Apple comes out swinging against Spotify complaint

Esequiel Farfan
Marcha 15, 2019

Two days ago, Spotify's CEO Daniel Elk wrote a blog post announcing that Spotify has filed a complaint against Apple with the European Commission that alleges Apple's App Store policies stifle competition.

Apple tore into Spotify in response to the music streaming service's European Union antitrust complaint.

Apple said that Spotify "seeks to keep all the benefits of the App Store ecosystem - including the substantial revenue that they draw from the App Store's customers - without making any contributions to that marketplace". In the statement, Apple said Spotify "wants all the benefits of a free app without being free".

It also pointed out that a huge amount of Spotify's customers opt to stick with the free version of the app, which is supported by ads, or are on premium plans promoted by mobile carriers, neither of which brings in any money for Apple. Spotify and Apple have previously clashed over the latter's failure to approve an app update to the former.

In its reply, Apple has rebutted most of the points made by Spotify on the website, "Time to Play Fair" bit.ly/2TDWtvT. Apple described Spotify's claims as "surprising", pointing out that the Swedish company has an Apple Watch app that's ranked as the top app in the wearable App Store's Music section.

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Its statement added that Apple has "reached out" to Spotify about support for its Siri and AirPlay 2 features "on several occasions", and that Spotify has "told us they're working on it, and we stand ready to help them where we can".

Spotify was not immediately available to comment on Apple's response. The only time Apple refused an update was when Spotify tried to sidetrack the App Store rules. There are a few reasons why Spotify thinks that, but chief among them is the fact that Apple keeps 30% of the revenue from all app fees, including monthly subscriptions fulfilled through the App Store's in-app purchase system - a revenue split Apple's own apps obviously aren't subjected to. Other companies have long had the same issue with the environment of the App Store. Apple points out that 84 percent of apps in the App Store pay nothing to Apple by dint of not charging users. "Spotify wouldn't be the business they are today without the App Store ecosystem, but now they're leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs", Apple said. The company also points out that Spotify's Watch app is now the number one app in the Watch Music category. Ultimately, Apple claims, only a "tiny fraction" of Spotify's subscriptions pay the 30% Apple tax.

"We think that's wrong", it said.

Just this week, Spotify sued music creators after a decision by the US Copyright Royalty Board required Spotify to increase its royalty payments. A similar antitrust case about potential overreach in Apple's walled garden-Apple v. This isn't just wrong, it represents a real, meaningful and damaging step backwards for the music industry, Apple said.

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