Addressing Spotify’s Claims - Apple

Deleted member 9330 · Mar 15, 2019

For those that want context: https://www.resetera.com/threads/spotify-files-antitrust-complaint-against-apple-in-eu.105086/

At its core, the App Store is a safe, secure platform where users can have faith in the apps they discover and the transactions they make. And developers, from first-time engineers to larger companies, can rest assured that everyone is playing by the same set of rules.

That's how it should be. We want more app businesses to thrive — including the ones that compete with some aspect of our business, because they drive us to be better.

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. 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.

Spotify claims we're blocking their access to products and updates to their app.
Let's clear this one up right away. We've approved and distributed nearly 200 app updates on Spotify's behalf, resulting in over 300 million downloaded copies of the Spotify app. The only time we have requested adjustments is when Spotify has tried to sidestep the same rules that every other app follows.
We've worked with Spotify frequently to help them bring their service to more devices and platforms:

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.

Spotify is deeply integrated into platforms like CarPlay, and they have access to the same app development tools and resources that any other developer has.

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.

Spotify is free to build apps for — and compete on — our products and platforms, and we hope they do.

Spotify wants all the benefits of a free app without being free.
A full 84 percent of the apps in the App Store pay nothing to Apple when you download or use the app. That's not discrimination, as Spotify claims; it's by design:

Apps that are free to you aren't charged by Apple.

Apps that earn revenue exclusively through advertising — like some of your favorite free games — aren't charged by Apple.

App business transactions where users sign up or purchase digital goods outside the app aren't charged by Apple.

Apps that sell physical goods — including ride-hailing and food delivery services, to name a few — aren't charged by Apple.

The only contribution that Apple requires is for digital goods and services that are purchased inside the app using our secure in-app purchase system. 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.

https://www.apple.com/newsroom/2019/03/addressing-spotifys-claims/

A shockingly direct reply, wasn't expecting that at all. Much more at the link, of course.

I felt like it was alright to quote a bit more than I usually would, since this isn't an article but a PR statement. Mods let me know if that's not cool.

Dartastic · Mar 15, 2019

Oh damn I am here for this

Redhead On Moped · Mar 15, 2019

Just read it, reminds me of the letter about Flash that Steve Jobs wrote.

Like that letter, Apple is absolutely in the right here.

Kwigo · Mar 15, 2019

Damn.

Deleted member 9330 · Mar 15, 2019

Redhead On Moped said:
Just read it, reminds me of the letter about Flash that Steve Jobs wrote.

Like that letter, Apple is absolutely in the right here.

That letter is a classic. And Apple still hosts it!

https://www.apple.com/hotnews/thoughts-on-flash/

I remember being upset set about that letter when it first came out because I thought it was Apple being stubborn and not supporting Flash and it would significantly harm the iPad long-term.

Nah, they were right.

Mindwipe · Mar 15, 2019

Yeah, total bullshit from Apple. They're running scared that their extortion racket is about to come tumbling down.

Lunaray · Mar 15, 2019

Yeah, I'm on Apple's side on this.

Maximus · Mar 15, 2019

I like this new, direct approach. Better than not saying anything and letting the world assume and build a narrative.

SilentPanda · Mar 15, 2019

The world won't decide, as it's filed in the EU, the European Commission will make their own decision on their own standard regardlass of the various PR response by either side.

Cascadero · Mar 15, 2019

I like the statement but I am not convinced the European Commission will follow Apple's take on the situation. The forced share might be perceived as competition abuse.

Infinity Times Two · Mar 15, 2019

I'm surprised they made any response, as this is a case for the european commission.

sabrina · Mar 15, 2019

I like this response. I like it a lot. Good on Apple!

Flaurehn · Mar 15, 2019

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.

That burn

RestEerie · Mar 15, 2019

i don't care which side won. I just want cheaper (free) music in a centralized and consolidated package.

Redhead On Moped · Mar 15, 2019

RestEerie said:
i don't care which side won. I just want cheaper (free) music in a centralized and consolidated package.

Why should music be free?

If you want lower-cost music though, Apple Music is the solution. 5 bucks student, 10 bucks single 15 bucks family.

It's the Apple Music catalog PLUS all the music you already own (including personally dumped discs that will never be on sale digitally, and personally projects) streamed anywhere and everywhere. No other competing music service quite matches that. Not sponsored by Apple, Cupertino, or any of that, and was a day 1 Spotify Premium person as well, just use Apple Music because it's the cheapest, but most complete option all things considered.

Kareha · Mar 15, 2019

What's stopping Apple from just removing Spotify from the App Store? They can't complain about competition because there are other streaming services available on there.

Redhead On Moped · Mar 15, 2019

Kareha said:
What's stopping Apple from just removing Spotify from the App Store? They can't complain about competition because there are other streaming services available on there.

Apple has nothing to gain by removing Spotify. They would only lose their current cut altogether, whilst looking bad.

Zaph · Mar 15, 2019

Haven't read Spotify's entire complaint, but some of Apple's responses here are telling, especially the ones under the "Spotify claims we're blocking their access to products and updates to their app." heading. They sidestep the claims by stating Spotify's treatment is no different to other apps, but Spotify's main complaint is treatment in comparison to Apple's own services and apps - that Apple has one rule for themselves and other for everyone else (something Apple can't really dispute given their public api's and private api's).

I'm not sure how far they'll get given Apple doesn't have a monopoly on the smartphone industry (they just monopolise the profits...), but as a primarily iOS user and Spotify subscriber, I've noticed Apple really does push their own Music app and subscription even thought I've deleted the app itself.

Redhead On Moped · Mar 15, 2019

Zaph said:
Haven't read Spotify's entire complaint, but some of Apple's responses here are telling, especially the ones under the "Spotify claims we're blocking their access to products and updates to their app." heading. They sidestep the claims by stating Spotify's treatment is no different to other apps, but Spotify's main complaint is treatment in comparison to Apple's own services and apps - that Apple has one rule for themselves and other for everyone else (something Apple can't really dispute given their public api's and private api's).

I'm not sure how far they'll get given Apple doesn't have a monopoly on the smartphone industry (they just monopolise the profits...), but as a primarily iOS user and Spotify subscriber, I've noticed Apple really does push their own Music app and subscription even thought I've deleted the app itself.

How? I deleted news, stocks, podcast, tips, and find my friends and have never been bothered or nagged to get them. At most you'll see an add for Apple Music on the iTunes Store, where it makes sense.

massivekettle · Mar 15, 2019

Whether or not Apple will get a fine from the European Commission will depend on whether there is a budget shortfall at the EU level that needs to be plugged.

kiguel182 · Mar 15, 2019

That's a good response but also means that either they are lying or Spotify is lying regarding Siri and Apple Watch.

Also, Spotify's royalty case is going to bite them in the ass here. Regardless of right and wrong is a bad look.

The one thing that is false in this letter is "everyone plays by the same rules". Apple Music does not need to pay 30 percent (or 15, or anything). That's the crux of the issue. They also might be getting first access to APIs and faster deployment. Also, they have sent notifications with promotions, something that is against the rules.

It's a good letter but doesn't address the main point of Spotify's case. Apple Music doesn't see its subscriptions cut for existing in the same space as Spotify.

That said, there's definetly a lot of holes to poke in this, I'll be curious to see what the courts say.

Aurongel · Mar 15, 2019

Apple completely sidesteps and undermines several points brought up in the original Spotify statement. They spend several lines describing how they treat Spotify's service similarly to other third party ones on their marketplace. Problem is, that's not addressing Spotify's point at all. I'm fairly certain their entire original argument revolves around Apples intentional segmenting of their private and public API's. Apple's response instead focuses on the fact that they don't treat Spotify differently than any other third party on their platform - which I don't think was the core argument Spotify was trying to make.

EDIT: I'm kind of getting the sense that Apple is about to have their "Microsoft Internet Explorer monopoly" moment and get a bunch of fines over it.

MrKlaw · Mar 15, 2019

Zaph said:
Haven't read Spotify's entire complaint, but some of Apple's responses here are telling, especially the ones under the "Spotify claims we're blocking their access to products and updates to their app." heading. They sidestep the claims by stating Spotify's treatment is no different to other apps, but Spotify's main complaint is treatment in comparison to Apple's own services and apps - that Apple has one rule for themselves and other for everyone else (something Apple can't really dispute given their public api's and private api's).

I'm not sure how far they'll get given Apple doesn't have a monopoly on the smartphone industry (they just monopolise the profits...), but as a primarily iOS user and Spotify subscriber, I've noticed Apple really does push their own Music app and subscription even thought I've deleted the app itself.

Yeah same with the Apple Watch comment. Yes they approved it quickly but Spotify and other third parties can't have apps that eg stream directly to the watch like Apple Music can.

Deleted member 9330 · Mar 15, 2019

kiguel182 said:
That's a good response but also means that either they are lying or Spotify is lying regarding Siri and Apple Watch.

They're talking past each other. Apple is being correct that Spotify could set up Siri shortcuts to get voice control that way, but they haven't. And they could make an Apple Watch app that lets you download to the Watch, but they haven't. Those APIs are public and have been used by other, non-Apple apps.

What Spotify wants is full access through Siri, not just shortcuts. And full integration on the Watch, which is halfway possible through the downloading thing that they haven't made. I was under the impression that streaming to the Watch was still Apple-only but recently some guy made a third-party Spotify Watch app that supported streaming and Spotify shut it down.

Infinity Times Two · Mar 15, 2019

I think they are both misleading in different ways. Apple is portraying Spotifys claims about equal treatment as in relative to other third party apps, but Spotify is mainly pressing on Apple Musics status as a first party app, with instant access to Apples private APIs, etc. There is a clear conflict of interest in being both the facilitator of an app marketplace, and a player of that same marketplace. (Apple Music isn't technically in the App Store, but it's on the iPhone).

On the other hand, Spotifys gripe with the 30% tax isn't necessarily the number, and they didn't even mention the drop to 15%. Any tax will put Spotify at a disadvantage, so in that way, Apple is right. They want all the benefits of the App Store, while not making any sacrifices.

MrKlaw · Mar 15, 2019

downloads to apple watch don't really suit a spotify model where you're wanting full choice. Its not even perfect for slower paced podcast listening as the syncing just seems soo slow it never has recent podcasts. Don't know if it forces bluetooth, or waits until both devices are on charge or something. I have tons of battery at the end of the day - let my watch use a direct wifi connection to download stuff.

mordecaii83 · Mar 15, 2019

As far as the 30% thing goes, why can't Spotify just block signing up for subscriptions in the app and instead link people to their web page? It seems like an easy issue to get around.

The different API's available thing is a bit more tricky.

Infinity Times Two · Mar 15, 2019

mordecaii83 said:
As far as the 30% thing goes, why can't Spotify just block signing up for subscriptions in the app and instead link people to their web page? It seems like an easy issue to get around.

The rules for the App Store is that you can't give your users instructions, links or Call-to-Action to other payment solutions than Apples IAP.

If you try to publish such a thing for your app, Apple will just block it until you remove it.

mordecaii83 · Mar 15, 2019

Infinity Times Two said:
The rules for the App Store is that you can't give your users instructions, links or Call-to-Action to other payment solutions than Apples IAP.

If you try to publish such a thing for your app, Apple will just block it until you remove it.

Fair enough, I remember reading that before but I wasn't sure when I posted my original question.

That's the problem with getting into services, if you own a platform the scrutiny is so much higher about being fair to competing providers of services. I wouldn't be surprised if Apple is ordered to do something, not sure what that would be yet though.

lemonade · Mar 15, 2019

It's so spicy!

I use Apple Music because I prefer the aesthetic of the default player and iCloud music library allows me to rip music from cds and have them available on all devices.

Big help especially considering the poor offering of J-Pop on Apple Music.

TechnicPuppet · Mar 15, 2019

I'm on my side. Which means I want Apple to get done for this.

Lnds500 · Mar 15, 2019

"Putting Spotify on Blast" .

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.

Drag her to filth. What was Spotify thinking with that claim?

Deleted member 9330 · Mar 15, 2019

mordecaii83 said:
Fair enough, I remember reading that before but I wasn't sure when I posted my original question.

That's the problem with getting into services, if you own a platform the scrutiny is so much higher about being fair to competing providers of services. I wouldn't be surprised if Apple is ordered to do something, not sure what that would be yet though.

Just let apps link to a webpage to sign up, it would remove a lot of the issues people have. Keep your 30% on IAP if you feel you need to, but don't ban them from telling users there are other options

Tuppen · Mar 15, 2019

Apple is conducting business in anticompetitive ways that's rather obvious. I think the question is if their market share is large enough to make it illegal. Their response sidesteps the issue since it does not address the competetive advantages first party apps have.

Infinity Times Two · Mar 15, 2019

Zeyphersan said:
Just let apps link to a webpage to sign up, it would remove a lot of the issues people have. Keep your 30% on IAP if you feel you need to, but don't ban them from telling users there are other options

That would be a threat to the profitability of the App Store. If developers could opt out of the 30% tax, why would anyone still do that?

Deleted member 9330 · Mar 15, 2019

Infinity Times Two said:
That would be a threat to the profitability of the App Store. If developers could opt out of the 30% tax, why would anyone still do that?

The rules that Google has in place are that you can only use a payment method other than their payment API if it's for a good that's consumable outside of the app. So Kindle books and Spotify don't have to use Google's payments since they're treated almost like physical goods in that they're not reliant on the Android app to exist, and Apple and Google both make exceptions for physical goods.

However, you do have to use Google's system for things that are consumable within that app, like anything for video games or app-specific features (like if you sell a dark mode as an in-app purchase).

What I'm saying is there's a middle ground.

jizzywinks · Mar 15, 2019

I'm with Apple on the 'Spotify wants all the benefits of a free app without being free" and I'm not sure I buy their line about them being blocked from making apps for the watch or homepod. Having said that, Apple needs to open up with the Siri API and allowing third party default apps. For as big as their services revenue is becoming, their services are pretty far behind the competition. Spotify is also absolutely in the right about Apple sending about promotional notifications, breaking their own rules.

MrKlaw · Mar 15, 2019

Zeyphersan said:
Just let apps link to a webpage to sign up, it would remove a lot of the issues people have. Keep your 30% on IAP if you feel you need to, but don't ban them from telling users there are other options

if ios didn't have a web browser that'd be ok - you'd need to go get a different device, many people wouldn't bother and would just use IAP. Also for end users the cost is the same so they'd go with convenience.

but a link in an app could literally pop up an in-app web browser taking you through a sign up without touching IAP. I can see why Apple blocked it

I don't know how I think about pricing and API access for services/apps that offer something Apple also offer.

I *think* my position is that the 30% is tough shit, cost of doing business. Put your IAP price up, or encourage sign up via web (but not in your app - so web, twitter, whatever).

The API access though I don't agree with. Apple should not gain an unfair functional advantage over the competition by withholding access to functionality. So if Apple Music can stream on the watch, Spotify should have the same access to be able to.

Wiped · Mar 15, 2019

Kareha said:
What's stopping Apple from just removing Spotify from the App Store? They can't complain about competition because there are other streaming services available on there.

EU competition laws would annihilate Apple for that. Abusing their position as the platform holder to crush competition (for rival service Apple Music) is what Microsoft did with Internet Explorer and it cost them billions and billions in EU fines.

Vinnie20 · Mar 15, 2019

massivekettle said:
Whether or not Apple will get a fine from the European Commission will depend on whether there is a budget shortfall at the EU level that needs to be plugged.

Be glad EU let you compete and make money in their regions. You could be selling hardware in China and have almost no market share in their streaming and payment apps.

Vinnie20 · Mar 15, 2019

Does anybody know how much cut google gets when you pay 10/m for the HBO app directly through the google play payment system?

Mindwipe · Mar 15, 2019

Vinnie20 said:
Does anybody know how much cut google gets when you pay 10/m for the HBO app directly through the google play payment system?

The same 30%. But you don't have to use the Google Play payment system as an app, which is the big difference.

Mindwipe · Mar 15, 2019

MrKlaw said:
I *think* my position is that the 30% is tough shit, cost of doing business. Put your IAP price up, or encourage sign up via web (but not in your app - so web, twitter, whatever).

You're not allowed to put your IAP price up, the app store terms ban such price discrimination.

mordecaii83 · Mar 15, 2019

Zeyphersan said:
The rules that Google has in place are that you can only use a payment method other than their payment API if it's for a good that's consumable outside of the app. So Kindle books and Spotify don't have to use Google's payments since they're treated almost like physical goods in that they're not reliant on the Android app to exist, and Apple and Google both make exceptions for physical goods.

However, you do have to use Google's system for things that are consumable within that app, like anything for video games or app-specific features (like if you sell a dark mode as an in-app purchase).

What I'm saying is there's a middle ground.

This is probably the most fair system, but I can't see Apple going for it. Using Apple's payment system inside the app for free would be costing Apple money, so I can see why they wouldn't want to go for that.

Apple rescinding the rule against linking to ways to pay outside the app sounds nice as well, but as another person said that would cost them a lot of revenue and if you let Spotify get away with it every other app would want to as well.

I think Spotify could get away with just not offering a method of signing up at all in the app and just have people use the website. They wouldn't even need to advertise it in their app, pretty sure anyone could figure it out (or just have a page that says you need to already be a subscriber to access premium features, i.e. heavily hint at using the site to sign up without violating Apple's policy.

Deleted member 9330 · Mar 15, 2019

MrKlaw said:
if ios didn't have a web browser that'd be ok - you'd need to go get a different device, many people wouldn't bother and would just use IAP. Also for end users the cost is the same so they'd go with convenience.

but a link in an app could literally pop up an in-app web browser taking you through a sign up without touching IAP. I can see why Apple blocked it

I don't know how I think about pricing and API access for services/apps that offer something Apple also offer.

I *think* my position is that the 30% is tough shit, cost of doing business. Put your IAP price up, or encourage sign up via web (but not in your app - so web, twitter, whatever).

The API access though I don't agree with. Apple should not gain an unfair functional advantage over the competition by withholding access to functionality. So if Apple Music can stream on the watch, Spotify should have the same access to be able to.

Hmmmmm. You know what, I think I've come to agree. I agree with you that the 30% (or whatever the percentage is for any storefront) is part of the cost of business. Every retailer takes their cut, no matter what, and in this case Apple is a retailer with the App Store.

I read Spotify's website about this (https://www.timetoplayfair.com/) very carefully, and they're actually kind of cagey about what they want. Do they want Apple to drop the 30% cut? It doesn't seem like it. It seems like they want the ability to redirect users to use other payments methods other than Apple's IAP to avoid paying the 30%, in which case I agree with Apple: Spotify wants all the benefits of being on iOS without actually contributing anything to it.

The API thing I definitely agree with you on. Apple is the only one that cares about that, Android Wear lets you stream Pandora, and Google Home and Alexa famously let you set whatever compatible music service you want as your default, even though they both sell competing services.

Mindwipe said:
You're not allowed to put your IAP price up, the app store terms ban such price discrimination.

They actually don't. When Spotify and Netflix were using Apple's IAP the prices were higher ($12.99 instead of $9.99). Spotify even talks about it on their website:

What choice has Spotify made and what are the consequences?
To offset the 30% tax, Spotify initially raised our prices from 9.99 Euros per month to 12.99 Euros per month. But then Apple Music launched at 9.99 Euros per month as they are not subjected to this same tax. So Spotify, like others, decided not to use Apple's payment system. As a result, we lost the ability to sell Premium subscriptions in-app on iOS. But it didn't just end there. They continue to tighten restrictions on us, punishing us for choosing the path that best aligns with our mission, and the only one that our business can sustain that ensures our longer-term viability.

kiguel182 · Mar 15, 2019

Yeah, they are side-stepping the whole point of Spotify's claim. Yes, they are on the same playing field as the other apps on the store. But not on the same playing field as Apple Music. That's the whole thing.

The fact that Spotify is scummy with artists doesn't make what Apple is doing fair competition.

EDIT: I also think that not being able to advertise sign-ups for the service outside iOS is scummy. They might not allow to offer the option in the app to use a third party service but not even a link? That is definitely not fair since Apple can use the IAP and not pay the 30 (or 15) per cent.

EDIT2: This wouldn't be a problem if Apple wasn't competing in the same space without any of the restrictions. That's the issue. Even if the tax was 1 per cent.

Irminsul · Mar 15, 2019

Everyone claiming Spotify is "scummy with artists" has to remember that in contrast to Apple Music, Spotify has a free tier that's still the basis for payouts.

Also, I probably shouldn't be surprised how many people defend rules that are blatantly anti-consumer, lead to a worse user experience and are also very obviously garden variety anti-competitive measures.

DryCreek · Mar 15, 2019

phonicjoy · Mar 15, 2019

MrKlaw said:
Yeah same with the Apple Watch comment. Yes they approved it quickly but Spotify and other third parties can't have apps that eg stream directly to the watch like Apple Music can.

Thats not correct. Overcast does it at the very least.

MrKlaw · Mar 15, 2019

phonicjoy said:
Thats not correct. Overcast does it at the very least.

Can it stream directly from the watch? I installed it (normally use pocket casts) specifically because it can *download* podcasts to the watch for listening without a phone but I didn't think it can stream them.

If it can that would be good (assuming it can access my subscriptions) because bloody hell the downloads are so slow i've Usually listened to a podcast before it's synced across. Any my phone.watch both sit on chargers overnight within 6 inches of each other.

Addressing Spotify’s Claims - Apple

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