Apple uses platform dominance to 'lock out' competition, says Elizabeth Warren



  • Reply 61 of 87
    jungmarkjungmark Posts: 6,688member
    Warren is so out of touch. Apple doesn't have a monopoly on any market it competes in. 

  • Reply 62 of 87
    brucemcbrucemc Posts: 1,527member
    I'm no fan of Elizabeth Warren but why does Apple need to take $3 of someone's monthly subscription fee to Spotify? All they're doing is processing a credit card transaction. The fact that they're dropping it to 15% after a year just proves its not necessary.
    Why do you feel the need to post drivel on the internet?  It is not necessary.  Perhaps the government should stop you from doing so?

    Perhaps you will say "but I am allowed to do so - it is my freedom to do so"?

    Apple doesn't need to take 30% (although they need to take something), but they are running a business "to make money".  It is their "freedom" to "choose" to set the prices for their business.  Apple is doing nothing illegal or immoral:
    - Apple's iOS, as everyone loves to say endlessly, is a minority share (less than 50% in US, and less than 15% globally).  There is NO monopoly.  You don't like the Apple ecosystem and how they manage their business, you can choose from over 100 phones in any given market.  
    - Any app can have an online signup for membership, and then users sign-in to the freely downloaded app.  Apple receives nothing.  It takes a few minutes of work.  It is choice.
    - Everyone's favourite "egalitarian" company, Google, charges the same % of sale price on apps for their store.  It seems to be a reasonable market rate.  Note that it was Apple that first dropped the subscription rate to 15% after 2 years - not Google.
    - If someone discovers the app because of Apple's App Store, and decides to purchase that app because that is how they found it, than that is "worth" a fee to that dev/company - they made sale, and kept 70% of value for something they otherwise would not have sold.  Apple's new policies on subscriptions reflect a change in the right direction on subscriptions long term.

    I realize that you are a negative person, and so see most things in a negative light, but that is not Apple's problem.
  • Reply 63 of 87
    I have to say she lost me on this one. Even if you are a startup with a great new platform your entire end goal is get it into the hands of as many people as possible. What use is a platform if only 10% of the public uses it at any given time? What use are platforms if they are segmented into a plethora of choices? The very success of any platform is based on its users interacting. So I guess she's saying all platforms should be open to and be inter-dependent on all other platforms? Yeah. Good luck making that a successful model. Idealist BS from and old lady who just doesn't understand tech and/ or just got a huge payout from some "small" competitors to Google, Apple et al. Older generations and their ignorance of the way the world works really makes me wonder how much longer their input is useful. I suppose all cars, tv's, trains, planes etc should use the same parts and every part should be interchangeable from brand to brand because that's what's "best"? Riiiiight. 

    The case of Spotify the had ages to solidify themselves as an apple competitor. Years before Apple even entered the market. Their problem is the free streaming service. There are more than a few examples where Apple couldn't compete.. Social for example. What she wants its idealist and verging on socialist. Corporations are obligated to dominate. I think there are probably bigger fish to fry in in the "free and open" market place. If you want to change the rules fine, maybe some do need to change, but I don't think Apple or the tech market in general is the problem in the day to day lives of Americans. How about places where profit shouldn't be the biggest concern. Like health care, prisons, utilities, energy, transportation, education. Etc etc etc 
    edited June 2016
  • Reply 64 of 87
    Massachusetts Senator Elizabeth Warren turned a critical eye to Silicon Valley in a keynote speech delivered at New America's Open Markets Program on Wednesday, saying industry leaders Apple, Amazon and Google use their respective platforms to the detriment of smaller, less powerful competitors.

    Falling just shy of accusing the tech giants of running a monopoly, Sen. Warren's (D-Mass.) remarks are in stark contrast to those presumptive Democratic presidential nominee Hillary Clinton made in laying out her technology agenda on Tuesday, a plan viewed as chummy to Silicon Valley. Warren was invited on stage at yesterday's event, prompting speculation that she might join Clinton on the Democratic ticket.

    At the Open Markets Program, Warren cautioned against "consolidation and concentration" of power in the tech sector, reports Re/code. The senator wagged a finger at industry heavyweights Apple, Amazon and Google for leveraging their respective platforms to effectively "lock out smaller guys and newer guys."

    "Google, Apple and Amazon have created disruptive technologies that changed the world, and [...] they deserve to be highly profitable and successful," Warren said. "But the opportunity to compete must remain open for new entrants and smaller competitors that want their chance to change the world again."

    As it applies to Apple, Warren took issue with the company's strict control over its various App Stores, saying sales regulations make it difficult for third-party streaming services to compete against products like Apple Music. The issue has been raised before by firms marketing music streaming services, which in 2015 branded Apple's App Store policies as anti-competitive.

    Apple takes a customary 30 percent cut of all purchases made through the iOS and Mac App Stores, including in-app transactions, meaning companies like Spotify must charge users an extra fee to break even. Spotify's premium $10 subscription tier, for example, sells for $13 on iOS and Apple does not allow linking to external stores. In response, Spotify last year encouraged customers to save money by bypassing the App Store and signing up online.

    To its credit, Apple is planning to loosen restrictions when a new revenue sharing model rolls out this fall. Instead of charging 30 percent across the board, the company will reduce its take to 15 percent for customers who hold subscriptions for more than one year. The idea is to drive sustainable income instead of one-time app buy-ins. Spotify says the changes are not enough.

    The streaming music company also took the opportunity to chime in on Warren's comments.

    "Apple has long used its control of iOS to squash competition in music, driving up the prices of its competitors, inappropriately forbidding us from telling our customers about lower prices, and giving itself unfair advantages across its platform through everything from the lock screen to Siri," said Jonathan Prince, Global Head of Communications and Public Policy at Spotify. "You know there's something wrong when Apple makes more off a Spotify subscription than it does off an Apple Music subscription and doesn't share any of that with the music industry. They want to have their cake and eat everyone else's too."

    In her speech today, Warren knocked Google for "its dominant search engine to harm rivals of its Google Plus user review feature," while claiming Amazon "uses its position as the dominant bookseller to steer consumers to books published by Amazon to the detriment of other publishers."

    The senator from Massachusetts is famously opposed to the consolidation of power by the few, hence her appearance at today's conference (incidentally, the meeting was titled "America's Monopoly Problem What Should the Next President Do About It?"). Warren's zeal for healthy competition extends far beyond the technology sector, though recent media coverage has focused on her interest in Silicon Valley's elite.
    I am ashamed to be a Massachusetts resident with this fool for a senator. Rather than just being a fake native american, she is now acting the old world European. Never mind that billions of people have benefited from, and like, Android and iOS. Tsk tsk, you unenlightened peons. We must sacrifice all these benefits to assure new competitors. Oh, wait a minute... these two systems are but a decade old! That's not fast enough turnover for this screaming anti-business harpie. My fellow Massachusetts residents deserve lobotomies for electing this witch.
  • Reply 65 of 87
    jungmarkjungmark Posts: 6,688member
    I'm no fan of Elizabeth Warren but why does Apple need to take $3 of someone's monthly subscription fee to Spotify? All they're doing is processing a credit card transaction. The fact that they're dropping it to 15% after a year just proves its not necessary.
    Seriously? Think of it as Spotify getting $7 a month per user for being in the App Store. 
  • Reply 66 of 87
    maestro64maestro64 Posts: 4,564member

    This woman is nuts, she pick the wrong example to try and make a point on. Apple is the last to the party and still not as big as the entire bunch in the market and she is claiming Apple is using it market dominance to control the market.

    All these steaming service would not be where they are today if it was not for apple making it easy for these companies to get the services on Apple products, let not forget Apple designed the model which everyone is now using. Apple has made huge investment and all these other companies are riding the coat tails and they expect apple to give it all away for free.

    So you subscribe to Spotify on Apple app store and it cost you $13 or go to spodify's website and pay $10 how is Spotify not making money. Oh I see apple got there $3 and Spofiy got they $10 either ways and still has to pay their bills on using the $10 but apple has to pay their bills using the $3 they got. The problem is Spotify set the low mark for how much a service like this should cost and now they are unhappy.

    I think these politician are trying to said companies like Apple is what is wrong in America. There are a lot of companies I take issue with and how they get what they can and never give anything back and it all about what is best for them and screw everyone else. Apple is not one of those companies they at least are trying to make things better everywhere they can. They are just pissed that Apple does not pay lobbyist to wine and dine Washington DC politicians, Apple made them look like idiots of the over seas tax issue, they made them look like idiot with the whole Iphone security issue and the list goes on. The only thing the government won was the ibook case and they was rigged case the outcome was already determined.

    edited June 2016
  • Reply 67 of 87
    JinTechJinTech Posts: 359member
    sflocal said:
    kevin kee said:
    He might have a valid point, but he conveniently forgotten if he wanted to attract more people (especially those who own iDevice) to use Spotify - he had to use Apple AppStore platform (including its policy). Otherwise there is no lock to chain him up, he is free to exit from AppStore and don't have to pay Apple. It's a fair trade.

    Also, it's hardly a 'monopoly' when iDevice only counts 20% of marketshare. On the other hand, Android which counts close to 80% of marketshare...
    Apple develops the hardware (iPhone), runs and maintains the infrastructure, payments, and logistics so that asshats like Spotify doesn't have to do it, and they Spotify complains that the 30% fee is too much.  Spotify is more than welcome to go out and develop their own fucking ecosystem and phone if they want.
    Which brings up the question, why doesn't Spotify come out with a hardware device the size of an iPod and make it do one thing, and one thing only, stream Spotify. Sell it for a hundred bucks and reap 100% of the profit from said streaming subscriptions. Done. 
  • Reply 68 of 87
    davidwdavidw Posts: 971member
    cropr said:
    kevin kee said:
    He might have a valid point, but he conveniently forgotten if he wanted to attract more people (especially those who own iDevice) to use Spotify - he had to use Apple AppStore platform (including its policy). Otherwise there is no lock to chain him up, he is free to exit from AppStore and don't have to pay Apple. It's a fair trade.

    Also, it's hardly a 'monopoly' when iDevice only counts 20% of marketshare. On the other hand, Android which counts close to 80% of marketshare...
    But Apple, in contrast to Google, does not allow app developers to link the app to an external store.  Taking the example of Spotify,  Apple does not allow that the Spotify iOS app directs people to the website op Spotify to buy the subscription.  Google does allow Spotify to make a link from the Android app to the Spotify webstore. 
    I don't think this is a big issue for Spotify, which is big enough and has the marketing resources to overcome this limitation, but for smaller players this can be difference between profit and loss.
    The  "monopoly" is not about the users or  iDevices having 20% marketshare world wide, it is about the app developers.  Apple has a monopoly of the distribution of apps in the iOS ecosystem.  As a developer you have no choice but to accept the very harsh conditions of Apple, if you want to reach the market of the iOS users.
    When the app store was launched, Apple actively promoted the newly developed apps and the conditions were perceived as fair. But now, with over 1M apps in the app store and with near 0 visibility, the 30% Apple is charging from the developer is no longer aligned with the return the developer is getting.  This is impeding innovation

    But both Apple and Google will handle the billing of the subscription account for that 30% cut. It's not as though once some one used the app to subscribe, Apple and Google are doing nothing to earn that 30% every month. I don't think many small time developer are capable of taking payment by CC on a monthly basis or have a way of keeping track of account payments. Plus handle subscribers that wants to cancel their subscriptions.

    Spotify would not have this problem but that small time developer doing it as a hobby or part time would not be able to keep track of their subscribers accounts, let alone handle subscribers that wants to pay with a CC. Not to mention the cost and time to maintain a web site and advertise cost for their app. Once you factor that in, paying the 30% is not that much of an expense. It's actually the big developers like Spottily, that are bitching about the 30% because they can already handle subscription account billing, already maintaining a website and advertising.

    If a developer, large or small, gets a subscriber that used an app to subscribe, then it had more than 0 visibility. It cost a developer nothing (besides the annual developer fee of $99 a year. Which allows you to submit unlimited apps.) if there's 0 visibility, as in order for you to have to pay Apple or Google the 30% of the subscription cost, you must have earned the other 70% when someone saw your app and subscribed.    

    Here's what the small time developer are avoiding by paying the 30% to an App store.

  • Reply 69 of 87
    jpellinojpellino Posts: 612member
    Warren has much to offer, but forgets that Apple was once the gnat on giant MS's pachydermous back, as was Google a mote in giant Yahoo's eye.
  • Reply 70 of 87
    I admire her ability to completely ignore facts! At last report, Android has 78% market share in the world. Yet, she calls out Apple for anti-competitive lock in? Apple may be most profitable, but they are certainly no longer the market leader....
  • Reply 71 of 87
    Isn't this the psycho that was trumping up Hilary?

    sheesh. Does she ever speak with actual facts? Or is she only capable of making stuff up to fuel. Mob mentality, taking advantage of easily confused issues. 

    So in her opinion, a company that WAS "the little guy" played by the rules and created an ecosystem from nothing that people would buy into and provided satisfaction and security to consumers... Is now somehow "wrong."

    good going lady. Now please GET going. And don't come back. 

  • Reply 72 of 87
    Well she had to have some base electorate of idiots who keep electing her into office - in this regard Hamilton was right, the Republic is un the hands of the mindless and irresponsible mob.  

    BTW- Franklin so distrusted a single executive rule that he was in favor of a three person panel of executives, sort of like the Swiss Executive model.
  • Reply 73 of 87
    davidwdavidw Posts: 971member
    I'm no fan of Elizabeth Warren but why does Apple need to take $3 of someone's monthly subscription fee to Spotify? All they're doing is processing a credit card transaction. The fact that they're dropping it to 15% after a year just proves its not necessary.

    If Spotify don't want to pay $3.00 to Apple (or Google) for subscriptions done through an App store, then they could lower the cost of the subscription to $5.00 and only have to pay $1.50. Remember, Apple (and Google) only gets $.33 for $.99 apps and makes nothing on free apps. They make very little or would lose money in the long run if all apps were $.99 or free. Even the 30% take on a $.99 iTunes track only netted then maybe $.05 profit. On which they still have to pay tax on. It's the higher costing apps that nets Apple any real money. Which help pay for all the free apps listed and the $.99 apps sales. Just like the sale of a $9.99 album in iTunes yields more profit than the sale of ten $.99 tracks.

    It's no different than real estates agent (seller and buyer) taking a 6% cut of the sale. Regardless of whether the sale was for a $100,000 home or a $1,000,000 home. I'm sure the $1,000,000 home didn't take 10x's the effort to sell. And surly, any over bidding above the asking price was no effort at all and yet the agents will still earns a 6% cut of that amount. If you don't want to pay the real agent 6% fee, list your home for sale on craigslist and only deal with buyers that are are not using an agent. You'll soon find out that the 6% fee is well worth the cost to have access to an agent's listing and having one handle most of the legal paperwork. Most people buying a home uses an agent and no agent for a buyer is going to want to deal with a person without an agent and listing a home for sale on craigslist. 

    Handling the credit cad transaction may be no deal to a developer like Spotify, but it is a big deal to small time developers. Here's what it involves in order to accept CC payments . Even $3.00 a month per $9.99 subscription may be worth it for some one that don't want or have the time to handle CC transaction on their own. For sure it's worth the $.30 per $.99 sale.

  • Reply 74 of 87
    normmnormm Posts: 567member
    redefiler said:
    Top expert?  Highly cited?  You copied that directly from her Wikipedia page.

    She was a career teacher before becoming a politician, she's never practiced bankruptcy law, zero experience kinda works against being a top bankruptcy expert.   She's never worked in that industry, she writes books for 19-22 year olds, some of whom then graduate and might start a career in bankruptcy law, and any of those people would be more of an expert on day one of their first bankruptcy client.
    I've never even looked at her Wikipedia page.  I've heard her speak on a number of occasions, and read some of her work.  She is a world expert on the effects of bankruptcy laws on society, not a litigator.  Like the difference between being an economist and being a businessman: business people are notoriously bad economists, because countries are very different than businesses.  She has the right background for making new policy, not for being a lawyer.
  • Reply 75 of 87
    mac_dogmac_dog Posts: 681member
    as much as i like senator warren, she's simply way off base on this one. obviously, she's going to bat for one of her contributors who are either older, established businesses who have fallen asleep at the wheel, or investors in those areas of business that are seeing the writing on the wall. those business are failing rapidly because they don't have the flexibility, adaptation, imagination, or energy to push beyond traditional ways of thinking and doing business. making a profit must not be THE driving force behind businesses anymore.

    she needs to keep her focus on the corruption in wallstreet, and the pharmaceutical & banking industries.
  • Reply 76 of 87
    gprovidagprovida Posts: 247member
    It costs real money to operate Apple Services.  In general Apple App fees are a break even operation not a major profit center, similarly Apple Music. Since Spotify has 3x number of paid subscribers, it seems a bit of a stretch to say Apple is a music monopoly. 

    Apple let has a simple curated policy, if it's free then there is NO charge, if you charge for an app or subscription then Apple get 30% to fund the infrastructure (including billing and charge card) and innovation - those Server farms world wide are not free.

    It should be noted, Apple is the best for paying Service for artists and other subscription services driven by low cost treat artists as second class.  Apple's music team and leadership has hired and prioritizes finding viable paths for artist financial success, this is not a priority of the other Services. 

    Finally, as the app market has matured and app developers and users are looking to long term evolution of Services, e.g., subscriptions Apple is making some adjustments on its rates. They will never be free, but 15% is pretty low for infrastructure.   

    One of the great injustices to creative industry was the recent monopoly case against Apple and book publishers. The same idiotic claims were successfully made driving out competition, closing brick and mortar bookshops, and taking competitive pressure off of Amazon with authors and publishers. 

    So so here we go again. 

  • Reply 77 of 87
    It's essentially true what she says and it's good for consumers and the economy in general if there isn't too much consolidation.  

    To to be honest, I was wondering when somebody would make it int the newsboy pointing this out. 
  • Reply 78 of 87
    Yep, when a platform dominates the market it's impossible to compete.  Just ask Blackberry, Palm, Netscape, and Yahoo 
  • Reply 79 of 87
    tdsmactdsmac Posts: 13member
    People are also overlooking the fact that The App Store also markets the apps. This is part of the cost of sales as well. So the 30% Spotify pays goes to marketing, credit card processing, hosting, etc. I'm willing to bet the paid apps help subsidize in small portion the "free" apps in terms of hosting and marketing. Spotify glosses over the fact that many people download the app by seeing it on the App Store either by visiting music apps, top downloaded apps, etc. Spotify would have none of that exposure if not for the IOS and App Store. The price drops in subsequent years to 15% most likely is due to upfront costs, like marketing, which don't apply to an app that has been purchased.  

    If if all users if Spotify were downloading based on Spotify marketing, then Spotify could easily state for them to signup on their site. I'm also willing to bet the reason why they are bitching about Apple is that those happen to be the paying customers. Where as, my guess is 80%+ on android are on the free version. 
    edited June 2016 brucemctmaylatifbp
  • Reply 80 of 87
    cintoscintos Posts: 112member
    rant all she wants, just ask Mr. Wall Street: Apple is not a dominant company, but on its way to bankruptcy. Google's Android holds a massive monopoly on handsets sold in the world.
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