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I believe that in this specific case Spotify makes a very compelling argument. App publishers that do not directly compete with Apple have a level playing fiel

I believe that in this specific case Spotify makes a very compelling argument. App publishers that do not directly compete with Apple have a level playing field although the Apple tax certainly hurts. But Spotify directly competes with Apple, and while Apple does not have to pay this tax as they can (probably) use their own billing services cheaper, Spotify couldn't do the same even if they implemented their own billing service or used a cheaper alternative. It'll be interesting to see what comes out of this. I for one hope that we someday all get to choose which billing provider we want to use in our apps.

basch 10y ago
30% isnt a payment processing fee, its a commission + infrastructure tax. You make money off your app? Because apple made it discoverable in the app store! You make money off your app, pay a share back for os/api r&d!
- DominikR 10y ago
  Where can I find more information about this infrastructure tax? Because I highly doubt that Apple actually needs 30% to pay for the app store infrastructure. And why are you mixing this with the OS API? I could just as well say that Apple needs some kind of OS anyways to be able to sell their expensive hardware. Also there are certain categories of apps that are allowed to use other billing providers. Why don't they have to pay for the OS API's and R&D?
  - zepto 10y ago
    The apps that use other billing providers are not selling digital goods.
    - DominikR 10y ago
      Of course you can, I have such an app in the store. A telephony app where you can access all features without the app. (You just dial one of our local numbers and that will be mapped to a foreign number) So this argument doesnt make sense.
      - zepto 10y ago
        False. You don't charge people through the app.
        DominikR 10y ago
        We do within a webview. Whats you problem that you believe you've got to explain to me how our app works? Seems like you don't have a clue what is actually possible. Go read the TOS for Apple's in app billing.
        zepto 10y ago
        Sure but you aren't charging for digital goods. You are charging for infrastructure access, which is explicitly allowed. Seems like you are trying to muddy the issue by pretending your case is representative of anything we are taking about here.
        DominikR 10y ago
        What we are doing is all digital. You buy credits on a website which you can use to call someone on a landline/mobile phone number. Our only infrastructure are VoIP servers. The infrastructure is not different than Spotify's. It's all just servers.
        zepto 10y ago
        Well that's clearly not correct. The service you provide to the customer is use of your VoIP infrastructure. That's what they pay for. In the case of Spotify, the service is not access to infrastructure. It is access to digital goods in the form of licensed music files.
    - deleted 10y ago
      [deleted]
  - MBCook 10y ago
    I don't think anyone is arguing that the 30% is the actual cost to Apple, there's no question there's tons of profit baked in there. But Apple is providing services for that 30% such as download hosting, billing, collections, subscription management, etc.
- yawn 10y ago
  The problem that I have is that there's no way around this gatekeeper. With Android and Windows Phone I don't have to publish my app to their app stores if I don't want to--they allow me and my customers figure out how to handle this. With Apple, it's either follow their rules or nothing. I don't understand how they feel justified charging an ongoing 30% monthly subscription for hosting some assets.
  - MBCook 10y ago
    They're not charging at for hosting the assets, that's why there's no fee for free apps. They only get that fee because you're using their payment infrastructure. If someone signs up for a subscription outside the app (like I have for Netflix) then someone can use that subscription on an iOS device in the company doesn't have to pay apple a a dime.
    - canuckintime 10y ago
      > They're not charging at for hosting the assets, that's why there's no fee for free apps. They only get that fee because you're using their payment infrastructure. There's an Apple developer fee ($99 per year) and of course you have to purchase Apple's hardware.
- tw04 10y ago
  In perpetuity? That's pretty tough to justify when they aren't charging monthly fees to apps that have a one-time purchase price. Does it somehow cost them less money to host an app with a one-time fee? If the argument is around billing... spotify is more than willing to take that on themselves, in fact that's what they're TRYING to do, and Apple is rejecting their app because of it.
  - duskwuff 10y ago
    > In perpetuity? That's a valid argument, and it's the reason why Apple is going to be reducing their cut to 15% on recurring subscriptions.
  - MBCook 10y ago
    It does cost them less for a one time purchase because they don't have to manage the entire subscription infrastructure. Apple stance is pretty simple, whenever they collect money they collect 30% (ignoring the discount for subscriptions over when you're). Whether that's a one time charge, where they collect money for a subscription every month, they charged a fee.
- Oletros 10y ago
  > 30% isnt a payment processing fee, its a commission + infrastructure tax. What infrastructure tax? Spotify is not using Apple's infrastructure to serve the music > You make money off your app? Because apple made it discoverable in the app store! You make money off your app, pay a share back for os/api r&d! Then why then don't have a cut from eBay, Amazon store (not the digital products), air companies, etc?
  - k-mcgrady 10y ago
    >> "What infrastructure tax? Spotify is not using Apple's infrastructure to serve the music" They're using Apple's infrastructure to distribute their app to millions of people globally. They're also getting access to Apple's payment infrastructure and the huge database of payment information Apple holds. The reason Apple forced IAP in the first place was so that users on small phones didn't have to enter address and card information in dozens of apps. If they allow apps to use their own payment processing it'll worsen the user experience for Apple's customers.
    - Oletros 10y ago
      > They're using Apple's infrastructure to distribute their app to millions of people globally. This is paid with the $99/year developers pay > They're also getting access to Apple's payment infrastructure and the huge database of payment information Apple holds. No, they are FORCED to use Apple payment infrastructure. Spotify has their own and they are very glad to use it if they are allowed
      - st3v3r 10y ago
        They are not forced to use Apple's payment infrastructure, as evidence that they have the ability to sign up through the website.
        Oletros 10y ago
        They are forced to use it if they want to have subscriptions in the app.
eldavido 10y ago
Yeah, I agree, Spotify's case is pretty compelling. I'm not a lawyer, but my understanding of the Sherman Antitrust Act (I wrote a paper on this in engineering law undergrad about the Intel/AMD case) is that whenever a company uses its dominant position in one market to attempt to restrict competition in an adjacent market, that's called "tying" and it's illegal. And this seems like a pretty textbook case of it: Apple has a strong, powerful position in mobile devices, and they're making it harder for Spotify to compete with them for music streaming services. Apple's argument would probably be "we do this to everyone, our behavior isn't specifically to reduce competition, it's standard commercial practice for all apps". Ben Thompson of stretechery has been commenting on this recently, mentioning that US antitrust law is based more on how people compete (following rules) vs. EU antitrust, which is based more on consumer outcomes and harm. And the harm in this case seems pretty clear: Apple's behavior, though perhaps unintentionally, is making it very difficult for Spotify to compete with Apple Music -- EVEN THOUGH (in the US regulators' view) they aren't acting with any kind of malice, or illegal intent (their view). The hard legal question is how to ensure competitive markets when tech platform operators make products that inevitably lead to monopolies, like the App Store. That one really should be legislated because it's a big, complex question that will come up with escalating frequency as more businesses exhibit tech-like winner-take-all dynamics.
- st3v3r 10y ago
  "I'm not a lawyer, but my understanding of the Sherman Antitrust Act (I wrote a paper on this in engineering law undergrad about the Intel/AMD case) is that whenever a company uses its dominant position in one market to attempt to restrict competition in an adjacent market, that's called "tying" and it's illegal." But it doesn't have a dominant position. It definitely doesn't have one in mobile OS marketshare. It doesn't in app store usage. "And this seems like a pretty textbook case of it: Apple has a strong, powerful position in mobile devices, and they're making it harder for Spotify to compete with them for music streaming services." But they don't. Android has far, far higher marketshare.

basch 10y ago

30% isnt a payment processing fee, its a commission + infrastructure tax. You make money off your app? Because apple made it discoverable in the app store! You make money off your app, pay a share back for os/api r&d!

DominikR 10y ago
Where can I find more information about this infrastructure tax? Because I highly doubt that Apple actually needs 30% to pay for the app store infrastructure. And why are you mixing this with the OS API? I could just as well say that Apple needs some kind of OS anyways to be able to sell their expensive hardware. Also there are certain categories of apps that are allowed to use other billing providers. Why don't they have to pay for the OS API's and R&D?
- zepto 10y ago
  The apps that use other billing providers are not selling digital goods.
  - DominikR 10y ago
    Of course you can, I have such an app in the store. A telephony app where you can access all features without the app. (You just dial one of our local numbers and that will be mapped to a foreign number) So this argument doesnt make sense.
    - zepto 10y ago
      False. You don't charge people through the app.
      - DominikR 10y ago
        We do within a webview. Whats you problem that you believe you've got to explain to me how our app works? Seems like you don't have a clue what is actually possible. Go read the TOS for Apple's in app billing.
        zepto 10y ago
        Sure but you aren't charging for digital goods. You are charging for infrastructure access, which is explicitly allowed. Seems like you are trying to muddy the issue by pretending your case is representative of anything we are taking about here.
        DominikR 10y ago
        What we are doing is all digital. You buy credits on a website which you can use to call someone on a landline/mobile phone number. Our only infrastructure are VoIP servers. The infrastructure is not different than Spotify's. It's all just servers.
        zepto 10y ago
        Well that's clearly not correct. The service you provide to the customer is use of your VoIP infrastructure. That's what they pay for. In the case of Spotify, the service is not access to infrastructure. It is access to digital goods in the form of licensed music files.
  - deleted 10y ago
    [deleted]
- MBCook 10y ago
  I don't think anyone is arguing that the 30% is the actual cost to Apple, there's no question there's tons of profit baked in there. But Apple is providing services for that 30% such as download hosting, billing, collections, subscription management, etc.
yawn 10y ago
The problem that I have is that there's no way around this gatekeeper. With Android and Windows Phone I don't have to publish my app to their app stores if I don't want to--they allow me and my customers figure out how to handle this. With Apple, it's either follow their rules or nothing. I don't understand how they feel justified charging an ongoing 30% monthly subscription for hosting some assets.
- MBCook 10y ago
  They're not charging at for hosting the assets, that's why there's no fee for free apps. They only get that fee because you're using their payment infrastructure. If someone signs up for a subscription outside the app (like I have for Netflix) then someone can use that subscription on an iOS device in the company doesn't have to pay apple a a dime.
  - canuckintime 10y ago
    > They're not charging at for hosting the assets, that's why there's no fee for free apps. They only get that fee because you're using their payment infrastructure. There's an Apple developer fee ($99 per year) and of course you have to purchase Apple's hardware.
tw04 10y ago
In perpetuity? That's pretty tough to justify when they aren't charging monthly fees to apps that have a one-time purchase price. Does it somehow cost them less money to host an app with a one-time fee? If the argument is around billing... spotify is more than willing to take that on themselves, in fact that's what they're TRYING to do, and Apple is rejecting their app because of it.
- duskwuff 10y ago
  > In perpetuity? That's a valid argument, and it's the reason why Apple is going to be reducing their cut to 15% on recurring subscriptions.
- MBCook 10y ago
  It does cost them less for a one time purchase because they don't have to manage the entire subscription infrastructure. Apple stance is pretty simple, whenever they collect money they collect 30% (ignoring the discount for subscriptions over when you're). Whether that's a one time charge, where they collect money for a subscription every month, they charged a fee.
Oletros 10y ago
> 30% isnt a payment processing fee, its a commission + infrastructure tax. What infrastructure tax? Spotify is not using Apple's infrastructure to serve the music > You make money off your app? Because apple made it discoverable in the app store! You make money off your app, pay a share back for os/api r&d! Then why then don't have a cut from eBay, Amazon store (not the digital products), air companies, etc?
- k-mcgrady 10y ago
  >> "What infrastructure tax? Spotify is not using Apple's infrastructure to serve the music" They're using Apple's infrastructure to distribute their app to millions of people globally. They're also getting access to Apple's payment infrastructure and the huge database of payment information Apple holds. The reason Apple forced IAP in the first place was so that users on small phones didn't have to enter address and card information in dozens of apps. If they allow apps to use their own payment processing it'll worsen the user experience for Apple's customers.
  - Oletros 10y ago
    > They're using Apple's infrastructure to distribute their app to millions of people globally. This is paid with the $99/year developers pay > They're also getting access to Apple's payment infrastructure and the huge database of payment information Apple holds. No, they are FORCED to use Apple payment infrastructure. Spotify has their own and they are very glad to use it if they are allowed
    - st3v3r 10y ago
      They are not forced to use Apple's payment infrastructure, as evidence that they have the ability to sign up through the website.
      - Oletros 10y ago
        They are forced to use it if they want to have subscriptions in the app.

eldavido 10y ago

Yeah, I agree, Spotify's case is pretty compelling. I'm not a lawyer, but my understanding of the Sherman Antitrust Act (I wrote a paper on this in engineering law undergrad about the Intel/AMD case) is that whenever a company uses its dominant position in one market to attempt to restrict competition in an adjacent market, that's called "tying" and it's illegal. And this seems like a pretty textbook case of it: Apple has a strong, powerful position in mobile devices, and they're making it harder for Spotify to compete with them for music streaming services. Apple's argument would probably be "we do this to everyone, our behavior isn't specifically to reduce competition, it's standard commercial practice for all apps". Ben Thompson of stretechery has been commenting on this recently, mentioning that US antitrust law is based more on how people compete (following rules) vs. EU antitrust, which is based more on consumer outcomes and harm. And the harm in this case seems pretty clear: Apple's behavior, though perhaps unintentionally, is making it very difficult for Spotify to compete with Apple Music -- EVEN THOUGH (in the US regulators' view) they aren't acting with any kind of malice, or illegal intent (their view). The hard legal question is how to ensure competitive markets when tech platform operators make products that inevitably lead to monopolies, like the App Store. That one really should be legislated because it's a big, complex question that will come up with escalating frequency as more businesses exhibit tech-like winner-take-all dynamics.

st3v3r 10y ago
"I'm not a lawyer, but my understanding of the Sherman Antitrust Act (I wrote a paper on this in engineering law undergrad about the Intel/AMD case) is that whenever a company uses its dominant position in one market to attempt to restrict competition in an adjacent market, that's called "tying" and it's illegal." But it doesn't have a dominant position. It definitely doesn't have one in mobile OS marketshare. It doesn't in app store usage. "And this seems like a pretty textbook case of it: Apple has a strong, powerful position in mobile devices, and they're making it harder for Spotify to compete with them for music streaming services." But they don't. Android has far, far higher marketshare.