Spotify Pens Joint Letter Calling Apple 'Harmful' and 'Anti-Competitive,' Claims App Store Ruins Business

[Patriot24]

Apple benefits from a monopoly position over its mobile ecosystem.

I’m not a legal expert, but this sentence makes me scratch my head. It’s one thing to argue that a company has a monopolistic position over an entire market, but now we’re arguing that they can’t own and operate the thing that they created because it gives them a monopoly over that specific mechanism?

Under that thinking, isn’t literally everything a monopoly? Should other restaurant chains be allowed to setup booths inside of McDonalds to sell thier hamburgers and fries? Can Target setup a pop-up shop inside of Walmart locations to sell products? Should Ben And Jerry’s get to dictate the definition of how big a “scoop” is at ice cream shops that sell their product? Doesn’t this forum have a monopoly on discussions of Apple products within the macrumors.com domain? Can 9to5Mac have a forum they control here to ensure things are “fair?”

What are we even talking about at this point? Ludicrous.

 

[MrRom92]

They just mad because they still haven’t figured out lossless yet

 

[jjMMpp]

Hey Spotify (who I subscribe to), how about you upgrade your library to hires that youve talked about for so long?

It's getting to the point where while I love your interface (not so much the in car version though), I'm tempted to subscribe to Apple Music or an alternative who will send me higher bit rate files.

I did, that and Joe Rogan… you can here the compression applied by Spotify to make classical music sound better because of their codec

 

[slplss]

F u Spotify for not implementing HomePod support. That’s on you. With love your faithful subscriber, because public playlists and so on.

 

[quagmire]

They are only complaining now because they need a way to increase their profits. They were more than willing to pay Apple the fees because that led to growth for their business. Now that growth is plateauing and thus profits, they need a way to show their shareholders they can keep up the growth in their profits. Trying to break free from the app store is now just one of their strategies.

I am not one of sympathize with Apple here. But that is what is going on.

 

[coredev]

As to the complaint, I don't know it's a difficult one, with the platform they wouldn't have a business, but that doesn't give the platform the right to change policies at whim like Apppe does.

The complaint made by these companies states this and you repeat it here.
But what are these policies changed "at whim"?

 

[jbellanca]

Well, later this afternoon when I get a few free minutes, I'm canceling Spotify. I was only keeping them because of the special pricing with Hulu, and their "Daily Drive" playlist. After this though, I'm done. I don't want to give them any more money to fuel these crazy rants.

 

[jlc1978]

But lots of these companies actually do that. Taking just the example of Spotify, they do run their own infrastructure, credit card processing, marketing, advertising, sales tax, websites, CDN, etc. The issue really is that Apple forces you to use their infrastructure. What if all of those companies would be more than happy to bear the burden of those costs, but they literally can't do so because, in order to reach millions of people on iOS, they have to use and pay for the Apple infrastructure? Or, more precisely, what if they already do bear the burden of those costs, and now they have to pay a 30% or 15% royalty for services they really don't need, which becomes a redundant expense? What if, instead of paying 30% or 15% of your revenue, you just paid Apple a fair price to be listed on the App Store and to cover server/infrastructure costs?

They pay for access to a larger, profitable user base, just as a store gets a discount from a manufacturer. Apple is running a for profit store, no a break even distribution hub. 30% is quite fair, compared to teh old methods, and Apple takes no cut until you sell.

You could simply say "ok, screw Apple and their customers" but given the market share of iOS, you're basically cutting off your arm to save your face at that point. If you want to actually get your product in front of all those Apple users, you are forced to use Apple's systems, and pay for them accordingly.

Which is exactly why it is fair for Apple to get a cut of revenue.

It's probably a fair statement that there are few apps or services that would actually cause an iOS user to abandon the Apple platform entirely. Therefore it's also reasonable to say that it is a monopoly for those specific customers.

Not really. If those apps go away they leave Apple. That is not a monopoly. They have choices beyond Apple.

Maybe there would be a flat rate per disc, but Apple isn't doing a flat rate per download or per purchase, they're doing a percentage.

That would kill small developers. Imagine if Apple charged $1 per d/l. Free w/in app purchases would pay for users that never do an IAP; potentially eliminating any actual revenue.

Spotify wants a free ride, and want the EU to force that. They need Apple's user base but don't want to pay Apple for access. Maybe Apple should charge a tiered fee monthly based on total d/ls? Say a dollar or 2 per d/l per month? Spotify would scream unfair over that.

Apple could charge for signing apps that are on a 3rd party App Store. Say 20% of revenue, with the right to audit the books.

Apple will have to find new ways to make money off their App Store, and smaller developers may get caught in the cross fire.

I am curious as to what exactly they want the EU to do, since the letter is vague on specifics in that regard.

Make Apple let Spotify use the App Store for free.

Perhaps Spotify, as a gatekeeper, should be required to allow anyone access to their App Store (if teh EU forces Apple to allow them) as well as stream anything tehy want to using Spotify.

It increasingly sounds like these companies want all the advantages of the App Store (it allows them instant access to Apple's user base), without having to contribute a single cent to help upkeep the App Store. I would compare this as being akin to jumping over the turnstile at the train station. Want to take the metro, but don't want to pay the fare.

Exactly. I doubt they, or any others, plan to reduce their prices by ~30% if they could use the App Store for free.

It's a money grab and they want the EU to do the grabbing for them.

 

[GLS]

Yawn.

Another day, another company (or two) bitching about the fact Apple makes too much money and that they have to play by Apple's rules to get on Apple's devices.

I've never seen such a bunch of spinless asses posing as CEO's who continually go after the one thing that probably keeps their damned enterprises afloat (iOS devices).

"We have to pay Apple 30%! It just isn't fair! Apple competes with us! Help us!"

Pathetic.

 

[robbietop]

Okay, I've had it with this nonsense.

Dear Apple,

Please build a sandboxed and neutered Third Party App Store capability into iOS so that Spotify, Epic, and other mouth breathing agitators who are only causing a worldwide stink because they have reached what is called The Law of Diminishing Returns will finally and truly shut their vacant minds and pie holes.

Spotify and Fortnite can't grow as fast or as big as they used to because they have reached Market Saturation. Anybody who was going to use the service and has heard about it would already be on the service by now. Spotify and Fortnite now have to go after people who have somehow not heard about them yet, or increase prices to show revenue growth to their mouth breathing toddlers on Wall Street.

Barring any new products or services, both of these loud mouths need to find new areas for growth, and so cost cutting is the first thing any company does to produce this.

Unfortunately, one of Spotify and Epic's largest costs, other than paying salaries to their developers, is the 15% service charge for being allowed on Apple's App Store. It's the same type of fee that credit card companies charge to use their trademark such as Visa, Mastercard, and AMEX, etc. Sure, there are only two mobile OSes of any merit, but that's not Apple or Google's fault that everyone else failed. Just as Microsoft was not a monopoly in the 1990s because Apple had a failing market strategy under the disaster that was Pepsi-boy.

Apple, you should just make a severely restricted and sandboxed Third Party App Store that you take 2% of all yearly revenues from each Third Party App Store owner (much larger than an individual 15% app sale cut, but humans are dumb and see 2 is smaller than 15). If you remember, A&W released a Third Pound burger back in the day to compete with the Quarter Pounder with Cheese at McDonald's. Americans thought 1/3 was smaller than 1/4. So, I'd say this is your best bet at winning the argument.

Once this is done, Spotify and Epic's arguments will be settled, you will be in compliance with the DMA, and you can charge a service fee of 2% Yearly total revenue in much the same way a licensor collects royalty payments.

However, they'll be back for more. They'll keep pushing the issue, but ignore them.

See, on Android, which supports multiple App Stores, the vast majority of users buy and download apps from the DEFAULT App Store the device comes with. This means that in Android land, over 90% of all sales are in the DEFAULT App Store for the device (Amazon, Google Pay, Samsung, etc).

Since all iPhones ship with the Apple App Store by default, what little money Spotify and Epic stand to make from this move is negligible.

You can then, as a conscientious and aware protector of consumer interest, can inform the user that Apple has no control over data collected by a Third Party App Store, that the Third Party App Store may have pornography, viruses, malware, and other filth not allowed in Apple's clean and pristine walls and that any and all issues arising from the installation of any and all apps from Third Parties is not covered the by the Manufacturer's Guarantee, the One Year Warranty as required by Federal Law.

Then wash your hands of it and let Spotify and Epic's third party App Store get overwhelmed by ShovelWare, MalWare, intrusive ads, and other lower brained experiences pushed by empty intellect marketing agencies.

Meanwhile, the rest of us will understand you tried to reason with them and their ilk, and yes they won in the end. But....MY HORSE! My kingdom for a horse.

 

[rhaezorblue]

Ok Spotify, then create your own computer business in your corporate garage where you build the motherboards by hand. Grow your business over 20 years and then launch your own smart phone model. You can then create your own app store. If you don't like Apple's app store rules, then leave it. I'm so tired of these businesses like Spotify complaining about Apple when this is their own creation, which Spotify does NOT have to be on it.

 

[jlc1978]

What nobody talks about here is that Apple Music does not need to pay the "Apple Tax" and therefore have an edge on all competitors.

Apple still has to pay for the infrastructure, just as a B&M store has to even for its store brands.

Apple is so big now that they can swoop in on any market and with the power of owning both the platform and the store, just price anyone else out of business.

They still have to make a profit, and lowering prices to drive out others lowers the profit. If they raise prices, new competitors will come in. As a result, they either have to keep prices so low it is unprofitable, meaning consumers benefit from lower prices, or raise prices and bring in competitors.

At what point will that be a problem for people here? Never? No?

Nah, as long as it makes the service cost less than before.

I am so sick of these people trying to bring down the app stores. People don't remember (or know) what it was like to be a developer and not have things like app stores back in the day.

You had to pay for so much extra infrastructure/security/webhosting/etc just to publish an independent app. You had to handle all the financial transactions for payment and refunds. You had to handle things if for some reason your hosting site crashed or worse, somehow got infected with malware. There was so much extra crap to handle.

App stores took that all away for a small fee and made the indie scene thrive and made it possible for small indie devs to get products out and be seen.

Now big greedy companies are trying to ruin all of it.

Exactly. Even before online distribution, making 30% margin on a product was considered great, since you had to cover all the costs upfront, including boxing, storing, printing etc. before you even knew if you get 1 sale.

Apple removed most of the costs, so essentially all it cost you now are developers fees, hardware to develop on and your time; greatly reducing the risks and costs, resulting in an explosion of small developers.

 

[Glenny2lappies]

If it wasn't for Apple doing the App Store properly, Spotify would probably never have become the large company they now are.

 

[kiken]

Spotify supports all smart speakers except Apple’s despite having the sdk made available years ago. When will Spotify stop this 'Harmful' and 'Anti-Competitive’ behaviour?

 

[paulvee]

Spotify has destroyed the ability of many musicians and artists to make a living.

 

[Born Again]

or a dog that bites the hand of the feeder...

More like the dog that visits the neighbor’s house to get treats.

 

[jlc1978]

Spotify has destroyed the ability of many musicians and artists to make a living.

Maybe the EU should look at their being a "harmful, anti-competitive, and monopolistic company that must be regulated through "urgent action" and require them to raise the rates paid for music?

 

[d686546s]

They pay for access to a larger, profitable user base, just as a store gets a discount from a manufacturer. Apple is running a for profit store, no a break even distribution hub. 30% is quite fair, compared to teh old methods, and Apple takes no cut until you sell.



Which is exactly why it is fair for Apple to get a cut of revenue.

The problem with that argument is that it basically treats the iPhone/iOS and the App Store as the same thing, which is the reason that someone like the European Commission might at some point decide that Apple is being competitive.

There's no argument that if you use the App Store to distribute your software and you use Apple's services to handle payments etc then it's entirely reasonable for Apple to be compensated fairly for that. Whether the 15/30% cut is 'fair' is another discussion entirely.

It's a circular argument: Apple deserves a cut because you use their services and you use their services because you have to, hence it's only fair that Apple gets a cut.

Apple is using its market power to push into new business areas, sometimes more and sometimes less successfully. Sometimes it shuts out competition entirely.

Spotify wants a free ride, and want the EU to force that. They need Apple's user base but don't want to pay Apple for access. Maybe Apple should charge a tiered fee monthly based on total d/ls? Say a dollar or 2 per d/l per month? Spotify would scream unfair over that.

Why should any company have to charge for 'access' to Apple users? As an Apple user I'm not Apple's property. If companies want to distribute their products through the App Store, and I'm certain most if not all of them would, then by all means charge them for services rendered.

If a developer wants to sell me a product outside of the App Store and I'm happy to buy it using their own payment systems and download it from their website, why should Apple get a cut of that?

In any case, it's not surprising that Apple (and Google and other gatekeepers) are increasingly under pressure to open up their systems. Mobile devices and services and digital payments provided through these devices are more and more central to how people do things, from social to business to official interactions, and it's completely undesirable to have so much power concentrated in the hands of American companies. While Chinese manufacturers are gaining ground, it's entirely unlikely that we will see the rise of another platform other than iOS or Android anytime soon, nor am I convinced that's really something we desperately need.

So lots of jurisdictions will try to undermine Apple's (and Google's and Meta's etc) power. The US would do the same if the shoe was on the other foot.

 

[OneBar]

Hey Europeans.... can you go to spotify dot com, download the app either to mobile or desktop, and upgrade to Premium...? Yeah? Stupid. I like Spotify but man they're a bunch of whiners.

 

[one more]

I am a long-time Spotify user and prefer it to Apple Music, but… Whereas some of Spotify complaints make sense, nobody is forcing Spotify users to subscribe to their paid plan from within the iOS app. As far as I understand it, Spotify could just remove the subscription offer from their app altogether, thus encouraging Spotify users to sign up online.

Why have not they done it yet? Possibly because they still prefer to get this extra potential 70% cut, rather than nothing, when people use their free plan instead.

Deezer is a French streaming app with a way smaller user base than Spotify or Apple Music, so it is naturally more difficult for them to compete.

Proton (Swiss) are also quite small to take on bigger and more established VPN players and web-based email providers.

Basically, I would encourage big & small businesses to try harder and get along between themselves, rather than sending it all off to the EU bureaucrats.

 

[compwiz1202]

So they are making money from Apple's platform (not as much as they want) and now they want to make the rules of how the platform is run? Way to go!

Exactly companies just want to keep making more anymore

 

[xbjllb]

"I want to speak to the manager."

 

[ArizonaApple]

If you want to use the apple platform you go buy there rules. Its a privilege not a right. These companies need to understand that.

 

[ColdShadow]

Honestly Spotify is completely superior to Apple Music in every way and is dominating it worldwide,I don’t think they need to worry about Apple too much.

 

[Jean Claude]

I'm as die-hard an Apple fan as they come, but I abandoned iTunes/Music years ago in favor of Spotify (and never looked back). Apple really $#%@ the bed with streaming, and allowed these companies to gain their foot hold in the first place. I remember Apple execs publicly thinking/saying their new streaming platform 'would be something similar to Pandora,' and I immediately knew they had no clue what the future of streaming was.