Addressing Spotify’s Claims

This is a surprisingly open response to what is likely to be a legal matter, particularly given Apple's usual silence on... most everything.

I definitely take issue with it's avoidance of the core issues though: That the services they provide aren't optional on the iPhone. They make it sound like connecting Spotify to users, and allowing them to use their in-app purchase mechanism is a service they offer that they should be paid for. But the reality is, that Spotify has no choice but to use that service, which is the definition of a monopoly.

In that, I feel they didn't meaningful counter Spotify's primary anticompetition claim, and I look forward to seeing what the EU makes of it.

> Spotify wouldn’t be the business they are today without the App Store ecosystem, but now they’re leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs. We think that’s wrong.

I think that's a very hypothetical claim.

> Let’s be clear about what that means. Apple connects Spotify to our users. We provide the platform by which users download and update their app. We share critical software development tools to support Spotify’s app building. And we built a secure payment system — no small undertaking — which allows users to have faith in in-app transactions. Spotify is asking to keep all those benefits while also retaining 100 percent of the revenue.

I think we should be clear that Apple built the app-store ecosystem to improve its iPhone adoption and lock-in. And Spotify isn't asking to keep 100% of the revenue. Spotify is asking for a choice of letting users pay how they wish.

The problem really is Apple wants to milk its App store ecosystem now that its popular and 30% / 15% is a very steep price / revenue loss for any significant player in that eco-system. And FWIW, Google provides a similar App store service, while also allowing users to what they choose with their phones (i.e., install side-loaded Apps).

I think Apple is going to find itself standing alone by the time the dust settles on this issue. Their 30% tax is a disservice to its own customers, not just app publishers.

Apple tries to counter that the problem is Spotify. It's Spotify that is money-hungry, Apple claims:

Underneath the rhetoric, Spotify’s aim is to make more money off others’ work.

The only problem with this argument is that Spotify is just one example. App publishers of all sizes have expressed grave dissatisfaction over this issue. Ultimately, this has led to a poorer experience for Apple's own customers in the form of higher fees for in-app purchases or weird, convoluted checkout flow that requires you to goto your browser to finish a transaction.

Apple won't find itself standing alone. Other major distributors like Google and Valve are both happy to take 30% off the top of app sales too, and if the chance comes to speak up in support, they will. But the difference is both of them can be circumvented by competitors, for instance Epic Games, who is challenging both. (Epic is launching an Android store soon.) Apple can't be, and that's likely to be the crux of any action against them.

From my understanding, Spotify is arguing that it should be void of platform/processing fees for in-app payments, potentially zeroing fees for everyone... That's a hard argument to make, because if they win that, then Stripe wouldn't be able to charge processing fees either. You'd get into an argument of what fees would be fair, and in-app payments are not a requirement for the app store so it's hard to argue it.

I think the most likely scenario is that Apple will capitulate and remove any restrictions from apps soliciting payments in a web browser from within the app (are there any restrictions on this?).