Published: Fri, March 15, 2019

Apple bites back at Spotify's damning claims against it

Apple bites back at Spotify's damning claims against it

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After a decade of worsening relations with Apple, Swedish music streaming giant Spotify took the extraordinary step today of filing a formal antitrust complaint with the European Commission, "after trying unsuccessfully to resolve the issues directly with Apple", according to CEO Daniel Ek.

The iPhone maker said the App Store contributed to Spotify becoming the business it is today, a public company that generates over a billion dollars of revenue per quarter, according to a statement on Friday.

The iPhone maker added that the App Store has generated $120 billion Dollars for developers while offering users a secure platform and that Spotify is seeking to sidestep the rules that every other app follows.

"Spotify has every right to determine their [sic] own business model, but we feel an obligation to respond when Spotify wraps its financial motivations in misleading rhetoric about who we are", the company wrote. Specifically, Spotify said Apple requires a 30 percent tax on purchases made through Apple's in-app purchase system, which includes upgrading from its free to premium service.

However, Apple said Spotify left out the fact that the revenue share after the first year of annual subscription drops to 15 percent. "It added that only a "tiny fraction of their subscriptions fall under Apple's revenue-sharing model". "Spotify is asking for that number to be zero".

Apple has torn into Spotify in a response to the music streaming service's European Union antitrust complaint.

Just this week, Spotify sued music creators after a decision by the US Copyright Royalty Board required Spotify to increase its royalty payments. Apple says it reached out to Spotify about Siri and AirPlay 2 support "on several occasions", to which Spotify replied it's "working on it".

Spotify, Apple contends, is demanding a completely different environment for its app.

"The only time we have requested adjustments is when Spotify has tried to sidestep the same rules that every other app follows", Apple said in a statement.

Apple even discloses that the majority of Spotify customers use its ad-supported plan which does not make any contribution to the App Store.

"We think that's wrong", it said. Similarly, most Spotify customers join the platform via partnerships with mobile carriers which again does not help the App Store in any way.

Apple also slammed Spotify for aiming to "make more money off others' work", including that of "artists, musicians and songwriters".

The Stockholm-based music streaming service also said Apple "routinely blocks" some of its product upgrades, such as integration with the Siri digital assistant and the Apple Watch.

Apple's approach has always been to grow the pie.

Apple has also hit back at Spotify's claim that its in-app subscriptions should be treated like payments for apps like Uber and Deliveroo, which happen entirely outside the App Store's system of in-app purchases.

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