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Apple Slams Spotify For Asking For 'Preferential Treatment' (buzzfeed.com) 181

On Thursday, Spotify made major accusations against Apple of playing unfair to its music service. The Swedish-based music company said that Apple didn't approve a new version of Spotify's iOS app because "it didn't want competition for Apple Music." The Cupertino-based company has responded to the accusations. In a letter sent to Spotify general counsel Horacio Gutierrez on Friday, Apple general counsel Bruce Sewell rebutted the streaming music service's allegations, adding "we find it troubling that you are asking for exemptions to the rules we apply to all developers and are publicly resorting to rumors and half-truths about our service," Sewell wrote. BuzzFeed News reports:"Our guidelines apply equally to all app developers, whether they are game developers, e-book sellers, video-streaming services or digital music distributors; and regardless of whether or not they compete against Apple. We did not alter our behavior or our rules when we introduced our own music streaming service or when Spotify became a competitor," Sewell explains. "Ironically, it is now Spotify that wants things to be different by asking for preferential treatment from Apple." And as for Spotify's suggestion that Apple is treading on dangerous, anticompetitive ground, well, Sewell doesn't seem too concerned. "There is nothing in Apple's conduct that 'amounts to a violation of applicable antitrust laws.' Far from it," Sewell, writes after wryly observing that not only has Apple's platform generated "hundreds of millions of dollars in incremental revenue to Spotify"; but that the Spotify App currently in the App Store is still in violation of Apple's guidelines. "I would be happy to facilitate an expeditious review and approval of your app as soon as you provide us with something that is compliant with the App Store's rules," he quips.Apple commentator John Gruber, writing for DaringFireball:Cry me a river. Spotify has long charged $12.99 via in-app subscriptions to get around the 30 percent "App Store tax". And Apple has now cut the long-term subscription split from 70-30 to 85-15. And Spotify is the streaming service most at war with artists over their abysmal royalty rates. Read between the lines and the real message here is that Apple Music is kicking Spotify's ass.
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Apple Slams Spotify For Asking For 'Preferential Treatment'

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  • If you want to play in the Apple walled garden, you have to play according to the rules. Pissing and moaning outside the walled garden doesn't get you preferential treatment.
    • Facebook gets preferential treatment. Why shouldn't Spotify?

      I think Spotify should sue. I'm sure they will find enough in discovery that would let them win.

      • Facebook gets preferential treatment. Why shouldn't Spotify?

        Citation please?

        If Facebook does get preferential treatment from Apple, let's look at the numbers: Facebook (1600M+ users) vs. Spotify (75M+ users).

        Which company would Apple benefit the most from — the whale or the minnow?

        • Facebook gets preferential treatment. Why shouldn't Spotify?

          Citation please?

          If Facebook does get preferential treatment from Apple, let's look at the numbers: Facebook (1600M+ users) vs. Spotify (75M+ users).

          Which company would Apple benefit the most from — the whale or the minnow?

          Netflix?

        • by dgatwood ( 11270 )

          Facebook gets preferential treatment. Why shouldn't Spotify?

          Citation please?

          Launch Facebook on iOS. Tap "More". Tap "More" in the resulting list. Tap "Ads Manager". Tap "Get Started". Tap "Billing". Tap "Add Card".

          • by dgatwood ( 11270 )

            And to put that in perspective, as of a year ago, there were only 2 million active Facebook advertisers. I doubt more than one percent of those use iOS to create or buy ads, but even if 100% of them did, Apple still created an exception for Facebook's 2 million advertisers and refused to create one for Spotify's 20 million paying users.

            I'll let you draw your own conclusions.

          • Facebook gets preferential treatment. Why shouldn't Spotify?

            Citation please?

            Launch Facebook on iOS. Tap "More". Tap "More" in the resulting list. Tap "Ads Manager". Tap "Get Started". Tap "Billing". Tap "Add Card".

            So you have proven that Facebook doesn't get preferential treatment, and instead does what everybody could do from the start without violating the rules,a dn many have done, including Spotify.

      • Since you brought it up, what is this preferential treatment that Facebook is getting from Apple? Are they selling subscriptions via in-app purchases?

      • Exactly what preferential treatment does Facebook get? AFAICT, the Facebook app conforms to Apple's rules. Where is the deviation?

    • by Anonymous Coward

      You realize that if it were Walmart doing this you'd be throwing a shitfit. However, because it's a "good" oppresive monopoly, that's okay that they're abusing their monopoly position.

      • So you know that GP would be "throwing a shitfit[sic]" if Walmart were requiring manufacturers to abide by Walmart's rules? You are aware then that Walmart has dedicated staff to assisting manufacturers in cutting costs (quality) in order to meet Walmart's purchase requirements? Does Apple dedicate resources to lowering quality standards? In what way is what Apple does even remotely like Walmart? It isn't a matter of preferring one to the other (they could both be shit or both be angels), they operate entir

        • by __aaclcg7560 ( 824291 ) on Friday July 01, 2016 @02:31PM (#52428903)

          You are aware then that Walmart has dedicated staff to assisting manufacturers in cutting costs (quality) in order to meet Walmart's purchase requirements?

          I was working in the video game industry (probably 1998) when Walmart decreed that it will only stock video games that came in an uniformed box size. At that time, most video games came in large boxes to stand out from the competition even though it may contain only a CD and a thin manual. Those large boxes soon disappeared as Walmart was too big of a market to ignore.

      • You realize that if it were Walmart doing this you'd be throwing a shitfit.

        Probably not. Every walled garden has rules. If you don't like the rules, go someplace else.

        However, because it's a "good" oppresive monopoly, that's okay that they're abusing their monopoly position.

        How is this a monopoly? Spotify wants to stay on iDevices, they need to follow the rules. Apple isn't preventing Spotify from competing on Android — or Walmart.

    • If you want to play in the Apple walled garden, you have to play according to the rules. Pissing and moaning outside the walled garden doesn't get you preferential treatment.

      Netflix doesn't get preferential treatment? Wait, does the Netflix app in the Apple store give Apple a cut of the subscription?

      • Netflix doesn't get preferential treatment? Wait, does the Netflix app in the Apple store give Apple a cut of the subscription?

        A quick Google search didn't turn up anything that Netflix got preferential treatment from Apple.

        • Netflix doesn't offer sales within their iOS apps. You have to purchase your subscription on the website.
          • Netflix doesn't offer sales within their iOS apps. You have to purchase your subscription on the website.

            I just downloaded Netflix for iPhone, created a new account and subscribed via iTunes. I didn't have to go to an external website to signup or pay for my subscription. Your information is out of date.

      • Netflix does not get preferential treatment.

        If you sign up for Netflix on an iOS device it uses your iTunes account... and they pay the 30% to Apple.

        Why do you think it would be different for them?

      • If you subscribe to a service outside of the App Store, Apple doesn't get a cut.

    • If you want to play in the Apple walled garden, you have to play according to the rules. Pissing and moaning outside the walled garden doesn't get you preferential treatment.

      Ahh, but Spottyfly actually managed to piss into the walled garden. Their app currently violates the rule not to have a link to "external in-app purchases". As does the new version that gets refused because of it.

  • If you want to sell SUBSCRIPTIONS via your App on Apple, you have to give them a cut. There are means to circumvent (having people go to your website to signup and pay) but taking payment and not giving apple their pound of flesh has always been operating procedure. I am unsure the problem here? I mean, you might not like the terms (30% is a lot) but it hasn't changed in years.
    • Re: (Score:2, Interesting)

      by Anonymous Coward

      Oh but it has not. From the original article:

      "Spotify stopped advertising the promotion. But it also turned off its App Store billing option, which has led to the current dispute."

      Compare to Amazon Video. You can't buy videos or subscribe to Prime from the app, and yet it hasn't been kicked out of the store. So why is Apple threatening to do this to Spotify? I can't *possibly* be because of Apple Music, is it?

      This smells very much like an anti-trust issue.

      • anonymous trolls...

        So, Apple's claim is that Spotify wants preferential treatment as compared to the rules Apple applies to *all* developers and your "rebuttal" is that Amazon Video has different rules?

        Not exactly a non sequitur, but your assertion in no way invalidates Apple's claim that they are applying the same rules to all developers.

        • by RingDev ( 879105 )

          Only that even if Apple applies the same rule (15-20% cut of subscription fees) to Apple developers, it means that Apple is still keeping 100% of the subscription fee.

          They are directly competing, they have a monopoly over the eco system, and they are placing a burden on other players in the eco system that does not harm them.

          It would sure appear as though they are on shaky ground here.

          • they have a monopoly over the eco system

            and in other news, Kentucky Fried Chicken has a monopoly on the Kentucky Fried Chicked ecosystem. BMW has a monopoly of the BMW ecosystem as well. You see the point? The monopoly has to apply to the industry, and they don't have a monopoly in the industry. They aren't even a majority.

            That's the danger of tying your business closely to someone else's business. They can pull the rug out from underneath you. It's really a case of nothing gained, nothing lost however. If Apple hadn't built their business, at Ap

      • by friedmud ( 512466 ) on Friday July 01, 2016 @02:38PM (#52428967)

        If you read other articles on it you will find that Spotify tried to put a link in their app that would take you to Spotify's website to sign up for a subscription.

        That is against the App store rules.

        They are free to NOT use Apple to start subscriptions... but they cannot link to another mechanism to do so. The best they are allowed to do is say "You must sign up for a Spotify account before using this application".

        That's what Kindle, etc. do.

      • by teg ( 97890 )

        Oh but it has not. From the original article:

        "Spotify stopped advertising the promotion. But it also turned off its App Store billing option, which has led to the current dispute."

        Compare to Amazon Video. You can't buy videos or subscribe to Prime from the app, and yet it hasn't been kicked out of the store. So why is Apple threatening to do this to Spotify? I can't *possibly* be because of Apple Music, is it?

        This smells very much like an anti-trust issue.

        The problem with the Spotify app, is that they want to do it easy to sign up from the web site from within the app. If they just dropped that, and just allowed you to log in if you had an existing account - or sign up via the app store if you don't have one - everything would be as it used to be, and the app would be accepted.

        What Apple does not like, is that if you don't have an account you're referred to Spotify's web page to sign up and pay there.

    • Subscriptions have changed to 15% Apple Cut months ago.

    • by teg ( 97890 )

      If you want to sell SUBSCRIPTIONS via your App on Apple, you have to give them a cut. There are means to circumvent (having people go to your website to signup and pay) but taking payment and not giving apple their pound of flesh has always been operating procedure. I am unsure the problem here? I mean, you might not like the terms (30% is a lot) but it hasn't changed in years.

      30% was pretty low for applications at the time the app store - if you sold it any other way (physical stores, carrier app stores etc) and you'd get far less. Subscriptions for magazines were also a bargain for the publishers - it's not like you'd get 70% from retail stores. The only problem there was Apple's privacy guidelines, meaning they didn't get the valuable subscriber information.

      For outlets like spotify, this is a much bigger problem. When you pay 70% of your renenue in licensing costs, you can

  • by eddy ( 18759 ) on Friday July 01, 2016 @01:27PM (#52428377) Homepage Journal
    Is that code for shill?
    • by geek ( 5680 )

      Is that code for shill?

      The Kim Kardashian of Apple Commentators

    • I know it must be hard to believe for people like you, but there are others out there who actually use and genuinely like Apple's products, and use and like Uber's, Lyft's, and Airbnb's services, and think that the shuttle busses are a fine way to get cars off our streets during commute hours, and think that Google glass was a really cool idea that should have been taken farther (A lot farther. I wanted my goddamned Predator, or at least Terminator, vision.). That doesn't make us "shills", or even "fanboi

  • by Anonymous Coward on Friday July 01, 2016 @01:28PM (#52428389)

    "Apple fanboi John Gruber"

    There, FTFY.

  • by justcauseisjustthat ( 1150803 ) on Friday July 01, 2016 @01:37PM (#52428479)
    It really sounds like Spotify is feeling financial pressure so they are trying to negotiate better terms by claiming Apples behavior is all about pushing Spotify out of business, when the truth is Apple benefits from Spotify being successful (the more they sell the more Apple makes). The only question in my mind is, does Apple make more net profit from that 30% of Spotify revenue (for just hosting) or does it make more with Apple Music (where it has to code, test, support, advertise, host and pay labels/artists)?
    • The other question is what business it is of yours? You might be curious, and that's fine, but Apple is free to run its business as it wants, within limits that I don't see have been violated. Apple is under no obligation to give special rates to anyone, and the 30% cut has been there since day one.

  • And Spotify is the streaming service most at war with artists over their abysmal royalty rates. Read between the lines and the real message here is that Apple Music is kicking Spotify's ass.

    I read it as Apple being entirely irrelevant in the streaming market.

  • I am going to have to make it a point to downvote stories sourced from Buzzfeed News. I do not recognize this as a valid news source.
  • Appleville (Score:4, Insightful)

    by PopeRatzo ( 965947 ) on Friday July 01, 2016 @01:51PM (#52428609) Journal

    The two people whose comments were sought for this article are:

    1) Apple general counsel Bruce Sewell

    2) Apple commentator John Gruber, who said,

    "Read between the lines and the real message here is that Apple Music is kicking Spotify's ass."

    Note: Apple Music has 13 million subscribers. Spotify has 30 million subscribers.

  • Deeper explanation (Score:5, Interesting)

    by Anonymous Coward on Friday July 01, 2016 @02:22PM (#52428821)

    Most of the articles on this dispute aren't getting too deep into what's going on, but here's some more information...

    1. Spotify's current app allows users to subscribe through the app, using Apple's billing system, which gives Apple of cut. User's can also subscribe on the Spotify website, which bypasses Apple's cut.

    2. Spotify is not allowed to advertise through the app that users can subscribe on a website outside the app. Spotify and Apple have had a dispute over this in the past, but Spotify chose to do as Apple asked, and removed all in-app subscription advertising targeted at iPhone users.

    3. Spotify is now trying to submit a new version of their app that offers no in-app subscription method, period, and also has no advertising or instructions on how a user can get a subscription. Spotify is assuming that even with no in-app advertising or instructions, users will figure out that they can subscribe on the website.

    4. Apple is claiming that this is still breaking the rules, and thus is rejecting the new version of the app. Spotify is claiming that this doesn't break the rules, and that Apple is just going to keep rejecting the new version of the app as long as they can so that users are stuck using the older version of the app that still has in-app purchases, from which Apple gets a cut.

    • by swimboy ( 30943 ) on Friday July 01, 2016 @02:42PM (#52429009)

      That about sums up the information that I've gathered as well, but it doesn't make sense. Apple counsel was very clear that Spotify was breaking Apple's developer guidelines with their latest app. None of the actions you listed are breaking the guidelines. So, one of two things must be occurring:

      1) Apple's lawyer is lying about the app breaking the rules.

      2) There's something else in the app that hasn't been made public that is violating the rules.

      I don't know about you, but I just can't fathom Apple's lawyers flat out lying about the app. Apple relies too much on developer goodwill to completely screw over a big developer so capriciously. I think there's more to this story than either side is willing to discuss, and it's my opinion that Spotify put one toe over the line in the sand that Apple has drawn, and Apple is threatening to cut it off.

    • by teg ( 97890 )

      Most of the articles on this dispute aren't getting too deep into what's going on, but here's some more information...

      1. Spotify's current app allows users to subscribe through the app, using Apple's billing system, which gives Apple of cut. User's can also subscribe on the Spotify website, which bypasses Apple's cut.

      2. Spotify is not allowed to advertise through the app that users can subscribe on a website outside the app. Spotify and Apple have had a dispute over this in the past, but Spotify chose to do as Apple asked, and removed all in-app subscription advertising targeted at iPhone users.

      3. Spotify is now trying to submit a new version of their app that offers no in-app subscription method, period, and also has no advertising or instructions on how a user can get a subscription. Spotify is assuming that even with no in-app advertising or instructions, users will figure out that they can subscribe on the website.

      4. Apple is claiming that this is still breaking the rules, and thus is rejecting the new version of the app. Spotify is claiming that this doesn't break the rules, and that Apple is just going to keep rejecting the new version of the app as long as they can so that users are stuck using the older version of the app that still has in-app purchases, from which Apple gets a cut.

      It looks as though the "offers no in-app subscription method, period" is a bit misleading - according to Ars Technica [arstechnica.com], Spotify replaced the link with automatically sending you an email that you could use to sign up.

  • Read between the lines and the real message here is that Apple Music is kicking Spotify's ass.

    At last count, Spotify has 30 million subscribers to Apple Music's 15 million; and that's despite Apple Music recently being made available on Android. The lines pretty clearly indicate that Spotify is beating the shit out of Apple Music, whether you read on, over, under, or between them.

  • Not the in-app fee. No sane person would use in-app purchases anyone. But change the clause, that the possiblity to pay outside the app may not be advertised. For ALL apps.

    And the paragraph about the artists is quite ironic, because spotify can pay the artists less, if apple wants its slice of the cake. Hey, there would be like 3 USD more (33%) for the artists, if it wasn't for apple.

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