Apple Challenges $2 Billion EU Antitrust Fine Over Spotify Complaint

[Hails09]

It depends. Are you more interested in making statements that are right, or more interesting in making statements that are rooted in ideology?

You are right that in the greater scheme of things, none of this here matters (insofar that Apple very likely trawls tech forums for insight, much less makes their business decisions based off the vocal majority here). However, aren’t we all here precisely to debate over what we believe to be right and / or wrong?

And contrary to popular consensus here, I don’t think that everything Apple does is wrong. I can see why they might be unpopular, but there is a fine line between Apple doing something I don’t like, and them deserving to get fined or sanctioned because of it.

If there is no point in debating anything because it involves multi-billion companies and does not directly affect me, then why are you even here?

What I’m getting at is who actually cares that Apple have been fined & why do people take it so seriously & personally.

 

[Hails09]

Sounds like they are pointing out the obvious hypocrisy

I just don’t get why you would take it so seriously & personally like some people do as if it’s a member of their family that’s been scammed

 

[Hails09]

I can guarantee that it is likely I care about many things you think I shouldn’t care about. I’m not sure why you think I owe you an explanation about what I care about.

Why do you take this so serious & personally like it’s a member of your family being scammed

 

[scorpio vega]

I just don’t get why you would take it so seriously & personally like some people do as if it’s a member of their family that’s been scammed

Why do you take this so serious & personally like it’s a member of your family being scammed

You don’t have to repeat yourself and nobody is acting like that. It’s called pointing out the hypocrisy.

This is only a big deal really for whatever reason because ppl hate seeing apple be successful and anything that hurts apple is a win. That’s a rather pathetic way of thinking in my opinion.

 

[AppliedMicro]

This is a ridiculous analogy.

Not only is there Android to choose from

It is not, once you‘ve bought into the system and committed to a platform.

Not only is there Android to choose from (which means Apple does not, in fact, control the entire market in town as you suggested)

It means exactly that: Apple control the „local“ market of customers that (to keep with the analogy) „live in town“.

👉🏻 Your choice of a restaurant, diner, taqueria or grocery store yesterday does not influence or determine your choice today. You can switch from one grocery store to another - or one restaurant yesterday to another today - in no time and at no cost.

Whereas you can‘t (practically) switch from buying Android apps to iOS apps overnight. Switching to Android is (to keep with the analogy) the equivalent of having to drive many miles out of town to another city to get your food.

It’s not that hard to understand why the analogy to restaurants or grocers is flawed.

Not only is there Android to choose from (which means Apple does not, in fact, control the entire market in town as you suggested), but also Android's marketshare is close to 70% in the EU

Apple is estimated to command (slightly) more than 50% of sales revenue for apps.
And it’s still a duopoly - and a monopoly once youöve committee to a platform by choice of smartphone.

Wait what now?

The customer gets to decide the price for themselves?

What are you talking about?
No, of course not.

Once third-party developers can negotiate and choose their preferred ecommerce/payment processor among conpeting services, then we have competition.

Note: it's not like Apple has increased their cut. It's been 30% all along. If anything, they've reduced it for smaller developers.

They haven’t decreased it either, for the biggest third parties. Given the increase in sales, pricing and number of transactions over the last 15 years - increased economies of scale, that is - it is expected that commissions would have fallen drastically, particularly for the biggest customers. That it hasn’t is a strong indicator of Apple having monopoly power.

 

[BaldiMac]

It is not, once you‘ve bought into the system and committed to a platform.

It means exactly that: Apple control the „local“ market of customers that (to keep with the analogy) „live in town“.

👉🏻 Your choice of a restaurant, diner, taqueria or grocery store yesterday does not influence or determine your choice today. You can switch from one grocery store to another - or one restaurant yesterday to another today - in no time and at no cost.

Whereas you can‘t (practically) switch from buying Android apps to iOS apps overnight. Switching to Android is (to keep with the analogy) the equivalent of having to drive many miles out of town to another city to get your food.

It’s not that hard to understand why the analogy to restaurants or grocers is flawed.


Apple is estimated to command (slightly) more than 50% of sales revenue for apps.
And it’s still a duopoly - and a monopoly once youöve committee to a platform by choice of smartphone.


What are you talking about?
No, of course not.

Once third-party developers can negotiate and choose their preferred ecommerce/payment processor among conpeting services, then we have competition.

Setting aside the word games of using a dictionary definition to make a legal argument, whether or not they are a monopoly or duopoly is irrelevant in this case. It's about whether it is reasonable to fine a company for failing to do something that it has already committed to doing by the date the commission demanded they do it.

They haven’t decreased it either, for the biggest third parties. Given the increase in sales, pricing and number of transactions over the last 15 years - increased economies of scale, that is - it is expected that commissions would have fallen drastically, particularly for the biggest customers. That it hasn’t is a strong indicator of Apple having monopoly power.

That's nonsense. Not only have prices come down (adding the 15% tier and reading app exemptions, for example), but a reasonable person would expect prices to have gone up as developers are receiving more value from the iOS platform over time. "Economies of scale" has nothing to do with it, since we aren't talking about production or delivery costs.

 

[AppliedMicro]

It's about whether it is reasonable to fine a company for failing to do something that it has already committed to doing by the date the commission demanded they do it.

Apple is in no way committed to good-faith compliance and ceasing abuse of its dominant position:

https://www.macrumors.com/2024/04/24/apple-spotify-app-store-rules-eu/

"Economies of scale" has nothing to do with it, since we aren't talking about production or delivery costs.

You're not claiming that economies of scale can only apply limited to physical goods that are "produced" and "delivered", are you? They're frequently illustrated with examples of physical goods production in economics textbooks - but can absolutely apply to provision of services or transaction processing as well.

but a reasonable person would expect prices to have gone up as developers are receiving more value from the iOS platform over time

Apple are providing transaction processing. That's the essence what in-app purchases are and how they work. That's the value - particularly to giants like Spotify and Netflix. Everything is just fluff to justify their exaggerated supracompetitive commission rates.

 

[Abazigal]

What I’m getting at is who actually cares that Apple have been fined & why do people take it so seriously & personally.

Have you never taken part in a debate?

 

[BaldiMac]

Apple is in no way committed to good-faith compliance and ceasing abuse of its dominant position:

https://www.macrumors.com/2024/04/24/apple-spotify-app-store-rules-eu/

Which, again, has nothing to do with the fine.

You're not claiming that economies of scale can only apply limited to physical goods that are "produced" and "delivered", are you? They're frequently illustrated with examples of physical goods production in economics textbooks - but can absolutely apply to provision of services or transaction processing as well.

Great. You ignored my point to argue semantics.

Apple are providing transaction processing. That's the essence what in-app purchases are and how they work. That's the value - particularly to giants like Spotify and Netflix. Everything is just fluff to justify their exaggerated supracompetitive commission rates.

That's nonsense, of course, but you're just trying to go off on a tangent.

 

[AppliedMicro]

Which, again, has nothing to do with the fine.

At least in hindsight, the fines were absolutely "reasonable" (as you put it). Apple were found to conduct their business anticompetitively. And they have (in light of their reaction to the DMA) shown repeatedly their to stop such behaviour. In fact, they've shown their intent to maliciously comply with the DMA's provisions to maintain their anticompetitive business practices

From the benefit of hindsight, it's absolutely "reasonable" to fine Apple - and fine them hard.

Great. You ignored my point to argue semantics.

You did:

""Economies of scale" has nothing to do with it, since we aren't talking about production or delivery costs."

It's disingenuous to accuse me of "arguing semantics" right after that. And of course it has got to do with "delivery costs". Higher number of transactions and higher spend per transactions leads creates economies of scale for Apple - hence lowering the per transaction cost of "delivering" the service for suppliers (Apple). And since that's not unique to Apple, it would lead to lower transaction costs/commissions in competitive markets.

Is there increased "value" developers are receiving from iOS? Well, the overall size of the music streaming and smartphone app markets has grown - but Apple doesn't seem to provide better "value". Quite the contrary: Spotify (or Netflix) having largely removed their in-app purchase options from iOS that they previously had indicates that Apple's in-app purchasing system provides less and less "value" to Spotify (or Netflix).

That's nonsense, of course, but you're just trying to go off on a tangent.

Merely calling something "nonsense" is failure to make a cogent argument.
In fact, it's not making an argument at all.

 

[BaldiMac]

At least in hindsight, it's absolutely "reasonable" (as you put it) to issue severe fines to Apple. They got fined hard - and since they have repeatedly shown unwillingness to compliance with competition law, they deserve it - and makes a large fine reasonable.

You still haven't addressed my point.

You did:

""Economies of scale" has nothing to do with it, since we aren't talking about production or delivery costs."

Higher number of transactions and higher spend per transactions leads creates economies of scale for Apple - hence lowering the per transaction cost of "delivering" the service for suppliers (Apple). And since that's not unique to Apple, it would lead to lower transaction costs/commissions in competitive markets. Of course it has got to do with "delivery costs".

Again, I'm not arguing semantics with you. I stand by my argument.

Merely calling something "nonsense" is failure to make a cogent argument.
In fact, it's not making an argument at all.

There wasn't a cogent argument to respond to. Which is why I called it nonsense. We've discussed it before. You know it's not true. (Hence your argument above.) You're misrepresenting it to make a point.

 

[Sophisticatednut]

Is Apple's way unjustified or illegal, or is it just a different way of doing things?

In other words, what is the ethical or legal dilemma here?

AFAIK video game consoles have operated like this since well before the App Store, but no one had - or seemingly has - a problem with it

Apple is unjustified in a legal sense.

Consoles have options, iOS apps don’t.
You can buy a game in Xbox games outside their official store. iOS can’t.

I have no idea why you think this is a distinction in anyway or why it matters. But I also simply don't agree with it; Spotify is a music store that sells subscriptions to music.

Nope, you pay to not have advertisements and better streaming services. A subscription isn’t a purchase.

The equivalent would be Apple Arcade, there you actually download and install something. But apple
Music you don’t get anything.

If you want to be pedantic with your definitions, Apple does not "sell" the Spotify App; they host it and you can download it for free. Nobody has ever paid for the Spotify app on the Apple App store.

I’m being legally pedantic. You can purchase something for free and gets a copy of a digital software.

This, in my opinion, is a silly distinction, and I doubt that it would stand up in a court of law within a rational legal system. Do magazines not "sell" magazines because they sell subscriptions? In what way is a subscription not a sale? I just find this whole line of attempted reasoning to be silly.

It does. When you subscribe to a magazine you get a copy of a singular unique copy of a magazine you own and can do whatever you want with. When you subscribe to Disney+ , Netflix, Spotify, cable TV, Apple Music etc you are at no instance ever provided ownership of any content.

Again, selling a subscription to music is still a sale.

Selling a the service of no advertising isn’t a sale of any music.

The app uses technology and services licensed from Apple. Those licenses restrict the use of the software and service. If Spotify doesn’t like the terms of the licenses, it can choose to use free, industry-standard technologies and provide their service through a website to avoid the restrictions in the Apple license. You should already know that they do this and it is available without restriction on the iPhone. They choose, though, to also provide an app. They do so because the value provided by Apple’s technologies and services enhance their product and improve their reach, thus making them more money.

They have done this since day 1. You can go to Spotify and save the website as a web app.

There no technology Apple provide that they actually need. Everything is mandated by the apple developer agreement.

They (and apparently you) believe that they should reap the value of Apple’s technology and services without restriction and for zero cost. That is absurd. Why should Apple subsidize Spotify? Let the EU give Spotify money if the EU thinks it should be subsidized.

They already pay a developer licensing fee. And every other app that is free is subsidized already by the same logic.

Apple needs to provide an exhaustive list of IP they want to be compensated for and they can choose to use something else or invent their own APIs etc.

Then why are people paying for it through a subscription, personal information, and attention? Are you unclear on the reason why companies like Spotify exist? Spotify exists solely to make as much money as they can.

Completely irrelevant as they( the consumer) pay for the removal of advertisement, not the actual use of the music that is provided for free.

there’s zero difference between listening to a radio station and an app allowing you to listen to the same radio station without advertisements for a fee.

The digital world and the physical world are very different markets with unique properties. If you're in a physical store reading content on the package that tells you about where you can find a product, you'd have to physically travel to another store to buy that physical product.

There’s millions of physical products you can open up your phone and access the information provided on the package. Example you can go and buy a magazine in store, open it up and subscribe with your phone and get a better deal than what you get from purchasing it from the stores.

And that’s without moving a single mm from the physical store you got the information from.

In the digital world, where everything is a simple click away, it's not in anyway comparable to the physical retail world.

But this is all beside the point; Apple has a business model. Nobody is forced to use Apple or their App store. Don't like the way they operate? Don't use them. Spotify can simply not use Apple.

Everything else is nonsensical arguments trying to justify an unjustifiable position.

The law is the only justification you need. Apples opinion of what they think they can do is completely irrelevant and as you said, they are free to leave EU and make their own rules somewhere else.

Apples complains is insane for a single things, harm to the consumer is 100% irrelevant if they harm the market and undertakers.

 

[wanha]

Apple is unjustified in a legal sense.

Consoles have options, iOS apps don’t.
You can buy a game in Xbox games outside their official store. iOS can’t.

Once again, you present a logically incoherent argument:

Whether you buy a game through the Xbox official store or purchase a physical copy of the game at Walmart, THE GAME MAKER IS STILL PAYING MICROSOFT 30%

 

[wanha]

That's not even close to what this EU fine is for. This is an anti-steering fine

The Commission fined Apple in March, saying that the company abused its dominant position in the market by forbidding music streaming apps to tell users about cheaper subscription prices outside the app.

This is Apple telling an app developer (e.g. Spotify, Netflix, etc) they cannot tell subscribers through their own app that there is a less expensive way (such as through www.spotify.com) to subscribe to Spotify.

This is analogous to a store or a news stand telling the magazines that they cannot put subscriber cards (remember those?)

View attachment 2380851

inside their own magazines that inform magazine buyers of a less expensive way to purchase the magazines (i.e. through the mail) vs buying it at the full cover price from the store or news stand.

So should EVERY industry get rid of anti-steering or, you know, just Apple?

Should Anker be allowed to advertise on Amazon that you can get Anker products for cheaper on Anker's own website?

Anti-steering is pure aspirationalism; it's extremely rare to find it in the actual world. Just because you found one example - magazines - is great, but proves nothing of the principle in play.

 

[AppliedMicro]

So should EVERY industry get rid of anti-steering or, you know, just Apple?

Little reason to do it in every industry. Government shouldn't overregulate.

But wherever you draw the line exactly, in markets
- as "gatekept"
- as large in sales
- with products/services used as ubiquitously and
- as concentrated
- with as much customer lock-in
as the market for mobile OS and apps (a duopoly, effectively), it should.

Should Anker be allowed to advertise on Amazon that you can get Anker products for cheaper on Anker's own website?

Amazon doesn't restrict Anker from distributing directly to consumers through their own web site nearly as much as Apple does.

Spotify doesn't advertise their subscriptions on Apple's App Store or website. They (want to) advertise within the app - their own product. Also, I'm not aware of Amazon dictating Anker what words or URLs they can include in printed material within their retail packaging.

👉 Anker absolutely should be allowed to advertise their website and products with content in the retail packaging they provide and include a rebate voucher or whatnot. If Amazon are found to anticompetitively abuse a dominant position in online retail to get dictate what Anker can include, they should be fined.

For a closer analogy, if Amazon were to take technical measures (such as firmware updates) to prevent Anker chargers and/or cables from working with (charging) their Kindle eBook readers (arguably a dominant product in that market), regulators should step in and they should be fined.

 

[BaldiMac]

Little reason to do it in every industry. Government shouldn't overregulate.

But wherever you draw the line exactly, in markets
- as "gatekept"
- as large in sales
- with products/services used as ubiquitously and
- as concentrated
- with as much customer lock-in
as the market for mobile OS and apps (a duopoly, effectively), it should.

So... it's okay as long as you don't step over the imaginary line that I won't tell you about until you've crossed it. Huh.

 

[AppliedMicro]

The application of competition law and legislation of laws such as the EU Digital Markets Act should be carefully deliberated and limited. And so should the number of companies that will be affected by such (admittedly quite onerous) regulation. It should be the exception and not the rule.

But boy can I tell and do I agree that computer operating systems, mobile apps/stores and services should be covered!

 

[turbineseaplane]

It seems American do not really understand the idea of consumer protection. Each time a company uses its market power to make if more difficult for the consumers to make their own choices, consumer protection steps in and that is great.

A lot of Americans suffer from the "temporarily broke on the way to being a Billionaire" mindset

tldr - They think they are in line to be one of those with massive power and wealth and so they don't like to see anything being done to restrict or inhibit anything for those who actually do have power and wealth.

A symptom of this is large swaths voting for folks who don't have their actual interests under consideration. An example would be broke people in rural places voting against "tax increases on millionaires that could help fund x, y, z"

In our example here ... the tax increases won't impact the broke rural voter, but funding "x, y, z" would help them immensely.

..But they vote against it..

Because.... what if THEY are soon one of the rich and powerful!??

It's quite a mind screw up

 

[Sophisticatednut]

Once again, you present a logically incoherent argument:

Whether you buy a game through the Xbox official store or purchase a physical copy of the game at Walmart, THE GAME MAKER IS STILL PAYING MICROSOFT 30%

You’re missing a fundamental part. For an Xbox game you purchase from their store you pay 12%, if the game is purchased from a traditional brick and mortar such as Walmart or GameStop they don’t take a cut at all as far as I can find today anymore. They have always had multiple options.

What did you think happens when you purchase Netflix, Disney+ or Amazon subscription etc from the Xbox? Or if you purchases in game currency from the Xbox store or alternative storefronts?

Microsoft don’t take a cut ether.

AppDB don’t use any api or technology to function on iOS. https://docs.google.com/document/u/0/d/1Qgqj4i0eRkyI_pFQ-9WVBopQ7gFA3mbqJCEWz3guPKM/mobilebasic

 

[Sophisticatednut]

So should EVERY industry get rid of anti-steering or, you know, just Apple?

Should Anker be allowed to advertise on Amazon that you can get Anker products for cheaper on Anker's own website?

Anti-steering is pure aspirationalism; it's extremely rare to find it in the actual world. Just because you found one example - magazines - is great, but proves nothing of the principle in play.

Seems to be very common.
Anker and others regularly include adds and gift cards in their packages.

I can order a Sony shaving machine or a windows computer of some sort and even games and the package regularly contains codes, gift cards, links for deals etc etc in the package you get access to once you have purchased the goods and opens the product.

Buying magazines have it, cornflakes have it along with competitions to win prizes.

Seems more that apps being banned from steering users to their own websites or cheaper options seems to be a rare things.

 

[BaldiMac]

You’re missing a fundamental part. For an Xbox game you purchase from their store you pay 12%, if the game is purchased from a traditional brick and mortar such as Walmart or GameStop they don’t take a cut at all as far as I can find today anymore. They have always had multiple options.

What did you think happens when you purchase Netflix, Disney+ or Amazon subscription etc from the Xbox? Or if you purchases in game currency from the Xbox store or alternative storefronts?

Microsoft don’t take a cut ether.

AppDB don’t use any api or technology to function on iOS. https://docs.google.com/document/u/0/d/1Qgqj4i0eRkyI_pFQ-9WVBopQ7gFA3mbqJCEWz3guPKM/mobilebasic

Nope.

Xbox digital store: 30%
Microsoft PC digital store: 12%
Physical purchase: 15% (plus 30% to the retailer)

https://query.prod.cms.rt.microsoft.com/cms/api/am/binary/RE4OG2b

Price Breakdown Of A $70 Video Game: Digital Vs Physical – Kantan Games Inc. CEO Blog – From Tokyo, Japan

www.serkantoto.com

 

[Abazigal]

 

[wanha]

Seems to be very common.
Anker and others regularly include adds and gift cards in their packages.

I can order a Sony shaving machine or a windows computer of some sort and even games and the package regularly contains codes, gift cards, links for deals etc etc in the package you get access to once you have purchased the goods and opens the product.

Buying magazines have it, cornflakes have it along with competitions to win prizes.

Seems more that apps being banned from steering users to their own websites or cheaper options seems to be a rare things.

You keep bringing physical products and their packaging into this argument as if it's somehow a relevant point to what we're discussing.

I can only conclude from this that you are not aware that Apple only takes their cut from the sale of digital goods and services (e.g. Uber, DoorDash, or orders made on the Amazon app), not physical ones (with a few exceptions).

Every Apple App Store fee, explained: How much, for what, and when | AppleInsider

The App Store has an enormous reach, enabling developers to access billions of users. But, there is confusion on how much Apple charges — and on what.

appleinsider.com