Apple comes out swinging against Spotify complaint

Spotify claims Apple’s 30% cut of revenue is effectively a tax on competitors

Spotify claims Apple’s 30% cut of revenue is effectively a tax on competitors

Eleven years ago, the App Store brought that same passion for creativity to mobile apps.

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. First, the 30% revenue share that Apple gets is for the first year of annual subscription, after which it drops to 15%.

Most apps that charge for digital services just deal with it and cough up the fee.

Apple released the "SiriKit" together with iOS 12. And we built a secure payment system - no small undertaking - which allows users to have faith in in-app transactions. That's the approach that Spotify and Netflix have made a decision to take.

Apple has issued a lengthy response to Spotify's complaint before European Commission regulators, which was issued earlier this week.

Spotify is deeply integrated into platforms like CarPlay, and they have access to the same app development tools and resources that any other developer has.

Now, Apple has offered a response via a 1,100-word statement titled "Addressing Spotify's Claims", in which the company pulls no punches. Apple also found Spotify's accusations in regards to Apple Watch surprising since it approved its WatchOS app in September 2018 with the same speed and process as it approved any other app. It added that Apple had often stymied it on app updates and locked it out of Apple services, "such as Siri, HomePod and Apple Watch". It also criticizes Spotify for wanting to take advantage of the reach that the App Store makes possible, without wanting to give anything back.

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It added that it had made almost 200 app updates on Spotify's behalf, resulting in more than 300 million downloads of Spotify's app. It notes that it doesn't charge apps that make their money exclusively through advertising, and that it doesn't subject apps that sell physical goods like ride-hailing and food delivery to the 70/30 revenue split. Apple points out that 84 percent of apps in the App Store pay nothing to Apple by dint of not charging users.

In light of Ek's blog post, Apple today fired off a rebuttal. "And to keep our price competitive for our customers, that isn't something we can do".

In response, Apple said it had approved and distributed almost 200 app updates on Spotify's behalf, resulting in over 300 million downloaded copies of the Spotify app.

The thing is, Apple is fighting this war on a few fronts. This has amounted to payments of "more than $120 billion for developers".

In the letter, Apple accused Spotify of being stingy, saying they want to enjoy the benefits the App Store ecosystem provides without paying into it.

In the past, I've argued that the benefits of Apple's approach to the App Store outweigh the downsides.

What do you think about this battle between Spotify and Apple? And it is possible that the European Commission's hard-nosed attitude towards antitrust could work in Spotify's favour. We want more app businesses to thrive - including the ones that compete with some aspect of our business, because they drive us to be better. "It added that only a "tiny fraction of their subscriptions fall under Apple's revenue-sharing model".

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