Of course Spotify still makes a loss (they chose to do so to gain market share, you have to be pretty ignorant not to see that) The problem here is cross-subsidizing. If a trillion dollar company can freely hash their mony around in different markets, no other one can compete in such market unless he has the same momentum in others. Which effectively has the same effect as a true monopoly (which it by definition, isn't) Apple (and Google, Amazon) pay for offices, server costs, stellar salaries & promotions, and can afford to make a near-permanent, severe loss without anyone even noticing by their lack of separate reporting/financial transparency. The level playing field that Spotify is asking for is a fair deal - market regulators have to stand up more proactively.
Well, Spotify is, of course, free to use the same tricks that other companies use. The reason they don’t stash money is because they don’t have any, and the reason they don’t have any is because their business model is a slow road to failure. So what you’re really demanding is that market regulators suppress companies with successful business models to protect Spotify’s poor strategy.
Twenty odd years ago, Apple was in worse shape than Spotify. They won by choosing battles they believed they could win. Spotify needs to stop whining and do the same.
I’m baffled by people who think that companies should only be allowed to reach a certain level of success before they’re automatically penalised.
I really don’t care fit companies that complain about Apple’s AppStore policies. They build it promote it and support it. They pay the processing fees and process cancelations and returns. Without them their service would not be where it is. If Apple didn’t do all that they do, many of these companies would have died long ago, or never been thought of.
My main point, they make in the article. Apple takes 30% of Customers that sign up via The App. Meaning they were not already a customer of theirs. They were Apple’s Customer. Apples website, AppStore, tv or print ads and Name brought them to the platform.
If if Spotify and others did a better job marketing and invested more than Apple to draw thier subscribers, they would signup on their website and then be prompted to download the app. Apple takes 0% of that. Realistically there is no reason why Apple couldn’t charge for every download of Spotify. When was the last time you walked into a physical store and everything was free?
Owning an app developing company, I disagree. If I have to do the marketing and persuade the potential customer to download my app and pay for it, it must be that the potential customer is considered as my customer. The manufacturer of the device plays an important role, but does not own my customer. If you have bought a CD of a famous pop artist, the manufacturer of the HIFI installation you use to play the CD on, does not get a cut on the selling price of the CD, although the manufacturer had you once as a customer.
The fact that Apple makes available a platform that takes care of the actual selling, gives of course Apple the right to charge for that. But a 30% cut is ludicrously high for that App store service. Especially if you take into account that, from a developers point of view, the quality of the service is quite poor: frequent outages, poor marketing, horrible search function so customers don't find your app, no decent web interface, ... (Google does a better job here with its Play store).
If Spotify and others complain about the Apple policies here, I think they have a very good chance to win:
Apple does not allow to make links to websites from within the app. (Google does not have that rule on its Play store)
Apps must be downloaded from the Apple App store. (Google does not have that rule on its Play store). On Macs you can download apps from other sources. Apparently the security argument that Apple always give to justify this policy, is not so relevant for the Mac.
Apple does not only operate the App Store service, it offers also paying apps that compete with third party apps that must make use of the service. Apple does not have to pay the 30% cut to itself. (applies to the Google Play store as well)
Vestager (the same EU commissioner who wants Apple to pay the Irish taxes) is very susceptible for anti competitive behaviour. I am 100% sure that she will perceive the combination of the above mentioned rules as a clear example of anti competitive behaviour.
Why should Apple get a recurring cut of subscriptions? Apple isn’t hosting the content. If I buy a subscription to a magazine I bought at Walmart should they get a cut of that subscription?
Actually, they manage the subscriptions, deal with issues, security and the customer is Apple’s. If Spotify brought the customer in they would have signed up on their site. Then Apple gets nothing. If you buy that subscription on Walmart’s website and the manage it and process it every month they will. If you don’t think the company that maintains the store, keeps it clean and up to date, pays processing fees and support cost should get a cut, there’s nothing stopping you from by passing Apple altogether. They don’t have to use Apple for subscription at all.
For many apps, Apple does all that and the developer doesn’t have to worry about credit cards, data, security etc. For Spotify, and apps that can do their own subscription models, it’s possible to embed a signup page in the app talking to their own servers. Handling their own credit cards etc.
Thars whar Apple bans and what could be problematic for them under EU law.
Maybe Apple could face problem for that but I can’t see a sense why Apple should allow that to Spotify, Amazon etc. like “Guys.. you already have all these subscription and payment mechanism in place? Great. Just bypass us guys. It’s ok. Feel free to do anything you’d like on our devices & our market.”
Any reason?
They also control safari on iOS so you could - by extending that argument - say that not only should Apple stop the amazon app from buying a kindle book direct in the amazon app but ban the amazon kindle webpage from loading on safari.
I presume that most people here wouldn’t want MS to force iTunes on windows to hand over 30% on music purchases.
Why should Apple get a recurring cut of subscriptions? Apple isn’t hosting the content. If I buy a subscription to a magazine I bought at Walmart should they get a cut of that subscription?
Actually, they manage the subscriptions, deal with issues, security and the customer is Apple’s. If Spotify brought the customer in they would have signed up on their site. Then Apple gets nothing. If you buy that subscription on Walmart’s website and the manage it and process it every month they will. If you don’t think the company that maintains the store, keeps it clean and up to date, pays processing fees and support cost should get a cut, there’s nothing stopping you from by passing Apple altogether. They don’t have to use Apple for subscription at all.
For many apps, Apple does all that and the developer doesn’t have to worry about credit cards, data, security etc. For Spotify, and apps that can do their own subscription models, it’s possible to embed a signup page in the app talking to their own servers. Handling their own credit cards etc.
Thars whar Apple bans and what could be problematic for them under EU law.
Maybe Apple could face problem for that but I can’t see a sense why Apple should allow that to Spotify, Amazon etc. like “Guys.. you already have all these subscription and payment mechanism in place? Great. Just bypass us guys. It’s ok. Feel free to do anything you’d like on our devices & our market.”
Any reason?
They also control safari on iOS so you could - by extending that argument - say that not only should Apple stop the amazon app from buying a kindle book direct in the amazon app but ban the amazon kindle webpage from loading on safari.
I presume that most people here wouldn’t want MS to force iTunes on windows to hand over 30% on music purchases.
But they didn’t do that, did they? I personally couldn’t see how they can “control” Safari. It’s just a portal to web content & if I’m not mistaken Spotify can already tell their customers to go to their website on iOS Safari & Apple will never get a dime.
Times have changed. We’re not talking about the days of the iPhone 1.
I fully agree with Spotify’s stance (as well as game developers who are complaining about the same).
When a company becomes so big with so much users with so much control, their marketplace becomes almost ‘public domain’ in a way. I think it’s a necessity for developers to offer alternative payment systems within the app - which Apple prohibits - to circumvent the absurd 70%/30% tax, especially in the case of Spotify where Apple is providing a similar service with Apple Music.
Some people in this thread claim it’s not a monopoly, but it is. Developers are stuck in Apple’s walled garden and it is not fair to offer the ability to implement alternative payment systems In-App. It’s absurd and should have been enforced by the authorities a long time ago.
I sincerely hope Spotify will win this bexause it will be a victory to the many developers struggling.
In the process of claiming “unfair advantage” to the EU, these folks expose their desire for an unfair competitive advantage: the crippling of their competitors and consequently, a lessening of consumer choice.
Wow, I like apple but the fan boy level on these comments is ridiculous. It seems the majority of you guys are pro-market place monopolies.
@RadarTheKat: This is not the same as a movie theater charging higher prices for wares as the movie theater doesn't compete against the chip and coke manufacturers. Apple is running a marketplace and completing in said market place. When I as a consumer have no other way to get the Spotify App on my phone but via Apple (marketplace owner) who then places said company at disadvantages to the marketplace owners own offering then you have an anti competitive & anti consumer model.
To others.... Spotify is beating Apple in free and paid sub numbers. I'm sure they are probably losing money but then the streaming business hasn't ever made money. Apple only does ok because its really a value add to there real product of hardware so they don't really need to.
@Genovelle: while your comment is right in the sign up process of Spotify being able to stop Apple getting 0% of the sign up dollar. The issue is around competitiveness, traditionally under monopoly laws we have not allowed the market place owner (Apple) to complete directly against the a vendor (spotify) This was due to the unfair market position the market place owner resides in. There is no difference here and we should all be concerned about Apple, Google, Amazon etc all pulling this garbage as it is not good for the consumer at all. Consumers are lazy so having extra steps one has to go through disadvantages Apple's competitors compared to the home grown offering.
@Jungmark: yes and as we are seeing the negative effects in that space. Consumers are being left with less choice, no other options to purchase different products easier or often worse products. It has also lead to abuses in negotiation of contracts for a fair price of goods from suppliers which hurts employees and other suppliers down stream...
Seriously you all need to get out of your apple fan boy bubble as this is a massive issue which goes beyond just Apple.
Consumers are not stupid dude .Its thinking like this that has allowed the EU to grow up into such a powerful regulatory state.
Aren't all states regulatory? That said, the EU isn't a 'state' but a collection of member states.
In this case and all other similar cases, a complaint normally has to be lodged for it to be investigated. We will see how it turns out but the complaint makes sense in this context. Any future ruling is another story but the consumer will be taken into the highest consideration while the issue is deliberated.
Of course Spotify still makes a loss (they chose to do so to gain market share, you have to be pretty ignorant not to see that) The problem here is cross-subsidizing. If a trillion dollar company can freely hash their mony around in different markets, no other one can compete in such market unless he has the same momentum in others. Which effectively has the same effect as a true monopoly (which it by definition, isn't) Apple (and Google, Amazon) pay for offices, server costs, stellar salaries & promotions, and can afford to make a near-permanent, severe loss without anyone even noticing by their lack of separate reporting/financial transparency. The level playing field that Spotify is asking for is a fair deal - market regulators have to stand up more proactively.
All you’re saying is that a big company can outmaneuver a small company by applying more or better resources and more money to a product or service category. Heck, Apple is doing this in hardware against most of its competition. But that’s not at issue or under contention here. The question is, should Apple, or any business be able to control access and charge commission for sales made by others in its place of business, like a movie theater chain selling in-house-popped popcorn while denying access to branded bagged popcorn like SmartFood? IOS is owned by Apple, licensed to customers when they purchase an iPhone or iPad. The customer owns the hardware, but Apple reta8ns ownership on the OS, and the OS is the property on which vendors like Spotify seek to market and sell their wares without charge, essentially for free.
I really don’t care fit companies that complain about Apple’s AppStore policies. They build it promote it and support it. They pay the processing fees and process cancelations and returns. Without them their service would not be where it is. If Apple didn’t do all that they do, many of these companies would have died long ago, or never been thought of.
My main point, they make in the article. Apple takes 30% of Customers that sign up via The App. Meaning they were not already a customer of theirs. They were Apple’s Customer. Apples website, AppStore, tv or print ads and Name brought them to the platform.
If if Spotify and others did a better job marketing and invested more than Apple to draw thier subscribers, they would signup on their website and then be prompted to download the app. Apple takes 0% of that. Realistically there is no reason why Apple couldn’t charge for every download of Spotify. When was the last time you walked into a physical store and everything was free?
Owning an app developing company, I disagree. If I have to do the marketing and persuade the potential customer to download my app and pay for it, it must be that the potential customer is considered as my customer. The manufacturer of the device plays an important role, but does not own my customer. If you have bought a CD of a famous pop artist, the manufacturer of the HIFI installation you use to play the CD on, does not get a cut on the selling price of the CD, although the manufacturer had you once as a customer.
The fact that Apple makes available a platform that takes care of the actual selling, gives of course Apple the right to charge for that. But a 30% cut is ludicrously high for that App store service. Especially if you take into account that, from a developers point of view, the quality of the service is quite poor: frequent outages, poor marketing, horrible search function so customers don't find your app, no decent web interface, ... (Google does a better job here with its Play store).
If Spotify and others complain about the Apple policies here, I think they have a very good chance to win:
Apple does not allow to make links to websites from within the app. (Google does not have that rule on its Play store)
Apps must be downloaded from the Apple App store. (Google does not have that rule on its Play store). On Macs you can download apps from other sources. Apparently the security argument that Apple always give to justify this policy, is not so relevant for the Mac.
Apple does not only operate the App Store service, it offers also paying apps that compete with third party apps that must make use of the service. Apple does not have to pay the 30% cut to itself. (applies to the Google Play store as well)
Vestager (the same EU commissioner who wants Apple to pay the Irish taxes) is very susceptible for anti competitive behaviour. I am 100% sure that she will perceive the combination of the above mentioned rules as a clear example of anti competitive behaviour.
Apple Music remits 100% of its revenues to Apple. What are You talking about when you say Apple doesn’t have to pay the 30% cut to itself?
30% gets you what Spotify is getting, the App Store, fulfillment, the iOS platform to deliver its service through to customers.
Both Spotify and Apple Music pay that 30%. The difference is that Spotify pays someone else the other 70% to create, run, maintain and upgrade/enhance their service. For those tasks, App Store included, Apple Music pays 100%to Apple. That’s an objective definition of the notion that Apple Music is owned by Apple; Apple has all those responsibilities to Apple Music and Apple Music returns all its revenue to Apple as compensation.
Times have changed. We’re not talking about the days of the iPhone 1.
I fully agree with Spotify’s stance (as well as game developers who are complaining about the same).
When a company becomes so big with so much users with so much control, their marketplace becomes almost ‘public domain’ in a way. I think it’s a necessity for developers to offer alternative payment systems within the app - which Apple prohibits - to circumvent the absurd 70%/30% tax, especially in the case of Spotify where Apple is providing a similar service with Apple Music.
Some people in this thread claim it’s not a monopoly, but it is. Developers are stuck in Apple’s walled garden and it is not fair to offer the ability to implement alternative payment systems In-App. It’s absurd and should have been enforced by the authorities a long time ago.
I sincerely hope Spotify will win this bexause it will be a victory to the many developers struggling.
Please explain in what manner developers are stuck in Apple’s walled garden? Last I heard there’s a Spotify app on Android, which by volume controls 80+% of the smartphone market.
Why should Apple get a recurring cut of subscriptions? Apple isn’t hosting the content. If I buy a subscription to a magazine I bought at Walmart should they get a cut of that subscription?
If you buy a Spotify Gift card from Walmart they do get their cut. Same as if you choose to buy 12 cards to have 1 year of service. If you buy the first card/month and then go to their website, well that is always your choice. But don´t complain to Apple or Walmart if you gift cards are not all over the store! Walmart can choose not to carry your cards. It is their retail space.
Apple is the landlord and property owner of the shopping mall. Instead of charging of monthly rent, they change a 30% of your revenue. Which they help you to process the payment, attracting traffic ( downloads ), transfers and advertise. Part of the job and profit within the money is to attract more people into the shopping mall. Since all rent are based on visitors, the more visitors the better. Now whether those visitors decide to shop and buy is not guaranteed.
This is all perfectly fine. It is model just like any real world property.
The problem is Apple decided to open its own shop within its property, selling stuff that directly competes with some of the tenants.
In an American view this is probably fine, since Apple owns the property they can do whatever they want with it. However in certain countries, this is consider Anti competitive. The shop would have to be a separate business with different financial account, so the rent is properly paid and subtracted within the cost of operation ensuring there is no product dumping below cost, which is illegal in EU.
I do think they had a case in EU when it was 30%. But when it is at 15%, it will be a tough call. It also depends on how Apple and the EU's case or Irish tax ends, as it may alter the results of how EU view Apple.
Times have changed. We’re not talking about the days of the iPhone 1.
I fully agree with Spotify’s stance (as well as game developers who are complaining about the same).
When a company becomes so big with so much users with so much control, their marketplace becomes almost ‘public domain’ in a way. I think it’s a necessity for developers to offer alternative payment systems within the app - which Apple prohibits - to circumvent the absurd 70%/30% tax, especially in the case of Spotify where Apple is providing a similar service with Apple Music.
Some people in this thread claim it’s not a monopoly, but it is. Developers are stuck in Apple’s walled garden and it is not fair to offer the ability to implement alternative payment systems In-App. It’s absurd and should have been enforced by the authorities a long time ago.
I sincerely hope Spotify will win this bexause it will be a victory to the many developers struggling.
Please explain in what manner developers are stuck in Apple’s walled garden? Last I heard there’s a Spotify app on Android, which by volume controls 80+% of the smartphone market.
Times have changed. We’re not talking about the days of the iPhone 1.
I fully agree with Spotify’s stance (as well as game developers who are complaining about the same).
When a company becomes so big with so much users with so much control, their marketplace becomes almost ‘public domain’ in a way. I think it’s a necessity for developers to offer alternative payment systems within the app - which Apple prohibits - to circumvent the absurd 70%/30% tax, especially in the case of Spotify where Apple is providing a similar service with Apple Music.
Some people in this thread claim it’s not a monopoly, but it is. Developers are stuck in Apple’s walled garden and it is not fair to offer the ability to implement alternative payment systems In-App. It’s absurd and should have been enforced by the authorities a long time ago.
I sincerely hope Spotify will win this bexause it will be a victory to the many developers struggling.
Please explain in what manner developers are stuck in Apple’s walled garden? Last I heard there’s a Spotify app on Android, which by volume controls 80+% of the smartphone market.
But less than 50% of all mobile revenues.
The amount of revenue Android vendors take in is inconsequential to this discussion. The fact there are many and varied smartphone options apart from smartphones that run iOS and the fact that most (all?) of those non-iOS smartphone options can run an app like Spotify is what determines that iOS is not required for developers to get their wares into the hands of the majority of the world’s smartphone users. Thus, developers are certainly NOT stuck in Apple’s walled garden, as the original poster claimed.
Comments
iOS devices are not a monopoly because they exist in a market of similar devices and they do not even have the largest share in that market.
Well, Spotify is, of course, free to use the same tricks that other companies use. The reason they don’t stash money is because they don’t have any, and the reason they don’t have any is because their business model is a slow road to failure. So what you’re really demanding is that market regulators suppress companies with successful business models to protect Spotify’s poor strategy.
Twenty odd years ago, Apple was in worse shape than Spotify. They won by choosing battles they believed they could win. Spotify needs to stop whining and do the same.
I’m baffled by people who think that companies should only be allowed to reach a certain level of success before they’re automatically penalised.
The fact that Apple makes available a platform that takes care of the actual selling, gives of course Apple the right to charge for that. But a 30% cut is ludicrously high for that App store service. Especially if you take into account that, from a developers point of view, the quality of the service is quite poor: frequent outages, poor marketing, horrible search function so customers don't find your app, no decent web interface, ... (Google does a better job here with its Play store).
If Spotify and others complain about the Apple policies here, I think they have a very good chance to win:
- Apple does not allow to make links to websites from within the app. (Google does not have that rule on its Play store)
- Apps must be downloaded from the Apple App store. (Google does not have that rule on its Play store). On Macs you can download apps from other sources. Apparently the security argument that Apple always give to justify this policy, is not so relevant for the Mac.
- Apple does not only operate the App Store service, it offers also paying apps that compete with third party apps that must make use of the service. Apple does not have to pay the 30% cut to itself. (applies to the Google Play store as well)
Vestager (the same EU commissioner who wants Apple to pay the Irish taxes) is very susceptible for anti competitive behaviour. I am 100% sure that she will perceive the combination of the above mentioned rules as a clear example of anti competitive behaviour.I presume that most people here wouldn’t want MS to force iTunes on windows to hand over 30% on music purchases.
I fully agree with Spotify’s stance (as well as game developers who are complaining about the same).
When a company becomes so big with so much users with so much control, their marketplace becomes almost ‘public domain’ in a way. I think it’s a necessity for developers to offer alternative payment systems within the app - which Apple prohibits - to circumvent the absurd 70%/30% tax, especially in the case of Spotify where Apple is providing a similar service with Apple Music.
Some people in this thread claim it’s not a monopoly, but it is. Developers are stuck in Apple’s walled garden and it is not fair to offer the ability to implement alternative payment systems In-App. It’s absurd and should have been enforced by the authorities a long time ago.
I sincerely hope Spotify will win this bexause it will be a victory to the many developers struggling.
In this case and all other similar cases, a complaint normally has to be lodged for it to be investigated. We will see how it turns out but the complaint makes sense in this context. Any future ruling is another story but the consumer will be taken into the highest consideration while the issue is deliberated.
30% gets you what Spotify is getting, the App Store, fulfillment, the iOS platform to deliver its service through to customers.
Both Spotify and Apple Music pay that 30%. The difference is that Spotify pays someone else the other 70% to create, run, maintain and upgrade/enhance their service. For those tasks, App Store included, Apple Music pays 100%to Apple. That’s an objective definition of the notion that Apple Music is owned by Apple; Apple has all those responsibilities to Apple Music and Apple Music returns all its revenue to Apple as compensation.
Please explain in what manner developers are stuck in Apple’s walled garden? Last I heard there’s a Spotify app on Android, which by volume controls 80+% of the smartphone market.
Apple is the landlord and property owner of the shopping mall. Instead of charging of monthly rent, they change a 30% of your revenue. Which they help you to process the payment, attracting traffic ( downloads ), transfers and advertise. Part of the job and profit within the money is to attract more people into the shopping mall. Since all rent are based on visitors, the more visitors the better. Now whether those visitors decide to shop and buy is not guaranteed.
This is all perfectly fine. It is model just like any real world property.
The problem is Apple decided to open its own shop within its property, selling stuff that directly competes with some of the tenants.
In an American view this is probably fine, since Apple owns the property they can do whatever they want with it. However in certain countries, this is consider Anti competitive. The shop would have to be a separate business with different financial account, so the rent is properly paid and subtracted within the cost of operation ensuring there is no product dumping below cost, which is illegal in EU.
I do think they had a case in EU when it was 30%. But when it is at 15%, it will be a tough call. It also depends on how Apple and the EU's case or Irish tax ends, as it may alter the results of how EU view Apple.