Apple Fires Back At Spotify Antitrust Complaint

Apple has responded with a hard hitting statement, after music streaming rival Spotify filed an antitrust complaint against it with the European Commission.

Apple said that for years Spotify has been using its App Store to dramatically grow its business, and that it seeking to keep all the benefits of the App Store ecosystem (including hefty revenues), without making any contributions to that marketplace

It comes after Spotify earlier this week said that Apple was not playing fair with its App Store fees and its own music streaming service. It launched this website to explain its position.

Anti competitive?

Spotify then complained to the European Commission saying that Apple unfairly limits rivals to its own Apple Music streaming service.

A second complaint concerned the large fee that Apple charges for all purchases via its app store.

But Apple is not taking that complaint lying down, and has hit back with its own statement, in which it fiercely criticised Spotify for the small fees it pays to artists, musicians and songwriters.

“What Spotify is demanding is something very different,” said Apple. “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. At the same time, they distribute the music you love while making ever-smaller contributions to the artists, musicians and songwriters who create it – even going so far as to take these creators to court.”

“Spotify has every right to determine their own business model, but we feel an obligation to respond when Spotify wraps its financial motivations in misleading rhetoric about who we are, what we’ve built and what we do to support independent developers, musicians, songwriters and creators of all stripes,” Apple said.

It also dismissed Spotify’s claims that Apple blocked access to products and updates to its app.

“Let’s clear this one up right away,” Apple stated. “We’ve approved and distributed nearly 200 app updates on Spotify’s behalf, resulting in over 300 million downloaded copies of the Spotify app. The only time we have requested adjustments is when Spotify has tried to sidestep the same rules that every other app follows.”

Apple also said that 84 percent of the apps in the App Store pay nothing to Apple when the app is downloaded or used.

“That’s not discrimination, as Spotify claims; it’s by design,” said Apple.

Fees payable

“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,” said Apple. “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.”

Apple also said that the majority of Spotify customers use its free, ad-supported product, which makes no contribution to the App Store.

“Even now, only a tiny fraction of their subscriptions fall under Apple’s revenue-sharing model. Spotify is asking for that number to be zero,” said Apple. “Let’s be clear about what that means. 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.”

Apple launched its Music streaming service back in 2015, and it competes directly against the music streaming goliath that is Spotify, which was launched back in 2007 in Sweden.

Spotify went public last year on the New York Stock Exchange, not to raise funds, but as a way for existing shareholders (mostly staff) to sell their shares on the open market.

Quiz: How well do you know Apple?