Addressing Spotify's Claims - <AUTHOR> https://www.apple.com/newsroom/2019/03/addressing-spotifys-claims/ <comment><USER3> > 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.

<comment><USER4> > 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.

<comment><USER5> Exactly what my local store does. They pay the wholesaler 10 and sell to me for 15.

<comment><USER6> No, not exactly. You're free to buy from other stores, and suppliers can sell to them. A very important distinction.

<comment><USER7> 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.

<comment><USER8> 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.

<comment><USER9> 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.

</comment></comment></comment></comment></comment></comment></comment><comment><USER10> 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.

<comment><USER11> _" 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.

<comment><USER10> 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.

<comment><USER12> 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)

<comment><USER13> 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.

<comment><USER14> 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.

<comment><USER13> 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.

</comment></comment></comment></comment></comment></comment></comment><comment><USER15> > 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).

<comment><USER16> > 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.

<comment><USER17> _> 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.

<comment><USER18> 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.

<comment><USER19> >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.

</comment></comment></comment></comment></comment><comment><USER20> 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.

<comment><USER21> 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.

<comment><USER22> _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.

<comment><USER23> 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

<comment><USER24> 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.

<comment><USER25> Visual Studio Community is free. It doesn't have the fancy cloud/devops enterprise-y stuff, but it's not like Xcode does either.

<comment><USER24> Ah! I didn't know Visual Studio Community was even a thing. Figures though, since I've never used either.

</comment></comment></comment></comment></comment></comment></comment><comment><USER26> 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.

<comment><USER27> 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.

<comment><USER26> 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.

<comment><USER28> 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.

<comment><USER29> 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.

<comment><USER30> > 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 - <USER2> 100?) to distribute your paid app for free.

</comment></comment></comment></comment></comment></comment><comment><USER31> > 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.

<comment><USER32> Wow! Thats a new one. Pay the open source world who Apple have been heavy contributors to themselves. Apple are such hypocrites indeed.

<comment><USER31> 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.

<comment><USER33> 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?

<comment><USER31> > 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.

<comment><USER33> 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?

</comment></comment></comment></comment></comment></comment><comment><USER34> 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.

<comment><USER35> 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?

</comment></comment><comment><USER17> 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.

<comment><USER36> > 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.

<comment><USER17> _> 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.

</comment></comment></comment><comment><USER37> 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.

<comment><USER38> That and the fact that they pay a shitload of money to Apple and Apple fucking won't allow Siri to work.

<comment><USER39> 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.

<comment><USER40> 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

</comment></comment></comment></comment><comment><USER41> 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)

<comment><USER42> 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.

<comment><USER43> It is quite different in terms of market share (which matters for anti trust issues).

<comment><USER44> Sony owns approximately 50% of the console market.

How much of the smartphone market does Apple control?

<comment><USER43> If you're a journalist, NGO worker, or government official, there is no alternative to apple.

<comment><USER45> What? Why?

<comment><USER43> Security/exploit resistence.

</comment></comment></comment></comment></comment></comment></comment><comment><USER46> 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.

<comment><USER47> > 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.

<comment><USER48> 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.

</comment></comment></comment><comment><USER49> 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.

<comment><USER50> Because apple needs wechat and not the other way around. WeChat being an essential feature for any Chinese customer.

<comment><USER49> so the AppStore policy is selective?

<comment><USER51> 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.

<comment><USER52> 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.

</comment></comment></comment></comment></comment><comment><USER53> 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.

</comment><comment><USER27> _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%

<comment><USER28> 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 $$, and Apple doesn't get that extra $$.

<comment><USER54> > 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/)

<comment><USER28> 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.

</comment></comment></comment></comment><comment><USER55> 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.

<comment><USER56> 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.

<comment><USER57> 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?

<comment><USER56> 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.

</comment></comment></comment></comment><comment><USER58> > 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.

<comment><USER45> Also they contribute $100/year.

</comment></comment><comment><USER59> 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.

<comment><USER30> > 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.

<comment><USER59> 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).

</comment></comment></comment><comment><USER60> 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.

</comment><comment><USER61> > 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/)

</comment><comment><USER62> 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.

</comment><comment><USER63> 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.

<comment><USER64> The writing in this was very unexpected. Reads more like some devs rant post and not an official statement.

</comment></comment><comment><USER65> 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.

</comment><comment><USER66> 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?

<comment><USER67> That's politics for you. Only address the issues that are favorable for you, ignore the rest.

</comment></comment><comment><USER60> 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.

<comment><USER68> 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)

</comment></comment><comment><USER69> 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.

</comment><comment><USER70> > 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?

</comment><comment><USER71> 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.

<comment><USER58> > 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.

</comment></comment><comment><USER72> 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.

</comment><comment><USER73> 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.

</comment><comment><USER74> 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)

</comment><comment><USER75> 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.

<comment><USER76> 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

</comment></comment><comment><USER77> 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.

<comment><USER78> 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.

<comment><USER77> 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%.

</comment></comment></comment><comment><USER52> > 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.

</comment><comment><USER79> 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.

</comment><comment><USER80> > 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/)

</comment><comment><USER81> 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.

</comment><comment><USER82> > 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.

<comment><USER83> 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.

<comment><USER84> 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.

<comment><USER83> 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)

</comment></comment></comment></comment><comment><USER85> 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.

<comment><USER86> Exactly - they never address this issue head on

</comment></comment><comment><USER87> 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/)

<comment><USER88> >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.

</comment></comment><comment><USER89> 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.

</comment><comment><USER90> > 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.

</comment><comment><USER91> 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.

</comment><comment><USER92> 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.

</comment><comment><USER93> 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.

<comment><USER94> > 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.

<comment><USER93> Well, only if google made the shampoo bottles and PNG provided the shampoo inside

<comment><USER95> No, only if Google offered the shelf for the shampoo bottle to stand on.

<comment><USER96> Precisely! AppStore is the shelf for Spotify...

<comment><USER97> Should we also be angry at Ebay, Etsy, Amazon for taking a cut of the sales too?

</comment></comment></comment></comment></comment></comment><comment><USER98> 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?

</comment><comment><USER99> 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.

</comment><comment><USER100> 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."

</comment><comment><USER101> > 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.

</comment><comment><USER102> 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.

</comment><comment><USER103> 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.

</comment><comment><USER104> > "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!

</comment><comment><USER105> 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.

<comment><USER106> > 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.

</comment></comment><comment><USER107> 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.

</comment><comment><USER108> 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.

</comment><comment><USER109> 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...

<comment><USER18> 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.

<comment><USER109> 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.

</comment></comment></comment><comment><USER110> 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

</comment><comment><USER111> 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%

</comment><comment><USER112> 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 !?

</comment><comment><USER113> This looks so unlike Apple. Almost childish.

</comment><comment><USER114> How the heck did this get thru a PR vetting?

</comment><comment><USER115> 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

</comment><comment><USER116> > 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.

</comment><comment><USER117> 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"

</comment><comment><USER118> 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.

</comment><comment><USER119> 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

</comment><comment><USER120> 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.

</comment><comment><USER121> Ben Thompson to the white courtesy phone. Ben Thompson. Thank you.

</comment><comment><USER122> 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.

</comment><comment><USER123> 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?

</comment><comment><USER124> But… they failed to adress the reason to why it took 3 years for Spotify to successfully get their Apple Watch app approved?

</comment><comment><USER125> Would be super fun if Apple removed Spotify from the App Store. The ensuing drama would be really entertaining.

</comment><comment><USER126> 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._

</comment><comment><USER127> Does Microsoft get a cut from Spotify for hosting their app on Windows operating system?

Just asking ...

</comment><comment><USER128> Hey Apple, if not for Spotify we would still had to cope with iTunes..

</comment><comment><USER129> The fear of being forced by the EU to allow app sideloads.

</comment><comment><USER35> 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?

<comment><USER130> 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)</comment></comment>


Wildbit launches dploy.io: Ship code from GitHub, Bitbucket, anywhere - <AUTHOR> http://wildbit.com/blog/2013/09/17/dploy-io-our-third-product

<comment><AUTHOR> I'm a developer who has brought this to life. If anyone has any questions, I'll be glad to answer.

<comment><USER2> Hello kind sir, can you please explain to me quantitative computing?

<comment><AUTHOR> [http://www.amazon.com/Computer-Architecture-Quantitative- App...](http://www.amazon.com/Computer-Architecture-Quantitative-Approach- Edition/dp/1558605967)

You're welcome.

</comment></comment></comment><comment><USER3> Congrats guys! Looks like a really, really sweet product! We'll definitely check it out :)

</comment><comment><USER4> Excited!</comment>


WhatsApp is down? - <AUTHOR> <comment><USER2> Yes, in Colombia, Brasil and Mexico too.

</comment><comment><USER3> Yes down in Bay Area, California too.

</comment><comment><USER4> Yep, at least in The Netherlands.

</comment><comment><USER5> UK too.

</comment><comment><USER6> yes

</comment><comment><USER7> yes</comment>


Rate my startup landing page + idea: Kleekbots.com - <AUTHOR>

http://kleekbots.com
View and control your Lego Mindstorms NXT robot with your smartphone instantly. See live video stream. Share with one click. Works on desktop too. Get free robot build-instructions each month.
--
Techie Mindstorm robot owners have posted cool pages and videos that show them controlling their NXT robot with their iPhone or Android phone. These are one-off demo projects that require significant hardware and software programming and tweaking abilities. Other less techie NXT owners have asked how they could do the same because it's cool.
Kleekbots is a service that lets people control their robot with their smartphone instantly and requires no tweaking or programming. And more.
We are beginning to see a trend that converges physical toys with smartphones, devices and social networks. Kleekbots is our idea of a first step towards that direction.
We'd love to hear your thoughts. Thanks. <comment><USER2> I really like this idea (robotics is one of my passions and anything that makes it easier is awesome).

Didn't mindstorms just come out with an android app? Does that effect you guys at all?

You definitely have that social aspect going for you but you'll be competing against Let's Make Robots which seems to be emerging as a leader in the robotics based social network space. You guys look prettier than LMR which is a plus and you seem to targeting the less tech-savvy among us who may be intimidated by LMR.

What's your plan to make money? I can't seem to find that anywhere.

Good luck to you!

<comment><AUTHOR> Thanks! We do think some area of robotics can and should be made a lot easier.

Lego recently released an offical android app for Mindstorms. It's cool and we definitely see it as a sign of where things can be going. We are looking into how it can be taken to the next level. And LMR is excellent for tech-savvy folks.

We think the idea of Kleekbots is really exciting and that Mindstorms and other users will think so too. We have a few business models in mind (eg pay- as-you-go) so as to be able to continue providing the service. We can see it going so very far.

We are definitely seeking community feedback from early stages, to tell us what people think of Kleekbots, what people would like to see, and especially how much people are happy to pay to take their Mindstorms (and smartphones too!) to the next level and beyond.

Thank you for the best wishes!

</comment></comment><comment><USER3> That's a very cool idea. Especially nice is the sharing functionality which I imagine could be a way to show-off robots to other users. I hope Lego doesn't mind or if it matters that they do.

<comment><AUTHOR> Thanks. Yes, the sharing functionality lets robot owners send a link to any friend or group to view live video and/or control their robot and this works wherever they are. We think this opens up further possibilities to build on...

We love Lego and many people do too. Even so, Kleekbots is designed to be toy agnostic and we think can be made to work with just about any type of toy at our end.

</comment></comment><comment><USER4> Clicky - <http://kleekbots.com></comment>


Elsevier's recent update to its letter to the mathematical community - <AUTHOR> http://gowers.wordpress.com/2012/05/02/elseviers-recent-update-to-its-letter-to-the-mathematical-community/

<comment><USER2> I agree with the authors complaints (I'm not in the same field, but the general complaint holds across disciplines). However the solution really is trivial. The machine learning community solved this problem a decade ago when the editorial board (40 of them) resigned en-mass from the Machine Learning Journal: <http://jmlr.csail.mit.edu/statement.html> JMLR (<http://jmlr.org>) is now the premier venue for machine learning publications, and you can visit their home page to see the (non-)restrictions they place on access. They are also very cheap to subscribe to if you prefer dead trees. Any other discipline that really cared about open access could do the same in a heart-beat. The research produced by a discipline is largely consumed by that discipline. If they want to know who is keeping the academic publishing racket alive they just need to look at themselves.

<comment><USER3> The machine learning community (along with the combinatorics, category theory and many other communities) created an open access journal. While this is laudable it did not solve the non-trivial problem that commercial publishers have a lock on 60 years of scientific publications.

<comment><USER4> This really is a hard problem. I'm not _sure_ this is right, but I think there's probably a case to be made that congress should seize the IP under eminent domain, write the publishers a check and tell them to go home.

<comment><USER5> I really wish this would happen too... For "national security" reasons!

</comment></comment></comment></comment><comment><USER6> >Urs countered that "according to Florian Breuer's computations the University of Stellenbosch, South-Africa pays roughly the same than the University of Muenster, Germany.

wow. Given that Stellenbosch is substantially smaller and in a 3rd world country one would expect that they'd pay less.

<comment><USER7> The choice of Stellenbosch in South Africa as an example is perhaps not ideal. While SA may be a third world country in parts, it is very "first-world" in others and has a GDP greater than Denmark, Finland, Singapore and Ireland. Stellenbosch is also one of the countries premier Universities. I am not sure we'd be as surprised if Universities from those countries were chosen as an example.

I'm sure it's more of a case of Elsevier charging whatever it could to each university.

<comment><USER6> > has a GDP greater than Denmark, Finland, Singapore and Ireland.

That says absolutely nothing. You'd need to look at it on a GDP per person basis. There all those countries you listed are far ahead of South Africa, in some cases by a factor of 10x.

</comment></comment></comment><comment><USER8> That story about the MFN clause (if there is even a clause) is amusing.

The academic publishing industry seems a bit like the film and recording industries. They do not want to face the fact that distribution and production are becoming less expensive. And they are going to fight to the end.

But their high fee structures will eventually be unsustainable.

UCal tried to take at least one of these publishers on some years ago, forcing them to renegotiate licensing terms. What ever became of that?</comment>


Why I'm shouting your coffee at our next catch-up - <AUTHOR> https://finnshewell.com/news-notes/2019/why-im-offering-a-free-coffee-with-every-initial-catchup <comment><USER2> thanks for the plug @wyattb ;)</comment>