EU to investigate Apple following Spotify anti-competition complaint

Posted:
in iPod + iTunes + AppleTV
The European Union's antitrust body is set to launch a formal investigation into Apple on claims that the tech giant's App Store policies hinder competitors of its Apple Music service.

Spotify VS Apple Music


Earlier this year, Spotify lodged a complaint with the European Commission alleging Apple, through its App Store, puts Apple Music competitors at a disadvantage.

According to a report from the Financial Times, the EU is now preparing to kick off an official probe into the alleged anti-competitive behavior.

The commission considered Spotify's filing and customer sentiment in its decision to launch a probe, an investigation that could take years to complete, the report said.

In its complaint, Spotify points to supposed unfair treatment such as when Apple rejected multiple Apple Watch app submissions in 2015 and 2016. Apple later added third-party API for music streaming apps on Apple Watch with watchOS 5, which has been used by popular services like Pandora. Spotify has yet to re-submit its watchOS app for review.

Another bone of contention is Apple's 30% cut of App Store purchases, a fee levied on all third-party developers. For subscriptions, the rate drops down to 15% after one year of continual payments.

Apple collects this cut on any sales of any digital items. That could be premium in-game currencies, or in this case, a subscription to Spotify. This goes towards Apple's hosting fees, development of the platform and developer resources, payment infrastructure and other expenses. Spotify can optionally remove the in-app subscription option and allow users to sign up directly from its website -- a route other subscription-based apps have gone.

The commission has yet to formally announce the probe.
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Comments

  • Reply 1 of 46
    genovellegenovelle Posts: 982member
    Spotify sucks

    trashman69macplusplusjbdragonAppleExposedwatto_cobra
  • Reply 2 of 46
    ericthehalfbeeericthehalfbee Posts: 4,107member
    genovelle said:
    Spotify sucks


    Spotify is all right. It’s their CEO that sucks. 
    fotoformatAppleExposedlostkiwiwatto_cobra
  • Reply 3 of 46
    CheeseFreezeCheeseFreeze Posts: 418member
    Good! I hope they rule in favor of Spotify. Not because of Spotify, but that the App Store model and monopoly needs to change. 70/30 is no longer sustainable to many developers as it was in 2007. Secondly it’s conceptually wrong to own an entire ecosystem - just one of two - and abuse that by taxing 30% and very specifically create exceptions to hurt competition (such as not allowing Siri to control Spotify)
    kkqd1337ElCapitanpratikindiamuthuk_vanalingamapplephdecoderringrogifan_new78BanditchemenginXaviercross1971
  • Reply 4 of 46
    ugh, no. it’s not a monopoly when android has far more marketshare and far more open than iOS
    jbdragonAppleExposedlostkiwiwatto_cobra
  • Reply 5 of 46
    apple ][apple ][ Posts: 8,743member
    I don't trust anything EU related, what a bunch of sick clowns. Apple created and run their own App Store, and any developer signing up knows about and agreed to the rules regarding the cut, etc.
    macplusplusravnorodomAppleExposedwatto_cobra
  • Reply 6 of 46
    sflocalsflocal Posts: 4,752member
    Good! I hope they rule in favor of Spotify. Not because of Spotify, but that the App Store model and monopoly needs to change. 70/30 is no longer sustainable to many developers as it was in 2007. Secondly it’s conceptually wrong to own an entire ecosystem - just one of two - and abuse that by taxing 30% and very specifically create exceptions to hurt competition (such as not allowing Siri to control Spotify)
    Oh man... your theory is flawed on so many fronts it’s not even worth the effort.
    wonkothesanefotoformatleavingthebiggbeowulfschmidtlkruppjbdragonAppleExposedlostkiwiwatto_cobra
  • Reply 7 of 46
    mcdavemcdave Posts: 1,201member
    Good! I hope they rule in favor of Spotify. Not because of Spotify, but that the App Store model and monopoly needs to change. 70/30 is no longer sustainable to many developers as it was in 2007. Secondly it’s conceptually wrong to own an entire ecosystem - just one of two - and abuse that by taxing 30% and very specifically create exceptions to hurt competition (such as not allowing Siri to control Spotify)
    I like our choice of ecosystems; the competent, integrated Apple ecosystem or the ludicrously fragmented (borderline fraudulent) other ecosystem which tricks  people into thinking they’re clever whilst making fools of them.  Why would you want to reduce our choice of models?
    lkruppwatto_cobra
  • Reply 8 of 46
    kkqd1337kkqd1337 Posts: 222member
    Sounds like a hot potato!

    Will be interesting to have the vicious side of Apple exposed here. Hopefully they will get what they deserve.


    pratikindiaappleph
  • Reply 9 of 46
    avon b7avon b7 Posts: 4,303member
    apple ][ said:
    I don't trust anything EU related, what a bunch of sick clowns. Apple created and run their own App Store, and any developer signing up knows about and agreed to the rules regarding the cut, etc.
    By the same token, Apple knows the rules of operating within the EU but then again this isn't about agreeing to Apple's rules but if the rules themselves are 'legal'.
    gatorguymuthuk_vanalingam
  • Reply 10 of 46
    EsquireCatsEsquireCats Posts: 674member
    The core argument is that Apple would be at an unfair advantage because they aren't beholden to their own 30%(Or 15% after one year) cut of subscription revenue when running Apple Music.

    But that relies on the assumption that the 30% of app revenues cover the cost of Apple's cloud infrastructure, bandwidth, the cost of hosting Apple Music, the cost of developing iOS and so on. This is patently not the case - the cost for all these things is overwhelming supported by the sales of hardware. Additionally Apple provides three months of free listening, which represents an additional cost to running the service.

    Consider the following:
    • The 9 most downloaded Apps are free, representing pure cost to Apple.
    • Many of those top apps have weekly or near weekly updates, each more than 100MB a piece, again a high bandwidth cost.
    • To date there have been more than 130B app downloads, again a huge bandwidth cost to Apple
    • Apple has paid out more than 70B to developers, meaning that at most they have acquired 30B in revenue, indicating that the app store not very profitable, and more likely a loss leader when considering the cost of data centres, bandwidth, development, investment in energy projects, upkeep and staff.
    It is more likely that Apple Music, like other Apple services - are no or thin-margin products to make the platform more attractive, and are not at any special advantage to competitors.
    edited May 6 jbdragonwatto_cobra
  • Reply 11 of 46
    apple ][apple ][ Posts: 8,743member
    avon b7 said:
    apple ][ said:
    I don't trust anything EU related, what a bunch of sick clowns. Apple created and run their own App Store, and any developer signing up knows about and agreed to the rules regarding the cut, etc.
    By the same token, Apple knows the rules of operating within the EU but then again this isn't about agreeing to Apple's rules but if the rules themselves are 'legal'.
    Apple should go to war against the EU. Their rules are often changing and new rules are constantly being made up all of the time. Perhaps it's time to break up the EU. That already seems to have begun, thankfully. 

    I don't mean war as in dropping actual bombs on them of course. Apple is not in the business of making smart bombs, not yet at least, though I'm sure that they would look awesome and have a sleek and clean design if it were to happen, but I do mean that Apple should view the EU as an enemy, because that's certainly how the EU views Apple and other American tech giants.

    Just the other day, some EU clown named Donald Tusk warned: The world needs to be wary of the rise of tech giants such as Google, Apple, Facebook and Amazon, comparing their powers to those of countries such as China, European Council President Donald Tusk said in Warsaw on Friday.

    https://www.reuters.com/article/us-poland-tusk-tech/eus-tusk-warns-of-risks-in-rise-of-u-s-tech-giants-idUSKCN1S91AO

    Apple should definitely view the EU as a hostile entity and as their enemy and Apple should treat them accordingly, with great suspicion and with extreme caution.

    Every demand and inquiry from the EU should be fought and contested using all legal methods available.

    The EU has a habit of trying to shake down certain big and rich American tech companies whenever they need some money.

    The EU sure likes to warn others a lot.

    If the EU ever tries to break up Apple, then the USA should respond in kind with numerous punitive measures in exchange, including pulling completely out of all military alliances with them, as they're basically freeloaders who don't pay their fair share.


    JanNLlkruppAppleExposedwatto_cobra
  • Reply 12 of 46
    ravnorodomravnorodom Posts: 238member
    genovelle said:
    Spotify sucks


    Spotify is all right. It’s their CEO that sucks. 
    It sounds like CEO needs a bigger yacht for the summer.
    watto_cobra
  • Reply 13 of 46
    shevshev Posts: 81member
    apple ][ said:
    avon b7 said:
    apple ][ said:
    I don't trust anything EU related, what a bunch of sick clowns. Apple created and run their own App Store, and any developer signing up knows about and agreed to the rules regarding the cut, etc.
    By the same token, Apple knows the rules of operating within the EU but then again this isn't about agreeing to Apple's rules but if the rules themselves are 'legal'.
    Apple should go to war against the EU. Their rules are often changing and new rules are constantly being made up all of the time. Perhaps it's time to break up the EU. That already seems to have begun, thankfully. 

    I don't mean war as in dropping actual bombs on them of course. Apple is not in the business of making smart bombs, not yet at least, though I'm sure that they would look awesome and have a sleek and clean design if it were to happen, but I do mean that Apple should view the EU as an enemy, because that's certainly how the EU views Apple and other American tech giants.

    Just the other day, some EU clown named Donald Tusk warned: The world needs to be wary of the rise of tech giants such as Google, Apple, Facebook and Amazon, comparing their powers to those of countries such as China, European Council President Donald Tusk said in Warsaw on Friday.

    https://www.reuters.com/article/us-poland-tusk-tech/eus-tusk-warns-of-risks-in-rise-of-u-s-tech-giants-idUSKCN1S91AO

    Apple should definitely view the EU as a hostile entity and as their enemy and Apple should treat them accordingly, with great suspicion and with extreme caution.

    Every demand and inquiry from the EU should be fought and contested using all legal methods available.

    The EU has a habit of trying to shake down certain big and rich American tech companies whenever they need some money.

    The EU sure likes to warn others a lot.

    If the EU ever tries to break up Apple, then the USA should respond in kind with numerous punitive measures in exchange, including pulling completely out of all military alliances with them, as they're basically freeloaders who don't pay their fair share.


     :D  paranoid Americans are the best
    cropr
  • Reply 14 of 46
    davidwdavidw Posts: 977member
    Good! I hope they rule in favor of Spotify. Not because of Spotify, but that the App Store model and monopoly needs to change. 70/30 is no longer sustainable to many developers as it was in 2007. Secondly it’s conceptually wrong to own an entire ecosystem - just one of two - and abuse that by taxing 30% and very specifically create exceptions to hurt competition (such as not allowing Siri to control Spotify)
    The only time a developer has to pay Apple 30% of the sale price of an app, in the App Store, is if they want to allow their Apple iOS customers to pay with their Apple iTunes accounts. There is nothing and I mean nothing, that prevents a developer from having their customers pay by way of their own payment system, outside of the App Store.

    If developers thinks paying Apple a 30% cut of the price of their app is too much, then let them host their own payment system. Let smaller developers require their customers to PayPal the money to their email account directly. Let them host their own web sites for payment purposes. Let them set up a business account with Visa and MasterCard, so they can accept CC payments and then pay the CC company 5% of each charge. Let them worry about securing their customers personal and account data from hackers on the internet. Let them have their customer mail them a check or money order. Let them handle any customers dispute with the payment.

    Then they can still have their app in the App Store, without  paying the "Apple tax". Apple will not "tax" them for having their app in the App Store if the payment is made outside of iTunes. How hard can that be for these developers complaining about the "Apple tax"? Surely, you must think that the cost for a developer to host, maintain and keep secure, their own payment systems, will easily be paid for by no longer having to pay the "Apple tax", if you're thinking Apple 30% cut is too much. ........ Right?   

    That's how I pay for my Netflix. I'm using Netflix auto pay, where Netflix directly bills by CC every month. Netflix do not have to pay the "Apple tax" with my subscription and yet, their app is available for me to use on my Apple devices. 

    What percentage of the their sales in the App Store, do you think it's going to cost developers to have their own payment system to handle the sales of their apps? Specially for the smaller ones. And that cost is the same whether they have any money coming in from the sales of their apps or not. At least with paying the "Apple tax", they are paying for a payment system with money that's coming in. If there's no money coming in from sales, there's no cost associated with maintaining a payment system outside the App Store.   
    tenthousandthingslostkiwiwatto_cobra
  • Reply 15 of 46
    apple ][ said:
    I don't trust anything EU related, what a bunch of sick clowns. Apple created and run their own App Store, and any developer signing up knows about and agreed to the rules regarding the cut, etc.
    I don't trust anything EU related, what a bunch of sick clowns.”

    That is a ridiculous opinion to hold. Especially if it’s coming from an American (which I’m admittedly assuming) at this point in history.
  • Reply 16 of 46
    mjtomlinmjtomlin Posts: 2,028member
    Good! I hope they rule in favor of Spotify. Not because of Spotify, but that the App Store model and monopoly needs to change. 70/30 is no longer sustainable to many developers as it was in 2007. Secondly it’s conceptually wrong to own an entire ecosystem - just one of two - and abuse that by taxing 30% and very specifically create exceptions to hurt competition (such as not allowing Siri to control Spotify)

    It’s not a monopoly. Geezus, I wish people understood what they were trying to argue. When they don’t it makes their entire argument pointless.

    Creating, maintaining, and controlling YOUR product does not make you a monopoly. A monopoly means you have a controlling, majority share of a particular market where others try and compete with you. Google has a monopoly in the web search, web ads. Amazon has a monopoly in the online retail, eBook markets, Microsoft has a monopoly in the desktop OS, office app markets, etc.

    Apple does not have a monopoly in streaming music, in mobile platforms, in mobile app stores, in mobile devices, in mobile operating systems. That’s like saying Apple has a monopoly in iPhones. So now Apple has to open their iPhone designs to others. It’s not fair that Apple gets to decide what components go in their devices? 

    Apple owns and controls iOS and the App Store. They ALLOW developers to write apps on THEIR platform and distribute and sell them in THEIR store. Without Apple there is no iOS platform or App store. And there’s nothing “conceptually” wrong about it. It is just one of many ways to run and maintain a platform.

    Furthermore, if you don’t like their way of doing things, there’s another, much larger, and open mobile ecosystem you can choose, Android. 
    edited May 6 lostkiwiwatto_cobra
  • Reply 17 of 46
    avon b7avon b7 Posts: 4,303member
    apple ][ said:
    avon b7 said:
    apple ][ said:
    I don't trust anything EU related, what a bunch of sick clowns. Apple created and run their own App Store, and any developer signing up knows about and agreed to the rules regarding the cut, etc.
    By the same token, Apple knows the rules of operating within the EU but then again this isn't about agreeing to Apple's rules but if the rules themselves are 'legal'.
    Apple should go to war against the EU. Their rules are often changing and new rules are constantly being made up all of the time. Perhaps it's time to break up the EU. That already seems to have begun, thankfully. 

    I don't mean war as in dropping actual bombs on them of course. Apple is not in the business of making smart bombs, not yet at least, though I'm sure that they would look awesome and have a sleek and clean design if it were to happen, but I do mean that Apple should view the EU as an enemy, because that's certainly how the EU views Apple and other American tech giants.

    Just the other day, some EU clown named Donald Tusk warned: The world needs to be wary of the rise of tech giants such as Google, Apple, Facebook and Amazon, comparing their powers to those of countries such as China, European Council President Donald Tusk said in Warsaw on Friday.

    https://www.reuters.com/article/us-poland-tusk-tech/eus-tusk-warns-of-risks-in-rise-of-u-s-tech-giants-idUSKCN1S91AO

    Apple should definitely view the EU as a hostile entity and as their enemy and Apple should treat them accordingly, with great suspicion and with extreme caution.

    Every demand and inquiry from the EU should be fought and contested using all legal methods available.

    The EU has a habit of trying to shake down certain big and rich American tech companies whenever they need some money.

    The EU sure likes to warn others a lot.

    If the EU ever tries to break up Apple, then the USA should respond in kind with numerous punitive measures in exchange, including pulling completely out of all military alliances with them, as they're basically freeloaders who don't pay their fair share.


    I think you don't understand how things work but that really isn't my point.

    You argued that Apple's customers know the rules and should simply abide by them or leave the App Store.

    I say Apple is in the same position and that's where your argument fell apart so you went on an anti EU rant.

    "Every demand and inquiry from the EU should be fought and contested using all legal methods available."

    Companies that find themselves under investigation sometimes do that. It's an option but if the EU rules unfavourably for a company, they probably were not following the rules anyway and then don't take the issue further.
    muthuk_vanalingam
  • Reply 18 of 46
    mjtomlinmjtomlin Posts: 2,028member

    genovelle said:
    Spotify sucks


    Spotify is all right. It’s their CEO that sucks. 
    It sounds like CEO needs a bigger yacht for the summer.

    No. Artists want more money. Spotify has to pass that cost onto someone else, so they’re desperately trying to get a free ride on Apple’s back. Which probably means a majority of their paid users are coming from Apple’s platform.
    jbdragonlostkiwiwatto_cobra
  • Reply 19 of 46
    gatorguygatorguy Posts: 21,300member
    mjtomlin said:
    Good! I hope they rule in favor of Spotify. Not because of Spotify, but that the App Store model and monopoly needs to change. 70/30 is no longer sustainable to many developers as it was in 2007. Secondly it’s conceptually wrong to own an entire ecosystem - just one of two - and abuse that by taxing 30% and very specifically create exceptions to hurt competition (such as not allowing Siri to control Spotify)

    It’s not a monopoly. Geezus, I wish people understood what they were trying to argue. When they don’t it makes their entire argument pointless.

    Creating, maintaining, and controlling YOUR product does not make you a monopoly. A monopoly means you have a controlling, majority share of a particular market where others try and compete with you. Google has a monopoly in the web search, web ads. Amazon has a monopoly in the online retail, eBook markets, Microsoft has a monopoly in the desktop OS, office app markets, etc.

    Apple does not have a monopoly in streaming music, in mobile platforms, in mobile app stores, in mobile devices, in mobile operating systems. That’s like saying Apple has a monopoly in iPhones. So now Apple has to open their iPhone designs to others. It’s not fair that Apple gets to decide what components go in their devices? 

    Apple owns and controls iOS and the App Store. They ALLOW developers to write apps on THEIR platform and distribute and sell them in THEIR store. Without Apple there is no iOS platform or App store. And there’s nothing “conceptually” wrong about it. It is just one of many ways to run and maintain a platform.

    Furthermore, if you don’t like their way of doing things, there’s another, much larger, and open mobile ecosystem you can choose, Android. 
    If there were absolutely no potential legal issue re: competitive harm the EU would not have accepted it for investigation. Nothing may come of it but apparently the legality is NOT as clear-cut as you would presume it to be. 
    edited May 6 avon b7muthuk_vanalingamchemengin
  • Reply 20 of 46
    mjtomlinmjtomlin Posts: 2,028member

    kkqd1337 said:
    Sounds like a hot potato!

    Will be interesting to have the vicious side of Apple exposed here. Hopefully they will get what they deserve.



    Care to explain?

    Apple develops operating system.
    Apple designs and makes devices for that operating system to run on.
    Apple develops the tools to write apps for that operating system.
    Apple creates a developer program to allow developers to write apps for that operating system.
    Apple creates and maintains a way for developers to sell and distribute those apps.

    Developers are allowed to sell their software at ANY price.
    Apple asks for 30% of that. Which goes towards financing the last three parts above.
    Developers AGREE to that before they start selling on the App Store.

    That last part is what’s the most significant here. Developers have to AGREE and Apple has to ALLOW before ANYTHING can happen.

    If Spotify wants a fair playing ground, then they need to start doing all the above themselves. Make their own devices and platform that they can run their service on. Amazon did it with the Kindle. Apple did it with the iPod and iTunes.
    AppleExposedlostkiwiwatto_cobra
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