Apple responds to Spotify’s complaint – gets called a ‘monopolist’

Last week, on Wednesday (March.13th), via a blog post, Spotify filed an antitrust complaint against Apple with the European Commission over the App Store’s unfair policies.

In addition, the CEO and founder of Spotify, Daniel Ek, also complained about the 30% tax that Apple levies on subscriptions made from within the App Store.

He added that Spotify would have to raise the price of premium memberships for its streaming service if it paid these fees.

Last Friday (March.15th), however, two days after Spotify lodged their complaint, Apple responded to the company’s comments, by labelling the complaint as “misleading rhetoric” and arguing that “Spotify wants all the benefits of a free app without being free.”

Apple’s response

Apple also criticised Spotify for the small fees it pays developers, musicians, songwriters, and creators.

“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 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 a total of 84% of 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.

Payable fees

“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% for the first year of an annual subscription – but they left out that it drops to 15% in the years after.”

Apple further notes that most Spotify customers use its free, ad-supported product, which makes no contribution to the App Store itself.

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% of the revenue.”

In a statement issued to Variety, Spotify responded to Apple’s comments by saying “every monopolist will suggest they have done nothing wrong” and that Spotify users on iOS are “Apple customers and not Spotify customers”.

Spotify also said that Apple’s response was “entirely in line” with what it expected from the company.”

 

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