Friday, March 15, 2019 [Tweets] [Favorites]

Apple (Phil Schiller, MacRumors, Hacker News, Reddit):

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

I don’t think anyone actually believes this. If a small developer did what Uber or Facebook did, they would have gotten more than a slap on the wrist. Meanwhile, certain apps that compete with Apple seem to get extra scrutiny. It’s also important to remember that the App Store guidelines are not laws passed by a democratic process with any pretext of fairness. Rather, Apple unilaterally makes the rules to advance its interests, and it changes them as necessary to thwart competitors.

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

Yet Apple specifically disallows sideloading apps and competing stores, which would drive the App Store to be better. And the digital content businesses like books and music—where Apple competes—are the ones where Apple sets the fees to disadvantage competitors. The built-in advantages of bundling and integration are not enough for Apple to compete; it forces companies like Amazon to make apps like Kindle harder to use. The businesses not competing with Apple—like Uber—are the ones that don’t have to “contribute” to the App Store.

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.

Today’s Apple believes that customers have no inherent right to install software on their devices, and further that any revenue related to using such devices owes a rent to the platform vendor. This is like Dixon Ticonderoga making rules for what you can write with your pencil and then demanding a cut if you sell any of your work.

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

I’m not sure whether this is true, but, again, the rules were specifically written to disadvantage competitors like Spotify.

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

And they’ve written the rules to make it really difficult to use other purchase systems because they know that IAP couldn’t compete on a level playing field. Customers have to suffer through a worse user experience because Apple refuses to charge a reasonable fee.

Damien Petrilli:

It takes some “courage” to use the 84% of free App as an argument, knowing most of those are the garbage and scam Apps which plague the App Store today. Most companies NOT paying Apple are basically unethical businesses who farm data and violate privacy to earn money. Meanwhile those trying to make a decent living with good Apps are hit by the 30% Apple tax.

Charles Perry:

From Apple’s response to Spotify: “We keep all our developers on a leash. It wouldn’t be fair to other developers to unleash just you. And really, shouldn’t you just appreciate what you’ve been given like all the other good dogs?” (I may have paraphrased.)

Dan Masters:

Disappointing to see Apple take the low road with irrelevant rhetoric. They’re using artists as their political football, with the sole purpose of swaying popular opinion & setting a narrative. This is the same company that wasn’t going to pay artists for streams during trials.

Apple justifies their ‘fair’ tax on devs, yet has happily paid much less than their fair share of taxes where they operate, while benefiting from each nation’s respective resources & markets. I guess Apple is more equally ‘entitled to their business model’ than others.

David Barsky:

“Contributions to that marketplace” is a funny way of saying “we’re mad that you’re not rolling over and letting us double-dip into revenue we have no business touching.”

Manton Reece:

Apple likes to brag about how much money they’ve paid to developers, but they leave out how much they’ve kept for themselves: about $50 billion. To Apple, they are doing us a big favor by letting us ship iOS apps. […] And yet in the previous quote, Apple says that 84% of apps pay nothing and they are fine with that. Uber pays nothing to Apple. Games with ads pay nothing to Apple. Why is it wrong for Spotify to also want to limit how much they pay to Apple? The line Apple has drawn around in-app purchase is arbitrary. They could just have easily restricted Uber accepting payments, or banned third-party ads.

Nilay Patel:

Apple put out a response to Spotify’s antitrust campaign today, and it is just extremely weird. Especially this part, where they repeat this inaccurate “suing songwriters” talking point that honestly makes no sense.

Owen Williams:

Apple repeatedly says that what Spotify is doing is “wrong” but then just goes ahead and makes provably untrue statements up - in order to make its approach look better, even though Apple has historically done the EXACT SAME THING TO CREATORS.

Dan Masters:

From just a few weeks ago!: “Apple changes its iPhone photo contest page to say it will pay winners, after originally stating ‘prize has no cash value’”

Owen Williams:

I find myself reading the long letter, which tries to rebuke each of Spotify’s points, thinking that the PR doublespeak is incredibly eloquent. Apple avoids touching on any of the issues in the ecosystem, while sometimes unintentionally reinforcing Spotify’s point: it controls a broad swathe of the ecosystem’s destiny, with little oversight. […] iTunes decimated the competition in the music purchasing business and ended up with a monopoly that was hard to compete with because artists had little other choice in where to sell their music. Then, it started exerting power over artists: threatening to remove them for not signing new contracts, and eventually wound up in court over price fixing after artists and competitors complained. Artists didn’t really like the service either, because it paid so little and restricted most of its music in the earliest days to Apple devices like the iPod. […] Spotify isn’t demanding anything different: they’re demanding the same business model as Apple Music, and the same rules applied to them as everyone else on the platform… including Apple. Attacking Spotify for making “ever-smaller” contributions here is contrite, because their margins are squeezed by Apple’s price pressure.

Previously:

Apple has painted itself into a corner with its newer “services” strategy, because the Spotify case now becomes an existential threat to Apple’s business model. Whereas it wouldn’t have been a big deal under Apple traditional strategy of selling insanely great products.

Ben Thompson:

I believe Apple’s App Store policies are per se illegal tying — specifically, iOS to App Store in-app purchase. Spotify, though, has a stronger case than anyone, because it is not only subject to Apple’s App Store policies but also competing directly with Apple Music. It will be very difficult for Apple to argue that it is not attempting to extend its position in smartphones into a dominant position in digital goods when that extension is rather concretely framed as a direct benefit to Apple’s own offering.

Via Rene Ritchie:

The “if you don’t like App Store terms, you can just sell through the web or Google Play Store”, which a lot of people are going to respond with, is the Walmart to Target argument, which is poorly fitting at best. […] Spotify has a real chance on the facts, at least on the core counts. The EU views anti-trust as a way to ensure competition, up to and including ridiculous things like forcing Microsoft to include browser ballots. But instead of being candid about that, and the general policies Spotify sees as unfair, and about the harm it believes those policies do to its business, they kinda play the victim card in a way that seeks to conflate or distort their harm onto us, which just comes off as, I don’t know, smarmy. […] And here’s where it gets a tad ironic: The same is true for Apple. Forget Apple Music. The App Store is really just a nicely packaged re-sale of other people’s apps.

Jesse Squires:

Apple’s response to Spotify claims “everyone is playing by the same set of rules.” This is a lie. Completely untrue. I worked on iOS at Instagram for 2 years. We (and FB) absolutely got special treatment in a number of ways. Especially for app reviews.

Oscar Apeland:

There is a clear difference in how I’m treated by app review with my new startup compared to when I developed a 150k+ MAU app

David Pierini:

Cash-rich Apple is reportedly not paying the artists who share their talents for the in-store ‘Today at Apple” sessions. Rather than money, the session leaders could select from three of the cheaper Apple products.

Steve Troughton-Smith:

Real talk: Apple (+ all the other App Stores) should have independent, 3rd-party oversight; I’m sure Spotify would have no trouble finding devs who have battled unjust/capricious rejections & suffered a chilling effect on innovation. Phil Schiller should not be final arbitrator As much as the media coverage will be they said/they said schoolyard nonsense, there is a real issue here, and it’s bigger than Apple’s “30%” The real “30% tax” is the apps and categories of apps we don’t and will never have, because they were nope’d from on high as they didn’t fit into the App Store box or raised uncomfortable questions re Apple’s business models. There is still no Steam Link app on the App Store

James Owen:

Apple claims that Spotify would not be the business they are, without the app store. What would Apple be without the iPhone? How could there be an iPhone without Qualcomm IP? Apple charges 30% QTL charges $7.50 on a iphone, and Apple says $QCOM is an extortionate thief.

Federico Viticci:

This part from Apple’s response to Spotify is somewhat misleading. There is no Siri domain for music playback that Spotify (or others) can use. There are Siri shortcuts, which Spotify could add, but the experience is FAR from the native integration Apple Music has.

John Gruber (tweet):

What Apple should do is allow apps that opt out of IAP to explain that users need to subscribe or make purchases using a web browser, and allow them to link to their website from within the app (even if they’d be required to open that link in Safari, as opposed to an in-app web view).

Why in Safari? Why even in a Web view rather than in the app?

There are also “Technology” taxes too - for example, you cannot embed certain plug-in platforms within your app despite open architecture standards and public APIs - so the alternative is that you vend from your own site but lose the DRM battle

Nick Heer:

By the way, Apple’s response to Spotify’s accusations has the conviction of damp newspaper. Their press release drags in some nonsense about Spotify’s disagreement with new royalty rates determined by the Copyright Royalty Board, and claims that there’s a level playing field for developers when everyone knows that the biggest developers often get special treatment. They didn’t even bother to sign the damn thing. One of the reasons this dispute has been rattling around in my head and why I’ve been having a hard time figuring it out is because both companies are acting like jackasses. Apple should have no problem allowing developers to direct users to purchase subscriptions outside of their app. Perhaps there should be restrictions on the subscription page — for example, mandating a minimum level of security, or maybe requiring that the checkout form supports Apple Pay. The rest of Spotify’s complaints are distracting, with some bordering on asinine.

Michael Rockwell:

Here’s the thing about allowing developers to opt out: it’s a slippery slope. If Apple allowed developers to push users to a website for purchasing digital goods, they would. There are plenty of payment systems out there and building a website that integrates with them is easier than ever. But I don’t want to give my credit card credentials to every single developer that builds an app I’m interested in. Doing so will only increase the chances of my debit or credit card becoming compromised and then I have to go through the hassle of getting it replaced, which is a major pain. To be fair, if developers used Apple Pay on their websites, these security concerns would be mitigated. But it’s not just the security aspect that has me on board with in-app purchases, simplicity is another major factor. The ability to quickly purchase a subscription through the app using my fingerprint, restore a subscriptions on another device, and manage all of my subscriptions in one a single location are niceties that would go out the window if Apple allowed developers to opt out.

That’s the problem with the 30%. It’s so high that, if there’s any way at all to opt out, it encourages developers to make things worse for their customers. IAP provides real value to both customers and developers, just not that much. At a sufficiently better price, apps would choose to use it—problem solved.

Secondly, if outside payments were specifically allowed, I think it’s likely that we’d see a rise of intermediate payment processors to facilitate transactions. You’d be able to pick a trusted company to remember your credit card information (and hide it from the developer) and to consolidate your subscriptions. There would be an SDK to make it easy to pay with Face ID. The company would charge a fee for this service, but it would be a fraction of what Apple charges. Big companies like Amazon, Netflix, and Spotify would use their own systems, but there’s not very many companies at that level, and you already trust them.

See also: Accidental Tech Podcast, Hacker News, Reddit (2), The Talk Show.

Apple has now responded to Spotify’s claims in a new filing with the European Commission. […] In actuality, Apple now says that Spotify isn’t paying the 30 percent fee on any of its subscribers. Essentially, Spotify only offered the ability to sign up for a subscription through its iOS app from 2014 until 2016. For subscriptions, Apple charges a 30 fee for the first year, then a 15 percent fee each year after that. All of the subscribers that Spotify acquired though its iOS app are long since out of that 1-year window. Apple also underscores in its response that Spotify only pays Apple a fee on just over 0.5 percent of its total subscribers.

Nick Heer:

In isolation, this almost feels like an acknowledgement of Spotify’s complaint. Spotify has lots of subscribers, but they have been forced to acquire the vast majority of them from outside of their iOS app because of Apple’s commission.

Stay up-to-date by subscribing to the Comments RSS Feed for this post.