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

[bushman4]

There’s no right answer that everybody will be happy with
But for those that use Windows we see that the viruses, hacks and malware are much greater than Apple. Do we really want to bring this problem to iOS

 

[bollman]

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



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.



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



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.

Oh, but you fail to acknowledge one thing: Apple can easily offer some services at a loss and still gain. As opposed to Spotify, Apple does not have one stream of income but loads of them. So, offering Apple Music at a loss might actually profit Apple as people buy iPhones and subscribe to other Apple services they operate at a gain. They can afford to operate Apple Music at a huge loss, as long as it drives sales of iPhones.
Apple builds the brand by offering as much as possible to get people into the ecosystem. Once there, people tend to spend more and more to stay within the ecosystem.
Eventually, Apple might offer just about anything you would probably need and they will just have a hose in your pocket sucking it dry.

 

[BaldiMac]

Oh, but you fail to acknowledge one thing: Apple can easily offer some services at a loss and still gain. As opposed to Spotify, Apple does not have one stream of income but loads of them. So, offering Apple Music at a loss might actually profit Apple as people buy iPhones and subscribe to other Apple services they operate at a gain. They can afford to operate Apple Music at a huge loss, as long as it drives sales of iPhones.
Apple builds the brand by offering as much as possible to get people into the ecosystem. Once there, people tend to spend more and more to stay within the ecosystem.
Eventually, Apple might offer just about anything you would probably need and they will just have a hose in your pocket sucking it dry.

I'm not sure what you're getting at here. Just because they "can easily" do something doesn't mean that they are doing it. Meanwhile, Spotify has actually been operating at a loss until this past year.

 

[jlc1978]

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.

I think taht would be the right conclusion.

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.

True. I think the current deal is fair.

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.

Developers can simply forgo iOS.

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.

The same reason a store "charges" to put a product on the shelf - gain access to a a profitable customer base.

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?

I really have no objection to 3rd party stores, just the idea a developer should get free access to Apple's and be able to collect payments separately. If hey want access to Apple's store Apple deserves to get paid. Collect outside of Apple? Pay a % of revenue, like EPIC charges; and pay Apple for signing the app, etc.

Personally, I doubt you'll see 3rd party stores that come close to rivaling Apple's; simply because teh cost to do so and offer the same benefits will result in similar fees.

Spotify et. al. want access to Apple's users, use their services but not reimburse Apple. That's like telling Spotify because you are so big, I should be able to put my music on your platform, sell it via a 3rd party payment system, and let my users access it for from your app, just like your subscribers do, without them paying you for a subscription so I can make more money than your royalties pay.

and it's completely undesirable to have so much power concentrated in the hands of American companies.

That, I believe it the crux of the EU's reasoning.

Oh, but you fail to acknowledge one thing: Apple can easily offer some services at a loss and still gain.

True, but they have to keep operating it at a loss to keep out competitors, so users gain by lower prices. Even so, Spotify could go back to a web streaming app.

As opposed to Spotify, Apple does not have one stream of income but loads of them. So, offering Apple Music at a loss might actually profit Apple as people buy iPhones and subscribe to other Apple services they operate at a gain. They can afford to operate Apple Music at a huge loss, as long as it drives sales of iPhones.

But there is no indication it does that. Operating at a loss will just hit the bottom line, so it makes no long run business sense.

 

[TheLinkster]

Ban them all, then we'll see what affect it has on your business.

 

[GSWForever8]

If I can remember apple gave all developers access to make a functional app for HomePod. Spotify just isn’t doing it.

Sounds like BS to me.

 

[bollman]

I'm not sure what you're getting at here. Just because they "can easily" do something doesn't mean that they are doing it. Meanwhile, Spotify has actually been operating at a loss until this past year.

Um, okay? And you know that for a fact? Afaik, Apple does not break down their services in their reports.
Is it really so difficult to imagine a company the size of Apple would see other benfits to certain services than actual financial gain from that specific service?

 

[bollman]

But there is no indication it does that. Operating at a loss will just hit the bottom line, so it makes no long run business sense.

Thing is, it would NOT hurt their bottom line!
Apple could offer Music at a loss that gains enough extra iPhone sales to cover that loss and turn it into a gain.

 

[webkit]

Sure, anyone can call anyone out on something. But it doesn’t mean the argument has significant legal merit. “Deserve?” Who determines that? Again, Apple has built something that Spotify wants to leverage for their benefit. But their argument is weakened by the fact that they are, after many many years, the largest music streaming service in the world.

What I’m failing to see is the compelling argument as to why Spotify deserves to be handed the Apple Ecosystem for free? That’s the core of the argument for me here. Why should the largest streaming service in the world not have to pay a fee to Apple for the services it provides?

And what’s the evidence of consumer harm? Make me a list of significant claims. Is Apple leveraging their power to raise prices? To pay artists less? The opposite is true.

Whether or not it has legal merit is up to government agencies and courts to decide. I was simply commenting that just because a company may have a strong position in a particular market (like Netscape did and Spotify does) doesn't mean that they can't/don't have a fair argument regarding another company's (like Microsoft or Apple) potential anticompetitive behavior. It didn't/doesn't necessarily matter that Netscape had dominated the browser market at one time or that Spotify dominates the streaming service market today.

The argument seems to be largely that there are only two major players in mobile OS (Android and iOS) and one of those two major players is being unfairly restrictive ("anticompetitive") when it comes to App Stores, payment systems, etc. In this case, it's ultimately up to the EU agencies and courts to take all of this into consideration and decide whether or not Apple's behavior here is unreasonable/illegal.

 

[webkit]

Netscape dropped share from 90% to 25% between 1995 and 1998. They didn't have the largest usage share in 2001 when the antitrust case happened. Microsoft did.

Arguments/complaints against Microsoft by Netscape (and others) were going on before the DOJ case started in 1998.

 

[BaldiMac]

Um, okay? And you know that for a fact?

That Spotify has been operating at a loss? Of course. Spotify releases financials.

Spotify income 2009-2024 | Statista

While Spotify is still making a remarkable amount of profit, the company reported a net loss in recent years.

www.statista.com

Afaik, Apple does not break down their services in their reports.
Is it really so difficult to imagine a company the size of Apple would see other benfits to certain services than actual financial gain from that specific service?

Again, what you can imagine isn't necessarily reality.

 

[BaldiMac]

Arguments/complaints against Microsoft by Netscape (and others) were going on before the DOJ case started in 1998.

You mean while Netscape market share was dropping precipitously because of anticompetitive agreements that Microsoft made with its hardware partners? That's nothing like the Spotify/Apple situation.

 

[philstubbington]

As a musician, I would argue Spotify did the same thing to the music industry.

.. and they pay less than Apple.

Apple Music vs Spotify: Who pays artists more? - 9to5Mac

Over the years, it’s become clear that Apple is far better at “playing fair” than Spotify when it comes to...

9to5mac.com

 

[Kierkegaarden]

The epitome of hyperbole.

 

[jlc1978]

Thing is, it would NOT hurt their bottom line!
Apple could offer Music at a loss that gains enough extra iPhone sales to cover that loss and turn it into a gain.

That’s a big if. Apple Music isn’t a must have and there are too many options that as a loss leader it makes no sense.

 

[.wojtek]

3rd party app stores and sideloading of applications can't come soon enough...

 

[DeepIn2U]

This is like a dog barking at a passerby

Naa....

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

Much closer to this ... better it's like a Gorilla going berserk constantly looking at its own reflection in a mirror in the wild.

of these people need to get over themselves. You try to run a business and provide the credit card service costs, the sales tax collection, the marketing costs, the advertising costs, and the website costs, along with the cost of downloading the app. Oh and you provide over a billion customers for the service. And after you do all that, let’s look at what it costs you. I guarantee that it is more than 30 percent of the cost.

BINGO!

THIS post should be done first after EVERY EU Law enforced against Apple like forcing USB-C without a specific specification of USB-C connector for all cellphones, chargers as a standard.

Two big companies fighting over money. Very exciting.

Man it would be great to see CEO's of big companies have a 1 on 1 MMA or cage match. THAT I would pay some serious money for!!

Cook vs Amazon's former CEO both in their physical prime,
the convicted female CEO that pretended to vocally be Steve Jobs and frauded 11 Billion of invester funds vs Cathy Wood!
FTX CEO 'Sam' vs early nerdy Zuckerberg.

comeone I'm sure a LOT of us would pay for that that.

 

[webkit]

Which, of course, would still be a subjective opinion based on subjective laws as passed by subjective legislators of subjective governments.

I just see a lot of “unfair” and “anti-competitive” being thrown about by a lot of people here and elsewhere. You know what I don’t see? A lot of evidence of harm to consumers.

"Harm" is not necessarily apparent in the moment and doesn’t have to be just about consumers. Competitors can be harmed too, which can directly or indirectly effect consumers in the longer run.

There probably weren't a lot of Windows/PC users who felt they were being "harmed" by Microsoft providing Internet Explorer for free (compared to Netscape which was mostly charging for Navigator at the time) but that didn't mean Microsoft wasn't engaging in anticompetitive behavior and didn't deserve to be called out on it. One way or another, consumers and businesses can both be negatively and unfairly impacted by dominance of a company in a market.

 

[webkit]

You mean while Netscape market share was dropping precipitously because of anticompetitive agreements that Microsoft made with its hardware partners? That's nothing like the Spotify/Apple situation.

Complaints against Microsoft by Netscape (and others) were going on when Netscape still had the larger share of the browser market. My point, again, was that just because a company may have a large share of a particular market doesn't mean that their complaints against another company are invalid or that the other company isn't potentially engaging in anticompetitive behavior and deserves to be called out on it. The government and courts then decide what, if anything, to do about it.

 

[cthompson94]

People here criticise Spotify because they talk bad about their favourite company. But it is quite obvious that big corporations like apple and others are destroying any competition and that this is very detrimental to the consumer.
One of the latest two examples is apple buying the weather app Dark Rain only to produce a very subpar equivalent as well as apple buying the classic music specialist app (don’t remember how it is called) only to remove it and not replace it (yet). And let’s see how good or bad it becomes...
Apple and other big tech are truly uncompetitive and use their massive weight to remove any and all emergent obstacles on their path. We could also talk about how vertical integration can be used to remove competition. My opinion is that apple should be broken up to separate all its services divisions from hardware and software: fitness+, appleTv+ even the Music Store should never have been allowed to stay within apple corp. We can go on about how they have uncompetitive advantages but you get the idea.

It isn't about trying to get rid of Spotify, I think majority of people here will agree with having competiton is good. The problem is Spotify trying to basically cut costs. Spotify and others think they shouldn't have to pay Apple for basically doing the work for them. Many companies have even put this cost on the consumer you can easily see it by looking at the price of say Youtube Premium on your web browser as opposed to the Youtube app so I really honestly don't understand the complaining these companies are doing. Apple is the one hosting the servers and has the fans that use the App Store, this same App Store posts the top 10 apps of various categories so basically if you app can make that it is free advertising and Spotify doesn't want to pay when every other store does this. The Playstore charges a percentage, PlayStation Store, Nintendo EShop, everyone does this, this is how stores make money either charge to be a "seller" on the store or charge a portion.

The consumer makes the decision on whether they would rather pay the "Apple Tax" or not. For instance myself, I don't mind paying the extra dollar or two that it costs to do a subscription through Apple, because guess what...when I want to cancel all I have to do is go to the App Store and go under my subscriptions tab and cancel.

 

[SpotOnT]

Side load what? Apps that let you pirate games? You have a plethora of options to buy games. Both digital and physical, you can buy game codes from retail and websites and disks too. It's a MUCH more free and open market compared to Apples App Store.

Side load whatever you want. Maybe you made your own game that you want to run on the PS5 that you legally own. Being able to buy software from multiple stores is not remotely the same as side loading.

I make this comment because the various arguments about opening up the iPhone that are making the way through various states and courts would open up the iPhone to anything. Not just a list of pre-approved apps from multiple store fronts. I just think it is hypocritical that people want Apple to make the iPhone hardware available to anyone, but no one makes the same demands about the various gaming consoles. And don't even get me started on how Steam is a defacto monopoly.

 

[webkit]

Yet it still has to be demonstrated. So demonstrate it.

That's up to Spotifty and/or other companies to take care of (argue) and governments and courts to decide. Again, I had simply commented that just because a company may have a strong position in a particular market doesn't mean that they can't/don't have a fair and valid argument regarding another company's potential anticompetitive behavior.

 

[Ace McLoud]

Spotify is paying and enabling Joe "Horse Paste" Rogan.

Their customers are complicit.

 

[jumpcutking]

I have a very simple solution. Invest in a competitor to Apple & Google; so that healthy competition befits both the consumers and the corporations. Heck, I’d build a competitive business just to bring back that healthy sense of competition.

 

[I7guy]

"Harm" is not necessarily apparent in the moment and doesn’t have to be just about consumers. Competitors can be harmed too, which can directly or indirectly effect consumers in the longer run.

There probably weren't a lot of Windows/PC users who felt they were being "harmed" by Microsoft providing Internet Explorer for free (compared to Netscape which was mostly charging for Navigator at the time) but that didn't mean Microsoft wasn't engaging in anticompetitive behavior and didn't deserve to be called out on it. One way or another, consumers and businesses can both be negatively and unfairly impacted by dominance of a company in a market.

In spotifys case it appears the artists are being harmed by their low rates of pay. Maybe Spotify should leave the App Store. They can survive on their own, they are a household brand.