Spotify Says Apple Won't Approve New Version Of Its App Because It Doesn't Want Competition For Apple Music (recode.net)

According to a report on Recode, Apple has rejected an update to Spotify's iOS app, and that this has caused a "grave harm to Spotify and its customers." The Swedish-based music company competes with Apple's Music streaming app and service. In a letter to Apple's top lawyer, Spotify says that Apple turned down a version of the app citing "business model rules" and demanded that Spotify uses Apple's billing system if it wants to acquire new customers and sell subscriptions. From the report:The letter, sent by Spotify general counsel Horacio Gutierrez to Apple general counsel Bruce Sewell on May 26, suggests that Spotify intends to use the standoff as ammunition in its fight over Apple's rules governing subscription services that use its App store. "This latest episode raises serious concerns under both U.S. and EU competition law," Gutierrez wrote. "It continues a troubling pattern of behavior by Apple to exclude and diminish the competitiveness of Spotify on iOS and as a rival to Apple Music, particularly when seen against the backdrop of Apple's previous anticompetitive conduct aimed at Spotify ... we cannot stand by as Apple uses the App Store approval process as a weapon to harm competitors."

Comments

Walled garden

[110010001000]

If you work in a walled garden you are just a gardner.

Re:Walled garden

[tripleevenfall]

Apple was already charging more per month for a Spotify subscription than what you'd pay by going through Spotify. You could subscribe through Spotify for $9.99, but if you subscribed through iTunes I think it was $12.99.

Apple is just making sure they get a hefty cut of what Spotify is doing, while adding no value.

Re:Walled garden

[Anubis IV]

This whole thing is a bit weird on both sides.
1) When Apple added in-app payments (IAP) to the App Store, they came with a set of draconian rules (e.g. devs must use Apple's IAP system and pay Apple their 30% cut; devs can't advertise other ways to pay outside the store, etc.). No one liked it, but devs adjusted by doing things like raising the price to cover Apple's 30% cut from people who paid via IAP which is what Spotify did.

2) This arrangement continues for several years.

3) Spotify decides it no longer likes playing by the rules they've been following for years, so they submit an update that includes ads for an off-store way of paying for a subscription at a lower price.

4) Apple rejects the update since it's in violation of the rules.

5) Spotify decides to take its ball and leave, so they not only pull the advertising, they also pull the ability for iOS users to pay at all from the app.

6) Apple apparently decides it wants to punish Spotify, so they reject that update, even though there's so far no indication of any form of rules breaking.

All of which is to say, this seems childish on both sides. Apple's rules are soon-to-be relaxed a bit (e.g. 15% cut for subscriptions that last longer than a year), but they're still draconian, and Spotify seems to be breaking the rules intentionally, then acting outraged in as loud a way as possible simply for the purpose of drumming up some PR.

Re: Walled garden

[MitchDev]

Actually, with Apple's attitude, they treat their customers like fertilizer...

Re: Walled garden

[GabeGhearing]

What I think would make the most sense is to allow Spotify(and others) to pay Apple for the infrastructure costs of the App Store in lue of the 15% commission. Some base fee + something per download.

Re:Walled garden

[known_coward_69]

spotify was always free to disable subs via the app and only do them via the website and spend their own money marketing their service

Re:Walled garden

[barc0001]

I agree with most of what you say, except instead of categorizing Spotify as being childish and looking for PR, I'd call it they're using their position to point out Apple's greedyness and trying to get changes to happen. When Taylor Swift did the same thing with Apple Music and the free trial crap, everyone was falling all over themselves to congratulate her on using her status for good. How is this any different?

Re:Walled garden

[Anonymous Coward]

> Apple was already charging more per month for a Spotify subscription than what you'd pay by going through Spotify.

No, Spotify was charging 30% more in order to keep the same price for themselves.

Re:Walled garden

[Kurrelgyre]

Apple was being unfair to artists, not its customers. Spotify customers who are paying through the app itself are the ones affected by the changes in Spotify's app, and Spotify has the gall to paint the situation as though these rules have suddenly changed.

Re:Walled garden

[Anubis IV]

Citation? I don't recall ever hearing of Apple having a Most Favored Nation (MFN) clause in their contracts with App Store developers, even early on. The biggest restriction at launch that they later backed off on was that IAP were only available for paid apps, not free ones, presumably to maintain a strong delineation between for-pay and free apps. It wasn't until later in the life of iPhone OS 3 (back before it was called iOS even) that they opened it up to free apps as well.

Apple has done MFN clauses in contracts elsewhere (most infamously in the eBooks market), but I can't find any evidence that they did so with app developers, nor do I have any memory of it, so if you have any way to reference that tidbit, I'd be keen to get more information.

Re: Walled garden

[Grishnakh]

A web page for a music-playing app isn't going to work very well. I agree that having an app for every little thing is really annoying, but music players are one place where they're really warranted.

Re:Walled garden

[davester666]

No, Spotify is the company which decides how much to charge for their subscriptions within Apple's App Store. They have decided to add the cost of Apple's billing fee to their subscription rate.

Re:Walled garden

[ColdWetDog]

If you have the law on your side, pound on the law.

If you have the facts on your side, pound on the facts.

If you have neither the law or the facts on your side, pound on the table.

Re:Walled garden

[Half-pint HAL]

Apple was being unfair to artists, not its customers. Spotify customers who are paying through the app itself are the ones affected by the changes in Spotify's app, and Spotify has the gall to paint the situation as though these rules have suddenly changed.

I am no fan of Spotify -- as with all streaming services, they shortchange musicians. However, the fact is that they're operating in a space where margins are exceptionally tight (and all their competitors are shortchanging musicians, too) -- Apple's cut is humungous in relation to most of the other costs in the system, and it takes a dubious business model and makes it unworkable.

And what does Apple bring to the table? People keep saying it brings the customers, but that's a two-way street -- there are plenty of Spotify users whose decision on what tablet or phone to buy would be heavily coloured by the unavailability of Spotify on a given platform. And Apple does not bring users to Spotify -- Apple passively facilitates it. They don't promote many apps, and Spotify has to advertise independently to get any awareness. Apple is trying to make a 500% markup by offering credit card processing facilities that Spotify still have to duplicate from someone else anyway (because Apple do not offer general payments processing that non-iOS customers can access) on customers that Spotify have to get for themselves.

Apple is not a shop. They do not stock the shelves. They rely on third-parties to do that for them, and the third-parties take on all the risk; then they skim the cream off the top of all income while assuming no risk themselves. I'm grateful for the fact that I can trust most apps to be secure on my iPad, but their payment system is crazy.

Re:Walled garden

[Anubis IV]

How is this any different?

A) Taylor Swift refused to even begin putting her content on Apple Music until the problem was dealt with. Spotify, on the other hand, was happy to play along for several years, until they decided they weren't. If it was a raw deal, why have they been putting up with it for years? And why complain when the deal is getting better for them (Apple's cut is dropping from 30% to 15%) unless they want publicity?

B) Taylor Swift would have been getting $0 during the trial period for new Apple Music users. Spotify has both been getting paid the same amount the entire time, and has been getting paid the same amount that they get on non-iOS platforms. Moreover, if they maintain their prices, they're set to actually start making more on iOS from their customers after Apple's cut drops, unless they pass that savings onto their customers.

Re:Walled garden

[Desler]

Huh? Apple didn't set Spotify's prices. Spotify did. They could have done what Amazon did if they didn't like the rules.

Re:Walled garden

[Curunir_wolf]

spotify was always free to disable subs via the app and only do them via the website and spend their own money marketing their service

There are plenty of apps that do this. Hulu and Netflix are among them.

Re:Walled garden

[BronsCon]

By insisting on a cut larger than Spotify's margins, Apple did, effectively, set Spotify's price on their platform. Did you expect Spotify would be willing to take a loss just for the privilege of having Apple customers use their service? I'm going to guess you don't own a profitable business.

Re:Walled garden

[BronsCon]

They're tired of having to gouge their customers an extra 30% ($3 of $10 is 30%) to make 9% less (70% - the cut they get to keep - of $12.99 is $9.09, which is 91% of $9.99) when selling through Apple. They don't have >30% margins to be able to afford to eat the cost, so they did the reasonable thing and stopped selling that way; Apple then, took their ball and went home.

Yes, I'm aware I didn't account for Spotify's payment processing cost in my math. Let's assume they're paying something average like 2.4% + $0.10 per transaction, so they're keeping $9.65 per $9.99 transaction. Ok, fine, they're charging their iOS customers 30% more to make 5.8% less. The only one who wins that game is Apple; especially when Spotify's customers have a $3/mo cheaper option (Apple Music) that doesn't have the 30% Apple overhead.

There's definitely nothing anti-competitive going on there, though. Nothing at all, I'm sure.

Re: Walled garden

[Khyber]

"A web page for a music-playing app isn't going to work very well"

Pandora works just fine in a browser for me - what stops Spotify from doing similar?

Re:Walled garden

[Half-pint HAL]

Now go back to the days when music occupied the airwaves? How much did they get then? zero. But what was the benefit? It's free advertising. Streaming is no different.

Streaming is very different. Imagine a showroom for washing machines where you can try them out by washing your clothes. There's no limit to the number of times you can come in and try them out. Is that an free advertising for Indesit, Zanussi, Hoover etc? No, because it undermines demand for washing machines. Now imagine that the showroom pays the suppliers a fraction of the usual wholesale cost for their washers. The washing machine makers lose out.

Re:Walled garden

[david_thornley]

So you're saying that Apple should act in a way compatible with Spotify's business model? Last I looked, no business had a right to make a profit, just a right to try.

If you own a profitable business, great. I'd bet you don't demand that other companies change things to your benefit without compensation.

Re:Walled garden

[BronsCon]

No, I'm saying they should apply their policies evenly and allow them to put their app in the store without an in-app subscribe option, just as they've allowed Google and Amazon to do with their media streaming apps. Spotify removes the in-app subscription option and Apple says "nope", despite the fact that they do not have a policy against this and, in fact, allow other apps to do the very same thing.

Re:Walled garden

[BronsCon]

and replaced it with a "enter your email here and we'll send you great information" text field

Can you cite a source for this information? It hasn't appeared in any of the over a dozen articles I read trying to find more details on this.

Re:Walled garden

[allo]

The point is, apple wants to forbid them to mention "It will cost 12.99 but via our homepage it costs only 9.99". The problem is, if they don't offer 9.99 to their customers, they look bad compared to apple music, even when they are not more costly, if the customer installs the app via appstore but pays on the website.

Re:Walled garden

[david_thornley]

It may be a guess, but it seems to me to be a lot more likely that Spotify tried to slide by the rules than that Apple bent theirs. In the articles that you read, where was the information coming from? It seems like the sort of thing that Apple might well not comment on but Spotify might well complain about.

Re:Walled garden

[BronsCon]

One of them was Apple's response to Spotify's letter, actually.

“Shortly after Spotify submitted its app on May 26, our team identified a number of issues, including that the In-App Purchase feature had been removed and replaced with an account sign-up feature clearly intended to circumvent Apple’s In-App Purchase rules,” Sewell explains.

So, then, every app with an account sign-up feature must be in violation, right? No? Well, then...

Spotify submitted a new version which continued to ask users for an email address in order to invite them to sign up for a subscription via the web interface at $9.99 per month while simultaneously jacking up in-app subscription price to $12.99.

Apple's rules say nothing about asking for email addresses, nor do (or can) they prohibit external advertising.

Apple does not allow links to or mentions of other places where you can buy services. Spotify is in compliance with those guidelines; if they were not, Apple would have stated as much and left it at that. Instead, they're whining about shit like "we feel like they're doing this to get around our rules without actually violating them, so we're not going to allow it" while allowing the exact same behavior in other apps, including several they directly point to as "doing it right" in their response.

Hell, one of my clients has an app that sees updates on at least a monthly basis; their app requires a login and provides facilities to create an account (including collecting an email address) right there, on the screen it presents to you the first time you run it. It gets reviewed by Apple no less than 12-20 times a year. If that wasn't allowed, it wouldn't be in the store.

Re:Walled garden

[david_thornley]

Apple can't do anything about external advertising. What they can do is prevent circumventing the rules on the App Store. I don't know what the rule specifically says, but Apple is within their rights to refuse to allow circumvention of the spirit of the rules.

The rule is to make sure an app doesn't have way to show users how to buy in-app purchases outside the App Store, depriving Apple of their cut. If a Spotify account didn't come with a signup invitation, I doubt Apple would care.

I know nothing of your client's app, and in particular don't know if it has in-app purchases. If it does, I'd imagine that the account doesn't have instructions on paying for them outside the app store.

Re:Walled garden

[BronsCon]

I don't know what the rule specifically says

Perhaps you should read it, then. Google is your friend; I don't have time to do research for, or argue with, people who display (and admit to) wilful ignorance.

Re:Walled garden

[david_thornley]

Okay:

Apps may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than IAP.

There was an in-app method that would result in the customer receiving notification of how to subscribe. That is a clear violation of the guideline quoted above. Since the rule says pretty much what I said, it would appear that I'm right and Spotify was violating the guidelines.

Re:Walled garden

[BronsCon]

It is not a button linking to the site, nor an external link, nor a call to action direxting the customer to purchase. It's a call to action for the user to enter thier email address, which Spotify uses as a username and would be collecting anyway in the course of creating the user's account, even through an in-app purchase. In other words, no you're not right, because the violation is not clear.

Re:Walled garden

[david_thornley]

I really don't think that's how a court would rule. You're being awfully picky on exactly what you consider "directing customers", and I'd think that an in-app action that gets the customer an invitation to subscribe is directing the customer to another purchasing mechanism. These are guidelines, not absolute rules, and trying to construe a guideline carefully to violate the spirit usually doesn't work.

There's a clear intent to the guideline, and Spotify is violating it. Apple is completely in the right here.

Re:Walled garden

[BronsCon]

I'm positive that's how a court would rule. Apps collect email addresses all the time; are you saying the courts will rule that those app developers can't contact those users via those email addresses? Or that Apple should be allowed to dictate private communications between two parties?

Re:Walled garden

[david_thornley]

From what I've seen, courts tend to look dimly on attempts to distort the meaning of words to evade rules. You're breaking things down much too far, and attempting to distance them from their actual meaning and purpose. It's fine to collect email addresses, but not to collect email addresses for sending information for payment outside the App Store. If Spotify used the email addresses in ways that don't involve sending payment information to the app users, Apple's happy.

What apparently is happening is that there is an action available in the app that asks for an email address, and an outside process that sends subscription information to anyone who has entered an email address. The user does something in the app that results in the user being directed to a means of payment outside the App Store. That is what happens, and it's clearly against the guidelines. This is not a matter of the app sending an email address for a legitimate purpose and Spotify using it for a private communication that coincidentally violates the guidelines. Look at what is being accomplished, not the individual technical steps, which have no legal significance.

Re:Walled garden

[BronsCon]

Well, Spotify seems interested in pursuing it legally, so we'll get to see which of us is right, it seems. No need to continue the conversation, just grab some popcorn and sit back.

Good

[geek]

Fuck Apple

Re:Good

[MitchDev]

You're already at 5 pts, so AMEN brother.

Everyone protects theiro own interests

[evolutionary]

Is this really a surprise? If it weren't for federal laws requiring competitors be allowed to participate in Canada, we'd only have Bell (Canada), Rogers and Shaw for providing ANY Internet access and consequently, crazy high prices for Internet services abusing their monopoly. Fortunately our laws require those companies with the physical infrastructure to provide at wholesale prices so resell to end customers. Food for thought..

I give no fucks.

[Dishevel]

Companies have bent over to allow Apple this power.
If the people are too stupid to realize that they are being treated like children or if they are ok with it then they should be cut off the good apps that us responsible people can handle.
If Apple wants to be a shit and separate their customers from the rest of the world, then we should just abandon them to their choices.

Re:I give no fucks.

[david_thornley]

If you consider the people as adults, you'll realize that they go along with things or not for their own purposes. Apple has its own reasons for dealing as it does with Spotify's apps. Spotify has its own reasons for changing how it runs things on iOS. Each customer has their own reasons for moving to iOS, staying on iOS, or leaving iOS. The advantage of a competitive market is that things tend to adjust. If Apple made a bad decision, they'll sell less stuff. If Spotify made a bad decision, they'll make less money. If an individual customer makes a bad decision, well, it's their decision, and doesn't really matter for the marketplace.

Re:I give no fucks.

[Dishevel]

iOS customers are too stupid to move. I mean they waited for years telling us all how awesome shit was before they ever even were able to cut and paste. We will not even mention how long it took for their main page to offer anything more than a place to dump app icons.

Re:I give no fucks.

[david_thornley]

And you have no idea what you're talking about. In order to understand the good qualities of something, you first need to admit that there might possibly be good qualities. You've picked on a couple of things and concluded that anyone who puts up with them is incredibly stupid.

You'll have a much better life if you learn something about understanding other people when they disagree with you.

Re:I give no fucks.

[david_thornley]

They do not have the most memory, fastest processors,

True, but not particularly relevant.

they are not immune from hacking and viruses, they do not have the most useful OS.

They're a lot safer from hacking and malware than Android, due to the way they set up the market. The most useful OS depends on what you're doing with it, and normally can't be decided objectively.

What are these neat things Android can do that iOS can't? I use both, and find them similar. What I want in a home screen typically is access to the stuff I want to do on the phone, and that works well on both OSes. I don't care for the Android permissions system, and prefer what Apple does. My iPhone is snappier than my tablet, but then again I went low-end on my tablet (which serves my purposes very nicely anyway).

I understand that Apple has been relaxing the rules on competing with built-in apps, but I can't check that here because I don't have connectivity. In any case, I've found the built-in apps to be perfectly adequate for my needs. Someone else might have different needs, but I'd like to hear from an actual person on that rather than a figment of your imagination.

As far as cut-and-paste goes, it doesn't seem to be that important for what I want to do with a phone. To judge a system, you need to consider what people are trying to accomplish with it, not go through a checklist of features that you like. Reminds me of the time someone argued that you can't attach stuff to an email on an iPhone, and insisted that being able to attach something to an email is vital, as opposed to being able to email those somethings.

I'm not actually an idiot, but I don't know which apps contain malware or adware. The App Store isn't perfect, but it's well curated. I'm pretty safe installing apps from there, more than on Android. For most things you'd want an app for, there's a great variety. (I've got something like five calculator apps installed, including the Apple one you say Apple doesn't allow competition with. All of them are good, although Apple seems to have nerfed theirs in the most recent version. Fortunately, they haven't yanked my other calculators from the App Store for being competitive.) As I mentioned, I use both iOS and Android.

So, we see that you are apparently unable to understand why an intelligent person might disagree with you, and resort to insults instead. You're unable to understand what's good about iOS devices, and resort to insults and assume fanboiism that simply couldn't support the number of iPhones and iPads sold. I strongly recommend assuming for the sake of argument that people know what they're doing, and trying to figure out why they're doing what they're doing. You'll still run into cases of people being stupid, but I learn quite a bit from doing this.

Re:Fuck Spotify

[dc29A]

There service

Where?

Re:Spotify

[Holi]

Or you know, have morals.

This is why android

[shaitand]

This right here. Understand now iphone users?

Re:This is why android

[tw2k]

Nope, I don't understand. Specifically I don't really understand what the dispute is actually about or what has changed. Apple have always said if you offer subscription in app then you use Apple's purchasing systems and "Apps may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than IAP".

TFA says they were running 'promotions' to get people to sign up by other means so that's not allowed and never has been, then says "Spotify stopped advertising the promotion. But it also turned off its App Store billing option, which has led to the current dispute.", is the claim that they are trying to publish an app that doesn't offer in app purchases and doesn't direct people elsewhere and Apple are rejecting it? That seems unlikely and doesn't fit in with the quoted response from Apple. The summary here doesn't even make any attempt to present any facts about the dispute.

This crappy hate piece seems to imply Apple are moving the goalposts and picking on Spotify because they compete in the same space. Whereas it seems like the truth is that Spotify decided to break the rules that have been in place for about 5 years - 3 years before they purchased the Beats music service that became Apple Music.

You can like or dislike the walled garden approach where Apple sets the rules for its.store. Feel free for hate them for the way they indiscriminately apply commission to all in-app purchases and make it difficult for you to get the revenue by other means. But lets not pretend they are picking on Spotify specifically or that anything has changed, except that Spotify decided it no longer wanted to play by the same rules it signed up to several years ago.

Re:This is why android

[shaitand]

In the case of spotify I think it's a reasonable model, just like Netflix was when it actually had a decent content selection. I run my own personal home streaming system and it definitely costs quite a bit to do right (able to stream full blu-ray streams to every tv in the house at once along with handling realtime transcoding of remote streams), even without the cost to buy the content. Granted music doesn't present nearly so great a cost but actually buying the amount of music that is on spotify would cost a great deal so paying a small subscription for access to stream anything in the library instead of having to maintain one is reasonable.

This is quite different than suckers who are participating in the itunes "pretend you own" scheme where the content you "bought" could disappear in the mist at any moment. You never bought the content here.

I do think the likes of Spotify and Netflix are suckers though and that's why their content disappears. You don't see studios taking back content from blockbuster and the like. Once they've bought it with rights to show publicly they should pay once and own it and be able to show it as much as they like.

Re:This is why android

[shaitand]

"Android has the same problems for different reasons. Apps suck on Android due to lack of quality control and lack of standardization of the OS and hardware."

Correction, there are apps that suck for these reasons. There are also apps for just about every purpose that are as good or better than anything available on IOS. There are only a few very oddball cases where someone releases an app on IOS and doesn't also release it on Android because there are no shortage of great frameworks that you can develop with and release to both platforms with no extra effort. There are however plenty of apps that are available for android and not IOS... hundreds of them.

Re:This is why android

[snadrus]

That's presuming all companies are Apple when in-fact Google gives away Android including source code. They also built-in mechanisms for third-party stores allowing any apps to be installed. Then, they further improved quality-control in these by running installs through an optional blacklist of dangerous apps.

Re:This is why android

[Half-pint HAL]

Google, Apple and MS all built huge empires and they have every right to occasionally strong arm competitors.

No, they don't. That's why we have antitrust laws and the like.

Re:This is why android

[Drethon]

Heck, when I released an app on both platforms I had my Android app ready long before the iOS app. With Android I paid a one time fee and the ability to create a new app for debug and migrate it to release was simple. With iOS I had a higher once a year fee (so that app is no longer supported on iOS) and had to rent a mac computer so I could build, test and deploy my app. From now on I will be releasing Android apps, then migrating to iOS only if it is worthwhile.

Re:This is why android

[thegarbz]

Specifically I don't really understand what the dispute is actually about or what has changed.

What's changed is that companies are finally sick of apple taking a 33% cut for adding precisely zero value on top of another company's effort. This is resulting in a very popular company attempting to pull out of the market altogether.

Enjoy Spotify while you can. Unless they come to an agreement you'll very soon understand what is changing for you.

Re:This is why android

[tw2k]

It's 30%, dropping to 15% after the 1st year. The value they add is making the platform, hosting the store, the content, the billing, app screening and all the other admin. We can argue all day about how reasonable that slice is but it isn't for zero.

Re:This is why android

[BronsCon]

You don't see studios taking back content from blockbuster

After the fire sale when they went out of business, there was nothing left to take back.

Re:This is why android

[thegarbz]

Sorry but who are you providing value for again? Not for me. I can get my Spotify subscription with zero input from Apple. They have their own platform. So what's the value to me that Apple pushes their way into this process?

Are you a car salesman by any chance?

Re:This is why android

[david_thornley]

What I don't really understand is why this is considered a dispute. It's a failure of two companies that previously had a business relationship failing to agree on terms to continue the relationship. A dispute would be if one side considered the other side to be violating the law or an agreement.

Re:This is why android

[david_thornley]

If you're writing apps to make money, and have any success at it, buying a Macbook and an iOS developer's license is a fairly minor expense. If you find it not worthwhile to spend a few hundred dollars a year (amortized) to sell an app on iOS, you're not successful.

Re:This is why android

[david_thornley]

Except that Apple has very rarely had a monopoly, whereas Microsoft and Google have both had monopoly power. For the past thirty years or so, if you wanted to run a general business computer with a specialized application you almost certainly had to buy Microsoft. Google seems to have dominant power in search space at least in some places. If you don't like your Apple products, you can buy Android and MS Windows systems without any serious problems.

Apple has the right to set its own marketplace rules, and everyone else has the right to participate in it or not. App developers are perfectly free to develop for Android only (and Windows and/or Blackberry if they think it'll be worth it).

Re:This is why android

[tw2k]

Do you think Spotify are making a fuss because they are concerned about YOU are not getting sufficient value!?

I think the value is in the platform with a thriving ecosystem, I can't really tell you which parts of that personally derive value from, I would hope you've been able to work that out yourself when you chose what platform to use. If you are only looking at this isolated marginal cost and benefit then it's difficult to see where the value comes from. But if you look at the bigger picture you might realise that revenue streams like this help to subsidise other activities that lots of people benefit from, one example being the hosting of free applications along with providing the tools and documentation to the authors of those applications.

Yes you can get your Spotify subscription directly from Spotify without zero input from Apple, nothing here changes any of that, you can always just go to their site and sign up. I'm happy to argue the toss about wether the cut that Apple takes is too much or not, but if you think that there is zero value (and zero cost) involved in Apple giving Spotify access to their store, their customer base, providing developer tools and support then there isn't really much point in having the discussion. From memory, for the early years Apple said this was not a significant revenue stream for them and they were happy that it just broke even. More recently though it seems that the revenue has increased significantly so I would presume it now contributes to a reasonable profit stream and that is part of the reason for Apple starting to make some (admittedly small) changes to reducing their cut.

And no, I don't work in sales at all, never have and hopefully never will.

Re:This is why android

[Drethon]

Nope, I'm a hobbyist that develops apps in my free time when not working my full time job or schooling. Probably don't have enough money to be one of Apple's target types of developer.

Re:Fuck Spotify

[Austerity Empowers]

Where?

Exactly!

And this is a surprise?

[QuietLagoon]

Apple needs to assure that the walls of its garden are not breached. Apple customers must only access what Apple wants them to access within the increasingly higher walls of the Apple Walled Garden.

.
It's the reason (well, that and buggy software, but mainly that) why I dumped the AppleTV, gen4, that I recently purchased.

Who is surprised?

[dhaen]

They deserve each other. Both piss on artists and offer a minimal contribution to their talent.

Re:Who is surprised?

[MitchDev]

You think Apple and Spotify are bad, wait till you learn about the RIAA and the labels...

Re:Who is surprised?

[dhaen]

Yea well I wasn't going to criticise an agency that is foreign to me as a UK resident because our own BPI is bad enough. Let it be known that my own job depends on media sales but I cannot defend the way these agencies behave.

Re:Who is surprised?

[MitchDev]

Business scum and greed transcends national borders...

The Dystopian Cyberpunk world (minus the "jacking-your-brain-into-the-network") is closer than many realize...

This is what laws are for...

[OfficeLackey]

While their are security benefits to Apple's walled garden approach, this is clearly an anti-competitive move by a market giant. Let the system work before we charge off with torches and pitchforks. Spotify will take them to court, where Apple will either settle or a judge should rule against them. If it goes any other way, then it's time to rally up the villagers. Till then, watch the show. Microsoft had it's turn as the bully and before that IBM and so on and so forth. Companies are going to push as far as they can until someone calls them on it and the laws are allowed to do their job.

Re:This is what laws are for...

[Grishnakh]

At some point, consumers need to take responsibility for their own choices. In the case of a true monopoly, it's true that consumers have little other choice, and even in the case of Windows you can make the claim that the presence of so much existing software on the platform, and the overwhelming marketshare, qualifies for similar treatment.

However, iPhone isn't even the market leader, not even close. Android is, by far. I really don't see why this warrants any attention other than "look! another way Apple users are getting screwed over! hahaha!"

I'm not worried about Ferrari owners getting the shaft with horrifically overpriced oil changes. So why should I care about Apple users getting screwed for $3/month?

Re:This is what laws are for...

[OfficeLackey]

The issue isn't iPhones, it's iTunes, with 64% of the market (http://www.statista.com/topics/1386/digital-music/). As a market leader, they can't use their position in that or other markets to stifle competition in that area. My point was that it's not yet time to wake the neighbors and preach the evils of Apple. Given time, the law should kick in and take them down a peg and restore balance. If it doesn't, then we should raise the volume of our indignity. Until then it should just be a headline on page 3 that we can skim or pass over. (and yes, that was a retro newspaper reference)

Re:This is what laws are for...

[Grishnakh]

You're making more of this than there is.

With MS in ~1999, people didn't really have a lot of viable alternatives if they wanted to use a desktop computer with any commercially available software (desktop Linux was still really young then, and even Macs had recently come out with the iMac and still ran OS 9). They had a de facto monopoly.

Yes, Apple has a monopoly over the Apple store, but that only affects iPhone/iPad users. They're a minority of the market. It's no different than how BMW has a monopoly over genuine BMW accessories for BMW cars and over factory service for BMWs through BMW dealerships. If you think BMW's accessory and service prices are ridiculously high, that's not a problem: don't buy a BMW. You have plenty of alternatives to BMWs, and much cheaper ones in fact. The exact same applies to Apple. Just because so many hordes of people (but still a minority) have willingly chosen to subject themselves to Apple's walled garden doesn't mean we need government intervention to force them to treat their customers nicely.

"Adding no Value"

[SuperKendall]

You are saying there is NO VALUE in having hundreds of millions of users who can sign up for your service with one click and not having to enter billing information, with a subscription that is set by default to auto-renew?

Ask me how I know you don't understand business or money at all.

Re:"Adding no Value"

[Gojira Shipi-Taro]

It's certainly not worth 1/3 the base subscription fee.

Re:"Adding no Value"

[suutar]

As the subscriber (and therefore the person actually ponying up some cash) I can say that there is nothing Apple is doing with regard to spotify that has 3 dollars a month value to me.

Re:"Adding no Value"

[FlyHelicopters]

They aren't, until Apple becomes big enough, then they have no choice...

That is why the anti-trust issues come in, Apple is large enough they should know better.

Re:"Adding no Value"

[Grishnakh]

But are they big enough? All the numbers I've seen show Apple to be a rather small portion of the smartphone market, and that's just in the US. Outside the US, they're tiny. Of course, there's also data showing that iPhone users are much more likely to spend money on apps than Android users, but as a portion of the market itself, Apple is not dominant. They merely hold a very lucrative niche.

Re:"Adding no Value"

[known_coward_69]

not to you, but to the app creator

Re:"Adding no Value"

[Grishnakh]

He has a point though. Apple is not a monopoly in the smartphone space, they don't even have a majority of the marketshare.

If you don't feel that Apple's extra $3/month fee to have Spotify on an iPhone is worth it, and you don't feel that a company that operates this way should be rewarded, you can get yourself an Android phone instead. And apparently, you have!

Why should we be worried about people who willingly buy massively overpriced phones, from a vendor with a long history of this kind of behavior, and then get screwed over when they could have seen it coming? Do we worry about how Aston-Martin owners get screwed over with overpriced accessories or service or mis-features on their cars which make it hard for them to change their own oil? Why should we worry about the plight of luxury phone buyers who have to spend an extra $3/month for a service they can get on Android without that surcharge?

When we see this behavior by Google as well, then maybe we can start complaining. But at least on Android, you're not physically prevented from loading apps from places outside Google's Play store.

Re:"Adding no Value"

[tbuddy]

If they didn't add value to it then people would not be going through Apple EVERY MONTH for the convenience. Same thing with people paying $8+ to Time Warner for a modem rental. If the price is too high and there is an alternative to do things cheaper it is up to the consumer to make that decision. Should the consumer opt for convenience at a price it is up to them.

Re: "Adding no Value"

[Anonymous Coward]

As a portion of the market in question,nnamely, mobile music listeners willing to pay monthly sub, Apple is huge and likely in violation of anti trust laws.

The courts will fugure this out. Thankfully for consumers, the courts have a better consumer protection history than your typical slashdot pro-business anti-consumer libertarian.

Re:"Adding no Value"

[green1]

If it was worth it to the app creator, don't you think they'd pay up instead of getting lawyers involved?

Re:"Adding no Value"

[richy freeway]

https://support.apple.com/en-g...

Hope this helps.

Re:"Adding no Value"

[known_coward_69]

netflix has been paying up for the last few years and growing subscribers

Re:"Adding no Value"

[suutar]

the app creator isn't paying the money.

Re:"Adding no Value"

[amicusNYCL]

You're willing to pay an extra $3 per month because you don't have to enter your billing information when you sign up (once)? That's really worth $3 per month to you? Because it's you that is paying that extra charge, not Spotify. Apple is charging you $3 per month to use the same app through your phone that you would use on a computer or whatever else. And you're suggesting that's a good value to you? Is it really that difficult to enter your billing information, or is that just a hassle that you're willing to pay an extra $36 per year to skip?

I'm looking for answers to these questions because I don't understand business or money at all, and obviously you do. So, where exactly is that extra value that makes it worth $3 per month to you?

Re:"Adding no Value"

[saloomy]

This is a problem for one sector of the industry against another sector. The model Apple has created saves the small developer a lot of resources and energy by allowing them to offload to apple:

1) the hosting costs of serving their application

2) Set up a payment gateway, processor, PCI compliance.. etc..

3) Provides metrics for small developers, a user-feedback system, an automatic update mechanism

4) A sales strategy that helps get smaller app developers noticed.

Searching in the App store is more small-developer friendly than searching in Google. If we used google for searching for our app games, all we would ever find is EA, and other developers wouldn't be as successful. The model works and the ecosystem is a testament to that.

and I can't state this enough
5) Providing a lot of small developers a robust QA department.

Can you image the plethora of crash, buggy, shitty, malware-ridden, infected, suspicious, devious, dubious, and malicious apps we would have if we all downloaded apps off random web-pages instead of the curated app store?

I don't feel like looking through all the slashdot articles on the various bugs and crap that have come out on Android, and friends of mine who are devout Android users have remarked how much better the iOS app versions seem to be. There is nothing you could get me to do to leave the curated app store, even there are downsides to the curation. Some apps get banned for content or purpose (porn, political satire) reducing selection. Also, Apple isn't perfect, and providing a high quality product does lead the consumer to believe the apps must be for all intents and purposes, perfect. So they may be less likely to practice computing safety. Suspicions attachment in email? In outlook, you listen to the warning. On an iPhone, you feel like theres not much it that can break, but there still issues that get through.

But, can you imagine if Microsoft did this for Windows EXEs? We wouldn't have as many of the shitty anti-virus, anti-malware, any-spyware, toolbar-removing, homepage-changing, crap-vertizing safety apps we have on PCs today. Not having to deal with that mess on my phone, priceless, and well worth the 30% overhead on my measly app costs, considering most really useful apps are free anyway, where Apple just absorbs these costs itself.

The real complaints come from the big guys, who have all this infrastructure. This is why you can't subscribe to Office365 via the Office apps. This is why there is no Autocad purchasable on the iPad. Their costs take into account all these functions, without having to subsidize it for free Apps. But they have their own sales channels and the app is seen as a "bolt-on". Just like the app that comes with your company phone system.

The real problem here occurs when you have hyper-competitive markets like song-streaming. Spotify, AM, Pandora, they all fight every contract and deal they make for fractions of pennies due to the micro-margins and huge throughput in their business models. That causes them to penny-pinch for the cost savings they need to be competitive. Those markets are now butting up against Apple's hard and fast "We didn't negotiate with Microsoft for Office, why would we negotiate with you? The rules are posted on the website right there!" rules for cost-sharing. And they are not happy about it.

Re:"Adding no Value"

[ColdWetDog]

Please provide an example of how decreased purchasing friction benefits consumers.

Condoms?

Re: "Adding no Value"

[davester666]

So, Apple's "monopoly" is "Customers with Money"?

Re:"Adding no Value"

[Holi]

Except the market in question is not the smartphone space. It is the streaming music market, which Apple does have sizable control (as in can dictate market prices). That is what may put them in the legal cross hairs. It's not bout the straight numbers, it is about how much control a player has in the market. Apple has been the controlling force in digital music since the beginning (where do you think the current pricing of about a dollar a song came from).

And if we really want to get into it. Apple has 100% control of this particular market, IE the walled garden. they control access to it, and when they decide to compete against you, you will be denied entry. This is very much an anti-trust issue. No less so then Microsoft deciding to bundle a browser (they never charged Netscape a dime for letting them run their program on Windows nor did they deny them the ability to.).

Re:"Adding no Value"

[tlhIngan]

As the subscriber (and therefore the person actually ponying up some cash) I can say that there is nothing Apple is doing with regard to spotify that has 3 dollars a month value to me.

Well... not having to give your payment information to Spotify is one. Apple doesn't share ANY purchaser information other than an ID that really can't be tied to anyone. So not having to worry about another site having your personal information might be worth it. I don't know if signing up for Spotify requires giving them your personal information, or if you can just pay $13/year and be done with it (since a lot of personal information is just so they can bill you).

Second, Apple offers a robust set of payment methods - even if you don't have a credit card you can use Spotify on iOS - just buy an iTunes gift card and use that. Granted, many services offer it nowadays, but iTunes ones seem to go on sale regularly - you should be able to find them for 10% off face value always, and 20% off happens often enough.

Of course, everyone assumes Spotify's app is the best in the world, and that Apple didn't reject it because it doesn't work on iOS 10, or it crashes, or some other thing. (One does wonder if Apple even reviews Google's apps, given how many of them crashed on startup - as if Apple intentionally did it to show people how bad Google's apps are).

Re:"Adding no Value"

[Khyber]

You obviously failed the Magnusson-Moss Warranty Act part of business.

Re:"Adding no Value"

[Khyber]

You don't need a monopoly to be convicted of anti-trust violations.

How do you people forget this simple fucking fact? It's as if you truly didn't pay full attention to United States vs MicroSoft.

Re:"Adding no Value"

[dgatwood]

The real problem here occurs when you have hyper-competitive markets like song-streaming. Spotify, AM, Pandora, they all fight every contract and deal they make for fractions of pennies due to the micro-margins and huge throughput in their business models.

That's not really the problem; I mean yes, it is part of the problem, but it is not the core problem. If every vendor had to pay that percentage for Apple's payment processing, those companies could continue to fight for every cent, but they would be competing on equal terms. The problem is that Apple itself is in the music streaming market, and by requiring everyone else to use Apple's payment service (on which Apple makes a profit) instead of much cheaper third-party payment services, it is effectively granting Apple an unfair competitive advantage over everyone else in that space, because they can choose to not take the extra profit on the transactions themselves, and thus can offer their own music service for considerably less money than anyone else.

Now if Apple is willing to give 30% of their Apple Music revenue to music charities to level the playing field, that's fine (and musicians everywhere would love it if they did), but otherwise, what they're doing is blatantly anticompetitive, in addition to undeniably harming consumers by tricking iOS users into paying a higher price for the same goods and services solely because they happen to have downloaded the app and subscribed through the app rather than going to the company's website and buying a subscription before downloading the app. (BTW, I reject the entire notion that Apple "brought those customers to the table". Most people who get apps do so after hearing about them outside the App Store. Almost nobody I know has ever discovered anything in the App Store without searching for it; the store is just too big for that to be practical.)

The thing is, lots of folks pointed out all of these problems way back when Apple first announced their in-app purchase rules, and it has been an ongoing battle ever since. Eventually, it is going to come down to an antitrust suit, which Apple is likely to lose. And that will also be bad for consumers, because the app store rules do have a valid purpose—making it so that users don't have to give out their credit card to every random app that they do business with.

IMO, the only solution that won't harm consumers is for Apple to change their rules so that the "in-app purchases only" rule has an explicit exception for subscriptions to services that are also available on non-mobile platforms via a website. This would basically cover all the interesting edge cases, would cause Apple minimal financial impact in the long run, and would prevent this from turning into an ugly lawsuit where everyone loses.

Re:"Adding no Value"

[dgatwood]

netflix has been paying up for the last few years and growing subscribers

Netflix isn't competing against an Apple-owned subscription video service. If that changes, you can bet their lawsuit will follow within days.

Re:"Adding no Value"

[will_die]

Where is Apple charging me an extra $3 per month?
That price is coming from Spotify who is not will t deduct for credit card fees or take into account fraud costs that Apple is now handling.
Apple charges a 30% fee to cover a lot most of the business costs of selling on the Internet and a company does not want them to and does want the customers they bring then it is simple matter of not producing an app for ipods.

Re:"Adding no Value"

[Anonymous Coward]

You don't need 100% or 70% or even 51% of the market to have a significant impact on it. Apple's 40% of the US smartphone market is enough to be able to cause real headaches for competing products in other areas like music streaming.

Re: "Adding no Value"

[MobileTatsu-NJG]

Around here Apple is a monopoly with a miniscule market-share. Must be Time Lord technology.

Re:"Adding no Value"

[Curunir_wolf]

netflix has been paying up for the last few years and growing subscribers

So why hasn't Apple banned Netflix from the App store? I don't pay my subscription through Apple. I have the app on my iPad, but I never even use it.

Re:"Adding no Value"

[Curunir_wolf]

Well... not having to give your payment information to Spotify is one. Apple doesn't share ANY purchaser information other than an ID that really can't be tied to anyone. So not having to worry about another site having your personal information might be worth it. I don't know if signing up for Spotify requires giving them your personal information, or if you can just pay $13/year and be done with it (since a lot of personal information is just so they can bill you).

I signed up for Spotify using my Facebook account (which was a mistake, in retrospect). When I decided to upgrade to the pay version, I used Spotify gift cards. So they don't really have that information from me (except what Facebook lets them have, which is all fake anyway).

Re:"Adding no Value"

[green1]

So what you're saying is that they do not feel it adds value.
When you're having trouble making ends meet, you cut things that don't add value, you don't cut the things that make you money.

Re:"Adding no Value"

[Curunir_wolf]

https://support.apple.com/en-g...

Hope this helps.

Nope.

Follow these steps if you don't want to associate a payment method with your account.

A credit card is required to set up accounts for children.

If you've already created your Apple ID, you'll need to add a payment method when you first use it to sign in to the iTunes Store, App Store, or iBooks Store. But you can optionally remove the payment method after you sign in to the store.

WTF, Really? That's NOT creating an ID without a CC. At all. They're still collecting your CC information. And keeping it, I'm sure, after you "remove" it. It's like those porn sites that "Hey, we just need a credit card for access to prove you're 18. We won't charge it. Promise". Also "Just the tip."

Why can’t I select None when I edit my Apple ID payment information? You might not be able to see or select the None payment option for one of these reasons. If you don't want to use a credit card, you can use another form of payment, such as a gift card.

• If you have an unpaid balance or payment due
• If you have a subscription that automatically renews
• If you're using the iTunes Store or App Store for the first time
• If you changed your country or region
• If you're a part of Family Sharing

TL;DR: Apple WILL get your credit card, or you won't get in.

Re:"Adding no Value"

[richy freeway]

I guess they changed it at some point then. I have had an Apple ID for however long and there's no payment info attached. I've used the account to acquire free apps from itunes. I can't really prove it any more as I no longer own any Apple devices.

Yet again I come along with the anecdotal evidence, but there you go. YMMV n all that.

Re: "Adding no Value"

[saloomy]

Yes, it sucks that you have to compete with essentially... Your vendor. This is becoming more and more prevalent in the IT industry, just look at office 365 vs the MSPs who resell exchange cloud services.

Your proposed solution sounds good, but my issue with it is that the App Store does not cost Apple $0 to operate. So if they gave away their 30%, that would harm them disproportionately since they would then also have to provide for their App Store team.

It's a tough nut to crack. They should be free to pursue every avenue of business, but they should also have to compete fairly. I'm not sure there is a really slick solution that makes things truly level. They use undocumented APIs for music that hook into Siri, and they have also integrated with the native iPOD app. Two things Spotify just can't do. There's an awesome clip of Steve jobs introducing default I.E. for OS X, and he said "Since we believe in choice, you can change your default browser if you choose", to thunderous applause. Apple have changed their beliefs since then.

Re:"Adding no Value"

[Anonymous Coward]

I literally just created an apple ID about 30 mins ago without using a credit card. You are wrong.

Re:"Adding no Value"

[Kernel Kurtz]

The problem is that Apple itself is in the music streaming market, and by requiring everyone else to use Apple's payment service (on which Apple makes a profit) instead of much cheaper third-party payment services, it is effectively granting Apple an unfair competitive advantage

It is not just the profit either. Apple then also has full insight into competitors revenue streams on its platform (ie strategic insider financial information).

Hard to believe it is legal.

Re: "Adding no Value"

[BronsCon]

Not at all; I'm the one making a 6-figure income, my wife's the unemployed iPhone user.

Re: "Adding no Value"

[BronsCon]

It's bigger on the inside!

Re:"Adding no Value"

[amicusNYCL]

Where is Apple charging me an extra $3 per month?

If you go to Spotify's site and sign up, they charge you $9.99. If you sign up through the iOS app, they charge you $12.99, and they owe Apple 30%, so Apple gets that extra $3. That's the Apple tax. Spotify doesn't pay it, they still get their $9.99 (a little less, 30% of 12.99 is 3.87 or so), you pay it. You pay Apple $3 extra every month for your $10 Spotify membership.

Re:"Adding no Value"

[thegarbz]

Yes. What hundreds of millions of other users do doesn't interest me. They add no value to me as the user and somehow charge $3 more.

Re:"Adding no Value"

[BronsCon]

You can buy prepaid Visa cards with cash, as well...

Re:"Adding no Value"

[Grishnakh]

Microsoft was a monopoly at the time: they had well over 90% (IIRC, probably more actually) of the desktop market. That isn't comparable to Apple, which has less than 50% of the smartphone market in the US.

The lesson from the MS trial was that you don't have to have literally 100% of the market to be a monopolist and subject to anti-trust law. 95% is good enough.

Trying to compare that to the current situation with iPhones seems rather ridiculous. What we have now is basically a duopoly, with Apple iOS and Android each having roughly half the market, and Windows Phone and others being bit players.

Re: "Adding no Value"

[ZipK]

So Netflix gets more subscribers but Apple continues to make money far our of proportion relative to its actual cost.

Cost is secondary, at best, with value based pricing.

Re:"Adding no Value"

[BronsCon]

That price is coming from Spotify who is not will t deduct for credit card fees or take into account fraud costs that Apple is now handling.

If 30% was the standard loss Spotify was taking on their web-based and Android-based subscriptions, I'm sure they'd be more than happy to give Apple a 30% cut of their $9.99 subscription. I can assure you no legitimate business loses 30% to fraud, chargebacks, and processing fees, which means Spotify's costs for these things are much loser than 30%; in order to remain profitable on Apple's platform, they must charge more.

Disclosure (e.g. how I know these costs firsthand): One of my clients is facing the same issue with software sold in packages ranging from $69 to well over $2,000 (there's a package in the $20K+ range that's literally every bit of software and content they offer) and their direct-sales margins range anywhere from 1% to 10%, they absolutely must charge app-store users 30% more in order to profit. As they're becoming less and less comfortable with the situation, they're now talking about pulling out of the app-store and only doing direct sales going forward, in order to continue offering competitive prices to their users. I may have convinced them to keep a very basic offering in the app store for marketing purposes, but they've expressed no interest in continued sales through the platform for these very reasons.

Re:"Adding no Value"

[exomondo]

If it's a subscription they want 30% of the subscription ongoing. All that stuff you listed that they provide they also provide to app developers who charge nothing for their applications and also on a one-off per-purchase basis for applications that charge money. What is it that subscription services providers get over those who charge nothing and those who charge a one-off price? Nothing.

Now most subscription services don't charge for the app itself so a way for Apple to get some revenue without just leeching onto services providers is possibly to take a 30% of the first month of the subscription. That way they get their one-off payment just like any other paid application.

Re: "Adding no Value"

[exomondo]

Your proposed solution sounds good, but my issue with it is that the App Store does not cost Apple $0 to operate.

Of course not, but it's a value-add. You think people would be buying iPhones and giving Apple the massive profit margin they make on them if they didn't have the app store? In addition they do not charge free application developers anything (aside from the registration cost they charge to everybody), they just want to take a cut if you are making money so a more reasonable suggestion for subscription services is this.

Re:"Adding no Value"

[exomondo]

He has a point though. Apple is not a monopoly in the smartphone space, they don't even have a majority of the marketshare.

You don't have to have majority marketshare, just significant market power and influence. Apple fanboys (NB: not every Apple user is a fanboy) love to crow about how iOS is the only profitable platform in the mobile app space and that Android users never pay but then once they're called out for anti-competitive behavior all of a sudden Apple are a tiny, uninfluencial player with miniscule marketshare.

To be competitive in the mobile app space you have to be on Android and iOS, you know that, if you're suggesting otherwise then you are clearly serving another agenda. I'm an Apple user (but not a fanboy), I have used iPhones exclusively for the past 4 years and have 3 Macs but I'm not going to pretend this is not asshole anti-competitive behavior by Apple.

Re:"Adding no Value"

[jrumney]

Well... not having to give your payment information to Spotify is one.

That covers the status quo before Spotify was blocked. The situation now is that you do have to give your payment information to Apple, and pay an extra $3 for the privilege. Spotify have been blocked for giving you options for payment method.

Re: "Adding no Value"

[davester666]

Then Spotify has determined that Apple has a monopoly on potential customers of a streaming music service? That sure as fuck isn't a monopoly.

The only thing Apple has a monopoly on is....people wanting to buy things from Apple.

Hell, Spotify doesn't have to pay Apple's cut. Right now they aren't, as they have (it's my understanding, I don't have the app and don't use their service) disabled the in-app purchases for the subscription. People can go to spotify's web site, even on their iPhone, and sign up and pay spotify directly, Apple doesn't get a cut at all, then they enter their username/password or whatever in spotify's app and they can happy stream whatever. It's just not as easy a process for a potential customer to do vs if Spotify continued to use iOS payments.

Re:"Adding no Value"

[cdwiegand]

Sure - instead of putting my CC info into Yet Another Insecure Website Just Waiting To Be Hacked, I can use my secure Apple-stored CC token to purchase a premium app. I trust Apple - I don't (want to) trust Valve, or Steam, or some weird website that offers Paypal OR credit card through some unknown 3rd party provider. Also Apple makes it just take my thumbprint, others have multiple screens or validation codes you have to enter - again, less "friction", more time for more important things in my life.

Re:"Adding no Value"

[Grishnakh]

They're not a niche player, but you're measuring wrong. There's only a handful of players in the market: iOS, Android, Windows Phone, and Blackberry. Samsung is not a player at all, nor is Sony, etc. When someone makes an app for a phone, they don't make a Samsung app, they make an Android app and it works on all Android devices regardless of manufacturer. So Apple is still in second place. They aren't competing against Samsung, they're competing against Google. This is all about the app stores, not the handset makers.

Re:"Adding no Value"

[Grishnakh]

I'm not claiming it's non-assholish; it definitely is. I just believe that if people don't like this behavior, they can choose to not buy Apple products. I sure as hell don't, because I do view them as assholes, and much bigger assholes than the alternatives. I'm not going to reward their behavior with my money. And unlike Windows for instance with applications, there's nothing that compels you to use Apple products; just about any app you want is also available on Android (except Bumble, gee darn).

Re: "Adding no Value"

[dgatwood]

Your proposed solution sounds good, but my issue with it is that the App Store does not cost Apple $0 to operate. So if they gave away their 30%, that would harm them disproportionately since they would then also have to provide for their App Store team.

The app store is entirely an orthogonal issue. Spotify is a free app, so Apple would still be obligated to distribute it for free even if Spotify stopped selling subscriptions in the app and presented only a login screen, thus forcing users to do a Google search for the website and buy a subscription there. So it doesn't make sense to treat those normal costs of doing business as part of the value added by Apple's in-app purchases.

So by my math, other than the fairly negligible benefit of customer convenience (only updating your credit card in one place instead of two every few years), the only real value that Apple's in-app purchases provide is the purchasing system itself, which is measured in the low single-digit percent territory, at least for customers the size of Spotify. (The benefit is bigger for smaller companies, of course, because they won't get the preferential merchant account rates and people will be less comfortable giving unknown companies their credit cards... but again, that doesn't apply in this case.)

So maybe not 30%, but how about 25%? That would roughly balance the scales.

Re:"Adding no Value"

[dgatwood]

Technically, they only know about the ones who didn't know that they'd save money buy buying the subscription on the website, which is likely to be a dwindling number over time, or at best, a continuous stream of newbies who eventually realize their mistake and start subscribing directly.

Re: "Adding no Value"

[BronsCon]

Then Spotify has determined that Apple has a monopoly on potential customers of a streaming music service?

Who ever claimed Spotify determined Apple has a monopoly on anything?

Hell, Spotify doesn't have to pay Apple's cut. Right now they aren't, as they have (it's my understanding, I don't have the app and don't use their service) disabled the in-app purchases for the subscription.

Indeed, this is the update that Apple refused to approve, which is why Spotify pulled the app from the store.

People can go to spotify's web site, even on their iPhone, and sign up and pay spotify directly, Apple doesn't get a cut at all, then they enter their username/password or whatever in spotify's app and they can happy stream whatever.

They sure can, and this is what Spotify intended; however, those very same users now cannot enter their login info into the Spotify app on iOS unless they already had it installed before Apple refused the aforementioned update and Spotify pulled the app from the store; and those users will already have subscriptions, likely through Apple's system. They do have to pay it, in perpetuity, for any customers already using that option.

It's just not as easy a process for a potential customer to do vs if Spotify continued to use iOS payments.

Now, this is based on actual fact and I can agree with it. However, it's also how Google Play (Music, Video, and Books) and Amazon's counterpart to that work on iOS and people don't seem to have a problem with it.

Apple's issue, in this instance, is that they were insistent, either Spotify use in-app purchases on iOS and not tell users they can get it cheaper elsewhere, or they leave. That's precisely what Apple was doing when they refused to approve the update removing the in-app purchase functionality.

The reason this is an issue for Apple is that, thus far, anyone with enough sales for Apple's policies to potentially be an issue and deep enough pockets to take the issue to court has, thus far, not been willing to risk their spot in the app store over it. Apple basically booted Spotify from their store with an ultimatum: keep ripping your customers off on our behalf, take a sizable loss after we take our cut[1], or leave. Since they issue, originally, is that they were tired of ripping their customers off on Apple's behalf, and they need to make a profit to stay in business, they were stuck with option 3. Apple's attempt to force the use of one service (their in-app payment system) as a requirement for continued use of another (their app store) is, de-facto, illegal, and with Spotify no longer in the app store, they don't have that spot to worry about losing anymore; and they've got deep enough pockets to see it through to trial.

[1]: Spotify's margins are somewhere in the realm of 12%, that means a 30% cut given to Apple represents a roughly 18% loss on each in-app sale to an iOS user at $9.99. At $12.99, their margins are 2.33% after Apple's cut. They can't afford a 18% loss on each iOS user, it's just simple mathematics. However, if just 20% of iOS users also use the service on another device and continue their subscription at the $9.99 rate, Spotify will at least break even ditching Apple's platform. This will hurt Apple much more than Spotify.

Re: "Adding no Value"

[davester666]

No, Apple didn't "boot" Spotify from the app store. Spotify removed their approved app from the store. There is a world of difference between those two things.

Apple's attempt to force the use of one service (their in-app payment system) as a requirement for continued use of another (their app store) is, de-facto, illegal, and with Spotify no longer in the app store, they don't have that spot to worry about losing anymore; and they've got deep enough pockets to see it through to trial.

What specific law prevents this contractual arrangement?

And, again, Spotify:
a) was not booted from the store
b) can use their own, no-cut-to-Apple, payment system with their iOS app, without having an iOS payment method.

Spotify chose to remove their existing app from the app store instead of removing the feature from their updated app that violated the terms of the app store developers agreement (which is likely the in-app redirection to a web site for payments).

Re: "Adding no Value"

[BronsCon]

No, Apple didn't "boot" Spotify from the app store. Spotify removed their approved app from the store. There is a world of difference between those two things.

Read that again, in context. Apple didn't give Spotify a choice other than: keep ripping off your customers for 20% of the profit a direct sale nets you, take an 18% loss, or leave.

What specific law prevents this contractual arrangement?

I'm not a lawyer so I can't quite the statute, but it'd be the same one that got Microsoft in shit for bundling IE.

Spotify chose to remove their existing app from the app store instead of removing the feature from their updated app that violated the terms of the app store developers agreement (which is likely the in-app redirection to a web site for payments).

RTFA again. They added the ad (which they'd been allowed previously) and were denied. They removed the violating feature (the ad) and the in-app purchase functionality. They were denied a second time for removing the latter.

I'll forgive you for arguing based on false assumptions if you'll take the time to correct your understanding.

Re: "Adding no Value"

[davester666]

I'm not a lawyer so I can't quite the statute, but it'd be the same one that got Microsoft in shit for bundling IE.

No, it wouldn't. Microsoft got in trouble because it 1) had a monopoly in the desktop os market and 2) required manufacturers to keep IE as the default browser. This resulted in IE also effectively having a monopoly on the browser market. Google is also having this problem in Europe because they 1) have a dominant market position in the mobile OS market and 2) requiring manufacturers to bundle/use a variety of google apps and services. The important thing to take away from this is that Apple is missing part 1. It doesn't have a dominant position in any market, other than the Apple OS market.

RTFA again. They added the ad (which they'd been allowed previously) and were denied. They removed the violating feature (the ad) and the in-app purchase functionality. They were denied a second time for removing the latter.

I'll forgive you for arguing based on false assumptions if you'll take the time to correct your understanding.

And you are assuming Spotify is being completely truthful and accurate. Neither of us have had an opportunity to use the rejected app. IMHO, it is likely the rejected app still has a link to a subscription sign-up page, which is prohibited by the ios dev terms..

And hey, Spotify Music still shows up in iTunes for me...with all their in-app purchases, so I guess they haven't removed their app... And it's still listed #1 in the "top grossing" list for Music apps, so it can't be that terrible for spotify.

Re: "Adding no Value"

[BronsCon]

I stand corrected, it seems they did not pull their app; I thought I had read that in the article, but it must have been a comment elsewhere in the discussion. TFA does, however, clearly state that the claims Spotify is making are quoted from "a letter sent this week to Apple’s top lawyer". Further:

The letter says Apple turned down a new version of the app while citing “business model rules” and demanded that Spotify use Apple’s billing system if “Spotify wants to use the app to acquire new customers and sell subscriptions.”

Apple's "business model rules" include restrictions on subscriptions and sales models, the ad must have been removed or the denial would have been for "advertising of external purchase options" or something similar. Are you insinuating that Spotify's lawyers are dumb enough to tell Apple's lawyer's that Apple is making demands they are not making? Because, well, the information in the article is pulled straight from that letter.

I'm curious to see the actual letter, but it was sent to Apple's lawyers, as well as several news agencies, all of which seem to be reporting the same thing. I don't think there's a conspiracy between every news agency reporting on this to misrepresent the content of that letter, and I don't think Spotify's lawyers are morons.

If it's being reported that the app was denied for a reason other than the (removed) ad and that Apple is insisting that Spotify use Apple's in-app purchasing system, and that these claims are sourced from a letter sent to Apple's legal team, you can bet your ass those are the facts of the situation.

Re: "Adding no Value"

[davester666]

“Spotify wants to use the app to acquire new customers and sell subscriptions.”

To me, this would indicate there is a link in the app that goes to a web page to sign up for a new subscription, which is against app store rules.

This wouldn't be the first time a corporation misrepresented a situation to paint themselves in a good light, and it won't be the last. Hell, it's not like this letter is under oath or anything.

For example, another Apple competitor, NetFlix, had an iOS app that worked for years without using Apple's in-app purchasing model, just using their own web site to sign up and pay for subscriptions, before adding in-app subscriptions to their iOS app.

http://www.theverge.com/2015/9/24/9395037/netflix-ios-app-subscribe-in-app-purchases

Re: "Adding no Value"

[BronsCon]

For example, another Apple competitor, NetFlix, had an iOS app that worked for years without using Apple's in-app purchasing model

You think that's news to me? From a little further up in the conversation:

It's just not as easy a process for a potential customer to do vs if Spotify continued to use iOS payments.

Now, this is based on actual fact and I can agree with it. However, it's also how Google Play (Music, Video, and Books) and Amazon's counterpart to that work on iOS and people don't seem to have a problem with it.

Re: "Adding no Value"

[davester666]

Now, this is based on actual fact and I can agree with it. However, it's also how Google Play (Music, Video, and Books) and Amazon's counterpart to that work on iOS and people don't seem to have a problem with it.

Again, to me this further indicates that Spotify is trying to knowing break iOS app store rules about including a link to a subscription page. If they instead go to a non-sign up now page, it probably gets through the approval process. And spotify knows this. And that is why it is likely that Spotify's letter is intentionally deceptive, because they know the reason why, but intentionally misrepresenting why the app is being rejected.

But as well, currently it is not possible to know, for sure, as the rejected app isn't available for examination. And we only have Spotify's version of events.

Re: "Adding no Value"

[davester666]

well, it seems to me that if spotify instead threw in a link (just as an example) to an ios-specific page that didn't have a sign-up-now button, it probably would not be rejected.

Re: "Adding no Value"

[stealth_finger]

So, Apple's "monopoly" is "Customers with Money"?

No, it's people with more money than sense.

Re:"Adding no Value"

[Plumpaquatsch]

They aren't, until Apple becomes big enough, then they have no choice...

Ohh, look, it's Apple, the monopoly without any marketshare again.

Re:"Adding no Value"

[Plumpaquatsch]

It's certainly not worth 1/3 the base subscription fee.

Says who? The companies that happily give the 30% (15% for subscriptions lasting longer than a year now) to Apple to give people easy access to their subscriptions, knowing they will make up the money they give Apple in increased numbers? Or those like Spotify that make the customers pay that fee, and still have people paying more for the subscriptions, because the convenience for them is actually worth it?

Of course the convenience is what actually disturbs Spotify - that people can just as easily cancel their subscription without going to their website, and join a competing product. And that's what the market leader Spotify is so worried about. Competition. They are anticompetitive.

Re: "Adding no Value"

[Plumpaquatsch]

People can go to spotify's web site, even on their iPhone, and sign up and pay spotify directly, Apple doesn't get a cut at all, then they enter their username/password or whatever in spotify's app and they can happy stream whatever.

They sure can, and this is what Spotify intended; however, those very same users now cannot enter their login info into the Spotify app on iOS unless they already had it installed before Apple refused the aforementioned update and Spotify pulled the app from the store; and those users will already have subscriptions, likely through Apple's system. They do have to pay it, in perpetuity, for any customers already using that option.

Errm what? Are you and Spotify actually claiming that Apple changed how login works on the non-updated app version that you can download now? Instead of Spotify fucking up the process themselves, either by incompetence or by malice to stir up this ruckus?

And are you also claiming that people subscribing using Apple's in-app purchase system can not ever unsubscribe?

Or are are you just writing gibberish because you have no fucking clue what is actually going on?

Re: "Adding no Value"

[david_thornley]

Apple didn't give Spotify a choice other than: keep ripping off your customers for 20% of the profit a direct sale nets you, take an 18% loss, or leave.

Apple is willing to give Spotify the right to sell stuff in the Apple ecosystem, provided they get their cut. Apple is providing a service here, and deserves to get paid. Have you ever sold anything somewhere on consignment? Did you get the entire purchase price? If you put a sign on your stuff saying you had more cheaper at home, did that sign stay there?

Spotify might well think the price too high, but they have other venues to sell their services in, so they aren't being kept out of the market. Whether the price is too high or not is a matter of negotiation between Spotify and Apple, and it appears that they didn't come to an agreement. This happens all the time in business. If you are running a farmer's market and rent out booth space, I have no right to set up a booth if I'm not willing to pay what you ask.

Re:"Adding no Value"

[david_thornley]

what they're doing is blatantly anticompetitive

Apple could forbid anyone else from offering streaming music services through iOS. Would this be more competitive?

Re: "Adding no Value"

[BronsCon]

The problem isn't the removal of the sign (e.g. the ad that Apple didn't allow), or Apple taking a cut when Spotify sells through an in-app purchase, it's the denial of the update that removed the in-app purchase option. They're literally being told "sell through us or leave" while others (Google's and Amazon's media apps, for example) are allowed to exist in the store without in-app purchases.

It's actually more akin to setting up tables at a food court and not selling anything than it is to setting up a booth at a farmer's market. They're paying for the tables (their yearly developer fees) that customers can sit at for free to eat their food they bought elsewhere; they're just not selling food in that same food court anymore. Apple is trying to tell them if they close their shop they have to also get rid of their tables, while allowing others to keep their tables up without opening a shop.

Re:"Adding no Value"

[FlyHelicopters]

Ohh, look, it's Apple, the monopoly without any marketshare again.

It isn't the marketshare of phones that matters, it is the marketshare of app stores...

Out of 100% of the dollars spent in all app stores, what percentage is spent in the Apple App Store?

Re: "Adding no Value"

[davester666]

it is likely that the rejected app includes a link that opens up to a 'subscribe here' web page. That goes against the iOS developer agreement. spotify knows this violates the terms, and wants to try to get/force Apple to change them, rather than working within the current rules.

Re: "Adding no Value"

[BronsCon]

The first update was rejected for that. Do you really think they didn't remove it before resubmitting? Of course they did; they removed it along with the in-app purchase option.

Re: "Adding no Value"

[BronsCon]

of course the app has a link to spotify.com.

Source? I've looked through dozens of articles on this issue and found nothing.

anyways, the fuck is adobe going to pay 30% to apple so they can just kiss goodbye to pro market on their pro ios devices.

Adobe does, in fact, have paid apps in the Mac app store, Protoshop Elements 14 sells for $99.99. They have quite a number of free tools available for iOS which are extremely useful in conjunction with Photoshop (including Elements, which they sell on the Mac app store) for the pro market; an iPad or iPhone isn't powerful enough to do professional work where the file sizes easily exceed the available RAM of an iPad Pro. They're useful for tracing, sketching, creating brushes, and working on small elements, but they're definitely not standalone tools, nor are any current iOS devices capable of running anything a professional user might consider a standalone tool; Adobe isn't missing that market, it just doesn't exist.

Re: "Adding no Value"

[davester666]

There was supposedly an alert/notification/whatever in the app saying go sign up on web site to get a discount, which is a clear violation. But it's also a violation to have a button/link in the app that goes to a web page offering a subscription, if you don't also use apple's in-app system to offer a subscription. And I think spotify still has this setup, and knows they have it, and knows it violates the iOS developer terms. This is another attempt by spotify to try to get/force Apple to change their dev terms.

Re: "Adding no Value"

[BronsCon]

Can you cite a source for this? It'll be the first I've heard of it if you can.

Re: "Adding no Value"

[davester666]

Here's an article on Apple's response to spotify:

http://www.idownloadblog.com/2016/07/01/apple-responds-to-spotifys-anti-competitive-accusation-talks-app-rejection/

Re: "Adding no Value"

[Plumpaquatsch]

No, Apple didn't "boot" Spotify from the app store. Spotify removed their approved app from the store. There is a world of difference between those two things.

Read that again, in context. Apple didn't give Spotify a choice other than: keep ripping off your customers for 20% of the profit a direct sale nets you, take an 18% loss, or leave.

You mean apart from swallowing the fee themselves, like most other companies do? Or simply not offering a subscription in-app?

What specific law prevents this contractual arrangement?

I'm not a lawyer so I can't quite the statute, but it'd be the same one that got Microsoft in shit for bundling IE.

You wouldn't find that statute if you were a lawyer either. You'd have trouble finding your own ass, but that's beside the point.

What Microsoft got in trouble was that they got in trouble before and consented " not to tie other Microsoft products to the sale of Windows " to get out of it. And then got in trouble for tieing the MS product Internet Explorer with Windows. See, that wasn't only easy, it's also completely unlike anything in this case.

Spotify chose to remove their existing app from the app store instead of removing the feature from their updated app that violated the terms of the app store developers agreement (which is likely the in-app redirection to a web site for payments).

RTFA again. They added the ad (which they'd been allowed previously) and were denied. They removed the violating feature (the ad) and the in-app purchase functionality. They were denied a second time for removing the latter. I'll forgive you for arguing based on false assumptions if you'll take the time to correct your understanding.

Errm, since it's not allowed in the terms and never was. they may have been let through once because the guy testing the app for approval didn't do his job, or because he didn't think Spotify would be so stupid to have such an add despite the rules saying they can't, or maybe Spotify hid it to avoid detection of it. Doesn't matter - such adds were never allowed, and everybody knows this.But please continue arguing on the false premise that somehow Spotify were the only people on earth who didn't know it.

Re: "Adding no Value"

[BronsCon]

You mean apart from swallowing the fee themselves, like most other companies do?

That would be the "take an 18% loss" option.

Or simply not offering a subscription in-app?

Their claim is that this is what they were trying to do in the update that was rejected. That would be the "or leave" option.

You'd have trouble finding your own ass,

I'm shitting as I write this; I'd say I found my own ass just fine, thanks.

but that's beside the point.

Having read you entire post twice and discarded the invalid, incorrect, or irrelevant portions, I'm left with nothing and have to ask: what was the point?

What Microsoft got in trouble was that they got in trouble before and consented " not to tie other Microsoft products to the sale of Windows " to get out of it.

Yes, that's bundling which is illegal under...

You wouldn't find that statute if you were a lawyer either.

Are you ready to stand corrected? The Sherman Antitrust Act, as well as the Clayton Antitrust Act. I wasn't sure either applied in this case, so I gave them another read-through. The Sherman Act is short so you can probably manage to read it all, but look specifically at section 2. Since it's quite packed with legalese (now, I did say IANAL, but I did not say I don't have any formal education in the field; I do and I can read and understand this crap just fine, I simply don't work with it every day in order to be able to recall it on-demand), you might have some difficulty in following it, so here are a couple easier references for the Sherman Act.

The Clayton Act clarifies the Sherman Act, specifically stating:

(f) Knowingly inducing or receiving discriminatory price

It shall be unlawful for any person engaged in commerce, in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by this section.

and

Sec. 14. Sale, etc., on agreement not to use goods of competitor

It shall be unlawful for any person engaged in commerce, in the course of such commerce, to lease or make a sale or contract for sale of goods, wares, merchandise, machinery, supplies, or other commodities, whether patented or unpatented, for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, or fix a price charged therefor, or discount from, or rebate upon, such price, on the condition, agreement, or understanding that the lessee or purchaser thereof shall not use or deal in the goods, wares, merchandise, machinery, supplies, or other commodities of a competitor or competitors of the lessor or seller, where the effect of such lease, sale, or contract for sale or such condition, agreement, or understanding may be to substantially lessen competition or tend to create a monopoly in any line of commerce .

Here's an easier to follow reference for the Clayton Act, as well.

And, before I drive my point home, the Black’s Law Dictionary definition of “induce", found on page 915 of the referenced edition (4th):

To bring on or about, to affect, cause, to influence to an act or course of conduct, lead by persuasion or reasoning, incite by motives,

Re: "Adding no Value"

[BronsCon]

Thanks for that, I missed that one.

I find this interesting, though:

Our guidelines help competition, not hurt it. The fact that we compete has never influenced how Apple treats Spotify or other successful competitors like Google Play Music, Tidal, Amazon Music, Pandora or the numerous other apps on the App Store that distribute digital music.

“That’s why we find it troubling that you are asking for exemptions to the rules we apply to all developers and are publicly resorting to rumors and half-truths about our service,“ Sewell concludes.

While it may hold true that the guidelines themselves may help competition (arguable) and that Apple's own competition may not influence how they treat competitors (arguable), that statement ignores one very important fact. In markets where Apple does compete (e.g. music streaming), Apple does, in fact, not apply those same rules to all developers; they allow themselves to sell directly from within their own apps. Sure, they might argue that they also charge themselves the same 30%, but that's probably the most hollow argument they could make; if you have $100 and you pay yourself $30, you still have $100; however, if you take the same $100 and you pay me $30, you only have $70.

The exemptions Spotify is seeking are exemptions which would bring Apple's conduct back in line with existing antitrust laws. See my analysis. IANAL but I do have legal education.

Re: "Adding no Value"

[Plumpaquatsch]

You mean apart from swallowing the fee themselves, like most other companies do?

That would be the "take an 18% loss" option.

Do you actually believe Spotifiy doesn't make far more than 20% profit on their rates? Not to mention that you forget higher profits through increased sales.

Or simply not offering a subscription in-app?

Their claim is that this is what they were trying to do in the update that was rejected. That would be the "or leave" option.

IOW it is possible, others do it, but somehow Spotify fucked up and it's Apple's fault.

You'd have trouble finding your own ass,

I'm shitting as I write this; I'd say I found my own ass just fine, thanks.

You always take a dump onto these pages every time you post here - fine that you finally admit it.

but that's beside the point.

Having read you entire post twice and discarded the invalid, incorrect, or irrelevant portions,

So you ignored everything you wrote? Good idea. Bye

Re:"Adding no Value"

[Plumpaquatsch]

Ohh, look, it's Apple, the monopoly without any marketshare again.

It isn't the marketshare of phones that matters, it is the marketshare of app stores...

Ohh, it's Google, the company that supposedly has a higher marketshare in app stores, but doesn't fucking matter when it suits their fanbois.

Re: "Adding no Value"

[davester666]

Apple has to be in some kind of dominant position or even appearing to be trending towards it for Antitrust. They aren't, except within the market of their own products. AND, Spotify can have all their cake. Spotify can have their app in the iOS app store and not use Apple's payment system. Apple doesn't have to also make it as easy as possible for Spotify to do so.

For example, every large chain grocery store has it's own "branded" food alongside regular 3rd party products, which significantly disadvantages 3rd party products.

Re: "Adding no Value"

[BronsCon]

Do you actually believe Spotifiy doesn't make far more than 20% profit on their rates?

Spotify pays out 70% of revenue. Then, they, have to pay their employees, pay for servers and bandwidth, and keep the lights on. Their margins are very, very slim.

Not to mention that you forget higher profits through increased sales.

Increased sales do not affect margins; more sales at a loss is just a bigger loss.

IOW it is possible, others do it, but somehow Spotify fucked up and it's Apple's fault.

Yes, it's possible and others do it; Apple is not allowing Spotify to do it, but that does not necessarily indicate that Spotify fucked up.

You always take a dump onto these pages every time you post here - fine that you finally admit it.

:) I was literally sitting on the toilet taking my morning dump. Funny, though.

So you ignored everything you wrote? Good idea. Bye

Your post, not my quotes therein.

The lack of points against (or even mention of) the legal facts and opinions I presented is very telling, indeed.

Re: "Adding no Value"

[BronsCon]

Spotify can have their app in the iOS app store and not use Apple's payment system.

Spotify is claiming that Apple did not allow their update to do just this. The article you referenced about Apple's response (thanks, again) did not state otherwise. In fact, it stated:

“Shortly after Spotify submitted its app on May 26, our team identified a number of issues, including that the In-App Purchase feature had been removed and replaced with an account sign-up feature clearly intended to circumvent Apple’s In-App Purchase rules,” Sewell explains.

So they were rejected for removing the in-app purchases and allowing users to create a free account to browse the content they can pay to stream? Neither of those are violations of Apple's terms and Apple is stretching with their "intent" statement.

Spotify submitted a new version which continued to ask users for an email address in order to invite them to sign up for a subscription via the web interface at $9.99 per month while simultaneously jacking up in-app subscription price to $12.99.

Apple's terms dictate that they can not state this within the app itself but place no such restrictions on external advertising, such as email. Additionally, Spotify did not "jack up" the price from $9.99 to $12.99 in the app, they've always charged that price. They pay out 70% of revenue in royalties based on a $9.99/mo subscription; what's left after Apple takes the other 30%? They charge more through the iOS app so they can have some revenue to pay their employees, pay for servers and bandwidth, and keep the lights on.

For example, every large chain grocery store has it's own "branded" food alongside regular 3rd party products, which significantly disadvantages 3rd party products.

There's so much wrong with that statement and it doesn't apply here for so many reasons. Where to start? ...

First of all, Spotify is paying Apple for inclusion in their store (developer fees), whereas grocery stores pay for the items on their shelves, whether they sell or not. Do I need to go on? Let me know; I can if necessary.

Re: "Adding no Value"

[davester666]

For example, every large chain grocery store has it's own "branded" food alongside regular 3rd party products, which significantly disadvantages 3rd party products.

There's so much wrong with that statement and it doesn't apply here for so many reasons. Where to start? ...

First of all, Spotify is paying Apple for inclusion in their store (developer fees), whereas grocery stores pay for the items on their shelves, whether they sell or not. Do I need to go on? Let me know; I can if necessary.

Well, surprise, grocery stores do work over their suppliers, like demanding sign up fee's, and extended credit terms, so they don't pay until WAY after the product is sold. And if it doesn't sell, you can bet they don't pay the supplier for it, it goes back if the supplier comes and picks it up, or it gets thrown away. Welcome to retail.

Re: "Adding no Value"

[BronsCon]

If they throw it away they pay for it; if the supplier buys it back, they buy it back (and that, my friend, is a sale). Credit is irrelevant. I spent a decade in retail, none of this is news to me. Yes, I simplified it a bit, but my point still stands: the store is buying from the supplier; Apple is not buying from Spotify.

Re: "Adding no Value"

[david_thornley]

Spotify wasn't allowing a creation of a free account that would provide the service. Instead, in their app, they were allowing the creation of a free account that would tell them where to buy the service. That's not how the App Store works.

Spotify needs to decide whether they want to provide an app that will work for customers who signed up completely independently, or whether to sell their subscriptions through the App Store and give Apple its cut. Those are the two alternatives, and it appears Apple is fine with either. If Spotify isn't, they can withdraw the app entirely. There are rules about using the App Store, which Spotify is not complying with.

The App Store is much more like a consignment store than a grocery store, so a consignment store that didn't allow people using its services to advertise in their shop how to get the stuff cheaper would be a better comparison.

Re: "Adding no Value"

[BronsCon]

Spotify wasn't allowing a creation of a free account that would provide the service. Instead, in their app, they were allowing the creation of a free account that would tell them where to buy the service. That's not how the App Store works.

My client's app, which sees one or two updates a month (12-20 reviews by Apple per year) and does the exact same thing, begs to differ.

The App Store is much more like a consignment store than a grocery store,

I wasn't the one who made the grocery store argument; you'll note that I pointed out a very obvious flaw in that argument and alluded to the existence of several more.

so a consignment store that didn't allow people using its services to advertise in their shop how to get the stuff cheaper would be a better comparison.

Better, yes; but still not quote right. There's not a brick and mortar store concept that really fits; stores sell products that require registration all the time. Further, the email sent to people who register via the app is not part of the app, which is all Apple's rules can govern. Again, if this was against the rules, Apple would have pulled my client's app during one of the over 100 reviews it's undergone since its release nearly 6 years ago.

Re:"Adding no Value"

[will_die]

If they want Spotify could charge $9.99 and apple would take 30% of that. It is not a US type tax that is added after the price.
Spotify ends up getting their exact same $9.99 a month and that is what Spotify wants and does not want to pay for the benefits apple gives the seller.

Re:"Adding no Value"

[amicusNYCL]

If they want Spotify could charge $9.99 and apple would take 30% of that.

Right, but then Spotify gets less money from those users, and why, because they signed up on an iPhone instead of an Android phone or a desktop? Why is that a reason for Spotify to get paid less? If Spotify is going to get charged when someone signs up on an iPhone then they should be able to pass that cost on to whoever decides that they need to use their iPhone to sign up. There's no reason Spotify should pay that. If you insist on only using your iPhone to sign up, fine, here's the $3 extra monthly tax. The rest of us will use a desktop or literally any other method to not get charged that extra amount every month just because Apple wants to charge Spotify when people sign up using their hardware.

It is not a US type tax that is added after the price.

In reality, what's the difference? What's the practical difference between a 30% sales tax rate and companies charging 30% more because they themselves get charged when people use that hardware? The single difference I can detect is where that 30% goes. In this case, it doesn't go to the government.

Spotify ends up getting their exact same $9.99 a month and that is what Spotify wants and does not want to pay for the benefits apple gives the seller.

Spotify simply disagrees that those so-called "benefits" are worth 30% of the total price. I tend to agree with them. They are big enough and well-known enough that they do not need to give Apple 30% of their subscription price if someone uses Apple hardware to register for their service. It's not like everyone knows about Spotify because of Apple. They did their own marketing, they built their own brand. They don't owe Apple shit, Apple is just the poster child for greedy companies and thinks that everyone will be happy to follow any rule they decide to make because their shit doesn't stink. Well, it does stink, and if companies want to pass that 30% Apple tax onto the user they should be allowed to do so without Apple shutting off access.

Easy Fix

[Anonymous Coward]

Do what Google did with "Google Play".

They removed the "purchase" option from the play apps.
Open up Safari / Chrome / Insert favorite iShit approved web browser here.
Go to Google Play's website, buy what you want there - Apple gets nothing.

Seems like a simple fix, they could possibly include a "button" that directs you to their website to "manage your account" if they wanted to and Apple still wouldn't get shit.

Re:Easy Fix

[BronsCon]

Seems like a simple fix,

From TFA:

Spotify stopped advertising the promotion. But it also turned off its App Store billing option, which has led to the current dispute.

Seems they did that, actually.

they could possibly include a "button" that directs you to their website to "manage your account" if they wanted to and Apple still wouldn't get shit.

That's specifically forbidden by Apple, actually, for the very reason you mention: Apple [...] wouldn't get shit.

This is why anti-trust laws exist

[Tony Isaac]

When a single company controls an entire marketplace (in this case, the marketplace of iDevice users), abuse is sure to follow.

Re:This is why anti-trust laws exist

[__aaclcg7560]

Spotify isn't available on Android?

Re:This is why anti-trust laws exist

[Tony Isaac]

Of course it is. But if you've ever known an Apple fanboy, you know that moving to Android would be like moving to a different country for them. To them, nothing exists outside of the Apple universe.

Re:This is why anti-trust laws exist

[__aaclcg7560]

Of course it is.

Last time I checked, Apple didn't control the Android market.

To them, nothing exists outside of the Apple universe.

There are people like that on either side.

Re:This is why anti-trust laws exist

[__aaclcg7560]

Apple customers aren't running Android, and they don't have the option to do so until the next upgrade at least.

If I wanted an Android phone, I would get an Android phone. I don't see Apple giving up the vertical stack that they built to allow a competitor OS to run on it.

Re:This is why anti-trust laws exist

[LynnwoodRooster]

That's OK, the Apple fanboys will continue to slide into irrrelevancy as iOS continues to shed marketshare... Not too far into the future they'll be as irrelevant as neckbeards.

Re:This is why anti-trust laws exist

[Grishnakh]

Yeah, and why should I care? It's not my concern if a bunch of rich, spoiled brats get screwed for $3/month.

Re:This is why anti-trust laws exist

[Half-pint HAL]

The rules are the same for any company. Spotify wasn't abused or picked on. They want Apple to make special rules for them.

No, they want Apple to allow them to operate on a level playing field in competition with Apple's competing services, because if they don't, Spotify will sink much quicker than they otherwise will. The writing's already on the wall for Spotify, as they're not going to be able to compete with bundled video+music packages in the long run. But as it stands, Apple's fees and policies mean Spotify must be 13% more efficient than Apple's service to be able to offer an equivalent service at the same price.

I would love to see a situation where Apple's policy on commission for all subscriptions is successfully overturned. However, if Apple was only forced to make allowances to apps and services that compete with their own apps, that too would be a good thing. (Consider how many alternatives to Pages, GarageBand, iMovie etc there are, and they all have the double competitive disadvantage that Apple promotes their own apps in the essentials category, and takes a large cut of their competitors' profits.)

Apple being excessive

[EndlessNameless]

It sounds like Apple wants their 30% cut even though Spotify (and other apps) are multiplatform. And, in fact, users choose those apps/services because of their availability on multiple platforms.

To be fair, I think Apple should prorate its App Store cut based on the total platform footprint of the service.

E.g., if Spotify is on 4 platforms (iOS, MacOS, Windows, and Android), then Spotify pays 1/4 of the standard rate on subscriptions.

If this applied only to recurring subscription costs, it would have no effect on revenue from one-off app sales and in-app purchases.

Re:Apple being excessive

[Anonymous Coward]

E.g., if Spotify is on 4 platforms (iOS, MacOS, Windows, and Android), then Spotify pays 1/4 of the standard rate on subscriptions.

Spotify only pays Apple for customers that are billed using Apple's system. Users who are only on macOS, Windows, or Android result in no payments to Apple. Users that are on iOS and any of those other platforms may or may not result in a payment to Apple.

But I consider Apple's billing system an incentive to try a subscription; I trust Apple to allow me to cancel my subscription without having to call an 800 number, wait on hold, and then deal with a "customer support agent" that just wants to give me a deal to keep my subscription. What is to keep Spotify from changing to such a model in the future? Apple, that's what. Too many services race to the bottom and try to keep their users by making cancellation painful - which I have personally experienced with SiriusXM and Neat.

Re:Apple being excessive

[Grishnakh]

To be fair, I think Apple should prorate its App Store cut based on the total platform footprint of the service.

E.g., if Spotify is on 4 platforms (iOS, MacOS, Windows, and Android), then Spotify pays 1/4 of the standard rate on subscriptions.

I completely disagree.

Instead, I think Apple should multiply their rates based on the number of platforms an app is available on. e.g., if Spotify is on 4 platforms, and costs $10/month on the other platforms, Apple should charge iPhone users enough that it makes the total cost $40/month to have Spotify (so, $10/month for Spotify, $30/month for Apple).

It's not like Apple users are going to switch to another platform. Plus, it'll make them feel good that they're spending so much more money for the same thing than non-Apple users.

Re:Apple being excessive

[dgatwood]

Nice straw man. Apple could just as easily mandate one-click cancellation of subscriptions purchased through third-party billing systems as a condition for putting an app in the App Store. Nothing about such requirements requires using Apple's massively overpriced payment system.

Re:Apple being excessive

[Grishnakh]

Why would anyone willingly subscribe to SiriusXM?

I got a free trial subscription with my car, and tried it out, briefly. The sound quality was so horrible (even 32kbps MP3 sounds better) I laughed when they called me up trying to get me to renew after the trial period.

Re: Spotify

[Anonymous Coward]

Twitter and facebook use bittorrent protocol to distribute messages et al. As does Blizzard, linux distros and many more.

Torrenting is a tool. Only another tool could percieve it as having morals.

LOL yeah. For CONSUMERS, different value

[raymorris]

> hundreds of millions ... with one click ... default to auto-renew?

> Ask me how I know you don't understand business or money at all.

LOL, absolutely. Apple brings a LOT of value, for app developers. I wrote some software that was way better than anything else in its $100+ million industry. And made almost nothing from it because I didn't get it in front of customers who were ready to pay. What Apple provides, an app store full of people who readily pay for apps, is hugely valuable.

For CONSUMERS, Apple provides payment convenience, which is worth a buck or two, and provides a good app store where they can easily find things like Spotify.

Re:LOL yeah. For CONSUMERS, different value

[Anonymous Coward]

For CONSUMERS, Apple provides payment convenience, which is worth a buck or two, and provides a good app store where they can easily find things like Spotify.

Worth a buck or two non-recurring, maybe to a lazy consumer. But worth a buck or two recurring monthly?

Re:LOL yeah. For CONSUMERS, different value

[Holi]

>and provides a good app store where they can easily find things like Spotify.

I would beg to differ, as you cannot find Spotify on their store right now.
Until Apple had a competing product they were not in the habit of removing streaming apps from their store. Now that they are competing they are adding onerous conditions to their competitors.

Re:LOL yeah. For CONSUMERS, different value

[Khyber]

" I wrote some software that was way better than anything else in its $100+ million industry. And made almost nothing from it because I didn't get it in front of customers who were ready to pay."

What would that be? I bet it's a piece of software I've never heard of because YOU FUCKING FAILED AT PROPER MARKETING.

You expected just the goddamned store presence to carry your ass alone? You make me laugh!

Re:Stupid game consoles

[gnupun]

Nintendo's console is only designed for games. Therefore, they are well within their rights to refuse a competitor's cartridge from working. The iPhone OTOH is a mobile, general purpose computer and Apple has no right to dictate whether some app/service can exist or not regardless if it competes with Apple. This sounds a lot life MS Office vs WordPerfect or Excel vs 1-2-3 and all the illegal maneuvers MS pulled against its competitors.

Spotify? Who is "Spotify"?

[fustakrakich]

There's always something else...

Re:Break Up Apple

[Grishnakh]

Why should Apple be forced to break up? They're not a monopoly, and not even close. If you don't like their service, then don't buy an iPhone. Most smartphone buyers get Android phones of some kind; you're free to join them (as I have).

I don't like Apple either. My solution was simple though: I simply opted to not spend $800 on a phone from them, and instead got myself a nice used Samsung Galaxy for $100-something. If I get tired of that, I can go get a phone from Sony, or Motorola, or LG, etc. If I get mad about the crapware on it, I can try installing CyanogenMod. I have choices, something you don't have when you lock yourself into the Apple walled garden.

Why should I feel sorry for the rich minority who didn't make that choice?

Re: Fuck Spotify

[Half-pint HAL]

What does it cost Apple to host the Spotify client download in the App Store? A very tiny fraction of the 15%/30% of the subscription fees of every single user on iOS. I reckon we're talking in the region of pennies per user.

Bell just lost in court, again

[phorm]

Not only that, but Bell just lost their appeal over access to their last-mile fibre. A good day for everyone in Canada (exept Bell shareholders, perhaps).

Re: Fuck Spotify

[93 Escort Wagon]

Who is on first.

I don't know.

RightSaidFred99

[Anonymous Coward]

Actually it's for people whose time is valuable.

Not something you'd know anything about, Slashfaggot.

Please become an hero.

Trump 2016.

Just think if there where no steam store for windo

[Joe_Dragon]

Just think if there where no steam store for windows and if you wanted to play on line you needed to buy live gold? Also limited or no modding and no user maps.

yes

[dlt074]

competition is good. apple is not obligated to provide their platform to anyone. they don't owe spotify anything.

Apple ban's emulator with open rom as well.

[Joe_Dragon]

Apple ban's emulator with open rom as well. On there store apps like that need to be self contained and apple does not even let apps use a real file system / share files with other apps.

Re:Apple ban's emulator with open rom as well.

[david_thornley]

Apple doesn't allow file sharing for security purposes. By restricting each app to its own space, it's easier to try to keep malware out of the system. You may or may not think this a good idea for you. If not, buy an Android.

I'm usually not the one on Slashdot defending the right of corporations to do whatever they want, but for some reason lots of people think Apple should be required to change their operations to help Spotify's business model.

Re:How is this surprising?

[rbgaynor]

What? I can most certainly make purchases using the Amazon app on iOS.

Which one to support?

[spyfrog]

I am not sure which one of those to support.
I like that Spotify takes the fight over Apples draconian rules on their store.

However, I also feel like Spotify had this coming. They have for years mistreated the Android users. For years Android was a second class platform. Spotify should reap what they have sown. They shouldn't have invested so heavily in the iPhone users as they did. So in some respect I think this serves them right.

Look how long it took them to support Chromecast. Apple TV however, that was supported early on. Yep.

Ya think?! English, do you speak it?

[raymorris]

> > because I didn't get it in front of customers who were ready to pay."

> I bet it's a piece of software I've never heard of because YOU FUCKING FAILED AT PROPER MARKETING.

Ya think? That's pretty much what "didn't get it in front of customers who were ready to pay" means, asshole.

Re:Spotify pushing billing rules...

[BronsCon]

This. And the only reason it hasn't been brought to court yet is because nobody with sufficiently deep pockets to fight it has been willing to be dropped from the app store over it.

Spotify has sufficiently deep pockets.

Spotify has left the app store.

Grab some popcorn, we're about to see this go to court.

Re: Illegal Tying

[BronsCon]

My client will be EXTREMELY happy about this!

Re: Fuck Spotify

[J053]

Third base!

Apple Hater Numbers Wrong, news at 11

[SuperKendall]

I never could understand why Appel Haters in particular seem to take such great pride in exhibiting ignorance of changes in the world around them, or such a poor grasp of math (only an Apple Hater reduces 15/100 to arrive at 1/3, and even 30/100 is not really 1/3)...

Totally incorrect

[SuperKendall]

As a subscriber do you honestly have NO appreciation for how easy it is to truly cancel a subscription through iTunes? Or the fact the content/apps you are subscribing to have NONE of your address and payment details if you do not wish them to? Or the fact you do not have to go through whatever hellish channel of pain a company has devised in order to actually cancel (or MAYBE cancel) a recurring payment?

That is worth far MORE than $3/month to me. I would literally pay double for any subscription to be able to leave and resume of my own free will with ease, and no risk of hacked servers leaking data about me. It's nice that you live such a secluded life you have transcended the pain of ordinary mortals, but to hundreds of millions these things matter.

Re:Totally incorrect

[suutar]

Indeed, I truly have no appreciation for that. If it works for you, great.

Re:Totally incorrect

[SuperKendall]

What matters is not that it works for ME. What matters is that it works for hundreds of millions of people, which it plainly does.

So you cannot understand why easy access to hundreds of millions of customers has value, that's fine as not being able to understand business "works for you". But what doesn't work at all for anyone is your assertion that there is no value provided, that si simply false at best.

Re:Totally incorrect

[suutar]

I have never asserted there is no value provided except in regards to myself. I have particularly never asserted that there is no value to an app creator.

Re:Fuck Spotify

[andymadigan]

In fact, Apple should go further and block their macOS app from installing as well, for one simple reason: every time the app updates it sets itself up to run on login. I used Spotify from the week it launched in the U.S. until Apple Music launched. I bought a Pro subscription almost immediately after I started using it. But every time the app updated it would throw itself into the login items list again, like this is Windows 98 and we need 80 programs to start and put themselves in the System Tray before you can use your computer.

Then Apple Music came out. Sure, the UI isn't as good, and it took me hours to manually transfer my playlists. But hey, I finally have all of my music in one app (yeah, Spotify has the ability to sync songs, but the feature was very flaky, and it wasn't easy to organize hundreds of songs). But, iTunes never starts up when I login to my computer, and I've long since made sure the iTunes "helper" was permanently disabled (by "damaging it).

Spotify could have kept at least one customer if they just hadn't been so damn pushy.

Re:Stupid game consoles

[david_thornley]

Apple does have the right to dictate whether some app or service can exist on iOS. If you don't like it, Samsung makes some very nice stuff with Android on it. In this case, Apple didn't ban Spotify; Spotify decided they couldn't make money following the same Apple rules they'd been following for years. Their decision.

A lot more maneuvers are illegal if you have a monopoly, which Apple doesn't have.

Re:Spotify pushing billing rules...

[david_thornley]

What's illegal about it?

Given the status quo before this, there was no requirement for Spotify users to buy their subscriptions through iOS. (As I understand it, it was possible to buy Spotify through a web store and use that account on iOS.) It was to Spotify's advantage to make it easy for people to buy subscriptions, and so they accepted Apple's rules for in-app purchases. Then Spotify decided they didn't want to pay what Apple wanted for access to Apple's market. I fail to see what's illegal about this. As far as I described it, it's all normal business.

Think of it this way. You buy a PS4 from Best Buy, and notice they sell games for it. You can buy them for what Best Buy charges, no problem. Now, you fire up your phone and check Amazon's prices and find you can get the games cheaper through Amazon. Sony finds out about this, and wants Best Buy to take a smaller cut of things sold in their store so Best Buy sells for the Amazon price, and Sony gets as much profit per sale. That seems to me to be a much better analogy.

Apple does not have a monopoly. They have competitors making good stuff in all of the markets they're in. If you don't like Apple, you are highly unlikely to find a killer app on iOS or OSX that keeps you using their stuff (unless it's iOS or OSX you want). The iOS App Store market plays by Apple's rules, which change slowly, and these rules are a perfectly legitimate reason for you to buy an Apple or a Samsung phone.

Re: Illegal Tying

[david_thornley]

So, what you're saying is that Apple should have to allow in-app purchases that they don't get a cut of? That they should provide a market for other companies for free?

$2Bn Spotify says otherwise. You more successful?

[raymorris]

> Your app being in App Store or available directly from the Internet is the same.

Spotify says that being in the App Store is very important.
Spotify brought two billion dollars last year, so apparently they have a clue.

You made how much last year? Yeah, thanks for your opinion, but I think I'll listen to Spotify and the other people who have made billions of dollars.

Re:$2Bn Spotify says otherwise. You more successfu

[Khyber]

Spotify got your ass with marketing. You swallowed it hook, line, and sinker.

You're a complete tool to have not tried advertising on slashdot, reddit, digg, ycombinator, and various other tech sites.

You relied upon ONE SINGLE LOCATION.

YOU PUT ALL YOUR EGGS IN ONE BASKET.

Those who fail to learn from history...

terrible psychic

[raymorris]

> Spotify got your ass with marketing. You swallowed it hook, line, and sinker.

What does Spotify have to do with my companies?

> not tried advertising on slashdot, reddit, digg, ycombinator, and various other tech sites.

False.

> You relied upon ONE SINGLE LOCATION.

False.

> YOU PUT ALL YOUR EGGS IN ONE BASKET.

False.

You're a terrible psychic - you're 0% on predicting the PAST

Re:terrible psychic

[Khyber]

Son, if you had advertised ANYWHERE, odds are I would've heard about your product.

That I know jack shit about your product tells me you didn't advertise right at all.

This is business FACT.

Don't read much, do you?

[raymorris]

You aren't much into reading, I take it, if you aren't familiar wirh any of my companies or my software. This doesn't suprise me. You already know everything, so why would you read about anything?

A hint if you're curious - you're using some of my software right now.