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This seems like an overly emotional interpretation of things, written in an intentionally aggressive style. Are there any lawyers here who can actually make an

This seems like an overly emotional interpretation of things, written in an intentionally aggressive style. Are there any lawyers here who can actually make an interpretation of the situation free of emotion and PR speak? I still don't understand the fundamental basis for why Apple is legally obligated to "play fair" on the App Store. Reasons I've heard that don't make sense to me include: - XYZ, inc. made a business on the App Store, so XYZ should be free to pay a cut to Apple that is intuitively "fair" in some vague sense, simply because their entire business is on the App Store. - 30% just sounds intuitively too much, so they aren't playing fair - 30% is higher than other, vaguely related platforms charge for vaguely related services, so that means it's unfair simply because the number is higher - Apple also makes apps that sell the same types of subscriptions, so Apple should be fixing prices of competing services at a point where...? Spotify can make a profit? Consumers are just always charged the same amount for any "music app" from any competing company? This seems to be the one that a lot of people hang their hat on as the nuanced way to look at it. "No, but it's about the competing product they offer, they undercut Spotify's price." etc. But, undercut what? Spotify's price point relative to their current business model? I don't understand the argument here. Spotify is another business. We're not talking about some minimum wage thing for a person where you have a moral imperative to keep the price above a certain point, inherently. I don't understand why any legal system should be forced to take Spotify's current business model as the peak optimal one possible, and then say that they couldn't possibly lower their price to match Apple's competing service without irreparable harm to their business. Why does any of this matter, legally? Companies make money, industries grow and fade, niches pop in and out of existence as paradigms shift, business cycles up and down. What are the laws that mean Apple must be civil with Spotify here?

judge2020 8y ago
The main issue is that Apple doesn't allow you to use any other payment method - even via linking to a website - to use in-app purchases. Take this analogy: Apple is a city and has exclusive say over whether or not you can build a brick-and-mortar store on their land. Apple here exclusively owns all of the land, and won't let anyone else build on it without their permission (required distribution via app store). In the current situation, Apple is saying "you can rent the land here for free, as long as you give us 30% of your sales". As per their press release, A bunch of game apps take advantage of the free property and make money via ads, which don't give Apple any cut of the revenue. Spotify is complaining that, in order to build on Apple's land, they have to pay this 30%. They say "fine. we'll pass the cost on to the consumer." and institute a $13/month charge instead of $10. Now that Apple sees music streaming is a profitable market, they build a store right across the street from the established Spotify store. Since Apple is both the city (who takes a 30% cut) and the store itself, they can decide to make the consumer price $10/month without actually losing any profit as Spotify would. This makes a bunch of iOS (iOS-only) Spotify customers cancel Spotify and switch to the cheaper Apple Music. Now Spotify is angry, and is taking it up with the state government (EU).
- sjwright 8y ago
  A great analogy. Apple have done all the work building the city—maintaining the water and power, keeping the roads repaired, building ample car parking and sidewalks, keeping out the criminals, watering the plants, ensuring that none of the vendors are scammers, and generally making the city a really nice place. They even provide all the construction equipment for anyone who wants to build their store. Then they spent a lot of money marketing this city and over time have built a strong reputation for the city as a great place to be, the result being the city is full of customers. Not only that, they're renting store space to the vendors for free, in exchange for a flat and non-discriminatory sales tax. Seems fair. Despite all that convenience, Spotify still doesn't have to sell you their service from within stores in Apple City. They could have put a store just outside the city limits in the wild, wild west (aka the WWW). In return for making it slightly more inconvenient for their customers, they wouldn't have to pay the city's sales taxes, even when their customers enjoy the product inside Apple City. But if Spotify want to sell within Apple City, they benefit from the immense conveniences that Apple have put in place, from the marketing and reputation that Apple has cultivated. And it's not like Apple deceived anyone—the 30% sales tax was never concealed.
- Benjammer 8y ago
  >they can decide to make the consumer price $10/month without actually losing any profit as Spotify would What in the world does this really mean though? What do you mean "without losing any profit"? How do you know what Spotify vs. Apple Music operating costs are? Why should they have equal operating costs? I just don't get this exact part of the whole argument. So what if they undercut Spotify, maybe Spotify should take 30% less profit when they sell using Apple channels?
  - je42 8y ago
    it is not only operating cost but also costs for licensing.
  - berbec 8y ago
    Let's assume neither Spotify or Apple have a crazy price advantage in the licensing of music. Spotify and Apple Music get to keep $6.99 of the $9.99 they charge users. They are both forced to pay $3.00 to Apple App Store. See how this helps Apple out a huge amount? One side has a 30% cut taken, the other has to deal with having their accounting made more complicated.

judge2020 8y ago

The main issue is that Apple doesn't allow you to use any other payment method - even via linking to a website - to use in-app purchases. Take this analogy: Apple is a city and has exclusive say over whether or not you can build a brick-and-mortar store on their land. Apple here exclusively owns all of the land, and won't let anyone else build on it without their permission (required distribution via app store). In the current situation, Apple is saying "you can rent the land here for free, as long as you give us 30% of your sales". As per their press release, A bunch of game apps take advantage of the free property and make money via ads, which don't give Apple any cut of the revenue. Spotify is complaining that, in order to build on Apple's land, they have to pay this 30%. They say "fine. we'll pass the cost on to the consumer." and institute a $13/month charge instead of $10. Now that Apple sees music streaming is a profitable market, they build a store right across the street from the established Spotify store. Since Apple is both the city (who takes a 30% cut) and the store itself, they can decide to make the consumer price $10/month without actually losing any profit as Spotify would. This makes a bunch of iOS (iOS-only) Spotify customers cancel Spotify and switch to the cheaper Apple Music. Now Spotify is angry, and is taking it up with the state government (EU).

sjwright 8y ago
A great analogy. Apple have done all the work building the city—maintaining the water and power, keeping the roads repaired, building ample car parking and sidewalks, keeping out the criminals, watering the plants, ensuring that none of the vendors are scammers, and generally making the city a really nice place. They even provide all the construction equipment for anyone who wants to build their store. Then they spent a lot of money marketing this city and over time have built a strong reputation for the city as a great place to be, the result being the city is full of customers. Not only that, they're renting store space to the vendors for free, in exchange for a flat and non-discriminatory sales tax. Seems fair. Despite all that convenience, Spotify still doesn't have to sell you their service from within stores in Apple City. They could have put a store just outside the city limits in the wild, wild west (aka the WWW). In return for making it slightly more inconvenient for their customers, they wouldn't have to pay the city's sales taxes, even when their customers enjoy the product inside Apple City. But if Spotify want to sell within Apple City, they benefit from the immense conveniences that Apple have put in place, from the marketing and reputation that Apple has cultivated. And it's not like Apple deceived anyone—the 30% sales tax was never concealed.
Benjammer 8y ago
>they can decide to make the consumer price $10/month without actually losing any profit as Spotify would What in the world does this really mean though? What do you mean "without losing any profit"? How do you know what Spotify vs. Apple Music operating costs are? Why should they have equal operating costs? I just don't get this exact part of the whole argument. So what if they undercut Spotify, maybe Spotify should take 30% less profit when they sell using Apple channels?
- je42 8y ago
  it is not only operating cost but also costs for licensing.
- berbec 8y ago
  Let's assume neither Spotify or Apple have a crazy price advantage in the licensing of music. Spotify and Apple Music get to keep $6.99 of the $9.99 they charge users. They are both forced to pay $3.00 to Apple App Store. See how this helps Apple out a huge amount? One side has a 30% cut taken, the other has to deal with having their accounting made more complicated.