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

[theotherphil]

Well no because not "everybody else"does.

I think they are also a bit miffed about this kind of anticompetitive bs from Apple

Everybody who uses In App Purchases for subscriptions pays 30% for the first year and 15% after that.

In App Purchases are for digital content only. You cannot use in app purchases for physical goods or services....such as purchasing items from eBay/ grocery store/ paying for hotels/ airbnb/ ride sharing or taxis.

It's in the terms of service that *every* developer agrees to in order to use the App Store.

 

[Rob_2811]

Everybody who uses the in app purchases for subscriptions pays 30% for the first year and 15% after that.

In app purchases are for digital content only. You cannot use in app purchases for physical goods or services....such as purchasing items from eBay/ grocery store/ paying for hotels/ airbnb/ ride sharing or taxis.

It's in the terms of service that *every* developer agrees to in order to use the App Store.

Only on continual subs.

The campaign of petty app rejections and then using push notifications to promote Apple Music while banning third party from doing the same. Anticompetitive, Not a good look.

 

[theotherphil]

Only on continual subs.

The campaign of petty app rejections and then using push notifications to promote Apple Music while banning third party from doing the same. Anticompetitive, Not a good look.

App rejections for not following the terms of service that Spotify agreed to when signing up for a developer account. This happens to all developers, across all categories, not just Spotify.

 

[macfacts]

That's not an abuse of power, it's getting paid for their service. Why should Apple allow Apps that explain how to bypass paying Apple?

Can developers bypass paying Sony/Microsoft/Nintendo when selling their games to customers? If there was a website explaining how to do this, do you think they would allow game/programs on their platform to explain how to bypass paying them?

It's absurd how many people here think that not only is it OK to bypass paying Apple (but just Apple), and not only that but Apple should make it easy and customer friendly to bypass paying Apple?

Yeah apple is providing a service (app hosting, cc proccessing, etc) but have you thought maybe somes of the ios devs don't want that service from apple. Maybe they want to pick and choose their own app hosting/app store, own cc payment processor, etc.

Do you know mobsters provide protection service too. Costs money to hire employees, costs money to provide 24/7 protection. 30% of your income seems reasonable.
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Best buy is a reseller, not a distributor. Has Sony/Nintendo/Microsoft not approved those games for sale, they wouldn't have been available for Best Buy to purchase and re-sell.

Who is arguing to bypass Apple's app approval process?

 

[MEJHarrison]

Yeah apple is providing a service (app hosting, cc proccessing, etc) but have you thought maybe somes of the ios devs don't want that service from apple. Maybe they want to pick and choose their own app hosting/app store, own cc payment processor, etc.

Do you know mobsters provide protection service too. Costs money to hire employees, costs money to provide 24/7 protection. 30% of your income seems reasonable.

With Apple's App Store, they don't get the choice to host it elsewhere. Personally, I'm glad for that. I hope I don't see the day they're forced to give up that control. They have the option to do payments on their own. Look at Netflix. They don't have the right to tell people in the app how to pay online it seems. That is what it is. Seems a little petty at first glance, but I'd like to hear Apple's explanation before picking a side there.

Do you know mobsters aren't making legal transactions like Apple is? So kinda of an apples to mobsters comparison there.

 

[Abazigal]

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?.

If only Apple had a similar music streaming service that iOS users could switch over to should they wake up one morning and find that Spotify was no longer available on their devices...

 

[DevNull0]

If only Apple had a similar music streaming service that iOS users could switch over to should they wake up one morning and find that Spotify was no longer available on their devices...

Do you even comprehend that that is the very definition of anti-competitive practices? For Apple to use their platform to poison the use of a competitor to force everyone to use their platform?

What if Spotify struck a deal with the telcos to block all traffic carrying Apple Music streams? People would always be able to use Spotify when they wake up and fine Apple Music unavailable That would rightfully be grossly illegal, and yet when its Apple doing it, you're all for it.

Even sadder, do you even comprehend that those laws exist to protect the public from greedy corporations?

 

[Abazigal]

Do you even comprehend that that is the very definition of anti-competitive practices?

Even sadder, do you even comprehend that those laws exist to protect the public from greedy corporations?

I don’t feel like I have lost out on any way from the way Apple does things. If anything, I am in the Apple ecosystem precisely because of the unique user experience made possible by Apple having such tight-fisted control over their platform. That’s why I am an iOS user and not an android one.

Ultimately, Spotify desires control over a platform they themselves don’t control. Apple isn’t perfect but maybe the best way to fight off a bully is by being an even bigger bully yourself.

Spotify is getting desperate, they are launching a ton of accusations (many of which don’t even hold water in my opinion) in the hopes that at least one sticks, and if it’s a fight they want, then perhaps it a fight they should get.

It’s funny in a way. It wasn’t so long ago that so many people here were boasting about how many subscribers Spotify had, how dominant a position it had in the music streaming market, and how Apple Music would never catch up. Now, Spotify is the scrappy underdog and Apple’s the bad guy threatening to drive it out of business?

Make up your mind, people.

 

[Abazigal]

In addition, am I the only one who thinks that Apple’s response was pure genius?

What Apple is effectively doing is mounting a PR offensive against Spotify to sway the court of public opinion against it. Spotify is no angel itself, everyone knows it, and this is a good time for Apple to remind the world about it.

By not pointing out that Spotify pays Apple only 15% after the first year, Spotify is making themselves look dishonest and lacking in integrity. I think that moving forward, Spotify will come to regret this move.

Second, Apple is now making Spotify seem like a company who needs (rather than wants) an unfair advantage in the App Store due to its own problematic business model.

Third, the issue of music payments has been a perennial thorny problem in Spotify’s side. That Apple continues to pay a higher rate to artistes than Spotify is just going to make Spotify look greedy and desiring everything for themselves.

Lastly, allowing apps to have the option of bypass the App Store for payments would jeopardise the integrity of the App Store is not an invalid argument, and one that Apple will likely focus on when addressing the EU.

In summary, while I am no legal expert myself, and knowing that the EU tends to favour smaller companies when it comes to handling competition lawsuits, I would say that Apple still stands a fairly good chance of winning.

As to where this lawsuit leaves Spotify once the dust has settled, well, I don’t think Spotify is going to be any better off than before they started.

Fun times ahead.

 

[DeepIn2U]

Spotify sees the writing on the wall. Apple is disrupting Spotify’s defacto monopoly on speakers by offering Apple Music built in.

Until recently, when someone purchased a connected speaker, Spotify was the only real choice even for iPhone users because Apple Music wasn’t offered. Apple Music is now spreading to these speakers so that people have a real choice and Spotify is scared.

not necessarily true ... Sonos Play:1/3/5 have office Apple Music via direct phone streaming for last few years now.
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Everything that Apple said is true.
But 30%? Are you kidding me, even 15%?
I would think services like this would expect 1-5%. Apple is greedy, pure and simple.

Not greed. Apple built a MUCH better service and showed the world the best way for distribution. They'll find the bugs in your app and report it TO YOU, they'll protect the end user from BS and sneaky code working to steal private data.

Google Play store, copied the App Store and they have a LOT more employees, as well as doing a MUCH poorer job with app security and NOT protecting their users.

Greedy, now their doing their job and properly. SO you want Apple to be cut ... are YOU going to do these services on your own? Like the days of Winmobile, S60 and such LMAO ... yeah enjoy that crap.

 

[ROGmaster]

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

Well it's their right to argue after all.

 

[pxxalex]

But Apple is in the business of selling and streaming music, so actually they have a point.
I'm not a Spotify user and I don't care if that 30% goes to Apple or Spotify, but it is clear to me that a company owning a platform and selling music is both a supplier and a competitor for Spotify, so it is obvious Apple has a big advantage over them on iOS.
Same for Netflix, Apple is selling content via iTunes and will soon have its streaming service so it will be in the same position.

Let me tell you what is not good for the users, which I care about. Having to pay more on your iOS device, or be forced to go to the company's site to pay for a subscription is bad user experience.
Apple deserves a cut, and 30% is ok for a small company or an indie developer. I make apps, and I'm ok with paying a fee to Apple or Google to be on their stores. But me and my company, we are "nobody".
Netflix, Amazon, Microsoft, and even Spotify don't need Apple to promote themselves, they take advantage of Apple's platform, but on the other end users expect those services to be on their devices. Netflix can't take its app out of the store, and Apple can't ban them either. So that's what is going to happen, they'll reach a deal with those companies and let them pay less than 30 or 15% for subscriptions, and everyone will be happy before a judge or some European Parliament will intervene. It is in their best interests. I'm tired of lawsuits and I think having only one store is better for the users, so I'm ok with the status quo. I live in EU and knowing how the commission thinks about those matters I think Spotify have a case here, maybe not in the US, but I'm sure Spotify have good chances here. Microsoft was fined by the European Commission, and the same could happen to Apple.

Somebody gets it.

 

[Rob_2811]

In addition, am I the only one who thinks that Apple’s response was pure genius?

What Apple is effectively doing is mounting a PR offensive against Spotify to sway the court of public opinion against it. Spotify is no angel itself, everyone knows it, and this is a good time for Apple to remind the world about it.

By not pointing out that Spotify pays Apple only 15% after the first year, Spotify is making themselves look dishonest and lacking in integrity. I think that moving forward, Spotify will come to regret this move.

Second, Apple is now making Spotify seem like a company who needs (rather than wants) an unfair advantage in the App Store due to its own problematic business model.

Third, the issue of music payments has been a perennial thorny problem in Spotify’s side. That Apple continues to pay a higher rate to artistes than Spotify is just going to make Spotify look greedy and desiring everything for themselves.

Lastly, allowing apps to have the option of bypass the App Store for payments would jeopardise the integrity of the App Store is not an invalid argument, and one that Apple will likely focus on when addressing the EU.

In summary, while I am no legal expert myself, and knowing that the EU tends to favour smaller companies when it comes to handling competition lawsuits, I would say that Apple still stands a fairly good chance of winning.

As to where this lawsuit leaves Spotify once the dust has settled, well, I don’t think Spotify is going to be any better off than before they started.

Fun times ahead.

No. It was a feeble response which didn't address Apples anticompetitive behaviour. I very much doubt the EU will be fooled.

The issue of royalty payments to artists is completely irrelevant also.

 

[ROGmaster]

No. It was a feeble response which didn't address Apples anticompetitive behaviour. I very much doubt the EU will be fooled.

The issue of royalty payments to artists is completely irrelevant also.

Apple's response was just background noise and it only resonated with their defenders.
That Abazigal user is a very emotional apple fan so of course he can't see it. He constantly makes up stuff in his mind and pretends like they are facts or undeniable truths.

 

[Lionel Messi]

It's time for us consumers to have a choice of downloading apps to our iPhones through other means beside the App Store. We already do and have been doing this for years on our Macs and Windows computers. It was great when the App Store was first introduced, but its been over 10 years and times are changing. Stop being greedy Apple!

I prefer "greed" than jeopardizing my phone's security. What will you gain from downloading the same apps you currently use from other means?

 

[LordVic]

Apple does behave in very monopolistic anti-competitive ways within the iOS ecosystem. Claiming otherwise is being intentionally disingenous.

However, As Apple is not a monopoly, i'm not sure that there's really anything to say. Spotify on the other hand, if they don't want to pay by apple's rules, they can just stop using Apple's payment processing.

this is what capitalism is.. if Apple is no longer offering a service that is worth the value they believe it is, than you stop being a customer and go somewhere else.

Lets put it this way. Apple is trying to grow services revenues in an attempt to convince Wallstreet that they're a growing business. if suddenly Apple started seeing millions less in service revenues because App providers like Spotify or Netflix stop using their payment platform, Apple might be forced to adjust, or risk losing other App makers business as well.

and if Apple refuses to outright change to meet market demands? Those app vendors are more than welcome to leave the ecosystem completely. How popular would an iPhone be if Netflix didn't install on it? Or Spotify? or many of the other apps?

Apple needs to be careful. I don't think they're wrong overall, but at the same time, it's a capitalist market and if they don't provide sufficient value to these companies, they may very well go elsewhere.

 

[ipponrg]

Apple does behave in very monopolistic anti-competitive ways within the iOS ecosystem. Claiming otherwise is being intentionally disingenous.

However, As Apple is not a monopoly, i'm not sure that there's really anything to say. Spotify on the other hand, if they don't want to pay by apple's rules, they can just stop using Apple's payment processing.

this is what capitalism is.. if Apple is no longer offering a service that is worth the value they believe it is, than you stop being a customer and go somewhere else.

Lets put it this way. Apple is trying to grow services revenues in an attempt to convince Wallstreet that they're a growing business. if suddenly Apple started seeing millions less in service revenues because App providers like Spotify or Netflix stop using their payment platform, Apple might be forced to adjust, or risk losing other App makers business as well.

and if Apple refuses to outright change to meet market demands? Those app vendors are more than welcome to leave the ecosystem completely. How popular would an iPhone be if Netflix didn't install on it? Or Spotify? or many of the other apps?

Apple needs to be careful. I don't think they're wrong overall, but at the same time, it's a capitalist market and if they don't provide sufficient value to these companies, they may very well go elsewhere.

It’s not just a matter of Spotify taking purchases on their website, but it’s the issue of Apple disallowing Spotify to even mention any campaigns that redirect externally in their iOS app. Because Apple Music is directly competing against Spotify on an open platform, it’s a thin line that the lawyers will fight over.

I can see it going either way.

 

[jlc1978]

No. You're focused on the details of the app store and totally ignoring the issue: That Apple (a) invites third parties to use their platform, and (b) competed with some of those third parties directly.

There is, of course, nothing wrong with that. Apple initially did not allow 3rd party apps, and then decide to open up iOS to developers. This was to both's benefit, Apple gained a wide variety of apps which helps drive the iPhone's popularity, and developers gained access to a large market. Apple is a partner, and in some cases, a competitor; which is not unusual in a number of other businesses as well.

 

[Bytor65]

Yeah apple is providing a service (app hosting, cc proccessing, etc) but have you thought maybe somes of the ios devs don't want that service from apple. Maybe they want to pick and choose their own app hosting/app store, own cc payment processor, etc.

You can have that. It's called Android.

The problem is you want to force the alternative to Android, to be just like Android. I say let the market decide. You can have Android for those who want their "freedom"(to have malware, and piracy) and you can have iOS where developers don't have to worry about piracy, and users don't worry about malware.

Who is arguing to bypass Apple's app approval process?

You just did above, where you said they developers should get to choose their own app store. Obviously an Appstore that isn't Apples would bypass their approval process.

 

[Abazigal]

It’s not just a matter of Spotify taking purchases on their website, but it’s the issue of Apple disallowing Spotify to even mention any campaigns that redirect externally in their iOS app. Because Apple Music is directly competing against Spotify on an open platform, it’s a thin line that the lawyers will fight over.

I can see it going either way.

Well, at worst, Apple could simply capitulate in this regard (allowing Spotify to make mention of this). What's the worst that could happen?

 

[Uofmtiger]

and if Apple refuses to outright change to meet market demands? Those app vendors are more than welcome to leave the ecosystem completely. How popular would an iPhone be if Netflix didn't install on it? Or Spotify? or many of the other apps?

With a company that operates with such thin margins like Spotify, I doubt they would survive without the Apple ecosystem, not the other way around.

 

[oneMadRssn]

Apple is a partner, and in some cases, a competitor; which is not unusual in a number of other businesses as well.

First, Apple was not a competitor on their own platform until recently. Before the launch of Apple Music iirc, they didn't really compete with other paid services on the app store.

Second, it is actually very unusual. I challenge you to name a single other platform/marketplace that enjoys near monopoly/duopoly market position, where the proprietor of said platform is also a competitor on that same platform.

I can help. Google Play is obviously one. Amazon selling Amazon-branded stuff on their own marketplace is another. Both of those are hugely problematic for the same reason.

People often call out Walmart selling Walmart-branded stuff, but Walmart does not have a monopoly / is not part of a duopoly on retail. I can go to Target, Costco, Kroger, KMart, etc. If I am a small manufacturer or widgets, and I want to sell my widgets at retail, I have choice. The same cannot be said of app store developers.

 

[LordVic]

With a company that operates with such thin margins like Spotify, I doubt they would survive without the Apple ecosystem, not the other way around.

That's their risk to take. it's a free market and they've got every right to walk away from paying apple if they want.

the question they have to decide is if they believe they can bring enough customers in without in app subscription to account for the potential loss users. Remember, if they do go away from inapp purchases. they will earn 30/15% more per transaction. So if they lose < 10% of their customers, they may very well still stay ahead and grow their margins.

 

[cknibbs]

slight disagreement: As I have posted elsewhere here, the App Store is more like a consignment store. Apple approves the items that will be in the store. And nobody gets paid until money is exchanged. Many retailers purchase the products prior to the retailer making the sale.

Good point - which makes it even more important that there is a cut for both parties.

 

[zarmanto]

How come I can buy a Spotify 1-month gift card in the Amazon iOS app, for nearly immediate email delivery, and nobody pays Apple a fee? But I cannot buy 1-month of Spotify in the Spotify iOS app, without Spotify having to pay Apple a fee? ...

I had a bad morning today, and quite frankly, I almost just went off on you for that one. To put it simply, you're using a classic "false equivalence" fallacy here. Amazon gets their piece of the pie in another fashion because they use a different business model, and there is nothing wrong with that. Differences between business models are not, in-and-of-themselves, bad. If you so strongly dislike Apple's business model for some reason, you are entirely free to take your business elsewhere and buy that gift card from Amazon or whoever else you prefer. (The same is true of Spotify -- but perhaps I'm jumping ahead of myself.) Nothing at all about this situation paints Apple as a monopoly; rather, quite to the contrary.

... People just have to realize that having one platform has all sorts of conflict issues. They're becoming apparent now that Apple has decided to enter into businesses that complete with others on their platform. ...

I came upon an interesting article yesterday, parallel to reading this forum; it contains (among other things) a chart showing the top all-time most popular apps by revenue. The link is just below, but before you click on it, would you care to guess what I found?

9To5Mac.com - These are the all-time most popular iOS apps and games from 2010-2018

In short, Spotify is number two on that particular chart, below only Netflix. That one is not a mere "downloads" chart, either... it's a measure of how profitable is Spotify's business on Apple's iOS ecosystem. So no matter what you might think of Apple's business model, Spotify is immensely successful, in part because of Apple, and the platform and business model that they devised. Or to put it another way: Spotify wouldn't even be able to protest Apple's business model in the first place, if that business model hadn't proven to be such an incredibly lucrative opportunity for Spotify -- talk about a classic example of biting the hand that feeds you!

Also of note: that number one spot, Netflix? They no longer enable collection of subscription fees through Apple's app store... and yet, to no ones surprise, they're doing just fine. Great, even! Tell me again, why Spotify doesn't just do the same thing? But no: they've apparently decided to go the route of asking a government body to intervene, and "fix" their little problem for them.

And what is their problem again, exactly? Oh yeah: their profits aren't as high as they want them to be -- and they're already actively squeezing content providers dry, so they need a new target. So their real problem... is their own greed.

Personally, I have no respect at all for Spotify's childish and immature behavior in this scenario. In fact, Netflix is facing an interestingly parallel scenario, in that Apple's upcoming TV service will be a direct competitor to Netflix. And in another MacRumors article posted just last night, the Netflix CEO expressed a starkly different attitude from that of Spotify:

In response to a question about how Netflix will compete with Apple and Amazon going forward, Hastings said the company will do so "with difficulty," though he pointed out that Netflix has already been competing with Amazon for years.

"You do your best job when you have great competitors," he said, before admitting that the increased competition has led to higher prices when sourcing content.

Now that's a man who I can respect, and with whom I will almost certainly continue doing business.

... There are only three solutions that I can see: spin off the platform into an independent company, spin off the businesses into an independent company, make the platform totally free to avoid conflicts. ...

I'm curious: does your discontent with those who supposedly wield monopoly powers also extend to other large corporations, or is your angst targeted exclusively at Apple, for some reason? Because Apple is by no means the only corporation in recent history to have been accused of abusing such powers. Do you also hold that Microsoft should have been broken up, instead of having been given a mere slap on the wrist?

The bottom line is, breaking up big corporations never really fixes the so-called "problems" that people perceive; all it does is change the nature of the issue somewhat -- and really, only for a little while. Breaking up Ma Bell didn't cause prices or policies to "roll back" appreciably for any significant length of time -- if at all -- and not breaking up Microsoft didn't cause the entire computer industry to become permanently beholden to Microsoft.

Nor are we permanently beholden to Apple, right now. Even as successful as they are, they too will eventually be overshadowed by the next "Big Thing." Whatever that might be.