Saturday 25 May 2019

Apple labels Spotify anti-competition complaint ‘misleading rhetoric’

Apple labels Spotify anti-competition complaint ‘misleading rhetoric’

2 months ago

Apple labels Spotify anti-competition complaint ‘misleading rhetoric’

2 months ago


Apple has accused Spotify of seeking to keep the benefits of being on its App Store without “making any contributions to that marketplace” in response to an anti-competition complaint the music service filed with the European Commission (EC).

On Wednesday, the music streaming service said Apple was giving itself an unfair advantage by charging a 30% tax on purchases made through its own payment system on Apple’s own iOS platform and the App Store.

This includes taking a cut of the money made from a user upgrading from Spotify’s free to paid-for premium version if the upgrade took place on an Apple device – which Spotify argues is unfair as Apple has its own music streaming rival – Apple Music.

The tax does not apply if people subscribe through a non-Apple device, such as on a desktop, and then use the service afterwards on an Apple device.

In response, Apple has accused Spotify of wrapping “financial motivations in misleading rhetoric”, and that the company would not be the business it is today without the App Store.

“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,” Apple’s statement said.

“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.”

The iPhone maker also argued that its 30% tax drops to a 15% cut after the first year, and that because the “majority” of Spotify customers use the free, advert-supported version of the app they made no contribution to App Store revenue.

Apple said only a “tiny fraction of their subscribers fall under Apple’s revenue-sharing model. Spotify is asking for that number to be zero”.

“Let’s be clear about what that means,” Apple’s statement continued.

“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% of the revenue.”

Apple also dismissed Spotify claims that it had blocked access to products and app upgrades, such as around voice assistant Siri and Apple Watch integration.

Apple labelled those accusations “surprising”.

In a blog post outlining his company’s position, Spotify chief executive Daniel Ek said Apple’s rules were designed to “purposely limit choice and stifle innovation at the expense of the user experience”.

“We aren’t seeking special treatment,” he wrote.

“We simply want the same treatment as numerous other apps on the App Store, like Uber or Deliveroo, who aren’t subject to the Apple tax and therefore don’t have the same restrictions.”

He argued that the company was left with technical and experience-limiting restrictions imposed on it that stifled its ability to communicate with customers if they chose not to use Apple’s payment system.