its store. The rules apply equally to all items in the store.
Spotify and others do not like this situation nor the rules. Spotify cannot change the rules. Therefore they are complaining to a government to force Apple to change the rules.

(Assuming the rules are not applied arbitrarily, I'm not sure if Apple would be considered monopolistic. Albeit they are quite controlling of their marketplace/platform)

It's not that simple.

https://www.timetoplayfair.com/facts/

I think Spotify has very fair claims. For example, why doesn't Apple take a 30% cut of any Uber payments? Why arbitrarily decide that apps like Uber shouldn't have to fork over 30%?

As a Spotify premium user and own Apple products, I think my experience has definitely hampered by Apple's restrictions on Spotify. For example, as a Homepod owner, Spotify is not allowed on it. Siri can't control Spotify. Spotify Watch App can't download music directly onto the watch so they can listen without bringing their iPhone along.

 

[AxiomaticRubric]

How gullible does Spotify think we are? So just because they aren’t Apple, we are meant to believe that Spotify is a small company being bullied by evil tech giants?

 

[senttoschool]

How gullible does Spotify think we are? So just because they aren’t Apple, we are meant to believe that Spotify is a small company being bullied by evil tech giants?

I don't care how big of a company Spotify is, if Apple really started messing with them on update approvals and threatening to remove them from the Appstore, that's just... wrong.

As an Apple user and work in Silicon Valley, Apple's actions towards Spotify, if proven true, would make me switch over to Android immediately.