Apple hit with over 1.8B euro EU antitrust fine in Spotify case

https://www.reuters.com/technology/apple-hit-with-over-18-bln-euro-eu-antitrust-fine-spotify-case-2024-03-04/

by nopakos • 2 years ago

588 643 2 years ago

reuters.com

YetAnotherNick3• 2 years ago

Is the fine going to EU politicians or to Spotify?

mrtksn2• 2 years ago

EU, the institution - in other words the European taxpayers. Politicians don't get a cut.

jeltz3• 2 years ago

Neither, it is going to EU taxpayers in the form of paying for investments into the EU and paying for EU institutions.

YetAnotherNick3• 2 years ago

Who selects the institutions that receives the money? Let me guess, it is politicians.

beardyw• 2 years ago

Where in the world would politicians get a cut?

TrackerFF• 2 years ago

Good, good. EU seems to be a good watchdog, with actual bite, as far as scummy BigTech tactics go.

rcMgD2BwE72F2• 2 years ago

I concur. Problem is, they're probably effective only because Europe has negligible control over Internet services/data due to its complete reliance on the Big Five US tech companies.

They may be imposing fines but Europeans have little (if any) control.

It might be a coincidence, but the EU announced an agreement on Privacy Shield (which had been revoked because of the strict GDPR requirements https://en.wikipedia.org/wiki/EU%E2%80%93US_Data_Privacy_Fra...) on March 25, the exact same day they agreed on a deal to supply EU countries with LNG https://www.reuters.com/business/energy/us-eu-strike-lng-dea...

Having too little power to provide essential services like energy and communication makes it pretty difficult to defend your citizens' interests…

miguelxt• 2 years ago

Spotify does not get that money. The general EU budget does.

Fines imposed on undertakings found in breach of EU antitrust rules are paid into the general EU budget. This money is not earmarked for particular expenses, but Member States' contributions to the EU budget for the following year are reduced accordingly. The fines therefore help to finance the EU and reduce the burden for taxpayers.

https://competition-policy.ec.europa.eu/index/fines_en

jeltz3• 2 years ago

Yes, these are fines, not damages. The headline says as much.

leereeves• 2 years ago

Can Spotify sue for damages as well?

mikae13• 2 years ago

Great news. Finally big tech is no longer untouchable. I hope there will be repercussions for the App Store situation [1] too.

[1] https://www.reuters.com/technology/apple-faces-strong-action...

vasco• 2 years ago

I agree with the sentiment but this is Big Tech fighting with Big Tech, or rather Big Tech / Music Rights Mafia fighting Big(ger) Tech. Small publishers are just happy bystanders in this case.

Would've been great if regulators had gotten smart on their own but I'm also happy to take it like this I guess.

GardenLetter276• 2 years ago

But the relevant part here is the App Store. Giving users more freedom to get their apps without requiring Apple's authorisation is a good thing.

It helps startups and stops Apple from abusing the App Store monopoly to funnel users to Apple Music over competitors, etc.

The Big 3 labels don't enforce exclusivity at all (although UMG has threatened it a few times) - so you can get the same library on Apple Music, Deezer, Youtube Music, Spotify, Tidal, Amazon Music, etc. so even though it sucks they have a monopoly on almost all popular music, at least there isn't a monopoly in distribution like the App Store.

mikae13• 2 years ago

The EU is fighting big tech on multiple fronts. My point was that this fine (and other fines) might show these companies what happens if they keep ignoring lawmakers.

mikae13• 2 years ago

“Apple’s New Fees Will Kill Free Apps”[1] is worth a watch too.

[1] https://www.youtube.com/watch?v=_6dbNzFD0zM

braza• 2 years ago

For whom was in tech during 90s and now in 2020s, what are the differences between Microsoft back then and Apple now in terms of why the regulators are so "soft" against an actor that is overplaying it's hand for consumers?

I was not in tech in that time, but I was cognizant about the fact that entire segments of media and policy makers just dunked on Microsoft due to anti-competitive practices back then, and I recall congressmen and congresswomen, members of DoJ and so on openly talking about break Microsoft in pieces and I wonder why we do not have those conversations today in the biggest markets (China, US and EU)?

FirmwareBurner10• 2 years ago

what are the differences between Microsoft back then and Apple now in terms of why the regulators are so "soft" against an actor that is overplaying it's hand for consumers?

The monetary proportion that big-tech contributes to US GDP. It would be silly to assume the US would ever kneecap it's most profitabile and rising industry. After killing its manufacturing industry, tech and finance is all ti has.

kaashif• 2 years ago

After killing its manufacturing industry

Manufacturing's share of US real GDP has remained relatively stable over time: https://www.stlouisfed.org/on-the-economy/2017/april/us-manu...

i.e. the quantities of goods produced is growing about as fast as the economy. The reason manufacturing is dropping as a percentage of nominal GDP is that inflation for manufactured goods has been lower than for other goods.

laborcontract10• 2 years ago

Microsoft's market share was well over 90% in the 90s. The iPhone's market share is 60%. Very different market dynamics.

It was a lot easier to see how Microsoft was being mean-spirited for consumers versus Apple. I'd argue that Apple's policies are consumer agnostic, and the only people really up in arms about Apple are developers and some of its partners.

Also the US is no longer in a position to be punching it's own companies, given the onslaught of Chinese companies that are seeking to undercut in even auto manufacturing now.

karmelapple• 2 years ago

This is the right answer.

Apple was nearly dead. Microsoft literally gave them a big investment to keep them alive [1] , in part to avoid monopoly-related issues [2].

Microsoft was doing everything in its power to kill the only other serious browser at the time, Netscape, and it basically had "won" the desktop and server market. It's pretty astounding that Apple was ever able to do as well as it did in the server, laptop, and desktop market.

1. https://www.neowin.net/news/a-quick-look-back-at-when-micros... 2. https://www.engadget.com/2014-05-20-what-ever-became-of-micr...

FirmwareBurner10• 2 years ago

Microsoft's market share was well over 90% in the 90s. The iPhone's market share is 60%. Very different market dynamics.

Couldn't be more wrong. It's not even remotely comparable.

Yes Microsoft had a 90% OS market share but it was an open OS running on open HW platform wich had many players, so users had the freedom to install whatever non-Microsoft SW and HW they wanted on it and SW developers could develop software for it without needing Microsoft's permission for sales or distribution on their OS, or giving them a 30% cut of their profits (other than buying a MS Visual C++ license maybe).

While Apple might have an "only" 60% market share now (though it's currently 87% amongst US teens today[1] so it's only a matter of time till it reaches 90s' Microsoft levels of monopoly amongst US gen-pop) but it's a closed OS running on closed HW with attestation, so costumers and SW developers have absolutely no choice but to run only Apple approved content on them. Vastly more restrictive than what Microsoft of the 90's could even dream of.

It was a lot easier to see how Microsoft was being mean-spirited for consumers versus Apple.

How? Just like Apple, Microsoft was only being mean spirited to SW and HW vendors and competitors, not to consumers.

[1] https://www.barrons.com/articles/apple-stock-teens-iphone-e5...

spixy• 2 years ago

iPhone's market share is 30% (globally)

KoolKat23• 2 years ago

From Felix Richter: "The information technology and communication services sectors, i.e. most things tech, were responsible for more than 70 percent of the S&P 500’s total return of 26.3 percent last year. Excluding companies from these two sectors, the index would have returned just 7.6 percent in 2023. The “Magnificent Seven” – Apple, Microsoft, Nvidia, Amazon, Meta, Tesla and Alphabet – accounted for roughly 60 percent of the index’s total return, illustrating how top heavy last year's rally has been."

In short, nobody wants to be perceived as the one that cooked the golden goose.

throw0101a2• 2 years ago

[…] the index would have returned just 7.6 percent in 2023.

And in 2022 tech was a big reason why the S&P 500 tanked, dropping 30% when the rest of the market dropped 20%.

Live by the sword die by the sword.

silverquiet• 2 years ago

In the US at least, I tend to think that was the last gasp of an old anti-trust regime that had basically run out of gas by then. The 80's saw a conservative revolution that extinguished a lot of worker and consumer protections.

https://www.promarket.org/2019/09/05/how-robert-bork-fathere...

HatchedLake721• 2 years ago

Apple makes both the hardware and software, it’s their device, hence they can do almost anything they want.

Microsoft at the time provided only software and put legal and technical restrictions on PC manufacturer’s ability to uninstall Internet Explorer.

muro2• 2 years ago

Apple makes both the hardware and software, it’s their device, hence they can do almost anything they want.

Somehow, that is repeated so often as if it was the truth. Making both HW and SW makes it even worse, not better.

zigzag3122• 2 years ago

There are regulations in many industries that prevent companies doing almost anything they want.

IMO there are good reasons for some regulation of platforms.

paganel3• 2 years ago

There's a big geo-political component now at play, at least when it comes to Europe (I live in Europe). Meaning that the Europeans can try and upset the big American corporations up to a point (almost 2 billion euros as in this case), but not any further, because at the end of it all the security of the continent depends on American hegemony, on American guns and ultimately on American money.

From that point of view the situation back in the '90s was a lot more fluid, as at some point there were even talks of an Europe that would have extended "from Lisbon to Vladivostok" (so leaving the Americans out of it altogether).

FirmwareBurner10• 2 years ago

the security of the continent depends on American hegemony, on American guns and ultimately on American money.

And the security of the American chip industry depends on ASML machines, and American airline passengers depend on EU made airplanes. What's your point? Every post-WW2 economy is dependent on the other economies nowadays. There's no fully independent economy that can survive on its own anymore.

US (and other including EU) companies get fined because they break EU laws, it's not done out of spite. If they dont wanna get fined they should stop breaking the laws. Simple.

RandomLensman4• 2 years ago

That security arrangement is currently dissolving, so those ideas around not upsetting the US are fading.

catothedev2• 2 years ago

The other element at play is that if the EU fines become so egregious that US companies pull out of offering certain products in the EU, then what would fill the vacuum? Answer: Chinese tech companies with CCP control - essentially building a direct pipeline of EU personal data that CCP can weaponize.

shellac• 2 years ago

I think you have to appreciate just how egregious the behaviour of Microsoft was in the 90s. We're talking about systematic attempts to use their absolutely dominant market advantage to move into new areas and kill rival technologies, plus quite deliberate sabotage of open standards process to prevent the web taking off. (I knew a few people involved in W3C then and Microsoft's behaviour was breathtaking)

Personally I'd avoid comparisons since you're looking at one of the worst situations imaginable, so anything else is bound to seem less harmful.

beeboobaa15• 2 years ago

So I guess apple learned how to be slightly more subtle, and to let their rabid fanbase do some of their work for them. It's still wild to me how they managed to get people to argue against the freedom to install whatever they want on their device.

jsnell2• 2 years ago

Apple is predatory on a level that 1990s Microsoft could not have dreamed of, which is all enabled by Windows being an open platform while iOS is locked down with strict technical measures.

Microsoft would make competition harder by bundling "good enough" versions of competing software into Windows, with business deals restricting pre-installs of competing operating systems (if you pre-install Windows on 100% of machines, you'll get a massively better deal than when installing on it on 95%), and (arguably) by making interoperability harder by not having stable documented interfaces and having the interfaces change with new releases every few years.

That was bad. But Apple... Apple hasn't been just making competing harder, but outright impossible. It's one thing to compete against a free pre-installed product. It's another thing to try to compete when the platform owner straight out forbids you from shipping a product that competes with them, or applies draconian business terms to the competition that their own business units get to ignore. They weren't just making interoperability harder by not documenting interfaces, but (in the case of iMessage) by actively breaking any attempt to interoperate.

marcosdumay• 2 years ago

deliberate sabotage of open standards process to prevent the web taking off

Whether Safari is this way deliberately or by chance, is something to be found on a court. But Apple's behavior here isn't different from the Microsoft one with IE.

matwood6• 2 years ago

Probably a host of reasons. MS had 90%+ of the OS marketshare (Excel had ~90% of the spreadsheet market). I think it's hard for people to understand just how dominant MS was at the time - closest might be peak Google with search. Bill G while likable today because of his philanthropy, was really painted then as a ruthless businessman. MS ignored DC and politics for the most part. At the time, the west coast was even more of a different world than what was going on in DC.

All the companies today learned from MS. They have armies of lobbyists and court politicians. They are all ruthless business people, but come across as more human and cuddly. They have become key parts of the US economy. I think there's also some fear that if they do go after big tech they could inadvertently make things worse for constituents. Remember, the only thing a politician thinks about is getting re-elected.

lozenge2• 2 years ago

Despite all the talk Microsoft wasn't broken in pieces and never paid a significant penalty. The loudness of the congressmen was to compensate for that.

Now the Overton window has moved and people no longer believe a company can be broken up.

riskable3• 2 years ago

Why do people always assume there's only two ways to deal with a monopoly? All you ever hear about in terms of dealing with monopolies are:

1) Break them up 2) Fine them

From history we know that #1 is really friggin hard to get right (see: AT&T). We also know that #2 is usually ineffective and can harm consumers that are still locked into the monopoly.

There's other options!

    * End the company (corporate death penalty).  Auction off all their assets and force all their intellectual property into the public domain.
    * Force FRAND-style licensing of all their products and services.  Make it so that if they want to make money they *require* 3rd parties to sell customized versions of their stuff.
    * A combination of forced public domain on their intellectual property and FRAND-style licensing.  Possibly with forced selling of assets.  Basically, just force the company out of whatever market they were abusing.

Monopolists are always difficult to break up and there's always going to be negative consequences. Whole towns could go bankrupt as a result of ending a company! Thousands of workers could suddenly be jobless. The list of possible negative outcomes goes on and on.

It behooves society to look past these short-term consequences though and look towards the future. The longer a monopoly goes on the more it stifles the future. It may feel like you're cutting off an arm when you end a really big, powerful company but it's more like cutting off a tree branch. More and better branches will grow in its place and younger, nearby trees will now have access to more sunlight.

Unpopular opinion (here on VC-funded HN): The way capitalism is supposed to work is that large, old companies are meant to be overtaken by newer, more nimble ones. It shouldn't be so easy for large companies to acquire smaller ones. That's a big reason why tech monopolies persist! SO many of Microsoft's "staple" products wouldn't be part of their portfolio today if it weren't for acquisitions.

sircastor2• 2 years ago

I recall reading that Microsoft basically had government oversight personnel on site. I also recall learning somewhere that the thing that basically saved MS from having the book thrown at them was that George W Bush was elected in 2000, and the DOJ switched hands - and didn't care much about pushing the issue.

[1]https://www.digitaltrends.com/computing/federal-antitrust-ov...

mrtksn2• 2 years ago

Apple is nowhere near as bad as Microsoft. Microsoft was so bad that Bill Gates had to eradicate deceases from the surface of the planet to redeem himself.

Apple still has great customer experience and they still sell their products to willing customers and their damage is essentially to their competitors and the users might be losing out on even better service or can be overpaying.

Microsoft was considered the Devils incarnation. Awful lot of people still hold grunge towards Microsoft due to the suff they had to face because of the Microsoft's abuse of their market position. People who are really really angry with Apple are not that many, it's mostly people who get sherlocked or were denied the ability to publish their idea on the AppStore. Also, there a few who think they could make more money if Apple didn't take a cut or didn't stop them from collecting data.

If Microsoft was Saddam, Apple would have been Lee Kuan Yew - Singapore's dictator.

rightbyte• 2 years ago

SaaS has given corparations so much more power over users and devs, that anything good ol' M$ did (remember that abbreviation?) could not be nearly as bad as a dominating company could do today.

gnfargbl2• 2 years ago

It might be hard to imagine in a world where open source mostly won, but in the 90s Microsoft essentially had a de facto monopoly over the computer industry.

Mac OS was a thing, but it was different and expensive enough that it was not really a viable alternative to Windows 95 for most people. Solaris and HPUX existed, but were not accessible to home users. The alternative platforms of the late 80s (Atari, Amiga, Acorn) had pretty much died out by the mid 90s. Linux was very much a thing, but without a viable web browser it was really tricky to use on a day to day basis... and the only really viable web browser was Internet Explorer, so you ended up dual booting to Windows. If you (I) wanted to use a computer, that's how it was.

In short, the kind of monopoly that Apple has with its App Stores affects some consumers in some ways, but the kind of monopoly that Microsoft had in the 90s affected almost every computer user in almost every way.

Agingcoder2• 2 years ago

At the end of the 90s, the internet was also not everywhere. Many people had 56k modems, smartphones did not exist ( and mobile phones weren’t exactly ubiquitous) so there was no way out, ie your apps were tied to your operating system, which meant windows to most people.

scarface_746• 2 years ago

Apple is a “monopoly” in the EU with less than 40% market share?

madeofpalk10• 2 years ago

Who's being 'soft' on Apple?

In the past few years Apple's faced significant regulatory and legal action over it's App Store in the US, South Korea, Japan, United Kingtom, Australia, and the EU.

The EU has just forced Apple to open up to alternative App Stores and enforce browser ballots when you first open Safari.

actionfromafar• 2 years ago

I hope the EU follows through, Apple's "compliance" is actually obstructing.

devjab• 2 years ago

Legislation has always been extremely slow when it concerns major corporations. Partly because there isn’t a great public incentive to really care about Apple vs Spotify, which means there is less political focus and in term less allocated resources. But mostly because EU law is complicated and large companies have a gazillion lawyers to poke at its holes.

briHass• 2 years ago

Involvement in the political process, i.e. donations to candidates/campaigns and general lobbying spend.

ralfd3• 2 years ago

For whom was in tech during 90s and now in 2020s, what are the differences between Microsoft back then and Apple now in terms of why the regulators are so "soft" against an actor that is overplaying it's hand for consumers?

Microsoft had a monopoly with the ambition to capture the whole market: “A microcomputer on every desk and in every home running Microsoft software.”

It is impossible for Apple to do that, it is against their DNA. They only sell limited product categories, all their hardware products would fit on a desk in their Apple Store if the merchandize wouldn't be so spaced apart. Their products are targeting a higher price point and if a product spirals to a race to the bottom (mp3 players, wifi routers) they leave the market. They dislike to partner with other companies. They are targeting consumers/prosumers, not business market. This all means there will always be very large gaps in the market which Apple won't cater too.

amelius3• 2 years ago

It is impossible for Apple to do that, it is against their DNA.

Just wait until they've integrated their entire supply chain.

noirscape• 2 years ago

Generally speaking, what changed was the value in the tech sector skyrocketing (enabling political lobbying as well as propaganda - the latter of which Apple is extremely good at, just look at the amount of HN comments mindlessly repeating their propaganda about how opening their platform is such a massive security problem. Meanwhile the App Store has been rife with spam and fake apps for the past decade; you literally can't easily find government apps here because shady app companies buy adspace on the searches and put up apps with similar sounding names but with aggressive monetization) combined with ~20 years of US regulators just not really enforcing much in the way of antitrust cases whilst the EU was still on the boat of "maybe we should ask nicely" since that usually works for local enforcement.

Things are finally changing on that end (far moreso in the EU because big tech basically keeps pretending it's just the backyard rather than to be taken seriously and it's pissing off regulators), but it's still somewhat of an oddly prescient fact that Silicon Valley/US tech companies broadly more or less "invent" old corporate crimes that take a decade to get enforced because regulators don't get that the difference between a physical form of fraud and a digital form of fraud isn't really that big.

EU is catching on and has been passing landmark regulations specifically to attack this crap, while the FTC is doing what it can in spite of the GOP having been pulling it's teeth for the past 20 years.

jojobas• 2 years ago

FWIW Microsoft software and generic hardware of the time were way more open for anyone.

Competing with MS was hard or even impossible, but they didn't try to control what you code or run on your machine, didn't try to interfere with software vendors' revenue streams and didn't even go after piracy the way they could.

Those was right calls that made Windows so ubiquitous.

matthewfcarlson2• 2 years ago

Could be wrong but Microsoft also had a policy back then to not spend much on lobbying before the trial. They now spend quite a bit. In the US, Apple spent a measly ~6 million a year before bumping it up to 9 a year in 2023. https://www.statista.com/statistics/1043061/lobbying-expense...

By contrast, microsoft has consistently spent 9-10 million a year. https://www.statista.com/statistics/1043105/lobbying-expense...

Could it be a coincidence? Obviously. But it does seem like if you play the game, you’re less likely to get burned. Of course, that’s a very US centric approach and it makes sense that the EU is the one bringing on these challenges.

Standard “my opinions are my own” post script.

oneplane3• 2 years ago

The difference is that Microsoft was targeting general purpose computing with policy-based restrictions, and Apple is selling mobile phones that are not general purpose computing devices and later on a service ecosystem to go with it.

We could re-qualify mobile phones as general purpose devices (which technically they could be but in reality they are not), that would make the parallels much closer, and we could also have the service ecosystem made non-optional (it still is optional) to make it a bundled requirement, that would make the parallels even closer.

Other than that, the landscape and context have drastically changed, especially when it comes to presence, attention, personal attachment and the abuse of all of that (addition, mass media consumption, personal information that gets stolen or mined, attacks on devices that have a real world impact). So even if we were to make it just a browser war it wouldn't really be the same.

It's a shame Palm, RIM, Microsoft and Nokia are no longer playing the same game, it would have been interesting to see what their take on the market would be. Considering all of their hardware and software had the exact same model (release it as an appliance, all software and in some cases all traffic goes through them), it would have allowed more people to have some perspective.

perryizgr82• 2 years ago

Apple is selling mobile phones that are not general purpose computing devices

Huh? Apple chips are not Turing-complete? Or are they "not general purpose computing devices" because Apple would like us to believe so?

rchaud3• 2 years ago

Only Microsoft tried to follow Apple in lockstep with Windows Phone 7: no USB mass storage, homegrown browser engine with no alternative, and no exposed filesystem.

Blackberry phones were sort of similar, but as enterprise-first devices they always had a reputation of being mostly a work email device, not personal. They still had filesystem access and microSD expandability though.

riskable3• 2 years ago

Apple is selling mobile phones that are not general purpose computing devices

I would argue this is 100% false. They are general-purpose computing devices! The only reason why people think they're not is because they're locked down.

Apple got away with it so Google did the same. Yet there's really no reason why these devices should be locked down the way they are. It should be much easier to take control of our phones than it currently is and I'd argue that with the recent EU decisions regarding app stores we're about to get just a tiny little taste of what these general-purpose computers in our pockets could be.

r00fus6• 2 years ago

It's a shame Palm, RIM, Microsoft and Nokia are no longer playing the same game

They tried, but completely failed competing with the jaws that were a) Apple taking all the profits at the top and b) Android taking the rest of the market

These smartphone providers had to compete on both fronts and it was too much for them (even for Microsoft).

The iPhone in 2007 was like alien technology compared to anything released before then (and I was a skeptic).

HumblyTossed• 2 years ago

Different times. The corporate propaganda machine that resulted from the Powell Memo hadn't yet infected the majority of minds (even with Reagan's heavy push) so there were still more people willing to hold companies accountable.

tambourine_man8• 2 years ago

Through the late 90s and yearly 2000s I needed to purchase an expensive and slow emulator plus a Windows license just to do banking, taxes or accurately open some Office files. That's a monopoly.

If you buy an Android phone, you can use Uber, Instagram, Spotify, banking, maps, accurately render web pages, taxes, etc. There's nothing essential to modern mobile that's iOS only.

MS had ≈ 95% global market share back then, Apple has ≈ 30% of mobile market share now.

You may not like Apple's attitudes, but claiming they have a monopoly on mobile is comical.

rsynnott3• 2 years ago

MS was a bigger chunk of the market, and it was, well, a lot more _blatant_. And already had a history of dubious behaviour by the late 90s (eg see https://en.wikipedia.org/wiki/AARD_code). As someone else mentioned, MS in the 90s to early noughties was probably the most egregious case of tech misbehaviour ever (though some of Intel's stuff also wasn't great), so you're kind of grading on a curve here.

vanguardanon• 2 years ago

Apologies for this, but it's "for who" not "for whom" in your case since it's the subject of the sentence.

iamthepieman• 2 years ago

All the sibling comments trying to compare exactly how alike or different MS vs Apple behavior is, like a compare and contrast high school essay, are missing the mark. Some are very insightful and bring up information I wasn't aware of. They aren't low value comments but I just don't understand why you would think it's even possible to compare two of the largest, most profitable companies (depending on the time we're talking about) 30 years apart. I mean, it's informative to discuss for sure but the markets, tech, laws and public opinion have all changed since then. Apple doesn't have to be as bad, in the same way, with the same motives as Microsoft, for it to be bad, anti-competitive behavior. The markets are both bigger, and more segmented as well.

I don't think we're going come up with a universal measuring stick to apply here though I'm sure some tech reporting outlets will try.

Aerbil3133• 2 years ago

One absolutely key factor is that tech dominates a far higher fraction of life today than it did in the past. So these companies will be increasingly powerful entities, which makes it hard to litigate against them.

punnerud2• 2 years ago

Do big tech companies listen to anything else than fines or loss of income? If there is any other way, that would be preferable

bdd8f1df777b• 2 years ago

Maybe imprisonment of the exec would do too. Unlikely to happen though.

punnerud2• 2 years ago

Don’t that also limit innovation by making them to risk averse?

throwaway20373• 2 years ago

You can say exactly the same for global investment banks. Only when the US and EU starting fining them billions of dollars after the Global Financial Crisis (when banking regulations finally got real teeth) did their behaviour change.

gitaarik6• 2 years ago

Or in the Netherlands they at some point obligated companies making commercials for loaning money that they add a message "loaning money costs money". Before that point, there was a booming (sometimes scammy) business regarding that.

Or how independent casinos were legal before, and people could still become stinking rich from it (the owners, that is). Until the government made strict rules allowing only them to have "real" casinos, for the people that still really want it, but then at least the government can use the money for something useful.

Vespasian4• 2 years ago

Since their only job is to make their shareholders as much money as possible the (potentical) cost of noncompliance must outweigh the cost of compliance.

It's silly to expect anything else.

Trying to make a profit is a really powerful force to improve the lives of many people as a side effect. So we allow it and now enjoy the benefits.

In my opinion it seems like companies need to be confined though and is (sometimes) inherently unable to exert sufficeient self control and will even go so far as to saw off the branch they are sitting on.

gitaarik6• 2 years ago

Well no, that is why we have laws, and if you break the laws, you get punished. But some companies will always try to push the boundaries. They are just experimenting with how far they can go. Kind of similar to children at a certain age. Hopefully these companies will eventually grow up and see that it is way nicer and constructive to play fair and work together in this world. But for the time we need to have the laws and punishments to keep them in place.

Moldoteck• 2 years ago

I salute the decision, but I wonder, is the fine big enough? I mean how much money did apple make with this behavior. If even after the fine they are net positive, wouldn't they continue the same way?

piva005• 2 years ago

The fines are not to claw back damages, they are a deterrent for the company to stop the behaviour with the idea if they don't stop those fines will keep happening with increasing amounts.

madeofpalk10• 2 years ago

The linked press release has a whole section explaining how get got to the fine https://ec.europa.eu/commission/presscorner/detail/en/ip_24_...

In addition, the Commission decided to add to the basic amount of the fine an additional lump sum of €1.8 billion to ensure that the overall fine imposed on Apple is sufficiently deterrent. Such lump sum fine was necessary in this case because a significant part of the harm caused by the infringement consists of non-monetary harm, which cannot be properly accounted for under the revenue-based methodology as set out in the Commission's 2006 Guidelines on Fines.

turquoisevar6• 2 years ago

Translation: even after switching the scope of the investigation multiple times during the tens years we investigated Apple because we couldn’t make anything stick, we still ended up with a joke of a case, so to really make sure we can continue our streak of our decisions being overturned by the EU courts, we decided to slap an additional “deterrence” fine on the basis of “fuck you, that’s why”

eigenspace2• 2 years ago

It's 0.5% of Apple's global turnover. So it's not a gigantic sum, but it's also certainly not nothing to them. And the fines will continue and escalate in size if Apple does not move to comply.

This is pretty comparable to a speeding ticket. E.g. if Apple was a person making $100,000 / year, this fine would be roughly equivalent to getting slapped with a $500 speeding ticket. Not a big dent in the total pool of income, but it still stings, and it is a deterrent to know that the next time you get caught speeding the fine will be even higher, and you could even lose your license if it happens too many times.

fransje26• 2 years ago

Well, it's a deterrent fine, giving a warning to other businesses tempted to do the same.

Repeated offenders will not get off so lightly though.

jph• 2 years ago

The Apple press release response is here: https://www.apple.com/newsroom/2024/03/the-app-store-spotify...

Gravityloss• 2 years ago

Interesting claim:

Today, Spotify has a 56 percent share of Europe’s music streaming market — more than double their closest competitor’s — and pays Apple nothing for the services that have helped make them one of the most recognizable brands in the world.

Don't they have to pay the provision of the subscription like other apps?

EDIT: actually read the letter and they indeed don't (thanks for the responses too)

lutoma• 2 years ago

Spotify does not allow you to subscribe in their iOS app. You have to do that in a browser and then log in. That way Apple does not get a cut.

ankit2193• 2 years ago

It explains it later that spotify does not allow for subscription via App store. so, all they pay is $100 per year as a dev fee which is basically nothing. Apple also claims that they flew an engineer to Sweden to help out Spotify.

raverbashing• 2 years ago

pays Apple nothing

Nothing? Not even the developers fees?

C'mon Apple

pohuing• 2 years ago

Apparently not. Spotify sells their subscriptions on their website.

efraim• 2 years ago

Today, Spotify has a 56 percent share of Europe’s music streaming market — more than double their closest competitor’s — and pays Apple nothing for the services that have helped make them one of the most recognizable brands in the world.

And they shouldn't have to, users should be able to install whatever software they want on their devices without paying a gatekeeper for it. Spotify exists on the web as well, they don't have to pay Google or Mozilla for delivering the service to their users. They don't have to pay Microsoft when users downloads and installs desktop software for windows. So why should Apple get any money because users install Spotify on their iphones? I'm sure Spotify pays Google for their cloud services that actually helps make them successful.

trollied• 2 years ago

$100/year dev license. Not bad for 119 billion downloads!

have_faith• 2 years ago

So much arrogance from them recently. The biggest threat to Apple right now are themselves.

grishka4• 2 years ago

for the services that have helped make them one of the most recognizable brands in the world

I'm pretty sure Apple did nothing for that, Spotify's own marketing did. It's not like people discover that Spotify is a thing thanks to the app store.

madsbuch9• 2 years ago

From the article:

Spotify Pays Apple Nothing

This sound like a child not getting their ice-cream. Why does Apple feel entitled to get anything from Spotify? There has never been any precedence that application developers owe the platform they publish their applications on anything.

Also, Spotify never asked for an app store. They have been imposed an app store. And now Apple feel entitled to payment for that service? You have to be a government to set taxes.

criddell2• 2 years ago

There's more than 45 years of precedent if you want to count video game consoles.

gorbypark• 2 years ago

I agree with the sentiment, but that's not entirely true. Video game console have pretty much always relied on this model to make money.

lozenge2• 2 years ago

Spotify does pay - 30% of subscription fees.

brtknr• 2 years ago

Surely Spotify wouldn't be able to publish if it wasn't paying $100/year fee to Apple. I guess $100 is nothing to Apple.

matwood6• 2 years ago

Why does Apple feel entitled to get anything from Spotify?

Apple has argued they do not sell a piece of hardware, but a platform. It includes hardware, software, and a marketplace (like a video game console like others have said). Apple will also say that they have cultivated the platform to have the most affluent users (like a console again). This shows up in the stats. Even with iOS having a minority marketshare in the EU, all developers want to be on it because that is where the money is. What is access to a market and platform like that worth? Apple thinks 15%-30%.

Yes, it has been symbiotic between Apple and devs, but Apple has done something that differentiated it from Android wrt the type of user. Otherwise, all the devs could have left and Apple would have been forced to change long ago.

wil421• 2 years ago

How’s this so much different than Nintendo? I’ve never been able to play any game I want to and I’ve always been forced to go through Nintendo or Sony to play games on consoles. (Or Xbox)

aquatica• 2 years ago

Their response is the kind of arrogant that makes me want to see them get fined for the entirety of their cash reserve.

t8sr• 2 years ago

Seriously, what audience is Apple playing this to? The insinuations made in this press release should get them sued again for libel. Not to mention how off putting this kind of tantrum is for their customers.

JFC, they really need to fix their PR team here.

geodel• 2 years ago

LoL. Under what law? Perhaps "I don't like it Law"

javier_e06• 2 years ago

I search Apple's response for the word cheaper and the phrase 'less expensive' which is the issue at hand, Apple insistence and not letting developer offer less expensive options in their own store. I found nothing of the sort. Apple is not a store, its a Mall. Imagine a Mall where security people enters your store to verify that you are not advertising stores at different Mall or else you get booted?

ftyhbhyjnjk• 2 years ago

Awesome news! Apple deserve far worse than this.

philoinvestor• 2 years ago

I wrote a few post on Apple's brewing problems, outlined within: https://www.philoinvestor.com/p/downside-at-apple-a-10x-in-1...

arkadiytehgraet• 2 years ago

Could someone please explain to me the following: does Apple have to pay the fine just once and then it can continue with the same practice of taking its 30% cut and preventing Spotify to direct users outside of the app for payment?

Or can EU sue Apple immediately again for the same thing? Or does Apple get some time to change their ways and if they don't, then they will get fined even more?

tpm• 2 years ago

They can continue to take 30%, but can't stop apps using other subscription methods.

Apple will now have to remove terms that prevent developers telling users about other subscription methods.

https://www.politico.eu/article/apple-gets-e1-8b-eu-antitrus...

lucianbr2• 2 years ago

When you are fined for speeding, can you then just go on speeding like the speed limit does not apply to you, having paid the fine once?

No. Apple is ordered to change their behavior and pay a fine. If they pay the fine but repeat the behavior, they are in for more trouble. The second time around, it would not take years to do the investigation and decide on the fine. It would be really fast.

However, what I'm worried is that they may appeal the fine, and get it reduced. This happens sometimes with these fines, actualy feels like most times.

gcanyon• 2 years ago

I think Spotify can direct users outside of the app for payment? From Apple's response:

Music app developers can even include information about other offers available outside of their app, along with a link directing users to a website to create and manage their account.

hu34• 2 years ago

Apps can link to external payment methods only if they pay Apple.

And there's a bunch of bureaucracy. You have to apply to the program beforehand, follow a bunch of guidelines, implement a bunch of hooks in app code and pray they will approve.

See section "Commission, transaction reports, and payments" from: https://developer.apple.com/support/storekit-external-entitl...

Apple’s commission will be 27% on proceeds you earn from sales (“transactions“) to the user for digital goods or services on your website after a link out (i.e., they tap “Continue” on the system disclosure sheet), provided that the sale was initiated within seven days and the digital goods or services can be used in an app. This includes (a) any applicable taxes and (b) any adjustments for refunds, reversals and chargebacks. For auto-renewing subscriptions, (i) a sale initiated, including with a free trial or offer, within seven days after a link out is a transaction; and (ii) each subsequent auto-renewal after the subscription is initiated is also a transaction.

sneak• 2 years ago

This is how much revenue Apple accumulates in 45 hours.

Apple’s 380B USD in annual revenue is over a billion dollars per day.

CommanderData• 2 years ago

Increase the fines!

Make it hurt instead of pinch.

mderazon2• 2 years ago

In that case, good for the EU, just another form of tax collection.

mopsi2• 2 years ago

Revenue != profit.

jannes• 2 years ago

revenue != profit

Manfred• 2 years ago

I will miss the handy subscription overview and a minimal amount of clicks to cancel or request a refund. I wish we could have both.

mjburgess• 2 years ago

... you can.

There's nothing stopping apple requiring subscriptions to appear on a unified management interface.

nozzlegear6• 2 years ago

Sorry, am I missing something? If I go to App Store => My Profile => Subscriptjons, I can see every subscription that I’m paying for in a unified view and I can cancel them all in a couple taps from there. That includes my Apple Music (Apple One) subscription.

gok• 2 years ago

The EU would surely fine them for that too.

tzs• 2 years ago

How could that possibly get past EU antitrust regulators?

My Spotify subscription, for example, was purchased on their website, which I got to via a browser on my desktop computer. Apple has had no involvement whatsoever in my relationship with Spotify other than as a provider of some of the platforms on which I run Spotify's apps to use my Spotify service.

If Apple were to tell Spotify that Spotify must provide a way to cancel my totally outside of Apple Spotify subscription from Apple's subscription managements interface as a condition of being allowed on the App store I can't see the EU allowing that.

saurik3• 2 years ago

I just can't imagine paying 30% more for a subscription to a third-party company offering a protection racket just so I can see it in a list and cancel it slightly more easily... there is just no way that that pencils out; I have bought a things throughout my life from lots of random parties and there is no way that I've lost enough money on hard to manage or refund payments that taxing me a full 30% to prevent it wouldn't be costing me a ridiculous amount of money.

rrrrrrrrrrrryan2• 2 years ago

That's always been how I've seen it.

As far as regulations go:

- Let Apple require that apps accept Apple Pay as one form of payment - Let Apple take whatever cut they want for Apple Pay - Let apps inform users about Apple's cut - Let apps inform users about alternative, cheaper, ways to pay.

How could anyone be against transparency?

Let all the folks that allegedly love the "convenience" of Apple Pay so much continue to pay an extra 30%.

shreyansh_k7• 2 years ago

Spotify does seem to be in an interesting position where it gets to piggyback on Apple's whole infrastructure and ecosystem without paying Apple anything. That should count for something...

occz• 2 years ago

I find this argument kind of ridiculous - yes, access to Apple's APIs does bring value to its app developers, but crucially, the app developers increase the value proposition of Apple's product by being available on the platform.

It would be just as fair in this case to say that Apple should be paying Spotify for making their app available on the App Store.

Luckily, by custom there is another solution - the platform providers charge nothing and let their customers decide what software to use, and the developers targeting the platform do not charge for developing their software for the platform. As it has worked forever on Windows, Linux, Android, MacOS, etc.

shreyansh_k7• 2 years ago

I find this argument kind of ridiculous - yes, app developers (such as Spotify) bring value proposition to Apple's products by being available on the platform. But, apps (such as Spotify) probably wouldn't exist and wouldn't have access to the immense value of an App Store and its tooling if Apple didn't exist.

Luckily, by custom there is another solution - respect each other boundaries and stop acting like whiny little children.

matwood6• 2 years ago

It's also not just APIs. I would argue more importantly, Apple has cultivated a platform with the most affluent users. Otherwise Spotify wouldn't care if they were on the minority platform in the EU. Apple's argument is the work they have done to get high paying users on the iOS platform is worth something to people who want to sell to that group.

Terretta5• 2 years ago

I find this argument kind of ridiculous - yes, access to Apple's APIs does bring value to its app developers, but crucially, the app developers increase the value proposition of Apple's product by being available on the platform.

And yet, in retail, it's common for product brands to pay for shelf space. There's a recognition that the place users are, is worth paying to be in.

Meanwhile, Steam shows what just the storefront part of such a platform should cost a developer, and interestingly, that open market price is higher than Apple's ask.

shuckles14• 2 years ago

This is a weird argument. Apple released a functionally comparable product to Spotify with about $2b of investment in Beats. Only one company on the planet has been able to create a functionally comparable product to iPhone, and that’s stretching the definition and required huge expense.

It’s pretty clear that Spotify’s value add to Apple is tiny while the reverse is much larger.

Spotify wouldn’t have a business in the counter-factual world where they were never allowed in App Store, while Apple Music would clearly exist. Their business model innovation was fairly limited; streaming music services began in the late 90s.

turquoisevar6• 2 years ago

It’s a symbiotic relationship but not a symmetrical one. In the beginning Apple needed the devs more than vice versa, but now it’s definitely the other way around.

Note the “more” part, it’s still a symbiotic relationship.

Apple couldn’t have made the iPhone successful without third party devs, but it’s doubtful Spotify could’ve been as successful as they are without access to the iPhone.

As an app developer for iOS myself I can say that Apple’s frameworks have been invaluable to me, especially the improvements and additions in the last few years have significantly made my work easier.

Not only that, because overtime I’ve become friends with some of the engineers that work on them, I also know how much time and money goes into them, at least on an individual engineer level.

So it seems fair to me that Apple gets paid for their IP. But I’m not interested in paying huge fees upfront like what was common when developing for game consoles, nor am I interested in paying potentially huge fees like the CTF.

To me, the best option is a revenue based commission. When I do well, Apple does well, but when I don’t I won’t owe Apple anything. This also motivates them to keep investing in frameworks, because with good frameworks I can make better and more successful apps, which then benefit them.

It also allows me to take risks and try out new things or even give away my work for free.

Personally I was already happy with 30% and that’s what I signed up for at the time. The 15% I pay now is of course even better, but it’s not like I passed on those savings to my customers. If I ever get so successful that I hit $1m in revenue then I’ll be more than happy to pay the 30%, because I will have been successful in part because of the tools provided by them. Or put differently, that success will be in part a consequence of what happened before I hit $1m, when I was still paying the 15%.

I’ve got friends that have launched their apps on Android as well, but those earnings are a rounding error compared to their iOS earnings and their apps are heavily being pirated on Android.

I can’t quantify what it is that Apple does different that it entices customers to spend money on apps (other than the lack of piracy perhaps), but it’d be silly to pretend like it doesn’t benefit developers to a degree that it warrants Apple getting something in return for that, in addition to the tool-based justification.

lucianbr2• 2 years ago

Apple is also in an interesting position then, where it gets to piggyback on various ISPs infrastructure without paying those ISPs anything.

Let's just ignore that customers pay, both for iphones and for internet access, shall we?

shreyansh_k7• 2 years ago

This is just showing poor understandings of personal boundaries.

Yes, Apple is piggybacking on various ISPs infrastructure. That is a deal the ISPs explicitly allowed everyone to do and marketed as a selling point for others to use in their services.

Apple is simply trying to enforce its own boundaries which it established before Spotify came into the picture.

shuckles14• 2 years ago

Comparing a legal monopoly (utilities) to a privately developed computing product is a bit absurd. What easement rights and wireless spectrum did the EU grant iPhone?

yxhuvud• 2 years ago

The customers of Apple pay for their phones. Spotify is not a customer of Apple (more than whatever they buy for their employees).

No further payments need to be involved.

shreyansh_k7• 2 years ago

I find these kind of arguments to be ridiculous.

Apple risked their resources and created the whole ecosystem before Spotify even existed. It's not like Apple put a gun to the heads of Spotify executives and forced them to use the App Store. It's the executives who reviewed Apple's terms and then decided that investing in Apple's ecosystem would be useful for Spotify.

madeofpalk10• 2 years ago

There's two things in response to this:

Apple accrues benefit from having Spotify in the App Store because it makes iPhones better. An iPhone with no apps is less useful than an Android phone with many apps. This should be a win/win scenario where both parties get value from the platform (they do!)

Also - Apple is welcome to just charge a fee for the costs they feel appropriate for the development platform and App Store distribution. However, that fee (one-off R&D, and per-download bandwidth) seems pretty marginal. I wish Apple had the guts to actually charge everyone to Core Technology Fee (50 euro cents per download), rather than requiring EU developers to opt into it https://developer.apple.com/support/core-technology-fee/

GardenLetter276• 2 years ago

But they aren't permitted to do anything differently.

If Apple allowed alternative App Stores and sideloading, this wouldn't even be a discussion.

nottorp• 2 years ago

Apple pays for Spotify's streaming bandwitdh? :)

If you mean app installs, it's apple's fault for not allowing sideloading.

nprateem• 2 years ago

I know. All those poor iPhone owners who bought them so they could use the millions of apps created by developers for free for Apple, and the same devs who also get rinsed on hardware and other costs. Apple get absolutely nothing out of any of this.

papichulo2023• 2 years ago

Can you image MS starts charging everyone (including everything done in the browser) because they are using Win32? Lol. The whole point of the OS is to provide API/ABIs and customers already paid for that.

ankit2193• 2 years ago

Somehow I wonder if this is indeed protectionism. Slack filed a complaint against Microsoft too, but no action has been taken on that. Having said that, it took five years and three pivots for EU to arrive at this decision. So, wonder how long it will take for Slack to come through.

klabb3• 2 years ago

I doubt it. Could be a soft factor, but at the end of the day this (and other rulings) are consumer related.

This being suspicious against the EU mindset is amusing. From a European perspective, the US has enormous influence, the arrow clearly points in the other direction. EU politicians are often desperate to please the overlords to the west, and very little if any pressure is exerted to protect EU interests. Also EU is uncoordinated, and doesn’t act like a unified force at all.

Take the Pirate Bay trial for another example. That was proven to be a US media industry hit job. Lots of things like that. The US hints at sanctions and everyone loses their minds.

Make no mistake, modern US corporations untangled from pesky regulations are still screwing over Americans the most. This “the Europeans are up to something” is amusing in the face of an absolute massacre of the middle class at home, with things like healthcare-insurance-prescription cartels being probably the most egregious example.

procgen• 2 years ago

Interestingly, in the US, the middle class only shrank because the upper class grew.

breadwinner• 2 years ago

Slack's case is an obvious example of Microsoft using their dominant platforms to stifle competition. Microsoft basically cloned Slack, then bundled it with Windows and Office. If this doesn't merit huge fines, I don't know what does.

GardenLetter276• 2 years ago

Yeah, Microsoft is just as bad.

Slack and Zoom should have good cases over the Teams bundling tbh.

The "Open"AI investment and sudden shift from a non-profit is crazy too.

ankit2193• 2 years ago

Exactly. It was a slam dunk case with any criteria. They cloned the product, bundled it free with other apps, and later as a standalone product, priced it at half of slack's pricing. Completely killed the market for slack.

Aissen• 2 years ago

It seems that the Slack complaint came after Spotify's ? (even though both are taking too long IMHO, only giants can afford waiting this much.)

Dah00n• 2 years ago

Why should Slack's later complaint come before Spotify's earlier complaint? Besides, it is not like all cases take the same amount of time.

xvector5• 2 years ago

This is absolutely protectionism. The EU rent-seeks from American tech while avoiding punishing any EU company. Ask any artist if Spotify is a monopoly!

smoldesu5• 2 years ago

It seems more plausible that America is neglecting to regulate their duopoly because it benefits them. Europe has multiple examples of Apple ignoring municipal orders and is justified in targeting Apple with legislation. If you want to accuse protectionism, the United States has the most to lose if domestically-bugged hardware falls out of market favor.

newbie578• 2 years ago

Now we await for the app store because of DMA. Let’s see how obtuse Apple can be.

s1k3s• 2 years ago

This isn't about music streaming but about the payment restrictions Apple forces on Appstore devs. The court decided that Apple's practices destroy competition, which is obviously true. Also it's in line with the new gatekeeping laws that are coming this month.

shadowfiend2• 2 years ago

Enforcing past behavior under laws that haven’t come into effect yet is not a great approach though…

eigenspace2• 2 years ago

These fines aren't through the new DMA. These fines are through preexisting regular antitrust laws.

oaiey• 2 years ago

This argumentation is probably being based on generic anti trust law ... and the DMA is a new specialization below it. Does not mean that you violated past law just because new law is also applicable to you.

madeofpalk10• 2 years ago

It's actully a 15 year old law (in it's current name, originally from 1958). From the article:

Today's decision concludes that Apple's anti-steering provisions amount to unfair trading conditions, in breach of Article 102(a) of the Treaty on the Functioning of the European Union (‘TFEU')

todd-davies5• 2 years ago

The specific guidelines that the Commission is relying on were written in 2006 [1].

[1] https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A...

turquoisevar6• 2 years ago

You seem to be confused with something else.

This was about music streaming and no court was involved with this. This is a decision from an executive branch. The courts will come into play once Apple has filed their announced appeal.

malermeister• 2 years ago

Interesting to see how positive the feedback in these comments is. I predict the mood will turn once the West Coast wakes up...

madeofpalk10• 2 years ago

Spotify really has the short end of the stick here. Apple does themselves no favors by participating from a privileged position at every point in the market. Apple App Store sets rules that disadvantages Apple Music's competitors.

To offer subscriptions on iOS, Spotify must give away 30% of it's revenue to Apple. Yet Apple compete with them with Apple Music. Do you think Apple is giving away 30% of it's Apple Music revenue? This means that in order for Spotify to compete head-to-head with Apple Music, it must either charge 30% more, or maybe 30% less money than it's next competitor.[0]

This is on top of Apple's blatently unfair rules that prevent developers actually explaining any of them to it's users, or informing users how to actually sign up or get a cheaper option. If Apple believes these rules are so correct, why does it ban communicating them to it's users?

[0] Indeed, for Apple Music on Android Apple bypasses Google Play payments, it's 30% cut, and bills itself via credit card.

gilgoomesh• 2 years ago

To offer subscriptions on iOS, Spotify must give away 30% of it's revenue to Apple

Spotify haven't paid revenue to Apple in years. This finding is because Spotify aren't permitted to "[inform] users of payment options outside its App Store" due to Apple's anti-steering rules.

hu34• 2 years ago

I think you agree with your quoted message then? To be more clear:

Spotify haven't paid revenue to Apple in years... because they haven't offered payment from inside the iOS app.

madeofpalk10• 2 years ago

I know. I also read the press release. So Spotify has three options available to them:

- They make 30% less on iOS subscriptions compared to Apple Music

- They charge users 30% more compared to Apple Music

- They offer less functionality (don't accept subscriptions on iOS) compared to Apple Music.

Apple uses one area of it's business to disadvantage competitors to it's other areas.

isodev• 2 years ago

Spotify hasn't paid revenue to Apple in years... because Apple does not offer reasonable terms for Spotify to comply.

The 30% fee + no way to redirect users to better offers is kind of extreme, especially when Apple has a first party offering which doesn't need to go through the same hoops.

baxtr• 2 years ago

This all sounds logical, but only to the extent you want it to be logical and numbers based.

Why not include all the dollars required to get a working phone platform to billions of people on the planet?

Ask Jeff Bezos or Microsoft how easy that is.

Spotify wants to have all the positive aspects of the global Apple ecosystem but is not willing to pay a price for it.

apwell23• 2 years ago

Why not include all the dollars required to get a working phone platform to billions of people on the planet?

yea they do it not as a public service but to make their own platform more attractive with apps to ppl who buy iphones.

This is not a service like aws purely benefit of app creators like spotify. Apple does it for their own benefit.

albert1804• 2 years ago

Yes, poor Apple selling their phones at cost to make money on the ecosystem like Google or Microsoft. Oh wait

lopis• 2 years ago

What's the point of defending a multi-trillion-dollar company? Apple is abusing its market position. Let's not pretend that they are strapping for money because getting a working phone platform is expensive. Apple doesn't provide 30% of the value of a company to deserve 30% of their profit. If they wanted to make it fair, they would charge a fair usage cost of the app store. Charge for hosting apps, delivering updates, appearing in featured apps, etc. Heck, companies already spend money on marketing, let them opt-out from appearing in search results if they want.

_aavaa_3• 2 years ago

Apple's profitability and their ability to sell devices is Apple's problem, not Spotify's.

Apple is not entitled to a cut of every transaction that happens on my device, despite however much their claim otherwise.

alkonaut• 2 years ago

Why not include all the dollars required to get a working phone platform to billions of people on the planet? Spotify wants to have all the positive aspects of the global Apple ecosystem but is not willing to pay a price for it.

But this assumes that by creating something Apple has right to all the profits from it. For consumers, it's likely better if they didn't. And consumers are voters while corporations aren't.

Spivak• 2 years ago

To offer subscriptions on iOS, Spotify must give away 30% of its revenue to Apple. Yet Apple compete with them with Apple Music. Do you think Apple is giving away 30% of its Apple Music revenue?

This isn't the right read on the situation — Apple pays the 30% in opportunity cost. Now Spotify doesn't actually pay the 30% but let's pretend they did. Every Spotify user they have paying $10/mo nets Apple $3/mo. So if Apple Music wants to enter the market every user they get that would have otherwise been a Spotify user loses them $3/mo. So the cost of the Apple Music subscription has to make Apple $3/mo in profit to break even with the cost of doing nothing. So if Apple's costs are the same as Spotify's for actually providing the service and Spotify charges $10/mo and Apple charges $7/mo Apple is losing money.

This is why across different industries and long before Apple existed this practice was ruled not anti-competitive.

mrkramer• 2 years ago

Apple always thinks they are right and they know the best, the very same stubborn mindset as Google. And why they keep repeating "Spotify Pays Apple Nothing"?!

rvz• 2 years ago

Great start. It's about time that Microsoft gets investigated as well.

haunter• 2 years ago

You mean the Xbox? Guess you can count Sony and Nintendo too then.

GardenLetter276• 2 years ago

Teams bundling would be the main one.

Then Xbox for not allowing alternative marketplaces like Steam.

OneDrive and Office365 cross-promotion is also a bit dodgy, especially tied in to the near-mandatory Microsoft account. Apple might get sued over iCloud for the same reason soon.

rcMgD2BwE72F2• 2 years ago

And Google, too.

Try using an popular Android application without being forced to install Google Play Services. You can't do banking, can't get notifications, etc. Many of the most critical apps will simply refuse to launch.

Google slowly turned Android into a Google service thanks to developers having to rely on Google's proprietary APIs.

I work at a small independent app studio, and we just decided to required the Google Play Services in our Android apps because too few people don't have it (why try and do without then). It's like all websites only supporting Chrome and nobody complaining (except a few nerds using custom ROMs). What a shame.

iammjm• 2 years ago

I like Spotify and I like Apple. But Apple do treat Spotify badly - I assume it's nothing personal but just sheer abuse of power to push their own product - Apple Music. Thanks to this I as a end user get a worse product - buggy Apple Watch App, connectivity issues, reduced functionality

judge20202• 2 years ago

The YouTube Music Apple Watch app works flawlessly for me. Maybe the problem is Spotify not putting in the effort to make a good watch app?

ted_bunny• 2 years ago

It's pretty poor on Android, fwiw

throwaway20373• 2 years ago

Also on Financial Times: https://www.ft.com/content/05606b16-8c4d-4535-893e-af909fcf2...

Glimjaur• 2 years ago

Apples response: https://www.apple.com/newsroom/2024/03/the-app-store-spotify...

Spotifys response: https://newsroom.spotify.com/2024-03-04/the-european-commiss...

mikeortman• 2 years ago

Apple's response, in a nutshell:

- A weird callout to the nationality of the company right out of the gate

- Spotify will be nothing without us (insert crazy ex memes)

- "Our engineering helps ensure that Spotify’s apps can work seamlessly with Siri, CarPlay, Apple Watch, AirPlay, Widgets, and more." -- yeah, because those are your products, Apple. You make your money on those products being tightly integrated

- A bizarre quantization of the apple ecosystem by total number of "APIs" Apple gives them access to (250k)

- A claim of insider coercion between Spotify and the EU Commission that made it difficult for Apple to win

- They are going to appeal

albert1804• 2 years ago

The Outrage out of Cupertino will be even funnier when they will get bonked for their BS Compliance with the DMA

TillE• 2 years ago

My favorite bit is their key highlighted argument that their anti-competitive behavior has been ineffective, therefore it's not anti-competitive.

bryanrasmussen• 2 years ago

A weird callout to the nationality of the company right out of the gate

not particularly weird, it's a rhetorical implication that the EU favors a European company unfairly.

turquoisevar6• 2 years ago

You should get your nuts checked, that nutshell is a bit rotten.

My nutshell contains something else:

- Apple lamp-shading that EU companies seem to get a pass

- Apple refuting Spotify’s claims that Apple’s acts somehow have harmed and stifled Spotify, by highlighting how successful Spotify is

- Highlighting how Spotify has benefited from Apple’s work without paying a dime, refuting the implied notion that Spotify is on the hook for 30% and refuting the implied notion that no benefit is provided in exchange for the commission by Spotify consistently calling it a “tax”

- Lamp-shading the fact that the scope of the EC’s investigation has changed more often than your average brothel’s bed occupant during the ten years of the investigation due to the EC not being able to make the case on all the other stuff they tried, from consumer harms to harm to competitors, eventually landing on a anti steering provision but only in the music streaming service market and only after that anti steering was already abolished, hinting that Spotify has been the driving force behind this indefatigable mindset to find something that sticks

- They think it’s BS and are going to appeal, according to them because no harm was proven, but I think in part because the actual fine is only $4m, because that’s how shitty the EC’s case was even after shifting the goal post so often, so the EC decided to add a bogus “deterrence” fine. That and of course because this is merely a decision by an executive branch, in that regard it’s not unlike, say, Trump’s executive orders, in that they’re not worth much more than the paper they’re written on until a judge has adjudicated it.

7moritz7• 2 years ago

Apple forgot to mention that one of the main reasons for the high fine is them having made false statements during the case.

burnerthrow0084• 2 years ago

What were the false statements?

dncornholio• 2 years ago

Apple's response makes me almost put my iPhone in the trash. What a trash article with trash arguments. It's like reading a kids writeup how they stole their candy that wasn't even theirs.

They also explained why my App Reviews sometimes take weeks, they treat their customers not with integrity. Sad stuff really.

cm2012• 2 years ago

I don't know of any big company that acts more like the little lord of everything than Apple.

kanbara• 2 years ago

did you not see spotify’s original dma posts? if you think apple’s comments are trash, daniel ek’s are even more immature

gitaarik6• 2 years ago

Why don't we all do that already? Would people that have well knowledge about all the shit Apple has been pulling recently, still buy products of them if they weren't already so vendor locked in?

rifty• 2 years ago

Also Daniel Ek's X response (although it basically follows the same talking points as the newsroom response): https://x.com/eldsjal/status/1764665330444406894

ergocoder• 2 years ago

yeah he isn't allowed to talk outside those talking points. It might undermine their case.

lapcat• 2 years ago

The European Commission announcement: https://ec.europa.eu/commission/presscorner/detail/en/ip_24_... (ironically with cookie banner)

Apple's response: https://www.apple.com/newsroom/2024/03/the-app-store-spotify...

mjhagen2• 2 years ago

Apple's conduct, which lasted for almost ten years, may have led many iOS users to pay significantly higher prices for music streaming subscriptions [...]

Apple Music and Spotify subscriptions cost exactly the same.

stephenr• 2 years ago

Not mentioned: Apple pays more than double the royalties of Spotify.

lock-the-spock• 2 years ago

Yes but Spotify gets only 70% of that cut while apple gets 100%. Without the apple tax Spotify might be able to either go down in price or increase quality/breadth/payouts to creators/other offerings/... The market is distorted and you pay more and get less if one monopoly takes all others for a ride.

concinds2• 2 years ago

Of all the narratives surrounding Apple's practices, "it leads to higher prices for consumers" is an outright lie, and I don't know why the EU is telling it. It applies to nothing. Reader apps (Kindle/Netflix/Spotify) don't use IAP so they currently pay nothing. In-game IAPs (where the vast majority of Apple's fees come from) would just pocket the difference, because customers are used to current prices and there's no price competition that could drive prices down (you can only buy Fortnite v-bucks from Epic Games, obviously). The App Store has exerted downward pressure on app prices compared to desktop apps, not upward pressure, since its inception.

The real benefit of these rulings is ease of competition (subscribing to Spotify as easily as to Apple Music, buying Kindle books as easily as iBooks, all great things). And more game companies dumping Apple IAP for their in-app gambling mechanics, overpriced cosmetic skins, and pay-to-win tokens, so they can make them non-refundable, screwing over parents. Some customers win and some lose, but prices won't change.

rchaud3• 2 years ago

Apple blocking even the mention of alternative payment options in its app is pathetic. They are what they supposedly reviled in the original 1984 commercial for the Mac [0]. They're even doing "newspeak" in the brazenly self-serving way they attempt to justify these choices.

The open web is the metaphorical sledgehammer here. Megacorps need to go back to selling cool hardware as is, instead of $1000 trojan horses for whatever Wall St analyst-approved "service" they can tack on.

[0] https://www.youtube.com/watch?v=VtvjbmoDx-I

udev4096• 2 years ago

What if Apple doesn't pay the fine?

albert1804• 2 years ago

They don't have a choice as long as they are doing business in the European Union. It will be probably taken out of their Accounts in the European Subsidiary after going through the usual process of People/Companies not paying.

s_dev• 2 years ago

Would be like going up against the taxman. They will pay the fine because 100% no Apple exec based in Europe will risk prison time.

kingsleyopara• 2 years ago

Worth pointing out that when this complaint was filed Spotify was publicly complaining about the lack of equal access to the HomePod and Apple Watch.[0]

Apple addressed this with API’s at WWDC the following year.[1] Yet here we are, almost 4 years later and Spotify have yet to implement support whereas competing services have.[2]

[0] https://newsroom.spotify.com/2019-03-13/consumers-and-innova...

[1] https://developer.apple.com/videos/play/wwdc2020/10061/

[2] https://www.macrumors.com/2021/05/06/deezer-announces-voice-...

Terretta5• 2 years ago

They* don't have to hustle to compete when they're the in-market dominant player.

* I mean Spotify.

matthewfcarlson2• 2 years ago

Drives me nuts. Apple even added this weird sort of work around where if you ask for it on Spotify, it connects to your phone and the phone airplays Spotify to the HomePod.

shuckles14• 2 years ago

Right: complainants can argue they should have access to all of Apple’s hardware devices for free while they themselves are an Apple-level monopoly in their market. I wonder how many billions of dollars in exclusive podcast deals for formerly openly distributed content consumers are missing out on because of these anti-steering rules.

danpalmer2• 2 years ago

The APIs don't allow applications quite the same access as Apple Music has. I imagine that using them would weaken Spotify's complaints, while also resulting in a sub-par user experience. Users lose out in the short run, but I wouldn't necessarily blame Spotify for this.

granzymes• 2 years ago

It would result in a significantly improved user experience… I really have no sympathy for Spotify intentionally refusing to improve their HomePod experience in order to avoid “weakening their complaint.”

macinjosh• 2 years ago

A financial hangnail for Apple. Thoughts and prayers to Cupertino. /s

perryizgr82• 2 years ago

I don't understand. If Spotify (or EU) is unhappy with Apple's offerings and don't think they are worth the money, they can simply build their own smartphone ecosystem and offer their products on there. Why coerce Apple? Why not let them do their own thing? It's not like they are preventing you from developing your own technology or funding/buying from someone else.

Seb-C• 2 years ago

I don't understand. If Apple is unhappy with the EU's rules and don't think they are worth the money, they can simply build their own country and offer their products on there. Why coerce Spotify? Why not let them do their own thing? It's not like the EU is preventing Apple from developing their own civilization or funding/buying from someone else.

xvector5• 2 years ago

Because as the past 20 years have demonstrated, the EU is fundamentally incapable of innovating in consumer technology. At this point all it can do is rent-seek from US tech.

vinay_ys• 2 years ago

Currently Apple wants to charge core technology fee per install (irrespective of App Store or not, after first 1 million install) and App Store commission of 14.1666% of total revenue. This seems egregious because it is charging it on customer transaction and ultimately it is coming out of customer pockets when they have already paid Apple for the hardware.

Instead, Apple should have disaggregated their fees. IMO, they can charge the following fees fairly:

1. Developer Ecosystem Tools – compilers, libraries, entitlements – can be one time or annual fees, not coupled with number of installs or revenue. (mandatory, entitlement fees could be per entitlement purchased by the app).

2. App Store registration fees – can be one time or annual fees, not coupled with number of installs or revenue. (optional – can choose to not use App Store)

2.1 App Store technical fees for app binary release certification – charged per app release/update.

2.2 App Store bandwidth fees – per app install delivered via App Store – charged per total bytes delivered.

2.3 App Store in-app purchase payment fees – percent of payment processed (currently 0.25%).

2.4 App Store ads fees – developers can choose to pay for Apple Ads for boosted discovery of their app within App Store.

They could provide free quotas for each of the above. That way free apps can still exist.

Apple can also provide iOS level capability via System Preferences or managed device profiles to lock App stores (or alternate app stores).

IMHO, this is likely the path that would be well-received and will be followed by alternate app stores as well.

EMIRELADERO6• 2 years ago

The problem with this plan is the "entitlement fee". The DMA mandates that OS API access be offered free of charge.

zigzag3122• 2 years ago

Platforms are very intertwined, where third party products increase the value of the platform far beyond the base value of the platform (i.e. the value created only by the creator of the platform).

A feedback loop is created as bigger platform attracts more third party products, which in turn make the platform even bigger. At some point it becomes impossible for new competition to enter the market.

IMO laws should treat platforms as special in order to promote creation of environments with a healthy amount of competition. Laws requiring openness of platforms seem to be one way to do it.

pjc503• 2 years ago

That only "works" for the DMA if there's a clear path through those where there's actually a market - i.e. it's possible to ship an app onto iOS devices without having to go through the fee/approval stage.

2.1 App Store technical fees for app binary release certification – charged per app release/update.

In particular, this is something that developers actively don't want and would pay money to not do.

developers can choose to pay for Apple Ads for boosted discovery of their app within App Store

Suspect this ruins the app store for everyone, in the way that boosted discovery ruined Twitter/X.

NekkoDroid• 2 years ago

Suspect this ruins the app store for everyone, in the way that boosted discovery ruined Twitter/X.

Well, that is more because every bot and their toaster is able to pay a 8$/month fee to have top visibility, especially when it partitally gets reimbursed due to the payouts.

todd-davies5• 2 years ago

Note that this fine is made up of 0.04bn of fine and 1.8bn of deterrent against future anti-competitive behaviour [1]. The the 2006 fine-setting guidelines allow the Commission to do that [2].

We should read the 1.8bn lump sum (roughly 0.5% of Apple's revenue) as partially being about music streaming and app stores, but mainly a warning to all large firms which are currently jockeying for a dominant position in emerging tech like generative AI and visual computing.

The warning: play fair and compete on the merits, or see you in court.

[1] "the Commission decided to add to the basic amount of the fine an additional lump sum of €1.8 billion to ensure that the overall fine imposed on Apple is sufficiently deterrent" https://ec.europa.eu/commission/presscorner/detail/en/ip_24_... [2] See paras 30 and 31. https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A...

JonAtkinson• 2 years ago

Hi Todd!

RugnirViking• 2 years ago

what is actually the difference in this case?

I thought the function of fines WAS the deterrent effect? or is some aspect of this restitution? I thought this was payable to the EU itself, not spotify.

tivert• 2 years ago

I thought the function of fines WAS the deterrent effect? or is some aspect of this restitution? I thought this was payable to the EU itself, not spotify.

Maybe it's something akin to punative damages (https://en.wikipedia.org/wiki/Punitive_damages), where the "fine" component is assessed according to the actual harm measured and the "deterrent" amount is meant to make it sting as a punishment.

The law always needs a little something extra to deal with people like the guy who parks in handicap spaces because he can afford the fines.

todd-davies5• 2 years ago

(edit) TL;DR: see tivert's comment.

In most cases, the Commission sets a fine which is based on the harm caused by some anti-competitive conduct, with relatively small adjustments for extenuating or attenuating circumstances. In this instance it's the opposite; the economic harm was small but the adjustment was huge.

You're right that the logic - deterrence - is the same in both cases. But what's different (at least in my view), is the object of the deterrence.

Ordinary fines are designed to make anti-competitive behaviour unattractive in terms of the costs and benefits. Maybe some underhanded conduct generates €40m extra profit, but the risk of a €40m fine plus legal costs and adjustments makes it not worth it.

The trouble is that these fines might are essentially just rounding errors for large firms. In this case, a €40m fine would be tiny in relation to Apple's revenue stream (~€350bn euros a year), thus not an effective deterrent. That's for two reasons. First, the 40m figure is too low since a "significant part of the harm caused by the infringement consists of non-monetary harm, which cannot be properly accounted for under the revenue-based methodology as set out in the [Commission's guidelines]"[1]. Second, the fine is trying to to "deter [Apple and] other companies of a similar size and with similar resources from committing the same or a similar infringement"[1] even when they could absorb the ordinary (small) fine as essentially a rounding error on their cost of doing business. In that case, large conglomerates could basically just ignore competition law.

So here, the Commission is deterring all firms which have a "particularly large turnover" [2] (e.g. Big Tech firms) from using their power in one market to gain an advantage in another market, as in this case where Apple used its control over its App Store to gain an advantage in the music streaming market. The fining guidelines allow for fines to be much larger (~50x in this case) for tech giants, even if the actual infringement didn't cause that much quantifiable harm.

You're right, there's no restitution here. As you say, the fine is payable to the EU and would be paid into the EU budget.

[1] https://ec.europa.eu/commission/presscorner/detail/en/ip_24_... [2] Para 30 https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A...

catothedev2• 2 years ago

Honestly, these multibillion dollar fines from the EU against US tech companies always have an air of 'Since we don't really have a domestic tech industry, these judgements don't really set a precedence for domestic companies, therefore let's just systematically use fines to collect cash'. An extra tax for big US tech companies doing business in Europe. Is there some truth to this?

msla• 2 years ago

We should read the 1.8bn lump sum (roughly 0.5% of Apple's revenue)

So it deters nothing, Apple pays it and continues to do what it's doing.

jijijijij5• 2 years ago

Respectively, 21% of Apple Music's 8.3B$ revenue, tho. Video streaming and other services may follow. Now, there is precedent.

piva005• 2 years ago

If they continue the fine amount will be increased on the next one. That's how the EU plays, you get a warning, then a deterrent, if that doesn't stop the behaviour fines will continue to be levied in increasing amounts.

GDPR rules follow the same structure and are a pretty good deterrent.

jijijijij5• 2 years ago

Any person or company affected by anti-competitive behaviour as described in this case may bring the matter before the courts of the Member States and seek damages. The case law of the Court of Justice of the European Union and Regulation 1/2003 both confirm that in cases before national courts, a Commission decision constitutes binding proof that the behaviour took place and was illegal. Even though the Commission has fined the company concerned, damages may be awarded by national courts without being reduced on account of the Commission fine.

Uff. Spotify can ask for damage compensation on top of those 1.8 B€, huh?! Apart from music streaming services, I don't see why the situation isn't fundamentally the same with video streaming and Apple TV, and maybe even things like VPN, or cloud services, where Apple has its own competing products now.

So... this ultimately may get really, really nasty and expensive for Apple. I am so here for it :)

Aerbil3133• 2 years ago

Looking from the perspective of Apple, the whole situation is really annoying. Let me play the devil's advocate here. They built the iPhone, iOS and all its frameworks and the App Store. Now they are forced to act as essentially a public service provider. Philosophically, the amount of users they have shouldn't necessiate them to be treated as one. But you know, everyone wants a piece of the cake Apple thought they baked under their own terms. It's quite telling that this regulation comes from EU which are not getting nearly the tax and revenue US gets from Apple.

bengale3• 2 years ago

I wonder how many billions in fines the EU can take out of US companies before they start to get political blowback.

gitaarik6• 2 years ago

Isn't this coming out from the politics of the EU? Isn't politics suppose to act on the desires of citizens? (In principle in Democracy). Would there be a lot of citizens that would want huge companies to easily gain a monopoly position? Is that what you want?

bengale3• 2 years ago

I’m quite sure I didn’t give an opinion either way. I’m also not that interested in how things “should” be. I was just musing that at a certain point there might be political blow back in the US towards a continent that doesn’t have a lot of leverage.

xvector5• 2 years ago

Really just want to see the US tech industry leave this rent-seeking region and throw them 40 years into the past. Let the EU develop their own messaging services, mobile OSes, browsers, computing devices, and internet backbones. It'll make both sides happier.

monkin• 2 years ago

As for me, Spotify could cease to exist. With each passing year, they become even more unusable. Now, even music recommendations are turning into rubbish. Not to mention the UI experiments...

sonicanatidae• 2 years ago

Apple fined 2% of the money they have in offshore accounts that they never paid taxes on.

FTFY.

moogly• 2 years ago

Why are we talking about Microsoft's behavior 30 years ago in this thread about current Apple? Appalling diversionary tactic, that's what it is. I guess the parallel I can draw here is that just as you shouldn't defend whatever unrelated crap Microsoft pulled off in the 90s,you shouldn't defend the crap Apple is pulling off today.

octacat2• 2 years ago

It is kinda obvious that Apple does not really want to comply with markets act, so deterrent is required here.

seec2• 2 years ago

As an "old" Apple customer, I'm going to say it's well deserved it's not like they didn't work hard for that to happen. Apple's behavior since a few years after Job's passing (around 2015) has been appalling on many fronts. They take their customers for fools and try very hard to trap them into their prison with very little recourse (and no you don't just get rid of very expensive devices for an alternative, especially if many of your purchases are dependent on the use of one of those devices).

As I get older, I care less and less especially since I am unlikely to purchase another iPhone (at the current price point with the current limitations) or any other Apple devices for that matters. In fact, the moment I decide to replace my Apple watch all the rest will follow in short order. While the platforms are still nice in some ways, they just don't provide enough lasting value with the current pricing and forced obsolescence (both hardware and software).

Anyway that's good news for everyone because in the futur Apple and their friends will maybe think twice before fucking over their customers with absurdly anti-competitive rules.

Apple hit with over 1.8B euro EU antitrust fine in Spotify case

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