At U.S. Senate hearing, Spotify, Match claim Apple is abusing power in App Store

Executives from Spotify and Match Group, the company behind dating app Tinder, testified Wednesday at a Senate hearing examining potentially anticompetitive conduct by Apple in the company’s App Store and by Google in the Google Play Store. The executives accused Apple of abusing its power over software developers that depend on Apple’s App Store to reach users.

Apple App Store
Apple’s App Store

David McLaughlin for Bloomberg News:

“Apple abuses its dominant position as a gatekeeper of the App Store to insulate itself from competition and disadvantage rival services like Spotify,” Horacio Gutierrez, Spotify’s chief legal officer, told lawmakers. Apple’s restrictions on developers, he added, “are nothing more than an abusive power grab and a confiscation of the value created by others.

App developers have complained for years that Apple and Alphabet Inc.’s Google force them to give up too big a portion of revenue collected from app sales. They also complain that rules governing app stores are overly strict and sometimes inconsistent…

Kyle Andeer, Apple’s chief compliance officer, and Wilson White, a senior director of public policy and government relations at Google, also testified at the hearing. Andeer told senators that the App Store revolutionized software distribution by making it possible for developers to reach users in a new way. He said the commissions are lower than what was charged for software distribution when Apple introduced the App Store more than a decade ago, and that its tight controls over which apps are allowed are aimed at meeting privacy, safety and performance standards.

MacDailyNews Take: Spotify sees the writing on the wall. Apple Music is growing 2.5 times faster than Spotify.

So, Spotify runs whining to governments around the world.

“This boils down to the fact that Spotify wants to use the platform that Apple built and maintains at great expense for free.” – MacDailyNews, March 13, 2019

Spotify is good at three things: Losing money, whining to authorities, and gypping artists.

27 Comments

    1. If we change the word Spotify with James, does it change anything? To most, the answer is no. The annoying negative beeeatches who have taken up residence at MDN don’t even bother to be helpful, or civil, or even factual. All you got is your endless opinionated whining. What a useless life you lead. Some would say, you exhibit more shittasticy than Spotify which has millions of customers, far more than Apple/Beats me-too offering.

      Let’s discuss WHY Apple Music is less popular than Spotify, yet Spotify and many other companies continue to chafe against Apple.

      Apple has gotten fat and lazy. It doesn’t justify it’s profit skimming, it just says by default it should have monopoly power over 3rd party app distribution and pricing (the Parler problem)
      Apple, as platform owner, thinks that without trying too hard, whatever product it installs by default will win (MS attitude problem)
      Apple gets to review every 3rd party app, which it can and does use to replicate and undermine the small party innovators. This is nothing new. MS used to buy hundreds of companies a year to take software code. Apple found a way to do it without buying anything.
      Platform operators all think they own the highway, with essentially no oversight, no liability, and infinite power to manage or police that highway— or how and when to collect tolls, in $ or in customer data, without full customer knowledge. (The Bridge Troll problem).

      All this stuff applies to varying degrees for all the mega IT companies. You would have to be blind not to see the extreme power Apple attempts to wield to enrich itself. Spotify is no saint but they are the hardworking underdog that Apple used to be, when Apple actually put its customer needs ahead of its profits.

      1. This is so wrong on so many levels.
        “Apple has gotten fat and lazy. It doesn’t justify it’s profit skimming, it just says by default it should have monopoly power over 3rd party app distribution and pricing (the Parler problem)”
        There are other ways to load apps onto your iPhone and especially Macs and tablets. Apple’s stores are just the safest way to do so. The “Parler problem” was that Parler refused, until recently, to moderate extreme content. Up until recently Parler would not even moderate illegal content.
        “Apple, as platform owner, thinks that without trying too hard, whatever product it installs by default will win (MS attitude problem)”
        This may be the marketing departments hopes, but look back over the years. Why has MS Office products still vastly outpaced the use of Apple’s equivalent applications? If people want to take the time there are many, many more examples of Apple’s products not being the preferred applications on iPhones, iPads, and Macs.
        “Apple gets to review every 3rd party app, which it can and does use to replicate and undermine the small party innovators. This is nothing new. MS used to buy hundreds of companies a year to take software code. Apple found a way to do it without buying anything.”
        While there have been claims of Apple building applications that compete after someone else builds a new app. However, there has not been a single (not one) credible claim that Apple’s review of apps going through their app store has led to a new Apple app.
        “Platform operators all think they own the highway, with essentially no oversight, no liability, and infinite power to manage or police that highway— or how and when to collect tolls, in $ or in customer data, without full customer knowledge. (The Bridge Troll problem)”
        Ah… So… Let’s make this more concrete (figuratively as well as literally)…
        I build a brick and mortar store to sell software to go onto my new computers that I’m shipping. You’re saying that in that store I must set aside floor space for your advertising medial and shelf space for all you products no matter what thePlus you’re saying I have no say as to what content is in that software including if it has malware within it that can directly or indirectly harm my customers. y are as long as they, have anything to do w or at a significant lossith software running on the computers I build. Further, on top of that I have to do that for free. So if you come in and want to have 100 different pieces of software that takes up a significant fraction of my flooring and shelving space I must allow you to do it and I must do that for free?
        Your position makes no sense on any level.
        You can complain that Apple’s 30% for the first year and 15% after that (with specific, beneficial exceptions for small developers) is excessive, but the rest of your diatribe makes absolutely no sense.

        1. Yes, but why should they then have the ability to disallow other stores on devices they don’t own?

          Apple needs to stop telling people how they can and can’t use their own devices or even repair them.

        2. Higo, since when does Apple get to prevent App developers from distributing their products in any other store?

          That is abuse of monopoly power whether you personally see it or not. It’s only a matter of time before the feds have to reign in Apple, as they did Microsoft.

          … and that is the real reason Apple dividends are so pitifully low. Timmy is piling up the cash for the day of reckoning he knows is coming. But don’t feel to sorry for him. He and all the other executives filled their Swiss bank accounts already.

  1. Now for something more important: How come the stock Ticker Tape thingy doesn’t scroll? It hasn’t for a while on my Mac (using Safari). It’s stuck on AMZN, AAPL, and MS
    Spotify…really? Tsk tsk tsk.

        1. As of 4am, and after installing 14.5 yesterday, it’s scrolling again. And I see Spotify is raising their prices. Probably to pay all of the lawyers, and not the musicians.

  2. I think Apple is missing the boat on this one. They are going to bring the Feds down on themselves because they won’t let people add apps they want onto the phones they OWN. Apple should make a “side load” app that can be installed on a Mac or PeeCee. Let folks download the app, then move it to the “side loader” and let the fools load whatever they want. 99.99% of people wouldn’t use it, don’t need it but it would shut down most of this foolishness.

    1. My father headed a fairly large company that depended entirely on electronics. He was not himself an engineer, but he worked with them every day for fifty years. After he retired, they helped set up his home computer. Pretty soon, he got an urgent message that popped up on his screen to warn him that he had been compromised and needed to download a particular brand of antivirus software. They were even kind enough to provide detailed instructions. He did as they asked, but he kept getting similar messages right up to the point when there was so much junk on his computer that it bogged completely down. If that could happen to him, it can happen to anybody.

      MDN readers are, by and large, very literate about technology. Some of us have built computers and others have programmed them in a variety of languages all the way back to FORTRAN. It is easy for us to forget that most people just treat their devices as appliances. They have no idea how they work, and don’t care, as long as they work. Even if they are among the 99.99% of people who would never need to use sideloading, they might still be among the sizable group who could be persuaded to use sideloading by a con artist, a salesman or just a well-meaning friend.

      Applecynic lays out a very good case for allowing computer-literate iOS users to download apps from third-party stores. Unfortunately, allowing those users to sideload while blocking other users from being scammed is one of those situations like demanding that device decryption be completely transparent for peace officers with a lawful warrant, while still being completely secure against everybody else. It sounds easier to implement than it is.

          1. The security of the Mac platform, which is objectively superior than iOS, proves that Apple doesn’t need to be the mobster running the one and only App Store in order to maintain peace in the neighborhood.

            It’s long past time that Apple was forced to give 3rd party app developers and their customers more freedom.

  3. Spotify seems to be doing fine (although they barely pay the artist) – I have several friends that only use Spotify (more than use Apple Music) not sure if they even know what Apple Music is and they seem to like it. I don’t see them changing streaming services just because it is baked in their iPhone in fact they never open the music app just Spotify.

      1. Perfect example of how certain individuals here love to mislead with cherry picked statistics.

        If you want the WHOLE TRUTH as to how the music streaming giants are doing, look not in isolation at the US market, but at the entire planet.

        If you would post subscribers and worldwide income, you’ll find Spotify has retained a large lead.

        Then if you cared about the whole landscape, you’d see which other companies are growing as well. Hint: there’s a company in the USofA that also streams music and movies and stuff. Some people think this competitor is in Prime position to upend Apple, because they aren’t limited primarily to Apple hardware.

  4. “Power”. It’s called competition and these loser companies can’t compete so they want daddy govt to do what they can’t. Reality is if Apple doesn’t have monopoly power, and they don’t, they can use all their power to kill the competition. If the competition can’t hack it, too bad.

    1. Imagine you’re a restaurant and you have to pay a markup to your food supplier, now imagine your food supplier makes their own restaurant and is able to get the same food for less.

      How is that fair?

        1. Bad analogy of the app market.

          Antitrust regulations, which are these days seldom enforced, would not look kindly on any company that uses its platform to extort higher prices than a competitive market would offer. Rockefeller ran into this when he negotiated special access to railroads, first by negotiating special rates for his oil railcars (which had a clause that limited access to other competitors), then later buying the railroads himself and jacking up freight prices or literally excluding competing oil companies from using the tracks at all. Sherman saw this as an abuse of power, especially considering the railroad rights of way were chartered to go through public property while the public got gouged. Common carrier laws then ensured that everyone got fair access on roads and rail.

          Now the world is digital and companies are falling over themselves trying to raise fences and digital restrictions and leashes.

          Apple attempts to sidestep regulations by not owning any network. The network is rented from other internet giants. But they are guilty of charging 3rd party developers insane distribution fees in excess of the real costs, and the end customer is none the wiser.

          Apologsts claim the garden has to be that way to be safe, but statistically, other open platforms (the Mac) are just as safe. Forcing arbitrary iOS App Store rules and fees is abuse of monopoly power. Developers have to not only pay the Apple rate, they also have to hand Apple their code, which more than once became an Apple feature.

          Apple apologists will then say, go buy an android. Well sure, the end customer could. And Google, because they do not run an app store monopoly, would let the end user side load apps. BUT THE APP DEVELOPERS CANNOT MAINTAIN MARKET SHARE WHEN APPLE DOES THIS. Developers who lose the entire iOS market are irreparably harmed. So they are forced to have Apple shake them down, and Google of course is happy to set their fees close to what super-rich Apple demands.

          Then there is the whole censorship and social media issue. If you think Apple should have to obey a higher law, responsible to the people, then most of us would agree. Corporations should not rule the world. It’s a lack of regulatory enforcement that allows these companies to wield unchecked power with impunity.

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