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March 15, 2019updated 19 Jul 2022 11:35am

Apple vs Spotify: Competition Complaint Draws Ferocious Response

"Spotify’s aim is to make more money off others’ work"

By CBR Staff Writer

Apple has hit back at music streaming service Spotify’s decision this week to file a competition complaint with European regulators against its App Store rules.

Spotify is “wrapping its financial motivations in misleading rhetoric” Apple said – adding a sharp dig at Spotify’s own approach to music artists for good measure.

Spotify’s move this week was announced in a blog post by founder Daniel Ek.

The move once more put the spotlight on the increasingly controversial platform power of companies like Apple, as regulators around the world ramp up rhetoric against the ability of major tech companies to offer their services on the platforms that they operate.

Ek described the company as “player and referee” on the App Store, which is now home to over 2.2 million applications. Spotify has launched a dedicated website for its campaign, with sections like “Five Fast Facts that Show Apple Doesn’t Play Fair.”

See this: Spotify Takes Apple to Competition Regulator

Apple is having none of it.

“After using the App Store for years to dramatically grow their business, 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,” the company said today.

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Spotify: “Tax” is Unfair

Spotify had complained in particular that Apple requires digital services to pay a 30 percent “tax” on purchases made through Apple’s payment system.

“If we pay this tax, it would force us to artificially inflate the price of our Premium membership well above the price of Apple Music. And to keep our price competitive for our customers, that isn’t something we can do.”

It also claimed that Apple is keeping Spotify off its devices (like smart speakers) and won’t let it connect with Siri or delayed its rollout on the Apple Watch.

Apple vs Spotify: Apple’s Response

Apple said: “Spotify claims we’re blocking their access to products and updates to their app. Let’s clear this one up right away. We’ve approved and distributed nearly 200 app updates on Spotify’s behalf, resulting in over 300 million downloaded copies”

“The only contribution that Apple requires is for digital goods and services that are purchased inside the app using our secure in-app purchase system. As Spotify points out, that revenue share is 30 percent for the first year of an annual subscription — but they left out that it drops to 15 percent in the years after.”

It added: “We found Spotify’s claims about Apple Watch especially surprising. When Spotify submitted their Apple Watch app in September 2018, we reviewed and approved it with the same process and speed with which we would any other app. In fact, the Spotify Watch app is currently the No. 1 app in the Watch Music category.

“Spotify is free to build apps for — and compete on — our products and platforms, and we hope they do.”

“Not Just the App Store Spotify is Trying to Squeeze”

Apple concluded: “Apple connects Spotify to our users. We provide the platform by which users download and update their app. We share critical software development tools to support Spotify’s app building. And we built a secure payment system — no small undertaking — which allows users to have faith in in-app transactions. Spotify is asking to keep all those benefits while also retaining 100 percent of the revenue.”

Underneath the rhetoric, Spotify’s aim is to make more money off others’ work. And it’s not just the App Store that they’re trying to squeeze — it’s also artists, musicians and songwriters. Just this week, Spotify sued music creators after a decision by the US Copyright Royalty Board required Spotify to increase its royalty payments. This isn’t just wrong, it represents a real, meaningful and damaging step backwards for the music industry. Apple’s approach has always been to grow the pie.

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