Spotify to Apple: Time to Play Fair

Hmm! What about?

> Apple's behaviour in this instance is clearly an abuse of market power and I fully expect the European Commission to rule in Spotify's favour.

I'm not contesting that. I'm saying that I don't believe Apple is doing anything wrong. (The law and me may differ on that.)

> Apple [has] a dominant market position

Isn't the test for this substitutability in the event that the dominant force increases price? (This area is a total unknown to me so thanks for taking the time to explain!)

> to advantage their own streaming service and disadvantage Spotify

I think the he-said-she-said of the software updates thing is easily parked (unless you think it forms a substantive part of their complaint), so I will focus on the pricing issue. Again I'm drawing a distinction between the ethics of the situation and the law (although I assume that to some extent, the latter follows the former).

Spotify's P&L will have a bunch of rows in it for the costs associated with acquiring a paid user. Different channels have different costs. For example TV, radio, google/bing/alta vista PPC. Each of those will have a cost per install and some channels and keywords will convert better than others. For example if I look at the analysis frequently cited about iPhone vs. Android users, it's easy to believe that there is a greater propensity to pay money for apps on iOS vs. Android.

If Apple was the only place to get those users, I could understand totally the belief that this is unethical behaviour. But Spotify grew by four million paying subscribers in Q4 of last year, all of whom are evidence that they can grow their business by ~$500m of ARR without the app store.

So for me Apple charging Spotify 30% for their paying subscribers (who came to the App store because of a product and marketplace which Apple created, markets, and curates -- benefits which are at least conceptually worth paying for by app developers, even if some of them quibble the 30%). Is the argument that Spotify should not pay this 30% [but still benefit from all the great things which Apple foots the bill for]? And if Apple wasn't in music streaming, they'd be able to charge Spotify 30% Because that to me seems orthogonal to a common monopolistic argument: they are able to do significant harm to Apple (app store), which is a business unit, and remove all of the acquisition costs they'd ordinarily pay through hany channel.

Would it be acceptable legallyl/ethically if Apple effectively treated app store as an acquisition channel like any other, and the Music business unit paid the 30% to App store?

We do have only two app stores. Apple and Google just haven't managed to kill all the competing Music & Movie services. They'd love to!

This makes me curious if this is how Uber(Jump Scooters) is undercutting Lime and Bird on Scooter and Bike pricing in my city (Dallas). Uber is $0 to start a ride + $.15 a min. Bird and Lime and $1 to start + $.15 a min.

Is this partially because Apple takes 30% from Bird and Lime, but not Uber?

???

Why's that?

Serious question.

And

>But a single choice should not allow a company to passively leverage your demand ever after...

That's how things have always worked though. And I'm not only talking about the tech industry now. I'm talking about nearly everything. Literally everything from Automobile manufacturers obliging you to buy accessories which fit only their vehicles, to sewing machines, even simple things like shaving razors.

We have to narrow our focus if we want the government and the courts to take us seriously. These shotgun approaches that qualify nearly every major corporation in nearly every market sector for a breakup just make us seem like amateurs.

You can't have a marketplace that you participate in? That just makes no sense. I mean think about it, you've just snared Walmart, Target, and dozens of other retailers with similar web presences in your net. You have to have something more tailored to tech companies, or you have to go with the laws as they stand. You can't say, "Oh, I just want to handicap companies comprising the top 25% of every market sector in the country." That makes you seem unreasonable.

The counter point is, if Apple allowed this, then every single App would use that method. Most people would not realize or care that they bought the XYZ in a web view vs through the AppStore payment system. Even apps that are currently paid only would switch to a "free" app with a "pay here" in-app purchase.

At this point the AppStore no longer can bring in any money for Apple except indirectly via encouraging iPhone sales.

Maybe Apple could charge the publisher for each app download or something instead to keep making money but I doubt that would be very popular.