
Addressing Spotify’s Claims - css
https://www.apple.com/newsroom/2019/03/addressing-spotifys-claims/
======
segphault
> Underneath the rhetoric, Spotify’s aim is to make more money off others’
> work. And it’s not just the App Store that they’re trying to squeeze — it’s
> also artists, musicians and songwriters.

Uh, I seem to recall Apple being forced to reverse some brazenly greedy
policies for their music service when a high-profile artist called them out
and withheld content in protest. For Apple to characterize itself as a
champion of exploited artists is pretty disingenuous.

~~~
cialowicz
> Spotify’s aim is to make more money off others’ work

Moreover, that's the pot calling the kettle black. That's the app store in a
nutshell -- Apple supplies the marketplace, but is also making a substantial
chunk of money off of others’ work.

~~~
isostatic
Exactly what my local store does. They pay the wholesaler 10 and sell to me
for 15.

~~~
ahmedalsudani
No, not exactly. You're free to buy from other stores, and suppliers can sell
to them. A very important distinction.

~~~
hjk05
Same story with phones. You are free to buy from other suppliers. But you
can’t walk into a Walmart and buy milk from whole foods on their shelf’s, even
if you feel that would be great for you personally because Walmart is closer
but you prefer Whole Foods.

~~~
felipelemos
And I am free to use Google Music, Apple Music, YouTube Music, Deezer and even
Tidal. Nobody is forcing me to use Spotify.

But, if I have an iPhone, the only application store I can use is controlled
by Apple.

In other words: if I am an artist and I want to offer my music via streaming I
have plenty of options. If one of them does have a deal that I find unfair, I
can choose others.

If I am a developer and I want to offer my app to iPhone users, I have only
one option. And if I am banned from this store for any policy infringement
(which sometimes is ridiculous and totally arbitrary) I have no other option
to offer my app to iPhone users.

~~~
thisacctforreal
I think it's somewhat frequent to have app submissions denied, but I haven't
heard of Apple banning future submissions in the same way that I hear of
Google permabanning developers.

I agree with Android it's slightly different because side loading is at least
possible, but I doubt many people are going to find your widget if it's not on
the play store.

------
supernova87a
As with so many matters that involve money, arguments fly around left and
right that claim to be on principle, but really aren't.

When you see ESPN and Comcast argue over showing the World Series, don't buy
the argument that one of them is "trying to prevent loyal customers from being
able to see their favorite game", or when your local hospital group withdraws
from your employer health plan that "the other side is trying to deprive you
of consumer choice".

Each side is wanting to make a share of the money, and they're disagreeing
over the price (or often the royalties share). No one is entitled to any
particular provision of service in _any_ of these cases. Except in regulated
industries there's no law governing the "fair" share that someone has to
offer, or someone has to accept. And in most cases, each side could choose to
compromise what it's asking for with no damage to its model of business (not
talking about $, just the principles they claim).

Spotify wants a lower $ charge. Apple owns the platform and controls that
access and $ charge. That's it.

This is a private contract dispute and only of interest because you care about
listening to music. There's no public right to have a music app be charged a
certain amount that's called "fair". Spotify could charge nothing to
consumers, and be charged nothing by Apple. It's their choice. It's Apple's
choice.

Don't be fooled into "principles" when there's money involved.

~~~
weavejester
_" There's no public right to have a music app be charged a certain amount
that's called "fair". Spotify could charge nothing to consumers, and be
charged nothing by Apple. It's their choice. It's Apple's choice."_

Competition laws place limitations on what a business can do. They're not free
to sell or price entirely as they please.

In this case Spotify are arguing that Apple is using its dominance of the
smartphone market to give an unfair advantage to its own music store. Whether
or not this is true is up to the courts to decide, but it's not a frivilous
case; there's a real risk to Apple that they lose.

~~~
supernova87a
Well, that is a separate and good point, and very much a political one. And
you can never tell with the EU.

As I said in a comment far below here, it's a funny thing, how to define
anticompetitive and monopoly practices, depending on how you frame the scope
of the market. See Peter Thiel's book for a chapter on this.

You could say that Apple has a monopoly over developers building apps and
providing their services to _people using iPhones_. Someone else looking at it
could say that Spotify has a multitude of ways to provide its content to
customers -- web, it's own Windows + Mac desktop apps, Android, etc.

Which way is a regulator supposed to look at it?

The point about Apple Music is also interesting. Actually Apple Music (the
streaming version) I believe came after Spotify. Anticompetitive regulations
are about penalizing behavior that discourages new entrants to the market.
Apple Music was actually the newer entrant in that case.

~~~
s3r3nity
I am very hard-pressed to believe iOS has a monopoly by most arguments.

Market share argument:

Android has 71% market share in the EU, as of February 2019 - compared to
iOS's 21%. [1]

Ease of customer switching argument:

If Apple pressed too much in a way that harmed consumers, there are many other
cheaper alternative Android phones vs. iOS to which they can easily port their
number over (say what you want about ISPs and Telecoms, I find this to be
pretty easy in the US - unless you signed an unreasonably stifling contract.
Admittedly I'm unsure how difficult this would be in most of the EU.)

Supply-Side Price elasticity argument:

In theory, if the 30% cut was too high, developers wouldn't want to develop on
the iOS platform, and would instead focus resources on developing on Android;
the specific cut would be at an equilibrium point that enough developers would
find profitable, and would still provide choice in the app marketplace for
customers.

[1] [http://gs.statcounter.com/os-market-
share/mobile/europe](http://gs.statcounter.com/os-market-share/mobile/europe)

~~~
jeremydeanlakey
Your argument relies on combining the markets for iOS and Android apps into a
single market. These are separate markets because you can't put an Android app
on iPhone or an iOS app on Android.

If iOS had 100% share, you probably wouldn't say it doesn't have a monopoly on
apps because you can just use desktop apps instead.

I also wouldn't say Comcast doesn't have a monopoly because they only have xx%
share and you can move to a different state or country and get another
provider. Or use your phone for internet instead.

> Ease of customer switching argument

This is confusing the consumer market for smartphones and the markets for
distribution of smartphone app.

> Supply-Side Price elasticity argument

Yeah, if any monopoly's cut is too high, you can exit the market. This is not
an argument that the monopoly is not a monopoly. This only means there is a
limit to the monopoly's power.

~~~
Aloha
Thats like saying that the market for car parts for fords and chevrolets are
separate market and monopolized by ford and chevrolet respectively.

It's bunkum and doesn't fit with 100 years of antitrust law.

~~~
jeremydeanlakey
If the products aren't interchangeable, then they are separate markets.
Someone in the market for a part that fits a Ford can't solve their problem by
buying the similar part that only fits a Chevy. Likewise, he can't but a new
tire to replace a carburator. The tire and carburator are also in separate
markets.

However, he can buy an aftermarket part. It's a different product but the same
market. So they don't have a monopoly.

I don't know much about antitrust law so I can't comment on that But I do
understand basic economics. And from an economic perspective, Apple most
definitely created a monopoly which they most definitely use for rent seeking.

------
exwiki
> Spotify wouldn’t be the business they are today without the App Store
> ecosystem, but now they’re leveraging their scale to avoid contributing to
> maintaining that ecosystem for the next generation of app entrepreneurs. We
> think that’s wrong.

I think that's a very hypothetical claim.

> Let’s be clear about what that means. Apple connects Spotify to our users.
> We provide the platform by which users download and update their app. We
> share critical software development tools to support Spotify’s app building.
> And we built a secure payment system — no small undertaking — which allows
> users to have faith in in-app transactions. Spotify is asking to keep all
> those benefits while also retaining 100 percent of the revenue.

I think we should be clear that Apple built the app-store ecosystem to improve
its iPhone adoption and lock-in. And Spotify isn't asking to keep 100% of the
revenue. Spotify is asking for a choice of letting users pay how they wish.

The problem really is Apple wants to milk its App store ecosystem now that its
popular and 30% / 15% is a very steep price / revenue loss for any significant
player in that eco-system. And FWIW, Google provides a similar App store
service, while also allowing users to what they choose with their phones
(i.e., install side-loaded Apps).

~~~
jhanschoo
> And Spotify isn't asking to keep 100% of the revenue. Spotify is asking for
> a choice of letting users pay how they wish.

But users can pay how they wish, if Spotify didn't mind the 30%/15% cut.
Spotify simply can't direct users to use their website to use an alternative
payment system. I think that is a very reasonable policy for an app store, as
it protects its users from poorly implemented financial info handling and
scams.

I agree that Apple's article is more hostile than it needed to be, but it is
only in response to an unreasonable attack by Spotify on Apple's IAP policies.

Regarding the walled-garden App Store policies of Apple, it's not friendly to
enthusiasts and some developers, but it is good for most Apple consumers, and
helps less tech-savvy users trust Apple's App Store.

Android has freer permissions on installing apps, because that is necessary
for vendor adoption. However, it is unclear if this is still ultimately a
better decision for consumers on aggregate.

~~~
abalone
_> But users can pay how they wish, if Spotify didn't mind the 30%/15% cut.
Spotify simply can't direct users to use their website to use an alternative
payment system. I think that is a very reasonable policy for an app store, as
it protects its users from poorly implemented financial info handling and
scams._

Give me a break. It doesn’t take 15-30% to implement a secure payment system.
This is proven by Apple itself: Apple Pay charges very little for secure
payments for physical goods.

~~~
mrunkel
Sure Apple makes money off their share of the payment system. Why shouldn't
they? They built the whole thing from scratch, including the phones it runs
on.

Also Apple doesn't just support the secure payment system, they also handle
distributing the money and providing customer support to the end user and the
developer. That isn't free either.

If you don't like the Apple model, there are alternatives.

Apple's argument (which seems compelling if we judge it on the result) is that
their model is the best solution for customers and developers.

~~~
marmada
>If you don't like the Apple model, there are alternatives.

What alternatives? Without allowing developers to create 3rd-party payment
systems, all payments must be routed through Apple.

>Apple's argument (which seems compelling if we judge it on the result) is
that their model is the best solution for customers and developers.

Apple's model does not seem to be compelling for developers/content creators.
Developers need to pay a large (for some) amount of money and give Apple a
large cut of their profits.

It's also unclear why Apple's model is best for consumers. While it seems good
because it protects consumers from scams on third party sites, for reputable
companies like Spotify or Netflix, there doesn't seem to be a risk, except for
increased prices to the end user because companies need to compensate for
losing a third of their earnings.

------
revel
I love how brazen this letter is.

> Apple’s approach has always been to grow the pie.

Apple's approach has always been to grow it's own pie. They have never been
even remotely interested in playing nicely with other companies. I don't fault
them for it, but let's not kid ourselves here; the app store is largely an
extremely profitable exercise in rent seeking.

It's not like this is new for Apple; they've had proprietary cables and
adapters for as long as I can remember. Developing software for their hardware
has always meant using Xcode, which, surprise, is not free. Literally every
other platform has given away tooling and emulators, but that's never been
true for Apple. Occasionally this kind of behavior works out well for
customers -- they were unafraid to use their market power as a cudgel to kill
off Flash (which I think we can all agree needed to happen) -- but all too
frequently it's purely anti-competitive. Apple has created some incredible
products and services over the years, but let's not kid ourselves about this;
this is simply a way of extracting value from Spotify.

~~~
simonh
There’s a thread of truth in what you’re saying, but it unravels on close
inspection.

Proprietary cables are hardly new, and to be fair those cables and connectors
are usually way better than the standard stuff. Firewire and thunderbolt were
actually released as open standards and saw decent adoption. Lightning is far
superior to Micro-USB. Just listen to the wailing and gnashing of teeth by
Macbook owners having to give up proprietary MagSafe for USB-C charging on
their laptops.

XCode is free and has been for ages. To this day you can develop whatever you
like for the Mac and not pay Apple a penny. You don’t even have to use XCode
to do it. It’s even free for iPhone development for your own device now,
though you have to pay a fee to publish stuff. I’m not sure what you comment
about emulators is about to be honest, The iOS emulator for the Mac is free.

Yes they want their cut from Spotify. I don’t understand the Apple
exceptionalism about this though. Nobody rages on HN about Sony’s monopoly
over games development for the PlayStation, or Microsoft for XBOX, or Nintendo
for the Switch, but for some reason Apple which came to this business model
two generations late is the root of all evil. It really is kind of weird how
that works. Maybe if their iconic image was a cute little plumber instead of a
half eaten fruit, everyone would say 'Aww how cute' and give them a pass.

~~~
rhodysurf
_XCode is free and has been for ages. To this day you can develop whatever you
like for the Mac and not pay Apple a penny. You don’t even have to use XCode
to do it. It’s even free for iPhone development for your own device now,
though you have to pay a fee to publish stuff. I’m not sure what you comment
about emulators is about to be honest, The iOS emulator for the Mac is free._

True it is all free except the whole having the purchase a 1000 dollar
computer part.

~~~
hellisothers
This is a disingenuous argument, you have to buy a PC to develop Windows. And
you have to pay $100-300 for windows, AND you have to play $600-$2500 _per
year_ for Visual Studio

~~~
coryfklein
Your personal accusation of disingenuousness distracts from what would
otherwise have been a good point. Let's see what a barebones setup costs for
developing with a solid IDE on each platform:

macOS:

$800 Mac Mini (Apple's most affordable offering that runs macOS)

$90 Acer SB220Q Monitor

$FREE Xcode

Total: $890

Windows:

$200 Dell Inspiron 11 3000 (Most affordable Dell PC I could find being sold
new)

$1200 One time payment for Visual Studio (but you don't get updates)

Total: $1400

So if have to both buy a computer and need a full featured IDE then Visual
Studio's license wipes out any savings you get from avoiding the "Apple tax".
It gets even worse if you want perpetual updates to Visual Studio which cost
$800/year but come free with XCode.

This is counter to what I had expected beforehand myself, I expected the
"Apple tax" to make the bar of entry much higher than PC development.

If, on the other hand, you can get by with a less advanced IDE or are
developing in a non-proprietary language like Java, Python, or Scala the cost
goes way down:

Cheapskate Option:

$200 Windows/Linux laptop

$FREE Eclipse/JetBrains CE IDE/Visual Studio Code

Total: $200

This is certainly more affordable than the $800 macOS alternative. Although
one could debate whether the above mentioned IDEs are on equal footing with
XCode/Visual Studio.

~~~
AlotOfReading
Visual Studio Community is free. It doesn't have the fancy cloud/devops
enterprise-y stuff, but it's not like Xcode does either.

~~~
coryfklein
Ah! I didn't know Visual Studio Community was even a thing. Figures though,
since I've never used either.

------
ocdtrekkie
This is a surprisingly open response to what is likely to be a legal matter,
particularly given Apple's usual silence on... most everything.

I definitely take issue with it's avoidance of the core issues though: That
the services they provide aren't optional on the iPhone. They make it sound
like connecting Spotify to users, and allowing them to use their in-app
purchase mechanism is a service they offer that they should be paid for. But
the reality is, that Spotify has no choice but to use that service, which is
the definition of a monopoly.

In that, I feel they didn't meaningful counter Spotify's primary
anticompetition claim, and I look forward to seeing what the EU makes of it.

~~~
zaidf
I think Apple is going to find itself standing alone by the time the dust
settles on this issue. Their 30% tax is a disservice to its own customers, not
just app publishers.

Apple tries to counter that the problem is _Spotify_. It's _Spotify_ that is
money-hungry, Apple claims:

 _Underneath the rhetoric, Spotify’s aim is to make more money off others’
work._

The only problem with this argument is that Spotify is just one example. App
publishers of all sizes have expressed grave dissatisfaction over this issue.
Ultimately, this has led to a poorer experience for Apple's own customers in
the form of higher fees for in-app purchases _or_ weird, convoluted checkout
flow that requires you to goto your browser to finish a transaction.

~~~
ocdtrekkie
Apple won't find itself standing alone. Other major distributors like Google
and Valve are both happy to take 30% off the top of app sales too, and if the
chance comes to speak up in support, they will. But the difference is both of
them can be circumvented by competitors, for instance Epic Games, who is
challenging both. (Epic is launching an Android store soon.) Apple can't be,
and that's likely to be the crux of any action against them.

~~~
chrischen
I currently subscribe to Spotify, use the iOS Spotify App, and do not make
payments through in-app payments nor do I pay the 30% Apple tax. So it is
circumventable, and Spotify is just "optimizing" their revenues here. So at
least compared to Steam, Apple's platform is actually _more_ open since you
aren't required to pay through Apple's platform. Though I'm not sure on the
current requirements for in-app purchases, so correct me if I'm wrong.

~~~
snorlaxle
I buy Steam games from Humble Bundle all the time. The developers can actually
generate steam keys and sell their game directly.
[https://partner.steamgames.com/doc/features/keys](https://partner.steamgames.com/doc/features/keys)

As far as I know you can't do that on iOS. There's also nothing stopping the
devs from selling IAP themselves on their own website. So no, Steam is much
much more open than Apple's App store. Not to mention the fact that Steam is
completely optional and the App store is not.

~~~
madeofpalk
> As far as I know you can't do that on iOS.

Not at scale, no, but you can generate promo codes (up to a limit - maybe
100?) to distribute your paid app for free.

------
infinity0
> What Spotify is demanding is something very different. After using the App
> Store for years to dramatically grow their business, Spotify seeks to keep
> all the benefits of the App Store ecosystem — including the substantial
> revenue that they draw from the App Store’s customers — without making any
> contributions to that marketplace.

Please Apple, pay all the open source projects that you use, a fair share of
the revenue you generate on top of them.

Hypocrites.

~~~
thegayngler
Wow! Thats a new one. Pay the open source world who Apple have been heavy
contributors to themselves. Apple are such hypocrites indeed.

~~~
infinity0
They contribute to specific open source projects with a long-term view to
undercutting other open source projects that are more independent of Apple.
That is far from being "nice" or "contributing back".

Have you heard of "dumping"? What Apple does in its FOSS contributions is a
similar thing - pour a ton of developer resources into critical FOSS projects
so that they eventually control the development process and claim they are
"contributing to open source", but in the end everyone that depends on these
projects have to follow the direction that they set. LLVM/Clang is _perhaps_
one exception, but even the Apple parts of that project's history have very
obvious goals of undermining GCC since they hate the GPL's guts,
counterbalanced by the legitimate need for a FOSS competitor to GCC that
attracts enough non-Apple influence in the LLVM/Clang project to balance out
the Apple influence.

~~~
josephg
Huh? I totally agree that the app store is a monopoly and leveraging the iOS
app store to pressure spotify (a competitor to apple music) is
anticompetitive.

But I'm very confused how you're twisting Apple's huge contribution toward
LLVM and Webkit over the years into some evil act. Even if all you want is for
GCC to be the best compiler it can be, work on LLVM has contributed to that
goal by raising the bar. Predictably, GCC has gotten a lot better in the past
decade or so. And I'm sure competition from LLVM has helped, just like how
browser performance improved remarkably across the board when Chrome first
came out. And Android's UI got way better after the iPhone was first released.
(It used to be _awful_ ). Competition raises all boats; and consumers benefit
when that happens.

Who exactly do you imagine is hurt by Apple's open source contributions to
LLVM? If clang dethrones gcc it will be because llvm gives developers what we
want - a faster compiler, faster executables, better IDE support or something
else. My life is made measurably better by these things. Getting all that for
free? Hallelujah.

If you don't like the direction Apple (and others) set for an opensource
project you care about, you're free to build your own community around a fork.
Thats what you would have to do anyway if you want a project to succeed
without Apple's support.

What do you want? Great, free software? You've got it. The freedom to change
that software however you want? Fork away, brave coder. The ability to sell
software based on your changes? Go right ahead.

So where does that anger come from? How is anyone worse off?

~~~
infinity0
> But I'm very confused how you're twisting Apple's huge contribution toward
> LLVM and Webkit over the years into some evil act.

I'm not twisting anything into an evil act, read my words more closely.

Some of Apple's contributions to open source have been beneficial to the rest
of us, _because there are competitors_ to keep them in check in those areas
they chose to do open source in.

You should have no doubt that, had those other competitors not existed,
Apple's open source contributions would have been used to push a monopolistic
advantage over other projects and organisations, and passed it off as "meeting
their business needs".

They do not do open source out of any principle of generosity or co-operation
with other projects, and much of their ecosystem is legally and technically
hostile to supporting FOSS the "proper way". For example it is impossible to
properly supply a GPL binary on an iPhone because in general you do not have
the ability to install arbitrarily-modified versions of it, a very fundamental
principle of the standard definition of Free Open Source Software.

Also I'm not sure why you cite Android vs iPhone since near-everything about
an iPhone is proprietary.

~~~
josephg
What areas are there no competitors, in the space of things they opensource?
LLVM has GCC. Webkit has (amongst others) blink. Darwin has Linux.
FoundationDB has dozens of great competitors.

And even in the absence of competitors, how is new permissively licensed
opensource software a bad thing? How, exactly do you weaponise opensourcing
decent software which has no competitors? Can you give some examples?

------
emsy
I've mentioned this in a reply but I think it's worth pointing out as its own
comment to gather thoughts on this: What if Microsoft would take 30% of every
transaction that is done via Windows? And if the sellers don't comply they
gets kicked off the platform. That's essentially what Apple is doing, but I'm
pretty sure if Microsoft was the one doing it the would be far fewer
apologists.

In fact, I very much think Microsofts business model, that is decades old, is
far better for customers and developers, and helped Microsoft become so
successful in the first place. Microsoft provides a platform for others to
make money on. The profit their customers make on Windows exceeds Microsoft's
by an inestimable factor. I'm not aware that MS ever provided a case for
regulation on that basis, and I think that's worth pointing out.

If your company controls a platform that affects a sizeable part of the
population, it should not be able to act on their whim. And if the company
doesn't play fair it needs to be regulated.

~~~
wodenokoto
These are very good points. My loosely connected thoughts on this:

We originally accepted this from Apple, because we didn't consider phones as
"real" computing devices.

Apple would get in a lot of trouble, with no apologist left to defend them, if
they turned MacOS into an app-store-only platform.

I feel like the major benefit of app-store for consumers is the curation of
"good actors". What would be the consequences of adware if the protected app
stores were let loose? On one hand I fear it would go completely off the
rails, on the other hand it is already worse today on mobile apps than on
PC/mac-apps, so can it really get worse? Would better access to opensource
apps help alleviate the adware problem?

------
abalone
Apple’s essential claims:

1\. 15-30% is a fair “contribution to maintaining the App Store ecosystem”
which has led to Spotify’s “dramatic growth.”

2\. Spotify is greedy and bad, just look at how they squeeze artists, unlike
us.

The second point is really weak considering that paying such a high fee to
Apple, which Apple Music itself doesn’t have to pay, might force Spotify to
take it out of the artists’ end to stay afloat.

And as to the first point, Apple makes it sound like the App Store was the
reason for Spotify’s success, so it’s only fair they take a healthy cut. But
there’s no other choice on iOS. It’s not clear if discovery in the App Store
was essential to Spotify’s growth or if it was just the only way to install
software on iPhones.

One need only look at macOS to determine how important the App Store is to
discovery and growth. Many, perhaps most developers bypass it.

~~~
ninkendo
> paying such a high fee to Apple, which Apple Music itself doesn’t have to
> pay, might force Spotify to take it out of the artists’ end to stay afloat.

bunnycom's reply to you is flagged dead, but there's an important rebuke to
that claim: Spotify doesn't use iAP for subscriptions any more, and Apple gets
no money off of Spotify today except for pre-existing subscriptions from
before Spotify disabled iAP:
[https://support.spotify.com/us/account_payment_help/subscrip...](https://support.spotify.com/us/account_payment_help/subscription_information/spotify-
through-the-app-store/)

So I think it's a bit specious to say Spotify has to squeeze artists more to
pay Apple's fees, when they're not even paying those fees any more.

And I'd venture to say the iAP process really does help growth of apps like
Spotify: it lets you use a single credit card you have linked to your iTunes
account for all in-app purchases with just TouchID/FaceID, and is a much
lower-friction way of paying money to an app than filling in your credit card
information into every app, having to change them all when your card expires,
etc. I wouldn't say it's worth a 30% (or even 15%) cut, but it's not
worthless.

~~~
abalone
_> I wouldn't say it's worth a 30% (or even 15%) cut, but it's not worthless._

Sure. By that logic Apple also “helps the growth” of Uber by offering the same
convenient payment method in the form of Apple Pay. Their fee for that: 0.15%.

Charging 15-30% is clearly about more than “helping growth”.

And Apple isn’t just charging for the convenience of IAP. They’re also
frustrating Spotify from collecting payment any other way. The specious
argument here is saying that strangling premium subscription growth doesn’t
hurt a company’s finances.

------
maaaats
What an immature letter, did not really expect a response like that.

It also fails to address the most important points from Spotify, which I
thought were: you have no choice but to use the apple store, and promoting
your own payment is not allowed. Fix one of those and most people would be
happy.

~~~
leoh
That and the fact that they pay a shitload of money to Apple and Apple fucking
won't allow Siri to work.

~~~
hello_friendos
I guess you didn't take the time to read the full response:

When we reached out to Spotify about Siri and AirPlay 2 support on several
occasions, they’ve told us they’re working on it, and we stand ready to help
them where we can.

~~~
intellix
Are they saying that there's no Siri or AirPlay2 integration because the
Spotify developers just didn't get around to it yet? Last I checked the
documentation the capabilities of what you can get from Siri were extremely
locked down to only a handful of usecases

------
rkangel
This is an interesting result of the collision of device sales, and a digital
distribution channel. The normal free market economic push back against Apple
on this would go something like:

* Apple charges too much

* It's not worth it for apps to be in the App Store

* App Store selection drops

* Consumers stop buying iPhones

In practice though, Apple has such a foothold, and device purchase is so
separate from App purchase, that most apps don't see a choice about being in
the AppStore. Does that mean that Apple has a monopoly on iOS app
distribution, and so should be regulated using anti-trust?

As an aside, the anti-trust section in this Money Stuff article is really
interest:
[https://www.bloomberg.com/opinion/articles/2019-02-28/bank-s...](https://www.bloomberg.com/opinion/articles/2019-02-28/bank-
sells-votes-on-another-bank)

~~~
rahkiin
Apple has a monopoly on iOS app distribution the same way Sony has it for
PlayStation distribution and Microsoft for Xbox: nothing gets on the platform
without their permission. It is their platform.

~~~
guipsp
It is quite different in terms of market share (which matters for anti trust
issues).

~~~
sjwright
Sony owns approximately 50% of the console market.

How much of the smartphone market does Apple control?

~~~
guipsp
If you're a journalist, NGO worker, or government official, there is no
alternative to apple.

~~~
IshKebab
What? Why?

~~~
guipsp
Security/exploit resistence.

------
life_of_sigh
From apples blog "And developers, from first-time engineers to larger
companies, can rest assured that everyone is playing by the same set of
rules."

This is the key issue spotify has, Apple music is not playing by the same
rules, in fact their monopoly on the app store its undermining Spotifies fair
competition.

Its undermining it becuase Apple Music a direct competitor of Spotify
effectivly doesnt pay the 30% Apple tax which makes it hugely cheaper.

If Spotify dodge the tax to make it able to compete on price, then Apple then
abuse the monopoly it has on the store to prevent Spotify from advertising a
premium option, it prevents them from offering or completeing the upgrade, it
prevents them from linking to a landing page to describe Spotify business
model, it prevents them fron doing anything or Apple will pull the app off the
store.

The only way Spotify could "compete" if it takes the 30% on the chin,
dramatically reduce its profits and investment it can make compared to Apple
Music and it will be bullied down.

There are other arguments here to with Apple slapping restrictions on Spotify,
not allowing for years to release an Apple Watch app etc but they are grey.

~~~
xvector
> Its undermining it becuase Apple Music a direct competitor of Spotify
> effectivly doesnt pay the 30% Apple tax which makes it hugely cheaper.

...as is the case with every native app? Notes doesn't have to pay the same
tax as paid notes apps, for example. The only solution here to establish
"fairness" as you want it is to abolish any marketplace fees entirely, and
that's pretty nonsensical, given that 15%/30% isn't a bad fee as far as
middlemen go.

> prevents them from linking to a landing page to describe Spotify business
> model, it prevents them fron doing anything or Apple will pull the app off
> the store.

And so every single app would simply link to an external payment system. The
App Store would cease to generate any meaningful revenue. Apps would freeload
off of an expensive and involved review process, reaping all of their
benefits, while not contributing back to the service or platform which allows
them to exist in the first place.

~~~
kelnos
Apple has chosen to be the sole gatekeeper of what runs on the phone. That
choice has costs, costs which Apple should bear.

Before Apple's IAP system existed, Apple didn't seem too worried about the App
Store not generating enough revenue to keep them afloat.

> reaping all of their benefits, while not contributing back to the service or
> platform which allows them to exist in the first place.

Please, you're acting like Apple is providing the App Store out of the
goodness of their hearts. No, they do it because a healthy app ecosystem
drives iPhone sales, and the lack of such would destroy the iPhone's viability
as a product.

It's a symbiotic relationship: the app developers benefit by having a place to
sell their wares, and Apple benefits by having apps that their users want and
need available on their platform. Except that Apple is abusing their end of
the deal by engaging in anti-competitive behavior in some app categories.

------
est
Can anyone explain why Wechat, the app that can do everything, streaming paid
music, read paid ebooks, order food and goods, play games, are allowed to
charge directly without IAP?

Heck wechat even had its own mini app store.

~~~
lozenge
Because apple needs wechat and not the other way around. WeChat being an
essential feature for any Chinese customer.

~~~
est
so the AppStore policy is selective?

~~~
nolok
Is this a real question (genuinely asking) ? Apple applying its policy
differently for some apps, or chosing to re-interpret some of their policies
randomly for some apps, is not an uncommon complaint and was a big part of
spotify's original complaing.

~~~
kodablah
It's a real question because the linked statement explicitly states the same
rules are applied to all apps. One who may not acknowledge the obvious
falsehoods can be excused for assuming the same rules are applied to all when
told that's the case.

------
fanpuns
Though I think there are parts of this letter that are obviously self serving
and hypocritical the point I find more problematic actually has nothing to do
with Spotify.

Apple says most apps contribute nothing to the app store. This is false. To
list an app on the app store developers must pay, yearly, for the privilege.
This is important because a reasonable person could make the argument that
_this_ is a more fair model and one more in line with providing the actual
service of the app store.

Apple,rightly IMO, has accused Spotify if wanting to have it's cake and eat it
too, but charging a fee to list and taking a percentage of revenue could
easily be seen as the same.

------
zaidf
_Underneath the rhetoric, Spotify’s aim is to make more money off others’
work._

Wow. It is astonishing to read this from a company being widely accused of an
unfair 30% tax.

Correction: the revenue share is 15%, it was originally 30%

~~~
chrischen
To be fair Apple capitulated and reduced it to 15% for after the first year,
and leave a lot of money on the table from freemium/ad-supported apps.

I'm honestly not sure what the big deal is. You can subscribe outside of the
App store (by not using in-app payments) and not pay that extra $$, and Apple
doesn't get that extra $$.

~~~
HeyZuess
> I'm honestly not sure what the big deal is. You can subscribe outside of the
> App store (by not using in-app payments) and not pay that extra $$, and
> Apple doesn't get that extra $$.

It seems that Spotify claims that even making that information known on the
app gets their app rejected. They have mentioned that Apple rejected their app
because of the word 'Free' being used, as well as 'promotions' being used
inside the app, and there is no way to link to external payment options.

Enabling payments via the App Store is helpful, denying other forms of
payments seems leaning towards being anti-competitve.

Link for reference:
[https://www.timetoplayfair.com/](https://www.timetoplayfair.com/)

~~~
chrischen
Ok, it's hard to tell because both sides are over-extending and exaggerating
the issues.

Asking Apple to change the 30% fee to 0, or some other arbitrary number is
untenable.

Blocking Apps from advertising that you can subscribe on their website outside
of the Apple platform is weakly tenable. I can see the argument and reasoning
that Apps should pay for "advertising" for the service through the Apple
platform, but in reality "discovery" through the Apple platform is limited and
in Spotify's case most people probably do not discover it through the
platform. That being said, I can see the argument that

1) If Spotify users discover them through the App store, they would not know
about subscribing directly through Spotify for a lower rate. Therefore Spotify
should pay the 30% as _user acquisition cost_.

2) If Spotify users come to the App store from Spotify, they should already
have signed up outside or know about the lower rate outside of the Apple
platform.

It seems to me the main reason why Spotify is against the 30% tax (aside from
generally wanting to not pay), is that

1) Spotify wants to be able to upgrade free users to paid users in-app with
the least amount of friction. They can do this by email, or through the App,
but obviously it's much easier to do so through an in-app popup. I've had
countless friends that have accidentally subscribed to in-app subscriptions so
I know how _easy_ it is to subscribe.

2) Spotify does not want to pay the lifetime 30%/15% tax on customers acquired
through the App store.

------
ac29
This argument is super thin -- they seem to think that Spotify enjoys a huge
advantage to being available on their platform (they do), without
acknowledging that they also enjoy a huge advantage from the most popular
music streaming app being available on their platform (which is also true).
Apple still makes most of its money on hardware, and having popular apps is
absolutely vital to selling hardware.

~~~
bunnycorn
Why?

Apple has Apple Music, has more music than Spotify and even if there is a
track on Spotify and not in Apple Music, you can upload your own MP3s and
stream them. I have a gigantic collection of Soundtracks and indie music
there.

~~~
tikkabhuna
If Spotify wasn't on iOS I would move back to Android in an instant. I don't
like Apple services because I don't want vendor lock in.

I use Spotify because they're independent and support a large number of
devices. This is just like how I use Sonos because they're independent and
support a large number of services.

Apple benefits greatly from having high quality, third party applications on
iOS. Wasn't the lack of third party apps/support one of the big issues with
Windows Phone?

~~~
bunnycorn
Lots of people said that when a popular local carrier changed from free
Spotify to free Apple Music on one of its plans. Everybody switched to Apple
Music.

Windows Phone failed primarily because it didn't offer anything that Android
or iOS couldn't offer.

------
chj
> Spotify seeks to keep all the benefits of the App Store ecosystem —
> including the substantial revenue that they draw from the App Store’s
> customers — without making any contributions to that marketplace

Wow, Apple's response is rather arrogant. Apple seems to forget that without
apps like Spotify, and those it said "contribute nothing to the app store",
app store won't grow to what it is today. I am pretty sure that Spotify is
willing to distribute outside AppStore if you give it a choice.

~~~
IshKebab
Also they contribute $100/year.

------
apandhi
As an app developer, I wouldn't care about the 30% cut if apple's In-App
Purchase SDK was up to par with other payment processors.

For example - as a developer I can't cancel subscriptions on a user's behalf,
even if they've requested us to cancel it multiple times, nor can I refund a
user's subscription, give them discounts/free months for their troubles/etc.
The thing is, when a user reaches out to Apple to request a refund (since we
can't do it on their behalf), and Apple denies the refund, we get the bad
review.

On top of all of that, Apple does not pay out their developers until 30 days
after the end of the month. That means that we can be waiting for 60(!) days
before we receive revenue from an active, paid, subscription. They don't even
let us know how much we will get paid for the month until a week before
payments are dispatched.

~~~
madeofpalk
> Apple does not pay out their developers until 30 days after the end of the
> month

30 days payment terms is fairly standard, no?

I usually don't get paid until 20 days after I issue an invoice.

~~~
apandhi
30 days would be fine - but since it’s 30 days after the end of the month, it
ends up being more along the lines of 45-60 days after the user has been
actively using the service (and thus costing us money).

------
paxy
Funny that they didn't mention Apple Music even once in their statement, which
is what a major part of the complaint is about.

Overall I'm shocked by the level of hubris coming from Apple. The app store is
a mutually beneficial ecosystem for all parties, but they make it sound like
they are doing the world a huge favor by running it.

------
aboutruby
> At the same time, they distribute the music you love while making ever-
> smaller contributions to the artists, musicians and songwriters who create
> it — even going so far as to take these creators to court.

Kind of weird to see Apple attacking another company.

Also Spotify main claim seems to be about their podcast acquisitions and Apple
didn't answer that:

> So we announce two podcast acquisitions we are super excited about, and all
> of a sudden Apple arbitrarily decides to prohibit use of its API to
> recommend podcasts to users

[https://timetoplayfair.com/timeline/](https://timetoplayfair.com/timeline/)

------
throwaway28616
Having dealt with Apple, this letter exposes the infuriating position I sense
they have.

I believe they feel entitled to do whatever they want on iOS because they
created it. That they have first dibs on any product or service on the
platform, and that if they allow you on the platform you should reward them
through money (dev fees and revenue cuts) for the privilege they are extending
to you on top of the product you paid for (not unlike ISPs who wanted to
charge Netflix in addition to their customers). And they don’t particularly
care about the impact to their users because they feel their users should be
grateful for the UX and quality of their hardware/OS.

They’ve told us we should be thankful for the customers they bring to us as a
developer.

It reminds me of rich people who feel like they earned everything they have
themselves and don’t realize they depend on the people and ecosystem they
exist in.

It’s arrogant and infuriating. Apple somehow seems to have consistently acted
this way for decades. And they seem to undervalue the body of software iOS is
built on top of and the ecosystem of apps that makes their platform sticky.

They’ve always pushed their own, often walled garden, solutions. And it was
annoying but their prerogative... until they gained market manipulating power
on the computing platform of the decade.

------
keiferski
I have noticed that the quality of writing at Apple has gone down dramatically
since Jobs passed. It used to be concise and elegant. Now it’s some cross
between a SAAS landing page and a passive-aggressive tweet.

You can see this everywhere from Apple.com to this letter.

~~~
ndnxhs
The writing in this was very unexpected. Reads more like some devs rant post
and not an official statement.

------
headmelted
To be fair, it does look like Spotify has clearly been selective with the
facts in it's original post. Ok.

None of this response addresses the main question raised by the Spotify letter
which is: "Is Apple abusing it's position as platform holder to grow it's own
products over it's competitors?". Their silence on this, the core issue,
speaks volumes.

No doubt a lot of people reading Apple's letter (and many in the media) will
be taken in by the empty rhetoric around helping musicians and forget that the
main story is about Apple's ability to monopolize media through the iPhone,
and whether it has attempted to do so.

As far as this story goes I could not care less about Apple or Spotify (and
I'm a customer of both).

I care about whether laws are being broken that exist to protect me from price
gouging in the future.

------
Grue3
Ctrl-F "Apple Music" 0 results

So they won't even address the elephant in the room, the fact that their own
service has preferential treatment?

~~~
dajonker
That's politics for you. Only address the issues that are favorable for you,
ignore the rest.

------
paxy
Apple is also being misleading about the 30%/15% fee variance. They make it
seem like Spotify's fees drop to 15% after it has been in the App Store for a
year. In reality, it is only 15% if a user is renewing their annual
subscription. For initial purchase of annual subscriptions or initial
purchase+renewal of all other subscription durations the fee is still 30%
indefinitely. And I'm willing to bet that the vast majority of users pay
monthly rather than annually.

~~~
xuki
Doesn't matter if it's annually or monthly or weekly, once you pass the
1-year-mark it's 15%:

[https://developer.apple.com/app-
store/subscriptions/#revenue...](https://developer.apple.com/app-
store/subscriptions/#revenue-after-one-year)

------
jillesvangurp
This sidesteps a few of the issues, which include that Spotify like others in
the app store is at the mercy of Apple interpreting its own rules when
deciding to block updates.

Then there's the notion that Apple is competing with its own customers in the
appstore. And when it comes to Spotify, Apple Music is a direct competitor but
I doubt they charge them 30% of revenue. They have a huge conflict of
interest. Pretending that they are even remotely neutral is ludicrous. They
block competing browser technologies; technology stacks not favorable to them;
content they don't like; business models they don't like; etc.

And then the infamous Apple tax is of course very lucrative for Apple. Calling
others greedy while charging this much while actively competing against them
is simply arrogant. Spotify has delivered lots of revenue to Apple over the
years. It seems Apple feels entitled to a huge chunk of this revenue and to
the privilege of unfairly competing with them at the same time.

This company (and others like it, cough Amazon) deserve to be scrutinized for
their anti competitive practices.

------
dgregd
> Spotify seeks to keep all the benefits of the App Store ecosystem

How about ISPs? Maybe they also should get 30% commission from all music
downloaded through their networks?

After reading Steve Job biography I read now the Jony Ive book. And I must say
that the current Apple has no taste. Taste in terms of whole product function
and coolness. It looks like industrial product designers and greedy people
took over the company. Do they really have to squeeze each dollar from
customers and app developers and destroy their magic brand? How they are now
different from Exxon Mobil or Louis Vuitton?

------
scoutt
It's a symbiotic relationship, but if it reduces to "which came first, the
chicken or the egg?" analogy it would be:

* the app store is successful thanks to apps like Spotify

* Spotify is successful thanks to the app store

I think the second premise tends to be more accurate to the case. If I make
the most used app in the world today, I cannot take credit for pumping the
success of the app store, because it was already there when I launched my app.

In either case, it's Apple yard, they set the rules and charge what they want.
Don't place your main source of income in another person's yard.

~~~
chj
> In either case, it's Apple yard, they set the rules and charge what they
> want. Don't place your main source of income in another person's yard.

It's too late. Had people known it would become what it is today, nobody in
their right mind would build apps for it. Not me at least.

------
kristaps
Notably absent: addressing the point that Apple's own streaming music offering
has an unfair 30% price (or profit) advantage over any other service that
chooses to use in-app payments.

------
johanneskanybal
The app store is shoved down my throat unless I jailbreak my Iphone NOT a
value add. I'd have ten times more apps on my phone without it. They'll lose
this legal battle.

------
benologist
Surprised Apple didn't point to this gem from their history to justify doing
whatever they want:

    
    
         "If you run to the press and trash us, it never helps."
    

[https://web.archive.org/web/20141226094343/https://developer...](https://web.archive.org/web/20141226094343/https://developer.apple.com/app-
store/review/guidelines/)

I think action against Apple is long overdue, Android shows multiple app
stores doesn't compromise security while Apple's corporate program was
compromised to provide malicious ones!

[https://techcrunch.com/2019/02/12/apple-porn-gambling-
apps/](https://techcrunch.com/2019/02/12/apple-porn-gambling-apps/)

Apple recently rejected Steam's over-the-internet streaming client for iOS
because they view it as a competing app store, it's getting a little bit too
stupid.

[https://liliputing.com/2019/03/valves-steam-link-anywhere-
le...](https://liliputing.com/2019/03/valves-steam-link-anywhere-lets-you-
stream-games-from-any-pc-over-any-fast-network.html)

------
jacquesm
There's this poem about big fleas having smaller fleas. Clearly Apple is about
as hypocritical as they come for calling out Spotify wanting to 'make money
off others' work' because they themselves do just that, and not just of
Spotify, but also of every artist in the Apple music department and of course
of all the App developers.

It's a pity that nobody has been able to come up with a direct-to-consumer
model for music that worked.

~~~
SirensOfTitan
I just came across this yesterday in a book I’m reading. Such a fun
coincidence:

So, naturalists observe, a flea

Has smaller Fleas that on him prey;

And these have smaller still to bite ‘em,

And so proceed ad infinitum.

Jonathan Swift

------
graeme
I think part of the problem here is that Apple's 30% fee is clearly aimed at
digital goods _for which the marginal sale has approximately no costs_. Most
digital goods are quite scaleable, and have enormous marginal per unit.

However, Spotify is not at all like that. Neither is Kindle, neither is
Netflix. So a system that is somewhat justifiable for software is simply
insane for digital goods which do have marginal costs to sell.

This is not necessarily simply to resolve. Witness, for example, the troubles
with corporate taxation, and EU proposals for a digital tax on gross revenues
rather than net revenues. This is basically aimed at the same sort of problem.
E.g. Spotify might actually be very happy to hand over 30% of _profit_ per
user to apple, as opposed to revenue per user. But, how the devil do you
calculate that simply, for all companies in this category?

I don't know exactly how to address it, but Apple should in some way address
the fact that not _all_ digital goods have zero marginal costs to sell.

This is far from the only issue at play, but I haven't seen it addressed, and
I think it's fairly central.

~~~
teilo
That may be true for bedroom developers, but it's just not true for the great
majority of people or companies making money on app sales. Consider how many
of them rely on cloud infrastructure. Those are not sunk costs. Consider also
how necessary it is to market your apps, pay your staff, etc. Also not sunk
costs.

~~~
graeme
Those are generally average costs, not marginal ones.

I don’t mean overall profit is 100%. I mean profit on a single extra sale is
genrally between 80-100%.

------
kodablah
> The only time we have requested adjustments is when Spotify has tried to
> sidestep the same rules that every other app follows.

So Spotify complains that the rules are draconian and the response is that
everyone has to follow them? If anything, it requires getting to a certain
size to have your complaints addressed like this, even if they are hand waved
away as consistently applied.

------
zedkrevas
I'm quite interested in all this, because I feel they have significant impact
on the future of these tech giants. Just as Google has been battling anti-
trust suits for some time, it seems like it's time for Apple to face the
music.

From Apple's reply to Spotify, I notice that they haven't made a single valid
counterpoint to Spotify's primary claim, which is that Apple is favouring
their own Apple Music service on the App Store and the Apple Watch, while
applying different rules for their competitors. In fact, it's quite
disconcerting to see Apple engage in this petty whataboutery, when they
mentioned that Spotify don't pay the musicians well: this point has nothing
whatsoever to do with this anti-trust case. It's quite okay for Spotify to be
horrible to the musicians and still want to be treated fairly by Apple.

I personally am on Spotify's side in this case and I hope cases like these
prevent these tech giants from brazenly stomping over rivals as and when they
see fit.

------
latexr
> Apps that are free to you aren’t charged by Apple.

To publish apps on the App Store you need to cough up 99USD/year[1]. So even
if an app is free to consumers, Apple is charging to make it available.

[1]: [https://developer.apple.com/programs/how-it-
works/](https://developer.apple.com/programs/how-it-works/)

------
mgoetzke
What about the fact that Apple Music does not compete fairly ? They provide
music services like Spotify, if they where a different company they would have
to pay and play by the same rules. They do not or do they ? I have no trouble
with free apps by the OS developer. But once you have to pay they must compete
with alternatives.

------
numair
> A significant portion of Spotify’s customers come through partnerships with
> mobile carriers. This generates no App Store contribution, but requires
> Spotify to pay a similar distribution fee to retailers and carriers.

Everyone would benefit from seeing what both Apple and Spotify are paying to
the carriers for these bundling deals.

~~~
dmitriid
Everyone would benefit from seeing what both pay the labels. Everyone speaks
about “they only pay artists X per stream”. However, neither of them pays the
artist directly.

~~~
hoffs
Well that's not really their problem is it, I'm sure independent artists that
do have their music on Spotify do get paid 'x per stream'. That is the problem
with the music industry and their label signing deals.

~~~
dmitriid
There are very few independent artists on Spotify that get paid directly by
Spotify. The absolute vast majority (easily 99.9999% of artists) are signed up
via the four major labels or (if they are independent artists) via
aggregators:

\- Spotify only started signing up independent artists since 2017 or so [1]
[2]

\- Even there Spotify recommends you upload music through aggregators or
labels [3] (I'm not even sure if you can get there as an artists without going
through a label or a distributor)

> That is the problem with the music industry and their label signing deals.

The music industry has no other options but sign deals with labels. Because
the major labels control the catalog of music that people listen to. Almost
anything even remotely popular you listen to belongs to them: from Taylor
Swift to Beatles, from Drake to Iron Maiden, from One Direction to Pink Floyd
etc.

And the industry is too scared to say anything against the labels for fear of
retribution. You go against Warner Music, they pull their content, and goodbye
Slipknot, R.E.M., Skrillex, Red Hot Chilli Peppers, Muse, Ed Sheeran, Eric
Clapton, Ghorillaz, ... [4] You go against Sony, and... etc.

[1]
[https://en.wikipedia.org/wiki/Spotify#Spotify_for_Artists](https://en.wikipedia.org/wiki/Spotify#Spotify_for_Artists)

[2] [https://artists.spotify.com](https://artists.spotify.com)

[3] [https://artists.spotify.com/guide/your-
music](https://artists.spotify.com/guide/your-music)

[4] [https://store.warnermusic.com/all-
artists](https://store.warnermusic.com/all-artists)

------
Rudism
Has Apple ever tried to defend their rule that apps can't link to or even
inform users of the existence of off-site registration or payment methods?
That has always seemed like the most absurd thing to me and the most blatant
example of Apple's true intentions with their app store.

~~~
daveidol
Exactly - they never address this issue head on

------
flocial
I can only imagine how Steve Jobs would have written this, the way he famously
addressed Adobe pushing for flash on the iPhone [1].

1\. [https://www.apple.com/hotnews/thoughts-on-
flash/](https://www.apple.com/hotnews/thoughts-on-flash/)

~~~
espressomachiat
>We know from painful experience that letting a third party layer of software
come between the platform and the developer ultimately results in sub-standard
apps and hinders the enhancement and progress of the platform. If developers
grow dependent on third party development libraries and tools, they can only
take advantage of platform enhancements if and when the third party chooses to
adopt the new features. We cannot be at the mercy of a third party deciding if
and when they will make our enhancements available to our developers.

------
Mikeb85
Forgetting specific claims about money and app store revenue cuts, Apple could
be in for some serious trouble in Europe, as the European Commission is far
more pro-consumer than the relevant authorities in the US. Where they'll get
into trouble is the fact that Apple Music uses APIs that aren't available to
other developers, that they restrict developers from redirecting to their
website from within the app, all while having a competing product. It's not
the competing product that's an issue, nor the app store cut, but the fact
that they're giving themselves an unfair advantage. The EC has already
punished Google for similar, I don't see how Apple escapes unscathed.

------
caprese
> As Spotify points out, that revenue share is 30 percent for the first year
> of an annual subscription — but they left out that it drops to 15 percent in
> the years after.

okay wake me up when it is more like 5 or 6%

This whole back and forth is so petty

> Underneath the rhetoric, Spotify’s aim is to make more money off others’
> work.

My sides!

> Just this week, Spotify sued music creators after a decision by the US
> Copyright Royalty Board required Spotify to increase its royalty payments.
> This isn’t just wrong, it represents a real, meaningful and damaging step
> backwards for the music industry.

AHAHAHA

In most cold wars, it turns out later that both sides have valid claims, they
are just unrelated to each other and lobbing those claims as rebuttals never
address the underlying issue.

------
djanogo
XCode is not free, the price is included in the Mac purchase. I can't do ANY
iOS development without first paying for Apple hardware.

iPhone is owned by user. If App Store is a profit center for Apple, then all
their claims of "for the good of platform" are invalid. If it's not a profit
center then I guess they can come up with whatever revenue model to socialize
the cost.

Apple Pay is different product, that discussion should be separate.

I am a conservative, but agree with Sen Warren, >$25B companies need to be
severely restricted on how they spread into other products. It might lead to
over valuing smaller companies as investors would have to constantly look for
new opportunities.

------
waterishail
Nice side stepping there on apple music not paying fees to apple store and
advertising from within the app as well as offering in app subscriptions and
tighter integration with other apple services that outside developers do not
have.

------
baxtr
Apple has created a massive platform with a large number of users over the
last years. This has cost them a substantial amount of money and hard work.
Why is not ok to monetize this Why is it ok to collect so many users on a
platform that you end up as "unicorn" like Spotify without paying money for
this acquisition channel? I don't get why Apple is viewed here as the "bad
boy". You could argue the same with Google. Why do they take money for ads?
Because they have the users. Same with the app store. Nobody forced Spotify to
create an Apple app. It was THEIR strategy to grow on the Apple store.

~~~
kinkrtyavimoodh
> You could argue the same with Google. Why do they take money for ads?
> Because they have the users.

That's a bizarre analogy. The analogy would be that Google not only takes
money from PnG for showing you an ad for Head and Shoulders, but then charges
forces PnG to sell you the shampoo through Google AND takes a 30% cut on the
revenue.

~~~
baxtr
Well, only if google made the shampoo bottles and PNG provided the shampoo
inside

~~~
WA
No, only if Google offered the shelf for the shampoo bottle to stand on.

~~~
TotoBOD
Precisely! AppStore is the shelf for Spotify...

~~~
rnotaro
Should we also be angry at Ebay, Etsy, Amazon for taking a cut of the sales
too?

------
chmaynard
I'm curious to know which individuals actually wrote Apple's response and why
they chose not to take personal responsibility for their statements.

In academia, scientific papers and scholarly debates are always presented by
individuals, not by their employers. If professor X from Harvard disagrees
with a claim by professor Y from Yale, the argument isn't framed as a dispute
between Harvard and Yale.

On the other hand, in the business world debates like this are usually
presented as a dispute between faceless corporations. Is there is some legal
reason for this?

------
ghego1
To think that in the response letter from Apple one could find anything but
reasonable statements would be very naive. That letter has been
drafted/reviewed by high skilled lawyers and, as much as one does or does not
agree with the points they make, it still makes some clearly outlined
arguments. So what I find most interesting is what it's not there. They do not
mention once the fact that their own streaming app can compete on better terms
since they do not have to give away 30-15% of the subscriptions.

------
codesternews
Whatever you say I think we should see from apple prespective also.

"Let’s be clear about what that means. Apple connects Spotify to our users. We
provide the platform by which users download and update their app. We share
critical software development tools to support Spotify’s app building. And we
built a secure payment system — no small undertaking — which allows users to
have faith in in-app transactions. Spotify is asking to keep all those
benefits while also retaining 100 percent of the revenue."

------
skinnyasianboi
> Spotify wouldn’t be the business they are today without the App Store
> ecosystem

Is that true? I remember me, my friends and family all had the spotify deskop
app way before installing it on mobile.

------
GiorgioG
I'd like Apple to stop pretending that it's still 2010 and that their services
provide the best experience for their customers. In a connected world, Apple
still wants to keep other major players out. I have Spotify,
SmartThings/Google/Amazon devices and in every single case, Apple makes them a
second class citizen by restricting private APIs, or has been very late to
integrate with them.

It makes it hard to justify another MacBook Pro / iPhone purchase going
forward.

------
jarjoura
Wow, this is like a relationship where one partner tries hard to convey
frustration and the other one not hearing any frustration at all but ends up
making them about themselves. At first I just felt Spotify was being a little
dramatic, like mom and dad fighting, but Apple's response is infuriating. I
actually feel really bad for Spotify now. Yes they're a business, but the
things Apple is accusing them of is the very thing Apple also does.

------
pwaivers
> "We found Spotify’s claims about Apple Watch especially surprising. When
> Spotify submitted their Apple Watch app in September 2018, we reviewed and
> approved it with the same process and speed with which we would any other
> app. In fact, the Spotify Watch app is currently the No. 1 app in the Watch
> Music category."

A) I don't see it on the watch store, and B) that is a long time to finally
get on the watch store!

------
sidcool
Corporations bickering out loud in public like neighbours. Quite a spectacle.

Having read both Spotify's and Apple's claims, I am confused. Both seem legit.

~~~
saagarjha
> Having read both Spotify's and Apple's claims, I am confused. Both seem
> legit.

Both sides are exaggerating: Spotify's claims that Apple is blocking their
apps and preventing them from shipping features are likely bogus, while
Apple's claims that they don't selectively implement rules when doing app
review is false as well.

------
skc
Ehh, just a minor spat in the end.

At the end of the day, almost literally everyone at Spotify fawns over Apple
and Apple gear. And that's a problem.

If these companies are now finding out to their detriment just how precarious
their existence is based on their dependence on Apple, then it might be a good
idea to start championing multiple competing platforms instead of scoffing at
any non-Apple related efforts.

------
mohsen1
I hope all of this results into Spotify Apple Watch that can stream music. I
go for runs and even though my Watch has cellular and I pay the monthly fees I
have to listen to podcasts instead of music

I thought about making a little automated system where it exposes my playlists
as podcast stations. Like an AWS Lambda that runs Chrome headless and streams
the output of Spotify web player.

------
C4stor
It's nice to see Apple admitting that they have for a long time, and for the
detriment of everyone, fused two very distincts roles.

The first is distributing software, and the second is processing payments.

Incredibly, the first is free for everyone, even if you distribute billions of
copies of your app, which doesn't make any sense in a vacuum.

But they allowed themselves to become the only payment processor available on
their hardware, while there are a ton of options in the wild, and this payment
processor takes a 30% cut. This is roughly ten times what Stripe charges for
the exact same service !

If Apple really wanted to allow a fair competition on their hardware, they
would provide these two services independently, and allow competition on the
payment processing part.

It would mean start charging for app distribution, but that would only make
sense anyway, since they endure a cost (however low) on every download.

But of course, it's not what they want (nor what google wants with the App
Store). They want to have a monopoly on payment processing, because that's
where you can extract as much money as you want.

Which leads to these ubuesque situations where greedy corps #1 fight with
greedy corp #2, and in the end, it's the customers that are losing anyway due
to jacked up prices on non competing-services.

And people saying that there is the option to switch to Android, well...it's
the same payment processing fee ! It's really a wonder none of those two
giants are competing on that point to attract developers...

~~~
mrunkel
The 30% is for distribution, payment processing (including refunds) and first
line customer support, in both directions.

It also includes vetting all app submissions for users.

I would wager that neither Google nor Apple cares about the developers
directly. Indirectly they want to make it possible for developers to reach
their (Apple's) customers because it's good for the customer.

However, the developer pays apple $99/yr, the customers a great deal more.

I still see the app store as a great thing for customers and developers.

And again, if you don't want to pay apple anything, release your app for free
and have your customers login to the app after they buy it somewhere else. But
if you want to leverage the app store's reach, you need to pay Apple their
share.

~~~
C4stor
That's exactly my point : 30% for everything makes 0 sense !

1\. Distribution shouldn't be indexed on the price of what you're
distributing. Distribution costs are mostly flat. They could be charging a per
MB cost of download, plus a flat cost for app curation for example, it would
make sense.

2\. 30% for payment processing is ten times what it needs to be.

3\. Same as 1., customer support costs doesn't depend on the app revenue, they
should be charged independently of that it Apple played fair.

$99 a year is a laughably small amount to pay for big editors, it doesn't even
cover bandwidth costs of distributing data. The only point is preventing the
app store being literally flooded by low quality apps.

So yes, to leverage the App Store reach, I should pay the App Store something.
And that something should nothing at all to do with what my own customers are
paying me, which the App Store shouldn't even know to begin with.

------
SalimoS
The 30% cut for the App Store is logical after reading this PR It’s like the
free tier in Spotify

A free tier that access the stream and the premium pay for more features and
that money cover the whole system

the Apple premium feature is the payement system that’s used by developers to
collect payment

It’s like Spotify don’t want to pay stripe or PayPal for using their payment
solution

------
dadoge
Lot of comments here refer to the 30% fee in isolation.

Where Apple is especially unfair in allowing others to compete is that it too
has a music service and in the past was able to charge users lower than what
any competitor would charge for a music streaming subscription.

So it’s the combination of 30% fee and making apps where it itself doesn’t
“charge itself” 30%

------
z3t4
Just let me download the mp3 and play it on whatever device I choose. First I
need a iPhone $1000, then I need a Internet service with enought data to
stream HQ audio $50 /month. Then I need a (Spotify or other) subscription $30
/month. Why not let me buy the songs/albums from some web page/app !?

------
roguesherlock
This looks so unlike Apple. Almost childish.

------
mcqueenjordan
How the heck did this get thru a PR vetting?

------
xxxmaster
Couldn't agree more. It's Apple's world, if you are asked to play in a certain
way - play it. Build your own ecosystem if you are not happy there. It's like
everything in life, if you are not happy with something you have to find a way
to make the change, don't Q_Q

------
mychael
> avoid contributing to maintaining that ecosystem for the next generation of
> app entrepreneurs

This is an insult to anyone with a brain. Calling fees "contributions" as if
they "maintain" anything beyond increasing shareholder value.

Don't be fooled by Apple's warm and fuzzy messaging.

------
jbverschoor
This whole discussion comes from spotify losing users, and Apple gaining so
much. I switched from spotify -> Apple music because: 1) I can store my own
music in icloud and play them on my devices 2) Better content and includes
videos 3) "Radio"

------
wand3r
It’s kind of a funny parrallel between this and the Qualcomm suits. How much
rent can one company extract before the market adapts. E.g clearing
subscriptions outside Apples channels, denying fees through major partners to
Qualcomm.

------
pvinis
Why is this public and they don't handle it directly between the two
companies? Not with posts, not with AppStore review feedback. Send some people
that can talk and solve this?

This kind of thing is so weird for me when companies do that

------
AngeloAnolin
I like the fact that apple published the contacts for further inquiries
related to this debacle (found on the bottom of the article). Their openness
and transparency in providing these information deserves an applause.

------
jen729w
Ben Thompson to the white courtesy phone. Ben Thompson. Thank you.

------
tw1010
Let me just throw out a guess here that stratechery will totally be on Apples
side on this. They seem to have a bias against non-US companies stretching a
long way back.

------
seandoe
They don't charge Spotify if users sign up on the web and then use the iOS
client app right? Could Spotify just add a surcharge if users pay through the
iOS app?

------
Shalle135
But… they failed to adress the reason to why it took 3 years for Spotify to
successfully get their Apple Watch app approved?

------
unstatusthequo
Would be super fun if Apple removed Spotify from the App Store. The ensuing
drama would be really entertaining.

------
kutoff
What I actually heard reading that closing statement...

 _We’re proud of the work we’ve done to force companies like Spotify into a
walled garden, restricting hundreds of millions of paying customers purchasing
choices, and we wish them continued success — after all, the whole point of
creating the App Store was to sell more iPhones so rent-seeking off the app-
developers that made us so successful is just an added bonus._

------
dugluak
Does Microsoft get a cut from Spotify for hosting their app on Windows
operating system?

Just asking ...

------
chewz
Hey Apple, if not for Spotify we would still had to cope with iTunes..

------
xpuente
The fear of being forced by the EU to allow app sideloads.

------
wodenokoto
Why can I buy train tickets on iOS apps using any payment provider, but not
spotify-subscription?

It can't be that it is a subscription service, because I can also buy
commuter-tickets as a subscription service using CC.

Is it that you can't sell competing services on app-store without paying apple
tax or is there an arbitrary list of services that requires apple tax?

~~~
philo23
Not that I completely agree with it, but I think the difference they go off is
a purchase of something physical (e.g. a book from Amazon) vs something
digital (e.g. an audiobook from Audible)

