Spotify Files Complaint Against Apple With the European Commission Over 30% Tax and Restrictive Rules (spotify.com)

Spotify today filed a complaint with EU antitrust regulators against Apple, saying the iPhone maker unfairly limits rivals to its own Apple Music streaming service. Spotify CEO Daniel Ek writes in a blog post: In recent years, Apple has introduced rules to the App Store that purposely limit choice and stifle innovation at the expense of the user experience -- essentially acting as both a player and referee to deliberately disadvantage other app developers. After trying unsuccessfully to resolve the issues directly with Apple, we're now requesting that the EC take action to ensure fair competition. Apple operates a platform that, for over a billion people around the world, is the gateway to the internet. Apple is both the owner of the iOS platform and the App Store -- and a competitor to services like Spotify. In theory, this is fine. But in Apple's case, they continue to give themselves an unfair advantage at every turn.

To illustrate what I mean, let me share a few examples. Apple requires that Spotify and other digital services pay a 30% tax on purchases made through Apple's payment system, including upgrading from our Free to our Premium service. If we pay this tax, it would force us to artificially inflate the price of our Premium membership well above the price of Apple Music. And to keep our price competitive for our customers, that isn't something we can do. As an alternative, if we choose not to use Apple's payment system, forgoing the charge, Apple then applies a series of technical and experience-limiting restrictions on Spotify.

For example, they limit our communication with our customers -- including our outreach beyond the app. In some cases, we aren't even allowed to send emails to our customers who use Apple. Apple also routinely blocks our experience-enhancing upgrades. Over time, this has included locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch. We aren't seeking special treatment. We simply want the same treatment as numerous other apps on the App Store, like Uber or Deliveroo, who aren't subject to the Apple tax and therefore don't have the same restrictions.

Comments

What do you expect from an American company

[Anonymous Coward]

that they would be fair, honest, and not engage in protectionism? Certainly, Apple would never do such a thing. But I agree it's criminal that they can get away with it.

I hope Spotify and other apps find a way around Apple's money-trap and dirty practices.

Re:What do you expect from an American company

[jellomizer]

A business from any country will engage in protectionism. I never had worked a software company that said. Here you go, take this code, we will show you how to use it, and give you training classes, all targeted so you can make a competing product with it.

Now the US has a problem as there is a vocal group of people who see any sort of corporate regulation as "OMG COMMUNISM!111!!!!!" which in general has made the amount of regulation in US Based companies low, allowing for a lot of bad behaviors.

Re:What do you expect from an American company

[jellomizer]

Actually I am a moderate, with right leaning tenancies. However, there is a difference between excessive regulations, and needed ones. The lesa fair economy creates a high volatility in the market, big highs, and big lows. When we are in a big high, we do not want to find ways to slow down, when we are down, we are trying to rush to bring things back up.
Yes the United States is still an innovation center, with it combination of (dare I say Socialist like protections) laws that promote development, like a rather forgiving Bankruptcy Laws, and Social Safety Net to prevent someone from failing too hard, that they cannot try again. We are also host to some of the worlds top Higher Education Centers, Colleges and Universities.
However After Apple started up the the garage, and now is the worlds largest company. The Lesa Fair method, will cause apple to feed into itself. And give it unfair competition against the other innovation that is going outside of it, and using its size to crush it. And companies like Apple, are so big that they span many types of services, so they are in an odd condition where they need to compete and partner with the same company. Because enough people like Spotify, Apple will need to support it, in order to sell its devices, because they will sell less without it. However Apple also wants to push its streaming music service, and that business unit is the one who also handles the payments. So they will make a platform designed to be great for Spotify to use, however cause it to be non-competive because of business redtape.

Re: What do you expect from an American company

[aliquis]

Criminal to get away with something?

That's not how it work. When it's decided a crime you didn't get away.

Re: What do you expect from an American company

[mSparks43]

surely a prerequisite of being an "American company" is that you have some money in America?

Apple dont have any money in in America.

The closest they come to having money in America is setting aside a small amount to pay "geniuses" to tell customers their otherwise perfectly working hardware needs completely replacing.

Re:What do you expect from an American company

[lgw]

A business from any country will engage in protectionism. I never had worked a software company that said. Here you go, take this code, we will show you how to use it, and give you training classes, all targeted so you can make a competing product with it.

Amazon did this, when they allowed third party sellers to compete with Amazon n the main amazon.com store pages. Of course, the EU wants to punish them for that now.

Re: What do you expect from an American company

[drinkypoo]

That's not how it work. When it's decided a crime you didn't get away.

Bill Gates and Microsoft did.

Re:What do you expect from an American company

[lgw]

The lesa fair economy

"Laissez-faire": literally "let do", but idiomatically "hands off".

And, yes, laissez-faire capitalism is silly, and "no regulations at all" is not a principle of capitalism.

Re:What do you expect from an American company

[lgw]

"no regulations at all" is not a principle of capitalism. - It's THE principle of retard-Republicanism however.

Oh, the Republicans love regulatory capture. Much like the Democrats: more regulations or fewer, whichever pleases their corporate masters.

Re:What do you expect from an American company

[Demena]

Libtard? Sounds like a right wing twit to me.

Re:What do you expect from an American company

[Demena]

"lesa fair". Right, you sure know what you are talking about don't you? You demonstrate little though and a vast ignorance.

Re: What do you expect from an American company

[cyber-vandal]

There are no giant privacy violating European organisations it's true, but both Android and iOS run on chips designed by a British company and the core of Android was created by a Finn.

Re: What do you expect from an American company

[loufoque]

Nokia, former biggest phone maker, is European.
Then they shot themselves in the foot by cancelling all their good projects and focusing on Microsoft Phone.

Re: What do you expect from an American company

[cyber-vandal]

ARM got big in the UK and is still there. Linux is a global phenomenon. South Africa isn't in Europe.

competition

[fluffernutter]

What ever happened to the concept of restricting businesses due to unfair competition? At one time TV networks could not sell products. Surely it works the same for the owner of the whole marketplace?

Re:competition

[supremebob]

I have to wonder if Spotify had something to do with Elizabeth Warren's comments about breaking up Apple as well.

I'd imagine that when you go against a company like Apple in a legal battle, you're going to try to fight it on multiple fronts. That way, Apple can't focus their efforts and assemble a legal "dream team" to quash the EU filing because they have other Antitrust filings elsewhere to battle.

Re:competition

[e3m4n]

Actually it sounds like the internet explorer case that microsoft lost, but on steroids. Its significantly more egregious since the app store is the gateway to loading software. At least in windows 98/xp the only means of installing software was to download a zip/exe/cab file and run an installer. That precluded the ability to stifle the customers power to install whatever they wanted. They still lost. With the app store, they can not only tell you what you can and cannot install, but also force the vendors to give them a cut of gross sale regardless how razor thin the profit margin is. I really don’t see how it’s much different then the mob showing up in your business and insisting that you buy their fire insurance.

Re:competition

[Dog-Cow]

Apple could fund a 100 lawyers for a 100 years out of petty cash. Multiple fronts isn't going to overwhelm Apple's legal team.

Re:competition

[fluffernutter]

Yes this is why the anti-competition laws were there in the first place. Apple takes this competitive advantage and leverages it against the entire industry.

Re:competition

[turp182]

Amazon has hundreds of house brands competing against 3rd parties (and they use sales information to drive new brands...).

But they don't charge 30% per transaction.

Re:competition

[registrations_suck]

Apple makes a phone and sells music services on it.

Spotify could make a phone and sell music services on it too. But instead, it wants to JUST sell its music services, and ride on the coattails of someone else who bothers to make the hardware to make that possible.

On a related note...Spotify of course doesn't make the music either. It is just a middle man. It wants to connector creators and consumers, and charge a Spotify tax to SOMEBODY (either users who pay, or advertise), to make use of its marketplace. Sound familiar?

Re:competition

[fluffernutter]

What do you think are Spotify's chances of making a smartphone and going up against Apple and Google? I'm interested to know, because if it's less than 50% your point is bullshit.

Re:competition

[Gilgaron]

I've not used Spotify, but I've used other competitors: the value added is the algorithms that help you find music. The rest of your argument is pro-anticompetitive trust. Should Spotify also pay a cut of their subscription free to Microsoft and Intel to stream to a PC?

Re:competition

[Registered Coward v2]

What ever happened to the concept of restricting businesses due to unfair competition? At one time TV networks could not sell products. Surely it works the same for the owner of the whole marketplace?

Spotify can chose not to be on the iPhone, or chose to stream via the web and still let you get access. if you look at Spotify, they are a music marketplace; so should they be required to accept any music and pay the same to the artists across the board for every listen?

Re:competition

[AmiMoJo]

Are they not allowed to just charge iOS users more, or require subscriptions to be bought via their web site?

I seem to dimly recall Apple banning that, or wanting to...

Re:competition

[fluffernutter]

Spotify's investors would not be likely to agree to abandoning the iphone.

Re:competition

[fluffernutter]

No No but you were talking about Apple selling a music app. This means that Spotify needs to compete against Apple's ecosystem, not just get a phone.

Re:competition

[Registered Coward v2]

Spotify's investors would not be likely to agree to abandoning the iphone.

I agree, and there are ways for Spotify to provide its service on an iPhone without requiring an app. Access to Apple's user base is clearly desirable given its size and demographics. For me, the broader question is " Should a company be required to give free or low costs access to a user base that exists because of their product?" If the answer is yes, the follow-on is "Should they be required to compensate the all of the product suppliers equally?" This would mean services such as Spotify and Apple Music would have to allow anyone to place music on it and compensate the artist for every time it is streamed. I am sure Spotify would disagree with the idea that they should treat all artists the same and allow unfettered access to their user base to all comers and compensate them as well.

Re:competition

[religionofpeas]

it wants to JUST sell its music services, and ride on the coattails of someone else who bothers to make the hardware to make that possible.

Apple rides on the coattails of the semiconductor industry. Shame.

Re:competition

[chiefcrash]

Apple makes a phone and sells music services on it.

Spotify could make a phone and sell music services on it too. But instead, it wants to JUST sell its music services, and ride on the coattails of someone else who bothers to make the hardware to make that possible.

On a related note...Spotify of course doesn't make the music either. It is just a middle man. It wants to connector creators and consumers, and charge a Spotify tax to SOMEBODY (either users who pay, or advertise), to make use of its marketplace. Sound familiar?

Microsoft makes an operating system and gives away a web browser with it. Netscape could make a computer operating system and give away web browsers too. But instead, it wants to JUST give away its web browser, and ride on the coattails of someone else who bothers to make the operating system to make that possible...

On a related note.... Netscape of course doesn't make the websites either. It is just a middle man...

Sound familiar?

Re:competition

[xonen]

What's so special about making hardware? Musicians make software. Spotify maintains servers that hosts files and streams them. Everyone in this scheme has a role. Without software, the hardware is useless. Without music, less people would want to buy a phone. Without musicians, there's no music at all.
There's also the carrier or internet in general. There's the various taxes and radio frequency licenses. There's so many parties involved, that i really wonder why you think Apple is so special and Spotify is not.

Disclaimer: i cancelled my Spotify account long ago and am back to old school cd's, vinyl, tapes and radio. My smartphone is next on the won't-replace list.

Re: competition

[reanjr]

The big difference is Windows marketshare was significant enough to be talked about as a monopoly.

Apple's not even the market leader.

Re:competition

[drinkypoo]

Apple makes a phone and sells music services on it.
Spotify could make a phone and sell music services on it too.

No, they could not reasonably make their own phone. Without access to someone else's app store, it would be dead in the water — lack of apps is what killed Windows Phone. Apple and Google are sucking all the air out of the room, and consumers have to be protected from the consequences of that fact. This isn't just about Spotify.

Re:competition

[xonen]

Musicians make software.

Obviously i ment: Musicians make music. Well, some make software too. Or hardware. Or all of them *shrugs*

Re:competition

[DRJlaw]

Apple makes a phone and sells music services on it.

Spotify could make a phone and sell music services on it too. But instead, it wants to JUST sell its music services, and ride on the coattails of someone else who bothers to make the hardware to make that possible.

That's a bit of revisionist history.

Apple makes a phone and launches a store that is the only way for non-enterprise, non-developer customers to load software upon it. Apple invites essentially all comers to the store, which is governed by generally applicable rules. It's 2007.

Spotify launches a music service and an app through the Apple store. It's 2008. Apple sells music services -- through iTunes, which is automatically present on the phone -- that do not include streaming music services.

Apple launches streaming music services -- through the Music app, which is automatically present on the phone -- that includes streaming music services. It's 2015. Spotify has been in this space on this device for 7 years.

Apple's music app is not subject to the same pricing structure -- Apple simply matches the Spotify service fee without the overhead of paying itself 30% -- and is marketed by email to all Apple ID holders, something Spotify itself cannot do.

But instead, it wants to JUST sell its music services, and ride on the coattails of someone else who bothers to make the hardware to make that possible.

They were invited in. Then Apple leveraged its dominance in the platform to make special, anticompetitive rules for itself and expand into that line of business. There are terms for bodies of law that govern that. I believe that they include antitrust (U.S.) and competition law (E.U.).

On a related note...Spotify of course doesn't make the music either. It is just a middle man. It wants to connector creators and consumers, and charge a Spotify tax to SOMEBODY (either users who pay, or advertise), to make use of its marketplace. Sound familiar?

Nope - not remotely familiar. Spotify doesn't impose special rules on the content of music based whether the artist is a Spotify employee (or partner) or not. Spotify doesn't function as a creator and a connector self-interested in promoting itself to the detriment of other creators. Spotify doesn't have a fee structure that requires artists to pay it substantially more than it pays itself to distribute creations through the service.

I'm not convinced by your argument at all. European authorities will not be either.

Re:competition

[thegarbz]

But instead, it wants to JUST sell its music services, and ride on the coattails of someone else who bothers to make the hardware to make that possible.

With great marketshare and power comes great responsibility. The fact of the matter is that no Spotify cannot do the latter precisely because of the advantage of being the market leader afforded to Apple.

It is called antitrust laws. Fortunately in Europe they apply to everyone rather than just looking at the singular cost to an end user like they do in the USA.

Re:competition

[ilsaloving]

Right, because that worked really well for Blackberry, Microsoft, Jolla...

I can't fathom how your post was modded insightful.

There's a huge difference between running a music service and building up an entire hardware ecosystem.

Apple spent well over a decade building up iOS before it decided to just jump into music subscription. And you think it's reasonable for Spotify to just jump into the hardware market willy nilly?

The problem is that Apple carved out a monopoly position with it's infrastructure and is now abusing that position to introduce new products at the detriment of existing ones. Just like Microsoft did with Internet Explorer. The difference is that Apple is trying very hard to keep itself from being declared a monopoly by keeping it's base small compared to competitors like Android, to hopefully avoid the circus Microsoft went through.

Ilsa

Re:competition

[registrations_suck]

What was Apple's chance of going up against everyone else in the mobile world? Hint: it was given virtually no chance of success at all.

Re:competition

[registrations_suck]

Apple shall be dictator and arbitrager of any decision concerning Apples bottom line.

That is pretty much the gist of it. If you don't like that, you are free not to buy Apple's products, or use its App Store. Go somewhere else where you can be more successful.

Re:competition

[fluffernutter]

There was no one in the smart phone market when Apple entered it with the iPod.

Re: competition

[fluffernutter]

Apple has one of the two biggest app markets. They use that to help their apps. Spotify does not own an app market. Fair competition should allow for Spotify either use Apple as a service to sell their app *OR* compete with Apple's app. What they should not be forced to do is both use Apple as a service and compete with their app and that is what is wrong here. Apple's app does not have to pass on it's own merits because Apple leverages the market to make it more affordable.

Re:competition

[hashish16]

I'm sure spotify has been planning this for some time. Just good timing, but maybe there was some interaction.

Re: competition

[Bert64]

Actually it's more like saying someone has monopolized diesel distribution, when the majority of cars use gas... You are free to choose a diesel car knowing these restrictions, or you can just as easily buy a gas car.

Re:competition

[Bert64]

There was blackberry, symbian, windows mobile...
Apple succeeded because their product was vastly superior to these existing offerings in various ways.

Re:competition

[Bert64]

Anyone can create a piece of "music" and distribute a million copies of it for negligible cost, many people do with varying degrees of quality. Once the first copy is created, infinite copies can be created and distributed for free.
Anyone can create a piece of software and distribute a million copies of it for negligible cost. many people do with varying degrees of quality. Once the first copy is created, infinite copies can be created and distributed for free.

It is much harder to create and distribute a piece of hardware, while anyone could in theory design a piece of hardware actually manufacturing it requires tooling and raw materials. Even after the initial design phase, each subsequent unit will still cost something to produce.

Re:competition

[Bert64]

The top and bottom of it is, you don't want to be dependent upon someone else's platform incase they decide to later cut you out of the market.

But instead of pushing for and promoting open platforms, companies are happy to be dependent on someone else's platform while the owner of that platform isn't trying to compete with them - and then act all surprised when that platform owner steals the lunch they laid out under their nose. The platform owner is a business too, if they see you making a good profit on a platform they control of course they're going to leverage their position to take that profit for themselves.

If you want to be able to run your business in an open market, you need open platforms on which to do so.

Re: competition

[registrations_suck]

Apple has one of the two biggest app markets. They use that to help their apps. Spotify does not own an app market.

Apple owns an app market because it created one for itself. Spotify is free to do the same.

Fair competition should allow for Spotify either use Apple as a service to sell their app *OR* compete with Apple's app.

What they should not be forced to do is both use Apple as a service and compete with their app and that is what is wrong here.

Spotify isn't forced to deal with Apple AT ALL. It is free to ignore Apple entirely.

because Apple leverages the market to make it more affordable.

And the very last thing consumers want is for something to be more affordable.

Re:competition

[registrations_suck]

It is ridiculous for a court to decide what should be included with an OS and what should not be included with an OS.

If someone wants to include web browser capability in an OS, the court should pretty much just fuck off.

Re:competition

[registrations_suck]

It is egregious that no one but GM is allowed make GM products. I mean, GM has a total monopoly on making GM products! That's so unfair!!

Re:competition

[registrations_suck]

No, they could not reasonably make their own phone. Without access to someone else's app store, it would be dead in the water

Really?

What App Store did Apple have access to when it made its own phone? Oh yeah, that's right! It made its OWN phone and its OWN app store.

Re:competition

[registrations_suck]

> The problem is that Apple carved out a monopoly position ...

I think this is the crux of the argument: does Apple have a monopoly? If so, a monopoly of what? Mobile operating systems? Music distribution systems? Mobile payment systems? It really is unclear what is the basis for the "monopoly" accusation.

It is because people are confusing "monopoly" with "vertical integration.

The only thing Apple has a monopoly on is making its own products. Those products include hardware (phones, computers, tablets, media streamers, etc.), controller software required to make THOSE products minimally work out of the box (OS X, iOS, tvOS, etc.), and applications to allow people to do something useful with those products (a browser, a messaging app, etc.).

Besides all of that, it also created a mechanism (App Store) for third parties to benefit from hardware that Apple sells to its customers. This increases the usefulness of Apple's hardware to its customers, and, presumably, allows Apple to sell more hardware to those customers.

Apple doesn't not sell hardware for the purpose of enriching 3rd parties, who are not Apple's customers. If THOSE people want to have access to Apple's customers, they pay Apple for that access. If they are unhappy with that arrangement, they are welcome to try to reach those customers another way, or pursue other avenues to enrich themselves.

Similarly, a head hunter doesn't provide access to its rolodex of job-seekers for free. If it makes a connection between a employer and an employee, it gets paid.

Re: competition

[registrations_suck]

Musicians are free to choose a different publisher/music store. iOS app devs are locked into 1 store.

Yes, but they are not locked into being iOS app devs. They are free to develop software for any other platform that interests them.

Re:competition

[JBMcB]

What ever happened to the concept of restricting businesses due to unfair competition? At one time TV networks could not sell products. Surely it works the same for the owner of the whole marketplace?

Those laws only kick in if the behavior is harming the consumer directly. Can a consumer easily get Spotify on other devices? Yes? Then there's no problem.

The converse to your idea would be any fly-by-night smart device manufacturer should be able to *force* Spotify to develop an app for their platform. Otherwise it's unfair, right?

Re:competition

[fluffernutter]

Well, your way there will eventually be one or two companies that own everything. In order for capitalism to function, competition must be encouraged not stifled. Limiting the markets that an app can participate in is stifling that app's ability to compete.

Re:competition

[JBMcB]

In order for capitalism to function, competition must be encouraged not stifled. Limiting the markets that an app can participate in is stifling that app's ability to compete.

Sure, but you are mis-defining competition. There are plenty of ways to use Spotify that don't involve Apple. You can even use Spotify on iOS using Safari and completely bypass Apple's app store. Otherwise there's Sonos, Alexa, Android, any device with a web browser, most blu-ray players, most receivers, smart TVs, any Roku-like device...

You could argue that Apple is stifling competition on Apple's platform, but they aren't preventing anyone from doing anything off of their platform, and that's where anti-monopoly rules would kick in.

Re: competition

[Obfuscant]

And the very last thing consumers want is for something to be more affordable.

I am an Apple user. What is this thing "affordable" you speak of? I would love to subscribe to your newsletter.

Re:competition

[Obfuscant]

There was no one in the smart phone market when Apple entered it with the iPod.

Apple neither entered the smart phone market nor created it when they released the iPod. The iPod isn't a smart phone.

Re:competition

[fluffernutter]

It doesn't matter. Competition in this sense is what is best for capitalism to work.

Re:competition

[fluffernutter]

It was obviously the predecessor and ramp-up to the iPhone.

Re:competition

[Obfuscant]

Spotify's investors would not be likely to agree to abandoning the iphone.

"We cannot make a profit selling through the iPhone. We cannot make up the losses by increasing the volume." That should be enough to convince all but the Apple fanboi investors.

Now, if Spotify is making a profit through Apple, then the issue devolves into crying because Apple won't let them make as much profit as they want. But they're still making a profit.

It's one or the other.

Re:competition

[Obfuscant]

It was obviously the predecessor and ramp-up to the iPhone.

There was no iPhone, and it was "obviously" a follow-on to the Walkman. And the thousands of other MP3 players that came before it. And it still had nothing to do with the smart phone market. Apple did not enter the smart phone market, as you incorrectly claim, when it released the iPod.

Re:competition

[thegarbz]

But instead of pushing for and promoting open platforms, companies are happy to be dependent on someone else's platform while the owner of that platform isn't trying to compete with them - and then act all surprised when that platform owner steals the lunch they laid out under their nose.

There's a reason they are happy with this, there are laws that protect their interests in doing so. Spotify isn't acting surprised in the slightest, they are acting on enacting the protections they have in place for their business strategy.

Re:competition

[JBMcB]

It doesn't matter. Competition in this sense is what is best for capitalism to work.

OK, then you are looking for substitute goods. If a consumer wants to use Spotify, is there a replacement platform for iOS that lets you do that? Yes. Is Apple preventing anyone from using a replacement platform? No. Then everything's OK.

Again, I can walk into Best Buy and buy dozens of devices that can run Spotify that have nothing to do with Apple. That's competition. How many of those devices also run Apple Music? Two or three? I'm failing to see the issue where Spotify is disadvantaged one ONE of those platforms. Granted, it's a popular platform, but it isn't even the MOST popular.

Re:competition

[fluffernutter]

So what if a person has $10000 in iOS apps? Spotify just isn't allowed to reach those people?

Re:competition

[fluffernutter]

You know, none of this really matters anyway. Life on Earth simply won't work if companies are allowed to leverage resources to the extent that they become the only company. Furthermore, there can be no capitalism either; so why go down this rabbit hole.

Re:competition

[unrealmp3]

Unfortunately it's not always this black and white. Some people REQUIRE an iPhone for work because of some apps that aren't available on competing platforms, so they are basically stuff in Apple's walled garden. The free market is an illusion at best.

Re:competition

[unrealmp3]

Are they not allowed to just charge iOS users more

They are, but whoever isn't tech-savvy or aware of that will compare Apple Music and Spotify and might decide to choose the former because Apple doesn't have to markup their subscription pricing to compensate the 30% cut. Sure, it's capitalism at work, but Apple is basically double-dipping on each subscriptions made through IAPs from their direct competitors.

or require subscriptions to be bought via their web site?

They can, but they cannot link or make it easy whatsoever for the customer to land on such a page, or make any mention of that possibility. Something that Apple also doesn't have to work around.

Re:competition

[unrealmp3]

Just like any other payment platform.

Is the payment platform providing the same exact service that the one being offered, therefore being in direct competition, or is it just handling the money processing?

Re: competition

[unrealmp3]

Apple owns an app market because it created one for itself. Spotify is free to do the same.

Can it add its own market on the iPhone though? No. It's a walled garden. Sure, Spotify will make its own smartphone company from the ground up, make an app store, etc. Even Microsoft tried getting in the game late with Windows Phone and didn't succeed. It's highly unlikely a competitor will be able to break in and have a significant enough marketshare to overtake Apple and tip the game in their favor now.

Re:competition

[unrealmp3]

Spotify could make a phone and sell music services on it too

lol, Microsoft tried to get into the smartphone market later in the game and they failed monumentally. It's unrealistic now to even think that a smaller business could break into that market solely to sell their music services. Apple does deserve to be compensated for their services, but to ask anyone to build an empire like this from the ground up to fight this is insane and out of touch with reality.

Re:competition

[unrealmp3]

Good for them, they're the pioneer who opened this world to others, and providing a service to process payment and that's totally fine. Now let's have a small thought experiment. Imagine that Visa decides to have 30% fees from the merchant for each transactions (which would be absurd, but that's not the point), most merchants would drop them almost instantly. Now, let's say that that payment processor decides to also get into the wholesale market and makes a huge breakthrough and becomes basically Amazon, Wal-Mart, etc. Some of their own services are exclusively sold there. Sure, they do not have a monopoly, but if you want that service you HAVE to get it there, using that payment processor only. Since Visa is the payment processor and they sell the service, all the money goes to them. Fine. Now, a competing service, that existed many years before, that is normally cheaper or similarly priced to the Visa one is sold in other places, but to reach a significant market you have to offer it through Visa's store. The thing is, if you want to make it easy to get it for Visa's customers, you have to use that payment processor. Since Visa is bigger than you and control the payment system, you have no other way to compete but to either increase your price, making your service less attractive, or operate at a loss which is out of question. This is how Apple can and will extinguish competitors, because they control the whole supply chain and it doesn't matter that you were there before, they'll kill you by systematically taking 30% of your sales because they did all the colossal work before. It's a tough situation to rectify, making sure that competitors have a fair ground but also that Apple is rewarded for maintaining their ecosystem.

Re:competition

[DRJlaw]

The top and bottom of it is, you don't want to be dependent upon someone else's platform incase they decide to later cut you out of the market.

Like Apple is/was dependent upon Qualcomm (excpeting their sudden decision to adopt inferior Intel modems because, surprise, Qualcomm has cut them off)?

What was Apple's actual response, again? Withhold billions in royalty payments and file antitrust/anticompetition lawsuits? Precisely.

Just because there are advantages to open platforms doesn't mean that it's always and at all times economically efficient to create or implement them,. They also do not justify a closed platform "leverag[ing] their position to take that profit for themselves."

Re:competition

[DRJlaw]

It is because people are confusing "monopoly" with "vertical integration.["]

And you're confusing laws containing a requirement for monopoly or "market power" (U.S. law) with laws governing anticompetitive actions (EU. law). Neither immunizes vertical integration from scrutiny, but competition law not so limited as you think, and certainly not as narrow as antitrust law.

Re:competition

[squiggleslash]

You've never used an iPod have you? There is pretty much nothing in common between the iPods (that were on sale before the iPhone that is, obviously the iPod Touch is a phoneless iPhone but that postdates the iPhone) and the iPhone. It absolutely wasn't the iPhone's predecessor, in function, technology, or anything else.

Re:competition

[squiggleslash]

There were plenty of smartphones in existence when Apple produced the iPhone. And plenty when it produced the unrelated iPod too. Nokia, Ericsson, Palm, Blackberry and others had smartphones out during the late 1990s.

Apple didn't even produce the first iPhone-like iPhone, that would be the LG Prada. There's ample evidence the iPhone was a direct rip off with Apple changing mid stream to clone the Prada when they saw it in action (early versions of iOS had a completely different UI philosophy.)

Re:competition

[chiefcrash]

Your argument is that Microsoft being sued for anti-competitive behavior isn't a valid comparison because Apple is even *more* anti-competitive about it?

Art of text

[del_diablo]

It wouldn't surprise me if the case has some merits, but only legal merits.
Appletax via their system is unavoidable, but in app billing is a large legal grey area unless properly defined and fought for in court.

But i RTFA as they said:
Beyond that, what annoys me is that unless Ek is incapable of writing concrete examples.
'Blocks communication' and ' blocks our experience-enhancing upgrades' isn't anything defined. So this isn't a strong opening for a blog post, its essentially whining via essay.

Re:Art of text

[e3m4n]

I am unaware of the legal parameters of Apple tax, so this question could already be answered, but what about apps that are free to download in the App Store that require you to login with your credentials? Like pandora or slingTv. If Pandora does their own billing externally, Apple can’t demand a cut of that can they? If they can that would be very disturbing, because what’s to keep Apple from demanding a cut of my pay since I use an app for my banking software and I pay my bank to hold my money. That would be a loophole that would allow Apple to demand a cut of every bill I pay from my phone. I’m sure those greedy bastards are probably dreaming up a way to pull that off

Re:Art of text

[ConfusedVorlon]

The EU has been pretty broad in the past in terms of how they interpret anti-competitive behaviour.

This certainly seems like the kind of thing they could go with. It's one thing for Apple to demand a cut when they manage the payment; But denying apps from using any other payment method (or even linking to a web page that offers payment functionality) may be a step too far...

And the EU can fine up to 10% of annual turnover, ~$25 Billion

Re:Art of text

[redback]

they dont demand a cut but they place other restrictions on you

Re:Art of text

[gnasher719]

Apple gets no money if a company sells through its website. Apple pays out 70% (and doesn't keep 30% because there is cost involved) of the purchase price of the app, and of _in app purchases made through the app store_.

I don't know how far Netflix has transitioned their sales, but eventually Apple will not get a penny from Netflix. The app costs zero and Apple keeps 30% of zero. Purchases through the Netflix website, Apple gets zero. The only restriction is that you can't advertise your website through the app.

Re:Art of text

[e3m4n]

Hmm. That gives me a thought. A lot of times when I want to authorize a Netflix application I’m presented with the URL and an authentication code. That would be a backdoor way around advertising your website correct?

Re: Art of text

[Harlequin80]

Not really.

Apple is trying to have its cake and eat it too.

Apple can either be the gateway to ios or it can be the music provider. But being both is anticompetitive.

If apples service can compete with a 1.3 multiplier then ok. But not ok without.

Re: Art of text

[Registered Coward v2]

Not really.

Apple is trying to have its cake and eat it too.

Apple can either be the gateway to ios or it can be the music provider. But being both is anticompetitive.

I disagree. They are not the only choice for music, nor the largest. They also aren't the largest smartphone OS either. If they controlled the the entire distribution market, perhaps; but they don't and Spotify has choices besides Apple. To use your reasoning Spotify is anticompetitive because it controls the gateway (its app and what goes on it) and is also the music provider.

If apples service can compete with a 1.3 multiplier then ok. But not ok without.

It certainly can. Of the $10 subscription fee, iTune's P&L gets $7 and The App Store's gets $3. Apple corporate gets to combine the two and thus Apple, Inc. gets $10.

Re: Art of text

[serviscope_minor]

They also aren't the largest smartphone OS either.

But they are large enough to be guilty of anti trust violations.

Re:Art of text

[registrations_suck]

When you ask Siri to play a song, it will always open in Apple Music. There is no way to tell it to use Spotify instead.

Oh well boo fucking hoo.

You don't have to use Siri to play a song. I don't. I play songs with my iPhone all the time too. I have Siri completely disabled.

This is a feature issue for those who buy the fucking phone. Don't like how it works? Then by all means, complain to Apple.

It's not a feature issue for a 3rd party app developer. Don't like how the platform works? Then go to another platform. Apple isn't collecting piles of money from you just to have access to the platform. It is virtually free to have access. You only get charged real money if you make sales. And guess what? If you're making sales, it is because the people who are SPENDING THE MONEY are sufficiently satisfied with the situation to spend the money and enrich the app developer.

Be brave

[stealth_finger]

So how about you just remove your service from apple and encourage all your tech buddy mates to do the same with their services? It might feel scary to cut off a big bunch but iphone has what, a 20pc market share or something. There are worse things and you can always go back when (if) apple wise up and stop trying to take a third of everything.

Re:Be brave

[fluffernutter]

You can't seriously think an app business can survive without having their app on iPhones.

Re:Be brave

[stealth_finger]

You can't seriously think an app business can survive without having their app on iPhones.

Seems they are having trouble on it too. Get enough apps to abandon the platform who will at most lose 20% of their customers whereas apple lose 100% of their 30% cut for nothing.

Re:Be brave

[sh00z]

You can't seriously think an app business can survive without having their app on iPhones.

Maybe not, but all Spotify has to do to avoid these charges is to pass all transactions requiring payment through a web browser (even if it's Safari on the phone). Seems pretty simple. Use an iOS app to "buy" anything digital, and Apple will take a cut. This is why Amazon's Kindle app kicks you out when you want to "buy" a book. Every other vendor seems to have caught on. It's not anti-competitive, it's the electronic equivalent of paying rent for a kiosk in Apple's mall.

Re:Be brave

[fluffernutter]

I don't believe Apple allows that.

Re:Be brave

[Anonymous Coward]

You can do this but 1) you can't advertise that website anywhere in the app or in your app store description and 2) you can't automatically link people from the app to your website. I believe you can include some text like "You cannot purchase this item via the mobile app" or something similar but that's it. The user would then need to know to go to your website to make the transaction. Back in the day this might have been a lot to ask of consumers but these days I think most people know that if you can't buy it in the app that you can probably just go browse the website. It's annoying for users and you could maybe argue that some companies would lose some sales because consumers don't want to be bothered but it's a legit alternative to paying Apple. Amazon does this and so do many other companies.

Re:Be brave

[ilsaloving]

Now you're getting into game theory, and considering that the iOS market is:
a) easier to develop for
b) overwhelmingly more lucrative per user than android

What do you think the likelyhood is of developers leaving en masse?

Re:Be brave

[stealth_finger]

Admittedly the likelihood is so low as to be laughable but if the cost of playing on apple's pitch is too high what option do they have other than to take their ball elsewhere?

Re:Be brave

[fluffernutter]

So in other words, you can, but the solution you are left with completely sucks for a mobile phone user.

Re:Be brave

[fluffernutter]

If the alternative is awful for people to do, you may as well not even do it.

Re:Be brave

[serviscope_minor]

It's not anti-competitive, it's the electronic equivalent of paying rent for a kiosk in Apple's mall.

Except they own half the malls in the entire world, and 3/4 of the malls that anyone visits[*], so they can charge 10x what previous mall owners charged. And they also own all the premium places in the mall, so they can guarantee more customers than the pokey lot in the basement that they give you. Not anticompetitive at all.

[*] A fiar bit of androids market share is on the low end. Apple's market share of paid phone apps is way higher than their share of smartphones overally.

No to Apple

[Stephen Chadfield]

I have never bought any Apple hardware or paid for an Apple service. Bunch of assholes.

Re:No to Apple

[drinkypoo]

You know who's a bunch of assholes? Facebook. I think they've put me into some kind of special new jail, because I can't post comments or status updates, but haven't gotten any notification about being in Fb jail.

Speaking of which, I can no longer submit stories or journal entries here...

Re:The EU is back with more tax

[Nadir]

You obviously did not read the article. It has nothing to do with EU taxes.

Re:boohoo

[Cmdln Daco]

Laws are meant to protect us all from predatory behavior.

That you feel the need to belittle this to a 'daddy' situation shows that you are firmly aligned with Apple.

Why not log on and make your comment?

I don't think they take an cut of public transport

[Joe_Dragon]

I don't think they take an cut of public transport tickets or it's well under 30% as the government has power to set an max fee.

Re:Divide hardware and services and content

[thereddaikon]

Not only is it sarcasm, its wrong and stupid. Car manufacturers don't make all the parts for their cars. And aside from the Benz Patentmotorwagen probably never have. Cars have many parts suppliers behind them, Delco, Bosch and Denso to name a few off the top of my head.

There is no 30% tax

[gnasher719]

Apple has exactly the same terms for everyone. If you sell your product including in-app purchases through Apple, you get 70% of the official price. Apple doesn't keep 30%, they have to pay credit card fees, carry the cost of gift cards that stores pay less than 100% face value for, and so on. They host your app on the store, and they supply all the in app purchases.

And there is a very simple way to get around the payment, which Netflix chose to use and which everyone else is free to use: Don't sell through your app and through the app store. Create a website, and handle the purchases yourself. I worked for a company that did that (same price through in-app purchase and through the website, we kept more money from the website), Netflix does it, everyone can do it.

I have an app on the store that I wrote just for fun, and it makes a little bit of money. If I had to sell it myself I wouldn't get a penny. (I hate advertisements, so I refuse to add advertisements). Nice thing about Apple is that they treat me exactly the same as Spotify. So I'd tell Spotify to p*** right off.

Re:There is no 30% tax

[Orphis]

You didn't read the article.

The problem isn't doing a website and host your own payment platform for your service, but it is that Apple prevents any company from contacting their own customers about payment options that are not linked to Apple.

Even if you create a Free Spotify account, on another platform, use it on your iDevice, then Apple can tell you that you have breached the developer terms of service if you contact them with an email saying they could upgrade to premium on your website.

The margins in this business are thin, and honestly, I wouldn't be surprised if Apple made more money from the 30% tax (all expenses accounted for) than Spotify providing the actual service. And that's with Apple providing their own competing service too which isn't limited to those ridiculous rules (and honestly would be surprising if they made a profit too, but that's not an issue for Apple to operate this at loss anyway).

Re:There is no 30% tax

[fred6666]

Apple doesn't keep 30%, they have to pay credit card fees, carry the cost of gift cards that stores pay less than 100% face value for, and so on. They host your app on the store, and they supply all the in app purchases.

So, Apple is keeping 95% of that 30%, at least.

Re:There is no 30% tax

[ilsaloving]

So apparently you missed the part, in the summary no less, that Apple places technical restrictions in your app if you don't go through their payment system?

Apple Music doesn't have to take a 30% hit to run on an iOS. Apple apps get additional benefits and integration that no other competitor is allowed to achieve even if they follow the rules.

This is pure anti-competitive behaviour, pure and simple. They were able to get away with this before when they were too insignificant to be worth bothering with. Apple is now a serious player and shouldn't be allowed to get away with these shenanigans anymore.

Re:There is no 30% tax

[guruevi]

So companies can't spam you to death for upgrading their 'free' service. Sounds great. Spoitfy could do the same as Pandora and Netflix, simply sell it through their own website, why do you want to spam/ad everyone to upgrade? If they see value in your premium service, people will sign up by themselves. If not, stop spamming me.

Re:There is no 30% tax

[guruevi]

That is pure bullshit from Spotify though. There are no technical restrictions on free or paid apps, I can write an app today that interfaces with the Watch or Health or whatever else Apple API's have available.

What I'm NOT allowed to do and what Spotify wants to do is collect statistics and other tracking information, badger or spam their customers and make it appear as though I accept payments through the app but actually send them to a third party website. There are various consumer protection complaints both in EU and US with various laws being designed to protect people from being scammed through apps and Apple simply won't allow "consumer enhancing experiences" like "rate this product" or "give me your location".

Apple Music plays by the same rules, they don't collect information, they don't sell the information, they are a freestanding service making somewhat of a profit, Spotify is failing because they are collecting and selling your information and keep spamming you to upgrade and people simply don't like it.

Re:There is no 30% tax

[aaarrrgggh]

We aren’t talking rocket science here— yesterday I went into the Netflix app, noticed I couldn’t change billing info, so I went to their website. If you can’t figure that out then life has bigger challenges.

I am curious if it would be construed as more anti-competitive if large developers got better rates on in-app purchases and subscriptions. 30% is a big hit to large players, but less so for mid sized and small developers.

Re:There is no 30% tax

[Sebby]

Apple has exactly the same terms for everyone. If you sell your product including in-app purchases through Apple, you get 70% of the official price. Apple doesn't keep 30%, they have to pay credit card fees, carry the cost of gift cards that stores pay less than 100% face value for, and so on. They host your app on the store, and they supply all the in app purchases.

You do a good job of outlining what Apple does with that 30%, but you failed to point out that app developers also don't have the option of doing those things themselves if they don't want to go through Apple. That bit's important too.

Re:There is no 30% tax

[drinkypoo]

We arenâ(TM)t talking rocket science hereâ" yesterday I went into the Netflix app, noticed I couldnâ(TM)t change billing info, so I went to their website. If you canâ(TM)t figure that out then life has bigger challenges.

On one hand, yes, not being able to figure that out is stupid. On the other hand, Apple has built their reputation on coddling stupid people.

Re:There is no 30% tax

[Ries]

You apparently never wrote an app. You can't integrate Spotify with Siri like Apple Music, there are tons of stuff were Apple apps have favorable integration other apps only can dream off. Heck you can't even change the default browser. There are a lot of stuff restricted to "Apple only", the NFC chip is walled off (no payment apps, because Apple Pay). Apple is really very anti competitive when they launch something themselves. There are plenty of restrictions on free or paid apps and a whole slur of rules favouring Apple.

Re:There is no 30% tax

[registrations_suck]

So, Apple is keeping 95% of that 30%, at least.

Right...because there are no costs to running its App Store, or the development of the products that the App Store runs on and make it actually useful to someone. None at all.

Re: There is no 30% tax

[gnasher719]

So, Apple is keeping 95% of that 30%, at least.

Right now Apple has a promotion running where you pay 10% less for App Store credit. So if you want to buy an app or services for $100, you pay $90, and the developer gets $70. Thatâ(TM)s 33.3% already gone. The rest also pays for supplying all the free apps. Like Netflix who just operate smarter. Or eBay. Or Facebook.

Re: There is no 30% tax

[gnasher719]

You do a good job of outlining what Apple does with that 30%, but you failed to point out that app developers also don't have the option of doing those things themselves if they don't want to go through Apple. That bit's important too.

My current employer actually makes its money through sales people who sign deals with customers, and as part of those deals the end users get to download a free app from the AppStore. Zero money goes to Apple.

Re:There is no 30% tax

[fred6666]

Of course there is. That's why they sell their iPhones with such a high profit margin.
But anyways, the cost of running the App Store is very low compared to the profif they make out of it.

Re: There is no 30% tax

[fred6666]

they charge $99/year to Netflix. It's more than enough to cover the hosting and bandwidth of their 100 MB (or so, I haven't checked) application.
They are free not to run these promotions if they can't afford it.

But more importantly, their store is what is allowing them to sell their iPhones for such a high profit margin. They need the developers. The developers would be glad not having to support iOS, there would be less fragmentation in the mobile application world if everybody ran Android.

Re:There is no 30% tax

[aaarrrgggh]

Small correction: lazy people, not stupid.

Re:There is no 30% tax

[drinkypoo]

Small correction: lazy people, not stupid.

Lazy people wouldn't want to wait for the context menu to pop up when they press their one mouse button.

Amazon's annual fee and small order fee

[tepples]

Summary of fees to sell physical goods on Amazon:

- $480 per year for a seller to be on its platform
- 15 percent of each order's total, including shipping but excluding sales tax, or $1.00 per order, whichever is higher
- 3 percent of sales tax

Apple charges each seller only $99 per year, and it has no $1 minimum fee per order. I imagine the $1 minimum fee has something to do with credit card and ACH debit processors taking a 30 cent fee per transaction.

Paid apps and in-app purchases on Amazon Appstore have a similar fee structure to Apple (source), though without the $99 per year fee:

- 20 percent for movie and TV subscription IAPs within Android apps
- 30 percent for paid apps and all other IAPs, including paid Alexa skills

Re:Amazon's annual fee and small order fee

[Sebby]

Just because “Amazon and Google do it too” doesn’t make it any more right.

Re:Amazon's annual fee and small order fee

[drinkypoo]

That's an excellent summary of why Amazon needs its behavior curtailed as well. They should be able to put all their own-branded crap (and it really is crap) on the store, or charge such abusive fees, but not both.

Re:Amazon's annual fee and small order fee

[Darth]

he's specifically responding to someone who said amazon doesn't do this. he isn't addressing the morality of the activity, he's addressing the assertion that amazon isn't engaging in this activity.

Re:Amazon's annual fee and small order fee

[Solandri]

You don't have to stock your home from Amazon though. You an go the local department store, or walmart.com, or the Salvation Army to get stuff for your home. Same for Android. You can load a different store, or even download an Android app directly from the app-maker's website and install it directly onto your Android device.

Apple is the only one who forces you to use their store, and prohibits you from using anyone else's. That's the lack of competition we're talking about. In Amazon and the Google Play Store's case, their fees and markups are somewhat justified because if they were egregious, sellers would preferentially use a competitor's store. In Apple's case, they have no choice. It's Apple's way or the highway.

And your minimum fee per transaction for credit/debit cards is horrendously out of date. The last time our business paid 30 cents per transaction was back around 2000. Currently it's around 10 cents per transaction, and the big retail chains like Walmart have probably negotiated far less since they don't bat an eye if I use a credit card for a 50 cent piece of fruit. Care to guess why the price per transaction went down? That's right - competition. Precisely the thing Apple prohibits.

Re:Amazon's annual fee and small order fee

[thegarbz]

The fees aren't the fundamental issue. The fundamental issue is that the fees aren't leveled between sellers for Apple.

To compare to Amazon, Amazon would too be in deep shit if:
Instead of $480/year they charged $590 / year and 20% of each orders total to use (Amazon's custom feature X)
AND (and the "and" part is key), if choosing not to do this caused you in a completely unrelated way to lose access to Amazon customer feature Y and Z
AND customers which didn't rely on feature X got feature Y and Z anyway for the original price.

Re:Amazon's annual fee and small order fee

[thegarbz]

No it's fundamental misunderstanding of the issue involved. Apple is not in trouble for charging fees, and what Amazon and Google do in this regard isn't wrong either.

They are in trouble for not charging levelised fees. They are in trouble for unrelated restrictions applied to force b2b customers to buy a more expensive service than they need.

Re:Amazon's annual fee and small order fee

[squiggleslash]

That doesn't seem like a comparable situation. Amazon is allowing competitors to sell products via its platform to a group of people who have no dependence upon Amazon. Additionally I'm guessing Amazon has no rules in place forcing products bought from them to only accept add-ons that are also bought from Amazon - that is, if you buy a PC from Amazon, you're not bound to buy PC software and graphics cards from Amazon.

The Apple situation is somewhat different. You're not paying Apple to promote something to a customer base that buys a lot of stuff from Apple. You're paying Apple for fundamental access to the people who buy Apple's phones. They've taken technical measures to prevent anyone from selling directly, and Apple not only controls that, but also requires any follow up content - like books and movies for apps that show them - also have Apple taking a cut.

Someone who wants to sell me a graphics card can choose to sell via Amazon or not. When I do a search on Amazon they won't show up if they don't list there, but if I'm buying something that expensive I'm going to also search a bunch of other websites too.

Someone who wants to sell me an iPhone app cannot choose to not list via Apple. I can't buy their software unless I buy it from Apple.

Based upon that, you can't compare the pricing. Is Amazon's apparently high? Yes. Does it mean Apple's prices are reasonable? Nope. Amazon's lack of anything resembling a monopoly here means that Amazon must be selling something of value. Apple, on the other hand, is taking advantage of its control of the platform.

There's other things too

[ilsaloving]

It's not just the financial aspects. Apple is hampering the whole experience for competitors. For example, Apple Music has Siri integration. Spotify doesn't, and it probably never will without outside intervention.

Apple is doing everything they can t make the playing field as uneven as they can for competitors.

Re:There's other things too

[guruevi]

Pandora has Siri integration.

Apple must die

[WCMI92]

They have become Microsoft back in 1995-8, a true monopolist.

Ironically Microsoft is largely irrelevant.

Apple, Google, Facebook, Twitter, however all need to be shattered.

Re:Apple must die

[Freischutz]

They have become Microsoft back in 1995-8, a true monopolist.

Ironically Microsoft is largely irrelevant.

Apple, Google, Facebook, Twitter, however all need to be shattered.

Apple? It's Google + Facebook that are the great monopolists. Apple does not hold a monopoly in any market segment.

Re:Apple must die

[drinkypoo]

Apple? It's Google + Facebook that are the great monopolists. Apple does not hold a monopoly in any market segment.

That is a falsehood, and what's more, it's a particularly tiresome one since it's been debunked so repetitiously. Apple has a monopoly on app installation on iOS devices. No other phone provider in history has made it so difficult (or for the average user, impossible) to install applications acquired from sources other than their app store. They are literally the most egregious offenders of this policy ever to exist in the consumer space. Only IBM has ever had a more offensive policy, back in the early days of their mainframe systems, when any software you wrote on the hardware effectively became the property of IBM. If your only defense is "IBM was worse back in the blue suit days" then you haven't got a leg to kneel on, let alone stand.

Re:Apple must die

[thegarbz]

Apple does not hold a monopoly in any market segment.

That is ignorance of the incredibly highest order, not only about Apple's market, but also that anti-competitive behaviours do not require a company to be an outright monopoly in order to be illegal.

Some clarification

[dreamstateseven]

As someone who uses both the Apple ecosystem, and Spotify, I don't feel this article is very forthcoming -- and isn't painting a complete picture.

Apple requires that Spotify and other digital services pay a 30% tax on purchases made through Apple's payment system, including upgrading from our Free to our Premium service.

I made an account on their webpage, and signed up to pay them via PayPal. I'm sure PayPal is taking a cut. I certainly believe it's nowhere near 30%, but you're not "forced" to use Apple's payment system for the one type of payment transaction you're going to do.

As an alternative, if we choose not to use Apple's payment system, forgoing the charge, Apple then applies a series of technical and experience-limiting restrictions on Spotify.

I have an account setup, I download the Spotify App from the App store -- and this is claiming that because I didn't pay via Apple that I am limited? Bullshit. Any limitation is there either way.

For example, they limit our communication with our customers -- including our outreach beyond the app. In some cases, we aren't even allowed to send emails to our customers who use Apple.

Again, citation needed. If you sign up via the web, you can easily get a user's email.

Apple also routinely blocks our experience-enhancing upgrades. Over time, this has included locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch.

Sure, you don't get the best integration with the ecosystem. I'll totally concede this. But Apple Watch now can control the Spotify app with effectively the same level of control it gives to Apple Music. Siri can control Spotify, but you can't speak out artists and the like. So Apple isn't locking them out, but again I fully concede that they are hindering the experience.

Re:Some clarification

[jonwil]

In regards to email, the problem Spotify has is that there is a rule whereby a developer of an iOS app is not allowed to provide information to those users about methods of payment for digital services that don't go through Apple. And this rule apparently means Spotify can't email anyone who has ever used the iOS app if those emails contain information on how to buy anything from Spotify.

Re:Some clarification

[drinkypoo]

But Apple Watch now can control the Spotify app with effectively the same level of control it gives to Apple Music. Siri can control Spotify, but you can't speak out artists and the like.

So to sum up your argument, it's the same level of control, except that it isn't? Nice one.

Re: Some clarification

[gnasher719]

In regards to email, the problem Spotify has is that there is a rule whereby a developer of an iOS app is not allowed to provide information to those users about methods of payment for digital services that don't go through Apple. And this rule apparently means Spotify can't email anyone who has ever used the iOS app if those emails contain information on how to buy anything from Spotify.

If thatâ(TM)s what Spotify says, then they are lying. Been there, done that, and sent emails to customers signing up through the website. No problem with Apple. Of course, you get no information about AppStore customers, which is exactly what AppStore customers want.

doesn't this so called Apple tax

[doginthewoods]

include payments to the people who wrote and played the songs? Spotify, being yet another business that doesn't want to pay for the music, really should shut up about this. At least Apple pays something that isn't so meager as to be an insult.

Re:doesn't this so called Apple tax

[radarskiy]

a). No, none of the 30% that goes to Apple is used for publishing or performance royalties.
b) Spotify pays higher royalties to labels than radio. The problem is that labels pay out lower royalties to creators for plays on Spotify than on radio, so if you don't own your own label you get paid less.

Re:doesn't this so called Apple tax

[trims]

OK, I haven't logged in for almost 3 years, and I had to in order to reply to this idiocy and the morons who upvoted something that is both easily verified as false, and displays a staggering ignorance of how streaming works.

The 30% Apple fee is ALL APPLE'S. They might incur some portion of other expenses, but nothing that Spotify wouldn't doing the same thing. So it's just Apple wanting a slice of Spotify's business, and punishing them if they don't play by Apple's rules, which, of course, Apple's own competition apps don't have to.

NONE of that Apple fee goes to the Artists. Zero. Zilch. It's Revenue to Apple, and at least half Profit.

Secondly. Spoitfy pays Artists significantly more than Apple does - I used to work at Apple Music, and know what their schedule is. Apple pays about 8% less than Spotify in terms of per-play royalties.

Radio DOESN'T PAY THE ARTIST. Period. They only pay the Songwriter.

Whereas Spotify pays BOTH.

And Spotify pays per-play. Whereas Radio pays based not just on plays, but the size of the audience. You will make a LOT more on streaming than via Radio.

Radio is viewed as essentially free advertising, and the artists don't get compensated for plays with the songwriters getting a smidgeon. Streaming is similar to CD sales, so both get paid, and a LOT more than Radio.

Re:doesn't this so called Apple tax

[thegarbz]

include payments to the people who wrote and played the songs? Spotify, being yet another business that doesn't want to pay for the music, really should shut up about this. At least Apple pays something that isn't so meager as to be an insult.

Err no not at all. Please read up on the structure before you put your ignorance on display for the world to see.

Re:Competition 2

[fluffernutter]

Really.. So people with iPhones are likely to listen to Spotify if they aren't in the Apple app store.

"monopoly"?

[supernova87a]

Why "should" Apple do any of the things you want? Who determines "should"?

Last I thought about the issue, access to an app store and the terms of such access (which by the way didn't even exist almost 10 years ago) wasn't a public utility or good with an expectation of fairness of pricing or in modification of terms.

Under what right does one claim that Apple (or any ecosystem platform) has to do anything beyond what is regulated in the payment and terms of operation?

Re:"monopoly"?

[religionofpeas]

Who determines "should"?

The law.

Re:"monopoly"?

[drinkypoo]

Why "should" Apple do any of the things you want?

Because otherwise, they stifle competition.

Who determines "should"?

The People, through their elected representatives.

Last I thought about the issue,

Was never.

access to an app store and the terms of such access (which by the way didn't even exist almost 10 years ago) wasn't a public utility or good with an expectation of fairness of pricing or in modification of terms.

The App Store is a market. Only free markets benefit The People. Apple is a legal fiction which only exists at the pleasure of The People. Ironically, you can't have a free market without government interference.

Under what right does one claim that Apple (or any ecosystem platform) has to do anything beyond what is regulated in the payment and terms of operation?

Under the right of self-governance.

Re:"monopoly"?

[shilly]

The People, through their elected representatives.

Which People? Apple is a US-based multinational. Spotify is a Swedish-based multinational. Customers in many other jurisdictions may use Spotify on iOS. What first principles are you using to determine which People's will should prevail, if there is a conflict between companies and the jurisdictions have different rules for how the conflicts should be resolved?

Re:"monopoly"?

[drinkypoo]

The People, through their elected representatives.

What first principles are you using to determine which People's will should prevail, if there is a conflict between companies and the jurisdictions have different rules for how the conflicts should be resolved?

That's obvious: The People in the various jurisdictions get to demand that they be treated a certain way, and Apple has the choice of whether or not to do business in each jurisdiction.

Re:"monopoly"?

[shilly]

That's a little abstruse. And why do you say it's all about Apple's decisions? Clearly, Spotify has the same choice.

EU responds ...

[PPH]

... 30% tax? More restrictive rules? Why didn't we think of that?

Free app with subscription on website

[Camembert]

Apple does get a share of purchases and also of in-app purchases or subscriptions. In that sense it is similar to any distributor of item such as for example amazon. Part of the sale price goes to the distributor (which can well be over 30%), in exchange for the distributorâ(TM)s tremendous wide customer reach As I understand it, Spotify could make its app free and requiring a login (and subscription setup) to be created on the Spotify website. It is indeed less convenient for the customer but then Apple wouldnâ(TM)t get anything (well, 30% of zero to be precise). There are several other apps that work like this. But yes I can see their argument. I donâ(TM)t agree with the blocking features argument however, because honestly it would be all about tracking the user.

Re:Divide hardware and services and content

[Spamalope]

More like they require gas purchases to pay 30%. And DRM the gas fill, such that the car computer tracks fillups with a toner cartridge like 'tracker' via NFC in the nozzle that authorized the next tank of miles. No 30% payment, and the activates limp mode until you pay a 'reactivation' fee. Maybe they can pretend safety features require a subscription paid per gallon, and put the car in limp mode as a 'safety precaution' because the safety features are disabled.

Hmm, sounds like cars aren't being 'fully monetized' yet...
Back to the lair for some marketing work!

Re:Divide hardware and services and content

[drinkypoo]

Not only is it sarcasm, its wrong and stupid. Car manufacturers don't make all the parts for their cars.

No, but they do have arguably anticompetitive agreements in place with the suppliers that prohibit their selling the parts directly for years after their introduction. And they also have abusive pricing on service documentation, which should be made available for the price of copying and distribution, since they have to produce those materials for their own purposes no matter what.

Re:Divide hardware and services and content

[registrations_suck]

Not only is it sarcasm, its wrong and stupid. Car manufacturers don't make all the parts for their cars. And aside from the Benz Patentmotorwagen probably never have. Cars have many parts suppliers behind them, Delco, Bosch and Denso to name a few off the top of my head.

Apple doesn't make parts for its phones. All that shit comes from some 3rd party manufacturer. Phones have many parts suppliers behind them too.

Re:Spotify

[fluffernutter]

No one buys a phone because of the apps that work with it. They either like the Apple closed system or they don't. They pay more for an iPhone or they don't. Then they use the apps that work with the phone they buy. Spotify cannot hope to 'lure' people to Android simply because their app works there.

Re:Divide hardware and services and content

[drinkypoo]

Maybe they can pretend safety features require a subscription paid per gallon, and put the car in limp mode as a 'safety precaution' because the safety features are disabled.

Apple is always in limp mode. Hard things are dangerous, so they only permit rounded surfaces.

Spotify has it backwards

[izzo nizzo]

If Spotify can't make their finances work, that's not a sign that Apple should subsidize them with both cash and platform changes.

Spotify is a disruptive business that has doubtless killed many other businesses. It's pretty normal to expect that they themselves may not survive. Yes, Apple's product is markedly similar, but it arrived later and has access to lots of ways to operate more efficiently.

When someone uses the term 'fair', it's typically when they are trying to trick you.

Re:boohoo

[registrations_suck]

Laws are meant to protect us all from predatory behavior.

And Apple is doing nothing predatory. It says, "We have an App Store. Here are the rules. Come use it and make yourself some money, or not."

Apple is not selling life's essentials. We're talking about convenient or entertainment applications running on a pocket computer costing hundreds of dollars. It's a fucking luxury by any standard! They're hardly preying on anybody. No one is going to die if they don't have Spotify on their iPhone, or even if they don't have an iPhone at all! No one has a gun to anyone's head threatening to kill them if they don't develop something for Apple's App Store or buy Apple's products.

Spotify's argument is essentially, "Apple's prices are so low that we can't compete in the market for luxury goods for entitled people." FIRST WORLD PROBLEM if there ever was one!

Why not log on and make your comment?

Because registrations suck.

Re: As an IOS dev I agree with Spotify

[gnasher719]

Apple restricts access to iOS for developers in ways that make it impossible to address certain functions (for example a non-apple app cannot develop an alarm clock).

I have two non-Apple alarm clocks on my Iphone so I guess you are wrong.

Re: They agreed to this

[Shikaku]

If you tried that your app would be removed.

https://developer.apple.com/ap... Yes, really, here's the relevant line right here, you are required to use the Apple Payment unless you have an agreement to something else.

Re:Spotify

[Obfuscant]

No one buys a phone because of the apps that work with it.

Really? I currently own two iPads (yes I know, not "phones", but Apple products) ONLY because of one specific app that runs only on iOS. Try again.

They either like the Apple closed system or they don't.

Irrelevant. I don't have to like the Apple closed system to want to use the app that runs only on iOS.

Spotify cannot hope to 'lure' people to Android simply because their app works there.

Hmmm. If people can be lured INTO Apple because of an app, they can be lured out of Apple for the same reason. And save money while doing it.