EU's antitrust head is ignoring Spotify's dominance and wants to punish Apple instead

Posted:
in iOS edited April 19

Antitrust chief Margrethe Vestager still wants to favor the dominant music streaming service in the EU, and says that Apple must allow Spotify's latest iOS antisteering update immediately.

The European Union suspects Big Tech firms are avoiding their responsibilities to the publc
The European Union suspects Big Tech firms are avoiding their responsibilities to the publc



Central to Spotify's iOS app is the addition of a link to its website, and details showing EU users the different pricing there. Previously not allowed by Apple, this is now permitted under EU regulations, but Spotify has been complaining that Apple is blocking the update.

Speaking to CNBC the EU's Margrethe Vestager said her office was continuing to investigate Spotify's complaint that it is being prevented from reaching its audience. Spotify is currently the leading music streaming service in the world, while Apple Music is variously in fourth or fifth place.

"This is absolutely top priority because it's about our choice as consumers," she said. "You can choose to pay within the Apple system and pay a 30% surcharge in order for that, but it should also be possible for you just to have a direct relationship with your service provider and pay the price that they're asking without the 30% Apple service fee."

Spotify doesn't pay 30% for all customers it holds, and not even close to a majority of them. That 30% applies to the first year of a maintained subscription, and it pays 15% on subscribers that it has held for over a year.

How many customers Spotify holds at each tier in April 2024 is unclear. However, in a 2019 regulatory filing, Apple said it collected 15% on 680,000 customers out of more than 100 million Premium subscribers worldwide.

Spotify itself hasn't ever disclosed this information. The company also keeps hammering on this 30% fee in blog posts and court filings, and Vestager continues to repeat it.

"So it's really high priority for us to get Apple to comply with this," she continued, "and we're investigating this as a very high priority."

Vestager is the Executive Vice President of the European Commission for A Europe Fit for the Digital Age, and said that the EU was concerned with all Big Tech firms. "We have the suspicion that these companies are not living up to their obligations," she said of Apple, Google, Meta and more.

"They play a very important role in the digital markets," she continued, "and if they close the market, then no other business literally has a fair chance of getting to their customers."

Smartphone monopolies and AI

CNBC

asked Vestager whether she considers that Apple has a monopoly on smartphones. It has been accused of this nonsensically by the Department of Justice (DOJ) and politicians, despite the iPhone reaching only 51% of the US population.

Vestager stressed that she is not involved in the US DOJ case. But she did have a better answer than the most recent proponent of breaking up Apple's non-existent monopoly, Senator Elizabeth Warren.

"I think what we see is that there are indeed very different and very separate markets when it comes to smartphones," said Vestager, "and [a] very high end, very expensive phone is not in the same market as a very, you know, affordable, cheaper phone."

"So one should be very nuanced when it comes to comparing phones," she continued. "Because those in the market for very high end are not in the market for any number of other phones."

Vestager was also asked about AI and called it an "existential risk for each and every one of us," especially in an election year.

"We have brought our European house in order [and] now have an AI act that kicks in full within six, 18, 24 months," she said. "But right here and now, you know, we're also asking AI providers to be very prudent."

"This is an enormous election year," she continued. "We need for service providers to make sure that when AI sort of enters into that space, that artificial content can be recognized, that deep fakes can be dealt with, because if not, well, then the integrity of our election is put at risk."

Separately, the EU launched a series of mass Digital Markets Act violation probes against Apple, Google, and Meta, in March 2024.



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Comments

  • Reply 1 of 45

    "Vestager stressed that she is not involved in the US DOJ case. But she did have a better answer than the most recent proponent of breaking up Apple's non-existent monopoly, Senator Elizabeth Warren.

    "I think what we see is that there are indeed very different and very separate markets when it comes to smartphones," said Vestager, "and [a] very high end, very expensive phone is not in the same market as a very, you know, affordable, cheaper phone."

    ----

    LOL...Vestager's "better answer" is parroting the DOJ approach to its lawsuit, i.e., claiming Apple's monopoly is in a pricing segment of the market and not the overall market. 


    "Spotify doesn't pay 30% for all customers it holds, and not even close to a majority of them. That 30% applies to the first year of a maintained subscription, and it pays 15% on subscribers that it has held for over a year."

    ----

    There's no mystery about Spotify and 30% commissions. Their own timetoplayfair web site states that they only used IAP on iOS for two years out of the fifteen that they've offered the app on the App Store. So they were only subject to Apple's commission for two years. It is a FACT that Spotify's preferred method for customer payments for subscriptions on iOS was to have them pay on the internet and entirely avoid Apple's commission. 

    edited April 19 thtAlex1NCaptainsBuddywatto_cobra
  • Reply 2 of 45
    tmaytmay Posts: 6,383member
    "We can create the rules to accomplish whatever we want to, and we want Spotify to dominate the music market". "That's about the best we can do with what we have to work in our uncompetitive by design EU"...shorter Vestager...
    teejay2012thttimpetusbyronlwatto_cobra
  • Reply 3 of 45
    nubusnubus Posts: 420member
    The surcharge isn't 30%. Apple is taking 30% making the Apple Tax / surcharge 43%. 
    VictorMortimer
  • Reply 4 of 45
    nubus said:
    The surcharge isn't 30%. Apple is taking 30% making the Apple Tax / surcharge 43%. 
    Spotify only used IAP on the App Store for two years. Please refer to Spotify's timetoplayfair web site for the facts. They've never allowed customers to pay via the App Store the other thirteen years. 
    edited April 19 teejay2012thtwilliamlondonAlex1Nbyronlwatto_cobra
  • Reply 5 of 45
    nubusnubus Posts: 420member
    nubus said:
    The surcharge isn't 30%. Apple is taking 30% making the Apple Tax / surcharge 43%. 
    Spotify only used IAP on the App Store for two years. Please refer to Spotify's timetoplayfair web site for the facts. They've never allowed customers to pay via the App Store the other thirteen years. 
    How does your comment relate to calculating surcharges? To modify... it is a 43% surcharge on app prices / a 30% tax on developers.
    edited April 19 gatorguywilliamlondon
  • Reply 6 of 45
    Maybe… EU's head of antitrust has nothing to do with… antitrust… but with not allowing non-european monopolies!
    It is not against monopolies… just against those not rooted on Europe!
    williamlondonwatto_cobra
  • Reply 7 of 45
    barthrhbarthrh Posts: 139member
    How does your comment relate to calculating surcharges? To modify... it is a 43% surcharge on app prices / a 30% tax on developers.
    What do you think retailers charge as a markup on hard goods on the store shelf? In the "old days" of buying software on disk, the retailers were taking 50% or more markup on wholesale. Retail is commonly a 100% markup on wholesale. Before anyone says "well you don't need to buy from that retailer", nor is that retailer obliged to put the URL of each product / competitors' stores on the shelf tags.

    You don't see developers complaining as vocally about the *same* 30% cuts happening on the Sony PS / MS XBox stores because they know the alternative -- distribution, packaging, marketing, collecting from the stores, lower wholesale vs. the 30% (or 43%) "tax" -- is way worse.


    foregoneconclusionteejay2012tmaythtwilliamlondonAlex1Ndewmebyronlwatto_cobra
  • Reply 8 of 45
    nubus said:
    nubus said:
    The surcharge isn't 30%. Apple is taking 30% making the Apple Tax / surcharge 43%. 
    Spotify only used IAP on the App Store for two years. Please refer to Spotify's timetoplayfair web site for the facts. They've never allowed customers to pay via the App Store the other thirteen years. 
    How does your comment relate to calculating surcharges? To modify... it is a 43% surcharge on app prices / a 30% tax on developers.
    There is no surcharge if customers pay via the internet. Spotify has never allowed anything other than internet payments 13 out of the 15 years they've been on the App Store.
    thtwilliamlondonAlex1Nwatto_cobra
  • Reply 9 of 45
    avon b7avon b7 Posts: 7,780member
    "The European Union suspects Big Tech firms are avoiding their responsibilities to the publc"

    I'm guessing that is relative to gatekeeper status and all that implies. That is something that Spotify doesn't have so its dominance is less of an issue.

    Nothing is being ignored as all it would take is a formal complaint of abuse of dominant position by someone. 

    Has that happened? Has Apple or anyone else placed a complaint? 
    muthuk_vanalingam
  • Reply 10 of 45
    Spotify doesn't pay 30% for all customers it holds, and not even close to a majority of them. That 30% applies to the first year of a maintained subscription, and it pays 15% on subscribers that it has held for over a year.

    Actually, Spotify hasn't paid 30% for any customers it holds in at least seven years. It stopped accepting in-app subscriptions in 2016, which means that by the end of 2017, it was only paying 15% for those customers who were still signed up through Apple.

    However, last summer, Spotify began telling the few customers who were still paying through Apple that they'd have to resubscribe to Premium directly or be switched to a free account. That was in July, which means by the end of last year, Spotify should have been paying Apple nothing at all.

    The 30% mantra is the most disingenuous thing that Spotify has ever said. 

    thtwilliamlondonAlex1Ntmaybyronlwatto_cobra
  • Reply 11 of 45
    Apple's 30% is highway robbery.

    Once Apple is forced to allow normal software installation on iDevices, I won't care what they charge.  As far as I'm concerned, they can charge 99% on their app store, and I wish they would, it would encourage developers to pull their apps off of it and distribute from their own websites.

    But since Apple still doesn't let us install software normally, I'm looking forward to the EU punishing them.
  • Reply 12 of 45
    jimh2jimh2 Posts: 635member
    Apple's 30% is highway robbery.

    Once Apple is forced to allow normal software installation on iDevices, I won't care what they charge.  As far as I'm concerned, they can charge 99% on their app store, and I wish they would, it would encourage developers to pull their apps off of it and distribute from their own websites.

    But since Apple still doesn't let us install software normally, I'm looking forward to the EU punishing them.
    You really have no clue as to how the selling of anything works. With your logic Walmart would not be permitted to apply their overhead costs (taxes, insurance, rent/mortgages, compliance, employees, travel, maintenance, training, etc.) to their items. If Walmart can buy a bike for $50 they should have to sell it for $50, which would at a loss.

    Apple will win as the software tools to create an App are not free and $99 is a token amount that assumes they will make money off of the App Store. 

    It is safe to assume if Apple added a setting to block 3rd party app stores the vast majority of users would select it. The EU is catering to a bunch of grifters with Spotify being the largest. Were I Apple I would drop the price of Apple Music to $0 and choke Spotify out of business.
    timpetuswilliamlondonAlex1Ntmaydewmewonkothesaneteejay2012watto_cobra
  • Reply 13 of 45
    chasmchasm Posts: 3,347member
    I see the EU and Ms. Vestager still do not give a whit about how little Spotify pays artists compared to Apple … both of these services underpay the musicians, but Apple pays nearly THREE TIMES as much as Spotify, last time I checked.

    Oh but that’s not anywhere near as important as the non-existent “monopoly abuse” Apple practices against Spotify …
    Alex1Ntmayteejay2012watto_cobra
  • Reply 14 of 45
    The US administration is a conflicted position. Normally such blatant attacks on US companies would have elicited a forceful response with possible trade sanctions. However with your DOJ going after the same companies in the US, any action is awkward. Since these DMA regulations are part of EU law, Apple and others will need to show that while the laws may be clear, the application to US companies is selective and unfair.
    Alex1Nbadmonkwatto_cobra
  • Reply 15 of 45
    dewmedewme Posts: 5,429member
    jimh2 said:
    Apple's 30% is highway robbery.

    Once Apple is forced to allow normal software installation on iDevices, I won't care what they charge.  As far as I'm concerned, they can charge 99% on their app store, and I wish they would, it would encourage developers to pull their apps off of it and distribute from their own websites.

    But since Apple still doesn't let us install software normally, I'm looking forward to the EU punishing them.
    You really have no clue as to how the selling of anything works. With your logic Walmart would not be permitted to apply their overhead costs (taxes, insurance, rent/mortgages, compliance, employees, travel, maintenance, training, etc.) to their items. If Walmart can buy a bike for $50 they should have to sell it for $50, which would at a loss.

    Apple will win as the software tools to create an App are not free and $99 is a token amount that assumes they will make money off of the App Store. 

    It is safe to assume if Apple added a setting to block 3rd party app stores the vast majority of users would select it. The EU is catering to a bunch of grifters with Spotify being the largest. Were I Apple I would drop the price of Apple Music to $0 and choke Spotify out of business.
    Apple’s $99 per year fee for developers is the deal of the century for anyone who has done professional software development on Windows. I recall spending north of $1500 USD for individual MSDN professional versions. The lowest subscription price for MSDN professional is around $45 USD per user per month. Enterprise subscriptions are $250 USD per user per month. 

    I’ve always felt that Apple priced its developer tools, developer programs, and App Store fees to allow hobbyists, makers, individual and small independent software vendors (ISVs) to get professional level tools and support services, like beta testing, storefront, distribution, billing, updates, user reviews, etc., at very low cost to these developers. The big ISVs can already afford to take on all of necessary costs and effort themselves, so they’re basically getting to ride on Apple’s gravy train less than they spend on “free” coffee for their staff. 

    IMHO anyone who thinks that 180 million app developers would be better served by hosting their own web based e-commerce sites, update services, advertising, etc., knows very little about what it really costs to develop and support a software product when they’re paying for everything required out of their own pocket.

    It’s ironic that those who are presenting themselves as victims of Apple’s generosity are largely capable of doing and funding everything on their own. 

    Again, it irks me to have these regulators and politicians state that they up in Apple’s shorts to save US from Apple. Based on Apple’s customer loyalty and product attachment rates I’d say that the overwhelming majority of Apple customers aren’t looking to be saved. It’s largely those who are already raking it in when playing by Apple’s rules (terms and conditions) that aren’t content to only get a free ride, they want to drive the train and harvest even more from Apple’s massive and largely captive customer base. 
    edited April 20 teejay2012tmaybadmonkwatto_cobrarob53
  • Reply 16 of 45
    tmaytmay Posts: 6,383member
    nubus said:
    nubus said:
    The surcharge isn't 30%. Apple is taking 30% making the Apple Tax / surcharge 43%. 
    Spotify only used IAP on the App Store for two years. Please refer to Spotify's timetoplayfair web site for the facts. They've never allowed customers to pay via the App Store the other thirteen years. 
    How does your comment relate to calculating surcharges? To modify... it is a 43% surcharge on app prices / a 30% tax on developers.
    You must really be busted up about VAT...
    Xedwilliamlondonwatto_cobra
  • Reply 17 of 45
    davidwdavidw Posts: 2,073member
    Apple's 30% is highway robbery.

    Once Apple is forced to allow normal software installation on iDevices, I won't care what they charge.  As far as I'm concerned, they can charge 99% on their app store, and I wish they would, it would encourage developers to pull their apps off of it and distribute from their own websites.

    But since Apple still doesn't let us install software normally, I'm looking forward to the EU punishing them.

    Another clueless post.

    Google allows ...... "normal software installation on Android devices",  and they charge developers about the same commission rate as Apple, to be in their Google Play Store. So why aren't Android developers pulling their software out of the Google Play Store and selling them on their own websites? Or selling their apps in other app stores that might be charging less in commission? If a 30% commission is highway robbery, then why aren't there any other app stores on Android that is making a killing by only charging 15% commission? Why is the Google Play Store still a "monopoly"with over 85% of the market share, when there are dozens of other apps stores and sideloading is allowed?

    Could it be that the vast majority of developers are not paying anywhere near a 30% commission. Over 90% of the apps in both Apple and Google apps stores are free. You think the developers of these apps are going to pull their apps off and have them available on their own websites? 

    In 2020,when Apple lowered the commission to 15%, for those developers that earn less than $1M a year (and that's $1M a year minus commission), over 98% of the developers (at the time) qualified for the 15% commission. You think small developers like these will be better off selling their apps on their own websites and not paying the 15% commission for Apple to handle payment processing fees, issue refunds, roll out updates, collect (and remit) all the government taxes (and VATS) required and to be in an app store that can reach over 1B potential customers? 


    The bottom line is that the biggest crybabies about having to pay a 30% commission are the less than 3% of developers that are making millions, if not 10's of millions or over a billion, of dollars every year with their apps in the Apple App Store. And the vast majority of them are selling gaming apps with IAP of virtual currency. These developers are not going to pull their apps from the Apple App Stores, even though most of them already operate their own websites that can handle payments. They haven't pull their apps from the Google Play Store, to sell on their own website or sell in their own app store on Android or sell through some other app stores with lower commission. They are not as stupid in running a profitable business, as you seem to be.


    And who will be gaining the most by any reduction in the 30% commission? Tencent and ByteDance. Both China companies and the largest mobile app developers on iOS and Android. It's no mystery why Sweeney, the CEO of Epic Games, is so adamant about getting government help to prevent Apple from charging a commission at all. Tencent owns over 40% of Epic Games and have their hand up Sweeney ass and using him like a hand puppet to shill for them.


    Even if Apple were to reduce their top commission to 15%, only the top 2% of developers will see any real benefit. Even Sweeney have admitted that charging 12% commission in his Epic Game Store, did not come close to breaking even, like he thought it would. And the Epic Game Store had not made a profit yet. So not even Sweeney would think Apple could charge much less than 15%.







    edited April 20 muthuk_vanalingamdewmeteejay2012williamlondonwatto_cobra
  • Reply 18 of 45
    avon b7avon b7 Posts: 7,780member
    chasm said:
    I see the EU and Ms. Vestager still do not give a whit about how little Spotify pays artists compared to Apple … both of these services underpay the musicians, but Apple pays nearly THREE TIMES as much as Spotify, last time I checked.

    Oh but that’s not anywhere near as important as the non-existent “monopoly abuse” Apple practices against Spotify …
    Why should the EU be concerned about determining prices? 

    Apple paying more (it definitely has the coffers to do that) is competition and that is good. 

    That said, if 'how little' is so low, I suppose three times 'how little' isn't much to write home about either. I can only imagine that something else is going on for Spotify to remain popular. Exposure? And what about ownership? Surely it's the labels that pay most artists if they are the owners of most content. 

    Even in the old days, the music industry was screwed up. All those advances for major stars with multi album deals left the vast majority of smaller artists without decent funding from labels. 

    At least now there is more control for artists in terms of distribution. 

    The industry may still not be healthy for almost anyone making music but Spotify is just one player among many. 


  • Reply 19 of 45
    dewmedewme Posts: 5,429member
    jimh2 said:
    Apple's 30% is highway robbery.

    Once Apple is forced to allow normal software installation on iDevices, I won't care what they charge.  As far as I'm concerned, they can charge 99% on their app store, and I wish they would, it would encourage developers to pull their apps off of it and distribute from their own websites.

    But since Apple still doesn't let us install software normally, I'm looking forward to the EU punishing them.
    You really have no clue as to how the selling of anything works. With your logic Walmart would not be permitted to apply their overhead costs (taxes, insurance, rent/mortgages, compliance, employees, travel, maintenance, training, etc.) to their items. If Walmart can buy a bike for $50 they should have to sell it for $50, which would at a loss.

    Apple will win as the software tools to create an App are not free and $99 is a token amount that assumes they will make money off of the App Store. 

    It is safe to assume if Apple added a setting to block 3rd party app stores the vast majority of users would select it. The EU is catering to a bunch of grifters with Spotify being the largest. Were I Apple I would drop the price of Apple Music to $0 and choke Spotify out of business.
    Apple’s $99 per year fee for developers is the deal of the century for anyone who has done professional software development on Windows. I recall spending north of $1500 USD for individual MSDN professional versions. The lowest subscription price for MSDN professional is around $45 USD per user per month. Enterprise subscriptions are $250 USD per user per month. 

    I’ve always felt that Apple priced its developer plans and App Store fees to allow individual and small independent software d
    badmonkwilliamlondonwatto_cobra
  • Reply 20 of 45
    dewmedewme Posts: 5,429member
    Correction to my earlier post; 1.8 million, not 180 million. My apologies. 
    watto_cobra
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