Apple’s App Store anti-competitive? Spotify and Elizabeth Warren think so

“Late last month, Apple streaming music rival Spotify accused Apple of anti-competitive behavior for rejecting its updated iOS app on the grounds that it violated the App Store’s ‘business model rules,'” Patrick Seitz reports for Investor’s Business Daily.Spotify didn’t file legal action, but instead publicly issued a call to elected and regulatory officials to act.”

“The questions go beyond whether Apple can take up to a 30% cut of revenue from third-party services that use its App Store billing system. A central issue is whether Apple can prohibit those services from publicizing alternative ways of paying, including having customers pay them directly online,” Seitz reports. “Apple says Spotify violated the App Store rules by encouraging customers to bypass Apple’s billing system and get Spotify at a lower price by buying it directly from Spotify. Last fall, Spotify offered new subscribers three months of service for 99 cents if they signed up on Spotify’s website, followed by the regular $10 a month. It revived the campaign in June, angering Apple, which threatened to remove the Spotify app from its App Store unless it stopped telling iPhone users about the promotion. Spotify stopped advertising the promotion, but it also turned off its App Store billing option, prompting Apple to reject Spotify’s latest app.”

“On Capitol Hill, Spotify’s complaints have captured the attention of Warren Sen. Al Franken, D-Minn., and members of the Senate Judiciary Committee,” Seitz reports. “Rutgers University law professor Michael Carrier says Spotify’s claims don’t appear to rise to the level of antitrust. Such cases usually involve companies with monopoly power, typically over 70% market share. Apple’s iOS has about 30% market share in mobile operating systems in use, according to Net Applications.”

Read more in the full article here.

MacDailyNews Take: Once again, these are Apple’s platforms, built from the ground up. Apple owns them. Hence, Apple can charge what they like for the use of their App Store infrastructure.

Anyone who doesn’t like it, including Spotify or… oh, we don’t know, the developers of the “Make Me Indian” app  😉 can go to other smartphone platforms, including one with 82.6% market share as measured by units shipped which — drumroll, please — neatly negates any and all imperiously vapid antitrust claims of Apple having a “monopoly” in smartphones.

SEE ALSO:
Elizabeth Warren accuses Apple of monopolistic-like actions; Spotify concurs – June 29, 2016

21 Comments

  1. While MDN’s take represents how things _ought_ to work, there are no guarantees. Anybody who has been paying attention to the courts and the government lately should realize that an adverse outcome for Apple is certainly possible.

    1. Hey, don’t be prejudiced against someone with 1/32nd Cherokee-ness based not on DNA but on high cheekbones so as to aid in employment purposes!

      Who is anyone to say that she is not. Heck, now a days, she can claim she is a Chief as she identifies with a male even though her birth certificate says she was born a her complete with lady parts.

      What’s next? Microsoft identifying as Mac OS even though it was born from DOS?!?

      1. There is plenty of room to criticize Senator Warren—a leftist demagogue—-without engaging in race-baiting. Calling her Pocahontas and leading crowds in war whoops is about as acceptable as calling somebody with German heritage a Kraut. Do you expect African-Americans to answer to “Rastus” and shuffle to please white folks?

        For your information, the threshold for listing on the 1907 Dawes Roll of Cherokee tribal members was 1/64. Today, the direct descendants of those on the Roll can be members at an even lower percentage.

        The Senator’s mother was not on the Roll, but that does not mean that she didn’t have a legitimately indigenous background. By all accounts, she was treated as Indian by her neighbors. She had to elope because her husband’s family opposed an “interracial” match.

        As I understand it, the Senator never listed herself as Indian on employment applications. She did join the minority teachers association at the University of Texas Law School, but only based on her heritage, not a claim to be culturally Native American.

        1. And she did check the box as a minority to get employed at Harvard, an act the prevented a ligitamate minority getting the position. But who cares about that.

          1. As I have mentioned, my grandmother was born in Indian Territory before it joined Oklahoma. She received an allocation of tribal lands as a Choctaw on the Dawes Roll at 1/64. Since I am her direct descendant, I could obtain tribal membership for myself and quite legitimately call myself a Native American despite being 255/256 Caucasian.

            I don’t do that, as it happens, but I can certainly see how a 1/32 Cherokee with immediate family members who faced discrimination for being “Indian” might check the box when asked about her ethnicity, particularly if she could check more than one box. Given the Senator’s excellent reputation as a law professor at UT, I wouldn’t assume that Harvard would not have hired her otherwise.

            Apparently, you and Mr. Trump will not accept Native Americans as “a legitimate minority” unless they wear feather bonnets and answer to “Pocahontas.” Back when he was testifying to Congress against the Indian Gaming Act, Trump repeatedly refused to accept registered tribal members as legitimate because they “didn’t look like Indians.”

            It’s funny, because the American social and legal tradition is that someone who has ANY provable minority ancestry is treated as a member of the minority group, even if their ancestry is predominantly European. That’s how the 29 (out of 48) states with miscegenation statutes in 1950—and the 11 states that had already repealed their prior statute—treated ethnicity. One drop of black blood and you were Negro for all legal purposes and could not legally marry a white person. “Mixed race” was not a recognized status.

            Now, apparently, they have the worst of both worlds. They don’t get the benefit of their white ancestry because they aren’t 100% white, but they aren’t entitled to minority protections unless they “look like an Indian” or African-American, or whatever.

      1. It depends on how you view a monopoly. In Windows case they have a monopoly in the PC OS market. In Apple’s case they have a monopoly in the Mac HW OS market. Yes, you can run other OSes on Mac HW but nothing gets close to the share Apples has on it. Monopolies all depend on what your ‘area’ is defined as.

          1. How is it stretching? To give some common examples, Time Warner Cable and ComCast are considered monopolies by the regions they serve and Electric Companies are in no way monopolies if you look at the entire market but are considered such in the regions they provide service. As such I would define a monopoly as any company/group that has large control over where a consumer may not use or have alternative services available to them.

  2. Spotify can make a web app. Then they don’t need to use AppStore. Problem solved. Then they don’t need to be in the AppStore.

    Even if Apple would have 110% market share, this web app possibility makes it impossible to accuse Apple being a monopoly. Because you have two options. All the porn is already outside the AppStore. (Big boys told me)

  3. Being anti-competitive is one thing, abusing monopoly power is another. Apple clearly is not doing the latter. The question of anticompetitive behavior is another. In once sense, all corporate behavior designed to increase market share and revenue is “anti” the competition, and we generally think this is a good thing. It keeps costs down and encourages innovation. The reality that Apple owns the only pipe though which Spotify can reach the best customers makes this situation somewhat unique. It’s clearly not abusing a monopoly. And Apple’s policy does make it more difficult for Spotify to compete for customers from Apple phone users. Something this complex does not lend itself to being grasped easily by politicians.

  4. When I first heard about this case I believed it was about Spotify complaining about the 30% Apple cut on their App for which Apple has a competing App providing a similar product/service. Now it sounds like the case is about Apple denying Spotify’s updated App which removes the in-app purchase/subscription function to offer those purchases exclusively through their website. Aren’t there other media companies (e.g. magazine, newspaper, etc.) that do the same thing and simply have a ‘reader/access’ App in the App store for free with ‘subscription/purchase’ functions available exclusively through their website?

  5. In the old days everyone feared Microsoft that they had a habit of copying other software and using their market power to destroy them. Now that is what Apple does. Yes they built the platform, but now they are using it to have unfair advantage over music services, book stores, cloud services, and so forth. It’s legal, but it’s not good for the consumer and it’s not good for the software market place.

    1. Apple’s not doing it just now. They’ve been doing it ever since they lock out competitive software sources and instituted an “App Approval Process”.

      I was disappointed when they didn’t bust up MS, but even they never went so far as an “App Approval Process”. Imagine if they “forbade” iTunes when the iPod was launched. Where would Apple be today?

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