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EU says Apple’s App Store breaks competition rules after Spotify complaint

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Re: EU says Apple’s App Store breaks competition rules after Spotify complaint

#501

Post by hervature »

skeptical_dog wrote: post #483
hervature wrote: post #466

Earlier quoted context omitted.

Wouldn’t it be nice if banks charged a fixed fee for a loan no matter the size? Visa/MasterCard/etc are not comparable here because they are financing transactions which do have percentage based mechanisms such as % of fraud or % charged back.

The cost to the issuer is proportional to the size of the purchase in the case of credit default or fraud. So a fixed fee does not make sense for loans. This isn't the case for the App Store. BTW, Visa/MasterCard don't manage risk afaik -- the card issuing banks do that. Visa just connects the pos terminal etc to the right bank.

That's exactly what I'm saying. I'm responding to someone who said that we as a society have accepted % of revenue based charging BECAUSE Visa et al. have models like that. I'm pointing it out that they have % of revenue models because their costs are directly tied to revenue. I'm not even going to get into cash back and points and international transactions which are one-to-one relationships with how much is being charged, but do you really think the banks pay for the privilege of being part of Visa? No, Visa has costs at least somewhat proportional to the volume going through that bank.

Re: EU says Apple’s App Store breaks competition rules after Spotify complaint

#502

Post by halostatue »

benhurmarcel wrote: post #392
simonh wrote: post #32

Earlier quoted context omitted.

It's 30% for the first year of subscriptions and 15% thereafter. According to Apple in 2019 Spotify didn't actually pay 30% on any of it's subscriptions at that time, and only paid the 15% on 0.5% of the App's users. The rest are ad supported and Apple gets 0% of the ad revenue. So for every Spotify app user Apple get's a 15% fee for, there are 199 Spotify app users Apple is distributing the App to for which they get…

> only paid the 15% on 0.5% of the App's users. That's the point. This is clearly because they removed the ability to subscribe in the app to avoid paying those 15%. So the rule imposed by Apple is costing them subscribers, all those who would have subscribed if it was available in the app (or even just if they could be informed about how to subscribe). The fact that Spotify has barely no customer who subscribe throu…

I don’t necessarily think that’s the case.

I haven’t ever subscribed to Spotify because I don’t see any _value_ in Spotify as opposed to what I get from Apple Music. I’m smart enough to know how to subscribe to Spotify from the web.

(There are other services like Pandora I would have paid for, in or out of the App Store, had they been available in my jurisdiction. Spotify just never interested me.)

I know that makes me an outlier, but it seems to me that Spotify has a much heftier case to make that they’re _missing_ customers because of Apple’s payment rules.

I personally don’t want alternative app stores; they will reduce the security and trustworthiness of the iOS platform. I do think that Apple should be reviewing its app / in-app purchase pricing, and I do think that there is a market access concern problem. I don’t have any good answers for it, because I _do_ think that some of the actions criticized have been net positives.

Re: EU says Apple’s App Store breaks competition rules after Spotify complaint

#503

Post by hervature »

xwolfi wrote: post #484
hervature wrote: post #466

Earlier quoted context omitted.

Wouldn’t it be nice if banks charged a fixed fee for a loan no matter the size? Visa/MasterCard/etc are not comparable here because they are financing transactions which do have percentage based mechanisms such as % of fraud or % charged back.

Banks and loan are not a good comparison since you ll most likely understand a million euros loan will be harder to produce for the bank than a 1000 one. Taking a percent is fine. Tbh it would be fine if Apple charged per bandwidth usage. But taking 50 or 500 euros in wont change how much it cost them to deliver the app.

That was entirely my point. I was responding to a comment that says we have precedent in accepting % revenue models because Visa has one. I'm pointing out to them that in finance, percentage of dollar amount is normal and orthogonal to the App Store model.

Re: EU says Apple’s App Store breaks competition rules after Spotify complaint

#504

Post by paulpan »

zibzab wrote: post #6
zibzab wrote: post #2

Unpopular opinion: This was a no brainer. Apple wanted 30% (or was it less for subscriptions?) on any business that used apps, no matter if they used apple infrastructure or not. Just think about it: one company is in practice entitled to 30% of what any other business makes (in any industry)!! Also, I think apple brought this to themselves by picking a fight with Spotify (on Watch support).

Should add, the ruling is not really about the validity of the 30% fee. What EU seems to argue is this: 1. Apple is in phone business, Spotify music. So far so good... 2. Then apple wants to get into the music business too. Now they have an unfair advantage since Spotify must pay 30% to apple while apple music "pays" 0%. So apple use their dominance in one area (phones) to get an advantage in a totally different area…

Right, the percentage of Apple's cut isn't the key part of this EU case.

Certainly doesn't help that it's the current 30% but it being 15% won't change the fundamental issues being argued - whether Apple is abusing its market power and shutting competitors out of or subjecting them to unfair practices in its iOS ecosystem. E.g. unfairly favoring its own Music app.

I think it's a fairly straightforward case similar to Microsoft's antitrust case for bundling the Internet Explorer in its Windows OS a couple of decades ago. The argument then was that Microsoft favored its own browser and crowded out viable competitors like Netscape. If anything, the case is more obvious here since you can't even install any other music streaming alternatives on your iPhone if it's not in the App Store - in Windows you could download and install another browser (even if most users didn't).

Re: EU says Apple’s App Store breaks competition rules after Spotify complaint

#505

Post by hrktb »

varispeed wrote: post #424
ocdtrekkie wrote: post #46

Since this is an EU case, that should mean it'll actually do something, and won't take a decade and a half to conclude. The penalty won't be the big deal here, it'll be what Apple is prohibited from doing. And it'll be really exciting if the precedent set blows back on the entire 30%-rent-seeking-platform-industry.

> Since this is an EU case, that should mean it'll actually do something Are you joking, right? Below is the quote from the linked article: > The EU ruled in 2016 that Apple had to repay 13 billion euros ($15.7 billion) in unpaid taxes to the Irish government, after the latter granted “undue tax benefits.” Apple and the Irish government have contested the decision and the case is still in court. I believe there is go…

The tax case takes so long because they have a participating government on their side, and it’s far to be clear cut on a legal perspective. The app store issue is in many respects simpler.

Re: EU says Apple’s App Store breaks competition rules after Spotify complaint

#507

Post by charwalker »

austinkhale wrote: post #500
rickdeveloper wrote: post #492

Earlier quoted context omitted.

~This is a really bad idea in my opinion because the total cost of operating the App Store would be equally distributed amongst all apps, which hurts small developers and benefits big corporations disproportionately. An app like Facebook, which is downloaded billions of times, does cost Apple significantly more than a small indie app used by, say, thousands. You can't get around that. Having the small indie app payin…

This is a strange take considering Facebook is distributed for free in the App Store with the current model. Apps paying the 30% tax _already_ subsidize Facebook’s distribution.

Does FB have in app purchases on iOS? If so, is 30% going to Apple as the processor?

Re: EU says Apple’s App Store breaks competition rules after Spotify complaint

#508

Post by charwalker »

shuckles wrote: post #460
yummies wrote: post #434

Earlier quoted context omitted.

The most ridiculous example of this is Tesla's offering of in-app Autopilot upgrades. At $10k, imagine what Apple's cut is, for absolutely no value added.

Buying a physical good or an upgrade to a physical good isn’t an “in-app” purchase. I don’t think Apple is taking a cut here — it’s probably just Apple Pay.

Apple Pay IS Apple. In app purchases are also subject to their % cut.

Re: EU says Apple’s App Store breaks competition rules after Spotify complaint

#509

Post by pembrook »

AnthonyMouse wrote: post #433
pembrook wrote: post #425

Earlier quoted context omitted.

> Prohibiting vertical integration prevents that sort of leveraging without having to micromanage every multinational conglomerate. How is policing all forms of vertical integration in the corporate world not micromanagement of all businesses?

It's macromanagement. It's a big clear fault line that regulators can see from outer space, instead of trying to evaluate whether Apple App Store charging Spotify a given percentage is anti-competitive based on a detailed analysis of their cost structure and having to argue about the allocation of fixed costs between business units. It also has the advantage of creating a de facto limit on entity size so we don't end…

> It's a big clear fault line that regulators can see from outer space

Nothing in the world of regulation is a clear fault line. You're just creating different points for regulators and lawyers to fight about. How are you defining "market power in any market?" Is it just if a company gets 20% of a market? 50%? 70%? 90%?

This also gets extremely sticky in markets that are still developing.

Take Saas for example. Mailchimp arguably has "market power" in email marketing (70%). Should they have been allowed to get into the social post scheduling business? Using your argument, you could call that unfair competition for social post schedulers like Buffer, since Mailchimp already holds market power over one area of the marketing stack.

But what if it's more efficient for all businesses to keep their email marketing and social post scheduling in one tool? Are you going to force everybody to be inefficient and use separate tools for everything because you think it's better the for the "social media management Saas" market?

Should that even be a market? How granular are you going to get over what's a market and what's just a product feature? Social post scheduling is both a feature, and a market of companies. This solves nothing and only creates more micromanagement headaches for regulators.

Re: EU says Apple’s App Store breaks competition rules after Spotify complaint

#510

Post by celsoazevedo »

tedd4u wrote: post #429
Mindwipe wrote: post #51

Earlier quoted context omitted.

> How is any business entitled to free or low-fee access to a platform that Apple built and maintain? Because we have a regulatory system designed to ensure that happens as capitalism doesn't really function if you don't. Also "platform" is bullshit. By "platform" we mean "Apple used it's control of the hardware to force control of all software on an unprecedented level so they could rent seek." There is no right to…

Why should people be forced to use Honda engines with Honda cars? Honda ONLY offers Honda engines, not any other manufacturer. The are abusing their control of the integrated car to force control of the drive system and engine. People should be free to choose to use Honda engines or not. Apple created an integrated product that billions of people prefer. I don’t think it’s for us to arbitrarily tell Apple which parts…

You can replace that Honda engine with a different one (at your own risk) if that's what you want. Honda also doesn't force everyone to give them 30 or 15% of engine oil or washer fluid sales.

The only way to install an app on an iPhone is via Apple's store. You can't download it from the dev's website and install it. You also can't use a different app store because Apple doesn't let you. And you also can't buy something on an app (eg: a subscription) without using Apple's payment system or even link to a donation page (why?).

You can have a well integrated product and still give users and developers some freedom.

For example, Android phones usually come with Google's Play Store, which is what the vast majority of users use. It's no different from Apple and the App Store. Then, optionally, you can download the apk (the .dmg or .exe equivalent) from the dev's website and install it. You can also install a different app store, if that's what you want (almost no one does it, but the option is there). Apps are still only allowed to do what the OS let's them do (eg: you still need to give them permission to access your location, camera, etc), so you're only missing the privacy given by the review process. And when it comes to payments, you can use Google's payment system or something else. Not very different from what happens on your computer.

Some people say this is terrible because then Facebook can create their store to bypass Google's rules. In practice, Facebook knows most users won't sideload apps or install a different app store, so they follow Google's rules like everyone else.

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