Spotify says Apple rejected update over App Store policies, 'causing grave harm' to service

Posted:
in iPod + iTunes + AppleTV edited June 2016
Apple Music competitor Spotify has accused Apple of rejecting an update to its official iOS app, claiming that the iPhone maker has exhibited "a troubling pattern of behavior" that's anti-competitive.




Spotify's allegations were revealed in a letter the streaming music service sent to Apple general counsel Bruce Sewell this week, a copy of which was obtained by Re/code. In the note, Spotify attorney Horacio Gutierrez alleges that Apple's App Store policies are "causing grave harm to Spotify and its customers."

In an effort to gain support for its case, the letter was also provided to U.S. government officials, including Sen. Elizabeth Warren (D-Mass.). The note likely played a part in comments made by Warren this week, accusing Apple of using its platform dominance to hurt competitors like Spotify.

At issue is Apple's share of sales and subscriptions that go through software available on the iOS App Store. For years, Apple has taken a 30 percent cut of all App Store sales, encompassing paid downloads, in-app purchases, and ongoing subscriptions.




In a move that could help the likes of Spotify and others, Apple announced earlier this month that it will take a smaller 15 percent cut of ongoing subscriptions through App Store downloads. However, Apple's 30 percent share is only reduced to 15 percent if a customer maintains their subscription for over a year.

Apple's policies have led companies like Spotify to charge more to customers who subscribe through their official iOS app. Spotify's premium subscription tier costs $10 if a user registers directly through the web, but transactions through its iOS app are charged at $13 per month. Apple also forbids linking to external stores to bypass App Store fees.

While Spotify's letter apparently did not specifically say what changes have been made in the rejected version of its iOS app, it does note that the proposed update was turned down due to "business model rules." Spotify was also informed that they would be required to use Apple's iTunes-based billing system to sell subscriptions through its iOS app.

In Spotify's view, Apple's policy is "a weapon to harm competitors." Like Spotify, Apple offers its own $10-per-month subscription music service, dubbed Apple Music. The latest data has Spotify at 30 million paid subscribers worldwide, while Apple Music reached 15 million paid users as of earlier this month.
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Comments

  • Reply 1 of 143
    tzeshantzeshan Posts: 1,876member
    In my review this is not a policy issue.  It is an implementation issue.  Because it requires Apple to change App Store app.  Apple engineers are very poor at making apps complicated.  
  • Reply 2 of 143
    eightzeroeightzero Posts: 2,244member
    "Harm?"
    "Yes."
    "Grave harm?"
    "Is there another kind?"
    edited June 2016 repressthismoreckpscooter63
  • Reply 3 of 143
    latifbplatifbp Posts: 544member

    All Spotify paying users should be questioning why Spotify needles its customers by forcing them to pay business operation expenses. That 30% fee is a business expense, one they can and I'm sure they do write off at tax time. BUT, not only do they write it off (so it doesn't cost them much or anything at all) but they force you, their customer, to pay more anyway. They're screwing you and any other dope who decides to believe this victim sob story.
    EsquireCatsnolamacguycalimwhiteTurboPGTmejsricjbdragonmorecklolliverbaconstang
  • Reply 4 of 143
    foggyhillfoggyhill Posts: 4,767member
    Bullshit Spotify, see you in court since that's seems were you want to go now...  This is GRANDSTANDING.
    latifbprepressthismwhitemejsricjbdragonmorecklolliverbaconstangjony0cornchip
  • Reply 5 of 143
    latifbplatifbp Posts: 544member
    Seriously, Spotify sounds like someone who has Borderline Personality Disorder! Boohoo, life is so unfair! Apple only spent billions upon billions of dollars engineering iOS and their App Store. But we should get to use it for free and make up whatever rules we want despite that!!!
    edited June 2016 repressthiscaliTurboPGTmejsricjbdragonmorecklollivergeekmeexmhillxbaconstang
  • Reply 6 of 143
    rob53rob53 Posts: 1,988member
    Spotify should be happy they even are allowed on iOS devices. Amazon kicked Apple out of its store so of course this means it's perfectly legal to limit competition and as everyone knows Amazon has the backing of the DOJ and US government. (only some of this is sarcasm)

    Spotify is not a competitor to Apple, only to Apple's streaming music capability. Sending crybaby comments to government officials is a sign they can't figure out how to compete on their own. They need a delivery platform yet they want to demand how that delivery platform works. Spotify feels they should be able to use mobile platforms for free as does many other developers and some members of our government. Spotify, like others, need to understand that they have to pay to get onto Apple's and other platforms.
    latifbprepressthiscalimwhiteTurboPGTmejsricjbdragonmorecklollivergeekmee
  • Reply 7 of 143
    ceek74ceek74 Posts: 323member
    Or Spotify could just not use the iOS platform.  Have fun.
    latifbpnolamacguyrepressthiscalimwhiteTurboPGTjbdragonmorecklolliverSpamSandwich
  • Reply 8 of 143
    seneca72seneca72 Posts: 29member
    foggyhill said:
    Bullshit Spotify, see you in court since that's seems were you want to go now...  This is GRANDSTANDING.
    Haven't you noticed there's a Presidential election coming up.  Sen Warren has been making noises about Apple and monopolistic practices, this is simply Spotify jumping onto the bandwagon.
    repressthisredefilermwhitejbdragonmoreckjony0
  • Reply 9 of 143
    NY1822NY1822 Posts: 582member
    I say Apple should do what Amazon did when it came to selling the Apple TV on Amazon. Not allow the app "so not to confuse the customer"

    http://www.techhive.com/article/2988560/home-players/amazon-wont-sell-apple-tv-and-chromecast-hardware-bans-marketplace-partners-from-selling-them-too.html
    edited June 2016 repressthisjbdragonmoreckbaconstangjony0cornchip
  • Reply 10 of 143
    rogifan_newrogifan_new Posts: 3,774member
    I'm glad Spotify is doing this. Apple should allow subscription apps to offer a redirect to the browser to sign up. There's no reason Apple should be taking 30% of someone's monthly Spotify fee. They're not hosting any content. And it certainly doesn't cost them $3 to process the credit card transaction. Google allows alternate payment methods. Apple should do the same. How hard would it be for Spotify to have a link in the app that takes you out to Safari to sign up? It wouldn't be. This is all about $$$ for Apple. 
    jonljasenj1kermit4krazy
  • Reply 11 of 143
    slurpyslurpy Posts: 5,107member
    latifbp said:

    All Spotify paying users should be questioning why Spotify needles its customers by forcing them to pay business operation expenses. That 30% fee is a business expense, one they can and I'm sure they do write off at tax time. BUT, not only do they write it off (so it doesn't cost them much or anything at all) but they force you, their customer, to pay more anyway. They're screwing you and any other dope who decides to believe this victim sob story.
    Yeah, it's complete horse-shit. Guess what- if you want the opportunity provide your app on the most lucrative appstore on the planet, with a base of hundreds of millions of paying customers, then there's a fucking cost to that. Instead of full or partially eating that cost, they pass 100% of it to their customers, which is utterly laughable. Is Spotify claiming that having an iOS app is worth zero to them and their business? If that's the case, then just pull it from the store. If not, then eat up the business expense, and quit the blatantly transparent whining. If Apple rejected an update, there's a very good chance there was a legitimate reason for doing so, not because "anti-competitive". Spotify is trying to exploit this narrative with baseless bitching and whining, playing the victim.
    edited June 2016 nolamacguyfreerangerepressthisceek74drewys808mwhitelatifbpjbdragonlolliverpscooter63
  • Reply 12 of 143
    foggyhillfoggyhill Posts: 4,767member
    seneca72 said:
    foggyhill said:
    Bullshit Spotify, see you in court since that's seems were you want to go now...  This is GRANDSTANDING.
    Haven't you noticed there's a Presidential election coming up.  Sen Warren has been making noises about Apple and monopolistic practices, this is simply Spotify jumping onto the bandwagon.
    Yes, I agree, and Warren is wrong on this as are nearly 100% of politicians on anything tech related.
    Net neutrality is probably one of the few things anyone in gov has got right on tech.
    latifbpjbdragontmaybaconstangbadmonk
  • Reply 13 of 143
    irnchrizirnchriz Posts: 1,580member
    Spotify just needs to do what Amazon does with the kindle app.  No purchases through the app just a message stating to use this app you need an account. User goes online makes an account then signs in.  

    As as others already do this its just Spotify being whiny little bitchies. 
    stompyicoco3
  • Reply 14 of 143
    Will someone pay these idiots to shut up? 
    latifbp
  • Reply 15 of 143
    So on one hand we have Spotify claiming that Apple/Apple Music have led to a huge uptick in Spotify users, but on the other hand we have Spotify claiming that Apple/Apple Music is harming their business.

    Meanwhile Spotify's ratio of free to paid users hasn't changed for years, (especially with Apple Music not even offering a free tier.)

    Since their ad-supported "free" tier now has a significantly larger number of users then even a razor thin margin would be seeing a large boost to Spotify's bottom line - it is after all a wholly digital service.

    So no I don't buy that Spotify's problems are from competitors acting unfairly or illegally, what's clear to me is that either Spotify can't make good out of a free tier (this proving that their business model was never sound) or they're just trying all of this on as a means to stifle new competitors in this segment - because Spotify has utterly failed to differentiate their service. I'd guess it is the second option, too bad for Spotify that Amazon et. al. will enter this space shortly: competitors who are far more ferocious than Apple and are willing to 100% duplicate Spotify's offer, and then still discount on that.
    edited June 2016 latifbpjbdragonentropyslollivertmaypscooter63badmonk
  • Reply 16 of 143
    nolamacguynolamacguy Posts: 4,758member
    I'm glad Spotify is doing this. Apple should allow subscription apps to offer a redirect to the browser to sign up. There's no reason Apple should be taking 30% of someone's monthly Spotify fee. They're not hosting any content. And it certainly doesn't cost them $3 to process the credit card transaction. Google allows alternate payment methods. Apple should do the same. How hard would it be for Spotify to have a link in the app that takes you out to Safari to sign up? It wouldn't be. This is all about $$$ for Apple. 
    there we go again w/ the misdirection about the credit card fee -- as if that was the purported reason for the 30%. nope. the 30% is rent to do busines in Apple's shopping mall, which they designed, built, and maintain with their own money. if you want to do business inside of it, you gotta pay rent. if apple didnt charge the fee for subscription apps, then all the other one-time-payment apps wouldnt instantly switch to subscription to avoid paying the 30% for their apps. that would be stupid. 

    its pretty clear. you cant walk into the Mall of America and sell magazine subscriptions for free, can you? same thing.
    edited June 2016 brucemccalimwhitelatifbplondorsupadav03mejsricjbdragonlollivertmay
  • Reply 17 of 143
    cpsrocpsro Posts: 2,442member
    "grave harm", my ass. No sympathy for Spotify here, until I know the reason Spotify's update was rejected. I expect it was rejected for good reason, or else Spotify would have told us why. Until then, my assumption is it's all a ploy by Spotify. The app is still available to download and presumably still works, so I don't see how rejecting an app for specious reasons is an issue that anybody outside the company should be concerned about. What a waste of time.
    edited June 2016 lolliver
  • Reply 18 of 143
    freerangefreerange Posts: 1,585member
    I'm glad Spotify is doing this. Apple should allow subscription apps to offer a redirect to the browser to sign up. There's no reason Apple should be taking 30% of someone's monthly Spotify fee. They're not hosting any content. And it certainly doesn't cost them $3 to process the credit card transaction. Google allows alternate payment methods. Apple should do the same. How hard would it be for Spotify to have a link in the app that takes you out to Safari to sign up? It wouldn't be. This is all about $$$ for Apple. 
    Seriously????? That's an absolutely ridiculous position. Apple built and maintains their iOS platform at great expense, and has invested BILLIONS in developing their user base, and you think Spotify should get a free ride for their competitive paid subscription as they have access to over 1 BILLION Apple devices? Which would in fact be special treatment compared to every other paid service in the AppStore. The reality is that Spotify, an Apple Music competitor, is allowed in the Apple AppStore, and further, has their free ad supported program available for download in the store at ZERO cost to them and their users. What could be more fair than that for a direct competitor to Apple?
    brucemcdrewys808calimwhitenolamacguylondorsupadav03mejsriclolliver
  • Reply 19 of 143
    igorskyigorsky Posts: 422member
    I'm glad Spotify is doing this. Apple should allow subscription apps to offer a redirect to the browser to sign up. There's no reason Apple should be taking 30% of someone's monthly Spotify fee. They're not hosting any content. And it certainly doesn't cost them $3 to process the credit card transaction. Google allows alternate payment methods. Apple should do the same. How hard would it be for Spotify to have a link in the app that takes you out to Safari to sign up? It wouldn't be. This is all about $$$ for Apple. 

    No shit that it's about $$$$ for Apple. Apple is a for profit corporation...what else should it be about?  Peanuts?  And why shouldn't Apple take a cut for providing a platform that allows Spotify to make money?  Do you have an issues with eBay or Amazon taking a cut for allowing people to sell in their marketplace?  Spotify should be kissing Apple's ass for providing them a lucrative marketplace instead of complaining.  Sounds like sour grapes to me. 
    edited June 2016 drewys808calimwhitenolamacguylondorsupadav03mejsriclolliverbadmonk
  • Reply 20 of 143
    freerangefreerange Posts: 1,585member

    slurpy said:
    latifbp said:

    All Spotify paying users should be questioning why Spotify needles its customers by forcing them to pay business operation expenses. That 30% fee is a business expense, one they can and I'm sure they do write off at tax time. BUT, not only do they write it off (so it doesn't cost them much or anything at all) but they force you, their customer, to pay more anyway. They're screwing you and any other dope who decides to believe this victim sob story.
    Yeah, it's complete horse-shit. Guess what- if you want the opportunity provide your app on the most lucrative appstore on the planet, with a base of hundreds of millions of paying customers, then there's a fucking cost to that. Instead of full or partially eating that cost, they pass 100% of it to their customers, which is utterly laughable. Is Spotify claiming that having an iOS app is worth zero to them and their business? If that's the case, then just pull it from the store. If not, then eat up the business expense, and quit the blatantly transparent whining. If Apple rejected an update, there's a very good chance there was a legitimate reason for doing so, not because "anti-competitive". Spotify is trying to exploit this narrative with baseless bitching and whining, playing the victim.
    Exactly! Well said!
    mwhitejbdragonEsquireCats
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