EU Fines Apple $2 Billion for Anti-Competitive Behavior Toward Spotify

[djphat2000]

One is a platform that is fairly vital to function well in most advanced economies, the other plays video games...

Yet we are in this situation because of video games. 🙂🙃🙂🙃🙂🙃

The EU seems to believe that I should be able to enter into a separate contract with Epic if I so choose without Apple being able to mediate that decision.

You can. But, if EPIC wants to run a store or App on iPhone. THEY, EPIC have to agree to the T&S of the developer account with Apple. So by extension, you are dealing with Apple because 1) you purchased an Apple Device. and 2) you're dealing with EPIC whom is dealing with Apple so you can have the app/store.

 

[wbeasley]

As I posted previously in that other thread, there are a number of different issues and by confusing them Apple is able to act anticompetitively while convincing people that analogies like yours are appropriate.

The issues break down something like this (in my mind):

1. Should Apple have some form of license fee for iOS SDKs and technologies?

• I think the answer to this is yes, but Apple acts like the answer is both yes and no, because they have so many inconsistent rules on this, if Apple wants to be a fair and equal platform on which apps compete fairly they have to charge everyone the same license fee structure rather than carve out exceptions for particular app categories (Reader apps, apps for purchasing real world goods and services)

2. Does Apple deserve a share of all revenue that occurs on iOS?

• Apple, again, acts like the answer here is yes for some apps and no for others based on which apps they can bully.
• I think the answer for this one should be no.
• If the answer was yes, and we take it to its actual logical conclusion, then all revenue from purchases made in safari should also count.

3. How should Apple be generate the revenue to cover the costs of running the App Store?

• If Apple has a large enough universal fee for accessing the iOS SDK then they can roll the cost of running the store into that.
• However if they want to make the fee smaller (or zero) they could have some sort of annual hosting and review cost based on the number of installs - Similar to CTF but more targeted towards recouping the costs of running the store - it would also have to be more universal than the current fee structure is as well.

Many people in this and other threads, as well as Apple, want to merge issues 1 and 2 together which I disagree with as it only makes things confusing and makes it hard to understand how Apple is behaving anti-competitively.

In your analogy, the membership would be issue 1 above but also reaching outside of the store into the home after the purchase has been made to demand further fees if you happen to use the thing you brought home from the store to make further purchases is issue 2. Again, what Apple is asking for is like buying a laptop at Costco and then Costco expects to be able to get a share of all purchases you make using the laptop.

Apple is acting like the Spotify being unable to add their own in app purchases system is like issue 1 when in fact it is issue 2.

Aside: This is not security, apps for purchasing real world goods already let you use alternative payment systems right in the app, Stripe has a whole SDK for it. If these apps are allowed then security argument is just empty words.





Apple charges a percentage fee (I think its 12/27% right now) if you want to include your own in app purchase system for digital goods (an arbitrary and capricious distinction vs physical goods). Up until recent court rulings apps couldn't even include a link to their website to sign up.

I don't want Apple to post a link to a website to sign up for Apple Music, what I want is for Spotify to be able to use their own IAP system without paying a fee to Apple for a share of a transaction they have nothing to do with (just like countless physical goods apps do).

I have addressed the issue of the percentage of the fee being a platform access fee above.

youve admitted Apple make nothing because Spotify dont use the buy button.
stop making out it is a big issue.
only 1% were paying by the button when Spotify pulled the pin on it.

THE BUTTON IS NOT THE ISSUE.

 

[bcortens]

youve admitted Apple make nothing because Spotify dont use the buy button.
stop making out it is a big issue.
only 1% were paying by the button when Spotify pulled the pin on it.

THE BUTTON IS NOT THE ISSUE.

As I’ve said, I take issue with Apples obviously misleading statements about the App Store being a fair and neutral store. I think preventing apps from offering in app subscription management is a worse user experience.

The fact that you don’t care doesn’t matter much. You haven’t actually tackled the logic of my opposition to the way Apple currently runs its store.

If this doesn’t impact you, why do you care?

What would be so bad about allowing third party apps from having their own in app payment system for digital goods? What is the logic behind continuing to prevent it? It doesn’t make Apple money, the companies that can get around it already do.

 

[wbeasley]

As I’ve said, I take issue with Apples obviously misleading statements about the App Store being a fair and neutral store. I think preventing apps from offering in app subscription management is a worse user experience.

The fact that you don’t care doesn’t matter much. You haven’t actually tackled the logic of my opposition to the way Apple currently runs its store.

If this doesn’t impact you, why do you care?

What would be so bad about allowing third party apps from having their own in app payment system for digital goods? What is the logic behind continuing to prevent it? It doesn’t make Apple money, the companies that can get around it already do.

Apple do not prevent in app purchase.
Spotify and others don’t want to pay Apple for the use of it. Totally different to what you claim.

Have you thought that Apple
Make the whole thing easy? You can set up your payment details and handle payments and refunds for you.

If the majority (99%) of people can pay outside and allow Spotify to avoid fees then that works well. Now 100% are paying outside. It’s not hard.

Spotify claim it is hurting them. It obviously isn’t.

You knew what Apple were doing when you bought into the walled garden. We all did.

I did a contract job. I got the job from a referral by an employee there about the company. He got a kick back when I started. That’s not uncommon in a lot of industries. He provided a service where everyone won.

No company has to use this “kickback”. It’s optional. Most small developers on here are supportive that the tools and support and infrastructure Apple provide them are worthwhile for the 15-30% they pay. A fee a lot lower than physical stores do.

I don’t see why you are so invested in forcing Apple to open up. What’s your motivation?

 

[Samplasion]

You knew what Apple were doing when you bought into the walled garden.

This argument is so old. You don't have to like 100% of something in order to buy it, especially in a duopoly market like the phone market where many are compelled to buy the "less bad" thing.

We all did.

You did. Most people don't even know what a walled garden is.

 

[wbeasley]

This argument is so old. You don't have to like 100% of something in order to buy it, especially in a duopoly market like the phone market where many are compelled to buy the "less bad" thing.

You did. Most people don't even know what a walled garden is.

An old argument doesn’t make it less right

They don’t know the term walled garden but they know the concept of only buying apps in the Apple App Store.

Most people find the million plus apps do what they want at a price they like.

A few loud posters here are demanding things the average person doesn’t want. You want game emulators etc. apps the App Store don’t allow for stated reasons.

I have never had a casual iPhone user discuss the lack of apps they want. Go demand game consoles open up and see how far you get. You won’t. They are proprietary and do what they do and no one, not even the EU, are pushing this one.

 

[Samplasion]

An old argument doesn’t make it less right

I gave you the reasons why it isn't in the rest of the post

They don’t know the term walled garden but they know the concept of only buying apps in the Apple App Store.

Most people find the million plus apps do what they want at a price they like.

Most people also find the millions of apps they want at a price they like on the Play Store. Besides, the average person doesn't know or care about how the system works w.r.t. app installation.

A few loud posters here are demanding things the average person doesn’t want.

The average person wants a phone that works. Everything else is something a lesser number of people want.

You want game emulators etc. apps the App Store don’t allow for stated reasons.

I want to install my app on my phone and not have to resign it every 7 days. But I recognize that that would be very disadvantageous for Apple 😂

Go demand game consoles open up and see how far you get. You won’t.

Because (as you've already been told time and time again) consoles aren't general purpose devices. You won't find productivity apps, music production apps, coding apps, etc. on consoles, while there are countless of them on my iPhone's app store.

They are proprietary and do what they do and no one, not even the EU, are pushing this one.

Because it's a false equivalency. Game makers have the choice of publishing their apps among 6 (or 7, depending how you count) platforms, and 3 (or 4) of them even have multiple stores they can publish to, if they aren't self-distributing their games. It's totally different.

 

[wbeasley]

I gave you the reasons why it isn't in the rest of the post

Most people also find the millions of apps they want at a price they like on the Play Store. Besides, the average person doesn't know or care about how the system works w.r.t. app installation.

The average person wants a phone that works. Everything else is something a lesser number of people want.

I want to install my app on my phone and not have to resign it every 7 days. But I recognize that that would be very disadvantageous for Apple 😂

Because (as you've already been told time and time again) consoles aren't general purpose devices. You won't find productivity apps, music production apps, coding apps, etc. on consoles, while there are countless of them on my iPhone's app store.

Because it's a false equivalency. Game makers have the choice of publishing their apps among 6 (or 7, depending how you count) platforms, and 3 (or 4) of them even have multiple stores they can publish to, if they aren't self-distributing their games. It's totally different.

this is going nowhere. we disagree that's all.

what you are demanding though isnt what anyone but a few tech people want. Regular people do want a phone that just works.

the fact you can get the same app on Android is great.
no one is making it exclusive for one or the other. that's freedom of choice. I use VLC on both iPhones and android devices. I use Spotify on both. And Netflix and others. Works for me and no drama paying outside the app.

so you think it's too much for Apple to make you sign your app every 7 days? if it was two weeks or a month people would still complain. no one value will make everyone happy. you might remember though that Apple gave you the tools to create that app for free and to test/evaluate on the phone. if it's that useful and you rely on it, sub it to the store for a token amount each year. if it isnt worth paying then its just a tinker app. which is fine. learning is good.

Consoles have powerful chips, similar sized screens and have had media players and ebook reader apps that later OSes dont have. why should nt we complain that they are up to the task and have these apps? It's not like loading pirated games and doing them out of money. no matter where you buy a console game, you are paying the hardware manufacturer some commission. dont pretend this isnt happening.

 

[Samplasion]

what you are demanding though isnt what anyone but a few tech people want.

The issue is that you see this as "demanding", but it's actually the EU putting some rules for participating in its market. Apple is free to not follow them if they want, they just lose access to the European market.

so you think it's too much for Apple to make you sign your app every 7 days?

Yes.

you might remember though that Apple gave you the tools to create that app for free and to test/evaluate on the phone. if it's that useful and you rely on it, sub it to the store for a token amount each year.

See, that's where the gatekeeping policies come in. Apple artificially tied app installation and testing to their own store, such that if you want to test an app, it is assumed you want to publish it on their store.

Consoles have powerful chips, similar sized screens and have had media players and ebook reader apps that later OSes dont have. why should nt we complain that they are up to the task and have these apps? It's not like loading pirated games and doing them out of money. no matter where you buy a console game, you are paying the hardware manufacturer some commission. dont pretend this isnt happening.

Love that you just glossed over the competition argument and bounced straight back to the "consoles are general purpose too!" argument.

 

[bcortens]

Apple do not prevent in app purchase.

Spotify and others don’t want to pay Apple for the use of it. Totally different to what you claim.

Apple prevents Spotify from offering their own in app purchase system, something that is allowed for Walmart, McDonalds, etc... it is demonstrably not a security issue. It is Apple deciding (long ago and never updating it) that digital goods are somehow special.
So long as countless other apps are allowed to offer IAP that doesn't involve Apple, then so should Spotify be permitted to offer in app purchase in their app without paying Apple.

Have you thought that Apple
Make the whole thing easy? You can set up your payment details and handle payments and refunds for you.

If the majority (99%) of people can pay outside and allow Spotify to avoid fees then that works well. Now 100% are paying outside. It’s not hard.

Spotify claim it is hurting them. It obviously isn’t.

You knew what Apple were doing when you bought into the walled garden. We all did.

This demonstrably has nothing to do with this. Sure they make it easy, but they could easily add rules (similar to the rule that requires apps to allow users to delete their accounts) that require apps handling their own subscriptions to offer in app refunds and payment cancellation.

It is perfectly reasonable for Spotify to want to use it's own payment system, if Spotify uses its own payment system in app then it integrates with the rest of Spotify better because the same subscription and payment information can be used if I later want to change something on the Mac or PC.

I did a contract job. I got the job from a referral by an employee there about the company. He got a kick back when I started. That’s not uncommon in a lot of industries. He provided a service where everyone won.

No company has to use this “kickback”. It’s optional. Most small developers on here are supportive that the tools and support and infrastructure Apple provide them are worthwhile for the 15-30% they pay. A fee a lot lower than physical stores do.

I don’t see why you are so invested in forcing Apple to open up. What’s your motivation?

Again, you and others continue to merge the cost of the SDK with being entitled to a share of every transaction. Apple clearly doesn't believe what you have written because if they did that kickback would be mandatory for all in app payments (including Uber, Walmart etc...) and apps that make very heavy use of the tools and infrastructure (Netflix, Adobe, Spotify) would be required to pay it.


My argument has nothing to do with "opening" the platform to third party stores, my argument has everything to do with Apple mixing the fee for platform access and thinking they are entitled to a share of all transactions on the platform together and by so doing creating a platform that doesn't act in a fair and neutral manner.

 

[Plutonius]

Go demand game consoles open up and see how far you get.

That's a good point. The EU should push for this.

 

[wbeasley]

That's a good point. The EU should push for this.

Bet they don’t…

 

[wbeasley]

Apple prevents Spotify from offering their own in app purchase system, something that is allowed for Walmart, McDonalds, etc... it is demonstrably not a security issue. It is Apple deciding (long ago and never updating it) that digital goods are somehow special.
So long as countless other apps are allowed to offer IAP that doesn't involve Apple, then so should Spotify be permitted to offer in app purchase in their app without paying Apple.



This demonstrably has nothing to do with this. Sure they make it easy, but they could easily add rules (similar to the rule that requires apps to allow users to delete their accounts) that require apps handling their own subscriptions to offer in app refunds and payment cancellation.

It is perfectly reasonable for Spotify to want to use it's own payment system, if Spotify uses its own payment system in app then it integrates with the rest of Spotify better because the same subscription and payment information can be used if I later want to change something on the Mac or PC.



Again, you and others continue to merge the cost of the SDK with being entitled to a share of every transaction. Apple clearly doesn't believe what you have written because if they did that kickback would be mandatory for all in app payments (including Uber, Walmart etc...) and apps that make very heavy use of the tools and infrastructure (Netflix, Adobe, Spotify) would be required to pay it.


My argument has nothing to do with "opening" the platform to third party stores, my argument has everything to do with Apple mixing the fee for platform access and thinking they are entitled to a share of all transactions on the platform together and by so doing creating a platform that doesn't act in a fair and neutral manner.

Apple are offering payments for a different type of service to what Spotify are asking.

 

[rellimie]

Just because alternatives exist doesn't mean a company can't be considered a monopoly e.g., Microsoft was declared a monopoly in the 1990s despite there being alternatives like Mac OS, OS/2, Linux, BeOS, etc.

Even if Apple isn’t a "monopoly", they do have a dominant position in mobile OS as part of a duopoly with Google/Android and deserve antitrust scrutiny regarding their anticompetitive behavior. A company doesn't necessarily need to be a "monopoly" (how that is defined can vary) to face antitrust fines, litigation, etc.

That is a bad example. Microsoft was found to be a monopoly because they had their OS on almost every PC you could buy AND their browser was default and couldn't be removed. I believe it was over 90% of store purchased computers.. A very small percentage of available PC's had alternate operating systems out of the box.

iOS isn't on almost every phone you could buy, just on Apple's.

If Microsoft just had Windows and IE on Microsoft hardware they never would have been found to be a monopoly.

As far as dominant position goes, that goes to Android and it's not even close. I understand that Apple and Google are the "duopoly" that you speak of but Android is so far ahead in market dominance that Apple should be able to run their platform how they choose.

 

[webkit]

That is a bad example. Microsoft was found to be a monopoly because they had their OS on almost every PC you could buy AND their browser was default and couldn't be removed. I believe it was over 90% of store purchased computers.. A very small percentage of available PC's had alternate operating systems out of the box.

It was a fine example as my point was that just because alternatives exist doesn't mean a company can't be found to be a monopoly. In 1999, Microsoft was found to have a monopoly in computer operating systems despite the fact that their were other computer operating systems in existence. The point here was that a company doesn't need to have 100% of a particular market to be classified as a monopoly. I will also add that being a monopoly is not necessarily illegal. Legal issues come into play more due to the combined dominance/anticompetitive behavior factors.

iOS isn't on almost every phone you could buy, just on Apple's.

If Microsoft just had Windows and IE on Microsoft hardware they never would have been found to be a monopoly.

As far as dominant position goes, that goes to Android and it's not even close. I understand that Apple and Google are the "duopoly" that you speak of but Android is so far ahead in market dominance that Apple should be able to run their platform how they choose.

View attachment 2359017

The point here is that Android and iOS are the only two major mobile operating systems in the market. In this case, I was not stating that either had a monopoly but a company doesn't necessarily (laws can vary by country/region) have to be a monopoly to be subject to antitrust laws.

 

[wbeasley]

That's a good point. The EU should push for this.

they wont though.

Apple are a much bigger fish and trophy for the EU to win.

The sheer arrogance of the EU to calculate a fine based on World Wide sales says it all.
EU contribute 25% of Apple revenue and iOS (not iPadOS) contribute even less.

They should be able to assess the profit iOS contribute and use that as a basis.
I see no reason they get to fine (and keep the money) using sales in another country they dont economically control policy. Over reach, at best.

 

[rellimie]

It was a fine example as my point was that just because alternatives exist doesn't mean a company can't be found to be a monopoly. In 1999, Microsoft was found to have a monopoly in computer operating systems despite the fact that their were other computer operating systems in existence. The point here was that a company doesn't need to have 100% of a particular market to be classified as a monopoly. I will also add that being a monopoly is not necessarily illegal. Legal issues come into play more due to the combined dominance/anticompetitive behavior factors.





The point here is that Android and iOS are the only two major mobile operating systems in the market. In this case, I was not stating that either had a monopoly but a company doesn't necessarily (laws can vary by country/region) have to be a monopoly to be subject to antitrust laws.

Android currently has over 70% of the market share....shouldn't Google have been the first target? I'm not sure why a company that has 25% of the market share is the monopoly in this situation.

 

[webkit]

Android currently has over 70% of the market share....shouldn't Google have been the first target? I'm not sure why a company that has 25% of the market share is the monopoly in this situation.

Google was also designated a "gatekeeper" and is a simultaneous target. According to Statcounter, Android's share of mobile OS in Europe is around 67% versus around 33% for iOS. Google and Apple are the only two major players in that market.

 

[deevey]

Oops Wrong forum

 

[The Phazer]

they wont though.

Apple are a much bigger fish and trophy for the EU to win.

The sheer arrogance of the EU to calculate a fine based on World Wide sales says it all.
EU contribute 25% of Apple revenue and iOS (not iPadOS) contribute even less.

They should be able to assess the profit iOS contribute and use that as a basis.
I see no reason they get to fine (and keep the money) using sales in another country they dont economically control policy. Over reach, at best.

You are aware that every major country in the world levies fines based on worldwide sales yes?

 

[wbeasley]

You are aware that every major country in the world levies fines based on worldwide sales yes?

why? what gives them a right to create a fine for sales OUTSIDE their legal jurisdiction?

if they had calculated it based on EU sale, I would still think what they did was wrong but the fine was at least based on their circle of influence and respected that decision. going after sales value where what they do is (still) legal is an overreach by the EU. simple.

 

[The Phazer]

why? what gives them a right to create a fine for sales OUTSIDE their legal jurisdiction?

Because otherwise companies could dodge their liability by setting up an IP holding company in a different country to make it look like they have no revenue in territory (as, for instance, Starbucks do to avoid paying tax in multiple countries).

 

[wbeasley]

Because otherwise companies could dodge their liability by setting up an IP holding company in a different country to make it look like they have no revenue in territory (as, for instance, Starbucks do to avoid paying tax in multiple countries).

maybe but it is well documented that 25% of income is generated in EU... and they could calculate the percent of that for iPhone sales or force Apple to disclose the info.

basically it was an over reach and cash grab. unjustified.

 

[wbeasley]

You are aware that every major country in the world levies fines based on worldwide sales yes?

examples?

 

[The Phazer]

maybe but it is well documented that 25% of income is generated in EU... and they could calculate the percent of that for iPhone sales or force Apple to disclose the info.

basically it was an over reach and cash grab. unjustified.

Apple could trivially move that income in legal terms if it had to to avoid a fine.

Wait until you find out the US taxes individuals and businesses for money that they don't earn in the US just by virtue of their citizenship and stock market listings.