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> The issue of the 30% cut alone is enough for further investigation,

Not really, it's 30% for everyone, not just Spotify.

> Not really, it's 30% for everyone, not just Spotify.

As they mention on the website. That's not true. It's not 30% for Uber or Deliveroo. And most importantly, it's not 30% for Apple Music.

It's 30% for "in-app purchases" which is a specific API which allows one-click payment for one-time purchases or subscriptions ONLY FOR digital goods, and the payment goes through the iTunes account (eg: credit card).

If you buy a real world product or service, you need to use a third party payment service like Stripe (or Apple Pay, if you want), there is a 0% commission fee from Apple. This is why Amazon can distribute an app on iOS that allows to buy whatever you want without Apple getting a cut; well, anything but digital goods, like Kindle books, which in fact can't be bought from Amazon iOS app.

And most importantly, it's not 30% for Apple Music.

What do you mean it isn't? Apple Store could trivially take a 30% cut of the Apple Music revenue, and the only thing that would change would be the distribution of revenue between Apple Music and Apple Store in Apple's revenue reports. The total revenue would be the same.

Exactly, but Apple can run their streaming service as a loss leader because they still get to book the 30% revenue on the store side. Spotify can't recoup that 30%.

This effectively gives Apple an extra 30% margin for their streaming music service.

So in that case we shouldn’t allow any VC backed company because they are all pretty much running at a loss.

I definitely couldn’t start a ride sharing company when Uber and Lyft are being funded by VCs...

It seems that 30% is for features that are delivery in app, since Uber and Deliveroo are delivered outside app they have a lower cut. It's just commission cut rules by Apple.

Regarding Apple Music I'm not sure what that supposed to mean. I'm pretty sure that Spotify doesn't charge the same for "Spotify Premium" and "McDonalds" ads.

Unless "everyone" also includes Apple Music, then it's anti-competitive.

That’s like demanding newpapers pay full price for ad space on their own pages. Just absurd. What does it even mean, Apple owns Apple Music.

Apple have a monopoly on the distribution of iOS apps, so they are required to offer fair terms to all app vendors, including themselves.

Apple could charge themselves the 30% App Store fee for Apple Music, demonstrating that the App Store is a fair marketplace that doesn't artificially advantage Apple's own services. It would then be incumbent on Apple to prove that Apple Music is priced fairly, rather than being deliberately operated at a loss to squeeze other streaming music services out of the market.

NYT Newspaper also has a monopoly on distribution of ads on NYT pages, so should they charge themselves to put their own ads?

Yes. So costs of putting up an ad are reflected in the relevant departments. Large corps do this all the time, transferring money from the left pocket to their right pocket.

It's somewhat similar to net neutrality proposals. AT&T doesn't have a monopoly as an ISP. However, if AT&T starts/acquires a video streaming service, they should not give unfair advantages to their own service because they want to compete with Netflix.

And Apple probably does this too.

What does it change ? Nothing.

Not absurd. Different departments in the same company have budgets of their own. If a department wants to buy an ad from their own paper, it should affect their remaining budget, just as it should show up on the Ad department's revenue.

Sure, but this would not affect Apple music, it’s not like they would shut it down. The Apple eco-system is so popular because Apple takes a holistic approach, they wouldn’t mind at all losing money on Apple music if it increased iPhone earnings.

Don’t worry, Apple takes a 100% cut of Apple Music’s revenue

Which might be negative.

.. that would just be Apple paying themselves.

Technically it does? Apple could be taking a 30% cut all Apple Music subscriptions for hosting the application and processing the payment. Apple then gets the remaining 70%.

Do they actually take a 30% cut? If they're accounting in that manner, then it's likely that Apple Music is running at a substantial loss, which would constitute predatory pricing under EU competition law.

You have an overly simplified view of Apple Music.

It’s on multiple platforms, it’s tied to Beats, it has a relationship with iTunes Store, there is advertising involved etc. So there could be multiple licensing and revenue sharing deals that mean Apple Music is not running at a loss.

In fact I think it’s likely than you’re wrong.

Does it count as a loss if they’re both taking that loss on iOS users?

Apple does pay artists a much larger cut than Spotify. At e.g. 5000 streams Apple pays the artist ca 37 USD vs the 22 USD that Spotify pays out.

$22*1.30 = $35.1

Interesting, so Spotify could pay nearly the same simply by paying the 30% to artists instead of Apple.

And of course, those 37 might already be partly paid by Spotify anyway.

22*1.3 = 28.6

Even if it's for everyone, the point is: it's egregious. Even more so when Apple competes in the same space.

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