Malcolm Owen
Spotify Chief Legal Officer Horacio Gutierrez has continued to attack Apple, calling it "disingenuous" about the economics of the App Store, and that Apple's application of a 30% fee.
On May 18, an op-ed by the Spotify legal chief was published, one that pointed to Apple's trial with Epic Games as evidence that Spotify "is no longer alone" in criticizing Apple. In an interview on Tuesday, Gutierrez delved further into his claims, explaining why he called Apple a bully for its control of the App Store.
"It is clear to me that when it comes to their policies on app stores and the way in which they're treating [not just] competing apps, but a whole variety of apps on their App Store, is just unfair," said Gutierrez to The Verge. "I think it deserves regulatory attention and I think they're getting regulatory attention for it."
For what Apple needs to change to make a more competitive environment, the CLO said it was clear that the decision "to tie Apple's proprietary payment system to the App Store was an arbitrary choice. It wasn't part of the App Store in the beginning, just as the 30 percent Apple tax wasn't a requirement when we made it into the App Store."
"We want Apple to go back to the situation that existed at the time when we joined the App Store," explains Gutierrez. "We want them to undo the tying of their proprietary payment system to the App Store and all of the other anti-steering provisions, which is a fancy way of saying punishments and penalties that they've created for those people who do not want to use their proprietary payment system. Basically, restore the situation to the way it was before their anti-competitive abuse started."
On the commission fee for IAP and App Store purchases in general, Gutierrez says it's remarkable "how little we learned about Apple's explanation" for things like the payment system and the App Store itself during the Epic trial.
The Spotify legal chief claimed "They continue to say, Well, we have to protect the privacy and security of our users and that's why we have to charge 30 percent and have all these other restrictions.' But how can it be indispensable for them to do all those things in order to protect privacy and security when they don't even apply those rules to a number of other apps that are on the App Store?"
Economics of the App Store
He was also struck at "how disingenuous it is that [Apple] would say that nobody's ever looked at the economics of the App Store, nobody's even asked the question How much money does the App Store make?'" Pointing to the "tens of billions of dollars of revenue," Gutierrez says "it defies credulity for Apple to say they're not doing this for the money and they haven't even asked how much money they're making there."
Since the percentage of the App Store is "arbitrary," he offers that Apple should be able to set it even higher to 50%, if it "can convince users in a market economy that the value they provide justifies" the cut. "What we're saying is they actually prevent competitors from coming in and offering alternative payment systems, and therefore there is no market."
Spotify is one of the major companies complaining about Apple and its control of the App Store. As a critic, it has made complaints to the Senate Judiciary Committee that Apple says are solely business grievances.
In Europe, Spotify's 2019 complaint to the European Commission resulted in the regulator announcing a "preliminary conclusion" in April that Apple breached EU competition laws.
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Christine McKee
Amber Neely
21 Comments
If that were indeed the case, then every other store faces the same situation. Walmart, Xbox, PlayStore, etc.
Does Spotify do what they do for the money, or just the dewey-eyed love of music?
Ass....
The problem with all of this is Apple does not have a monopoly. There are plenty of viable alternatives to using Apple products, namely Android. A user is making a choice to be in Apple's walled garden. Developers are making a choice to access that market. This is the problem with the EU's initial conclusion as well. They claim Apple has a monopoly for "iPhones and iPads." That's like saying Toyota has a monopoly on Camrys and Rav4s. Their reasoning...that people won't change devices just because things are more expensive, blows their entire conclusion out of the water. The consumer is actively making a choice. Moreover, the notion that Apple's system has somehow harmed consumers, developers or innovation is comical. The entire ecosystem (including GooglePlay) wouldn't even exist without Apple. Apple literally created the entire market.
Many years ago, when one of my nieces was seven or eight, she kept insisting that something wasn’t fair. After several minutes of asking I was finally able to get her to articulate what her definition of fair was. She said fair is I get what I want. As far as I can tell whenever any businessperson starts talking about fair, they are using the exact same definition – fair is they get what they want.