Apple shot back at Spotify on Friday, just days after the music streaming service filed a complaint with the European Union (EU) regulators over anticompetitive practices, accusing the company of wanting “all the benefits of a free app without being free.”
Spotify filed an antitrust complaint with the European Commission, the EU's administrative arm, earlier this week, arguing that Apple’s App Store policies benefit its own streaming service, Apple Music. 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. Spotify and Apple Music both currently charge customers $9.99 per month for its premium subscription.
“If we pay this tax, it would force us to artificially inflate the price of our Premium membership well above the price of Apple Music,” Spotify founder and CEO Daniel Ek said in a blog post. “And to keep our price competitive for our customers, that isn’t something we can do.”
However, Apple said Spotify left out the fact that the revenue share after the first year of annual subscription drops to 15 percent. The company added that most of Spotify’s customers use their free service, which contributes nothing to the App Store, and that a large portion of its customers join through “partnerships with mobile carriers,” which also adds zero contribution to its store.
“Spotify wouldn’t be the business they are today without the App Store ecosystem, but now they’re leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs,” Apple said in a press release. “We think that’s wrong.”
In its complaint to EU regulators, Spotify said Apple blocks access to its app and upgrades its releases, including on the tech giant’s Apple Watch (the music app for the device was released in November 2018). In its retort, Apple said it finds the claims “surprising.”
"When Spotify submitted their Apple Watch app in September 2018, we reviewed and approved it with the same process and speed with which we would any other app,” the company said. “In fact, the Spotify Watch app is currently the No. 1 app in the Watch Music category.”
Apple also slammed Spotify for aiming to “make more money off others’ work,” including that of “artists, musicians and songwriters.” The company was noting Spotify’s appeal of a recent Copyright Royalty Board ruling that increased streaming royalties for songwriters by more than 44 percent (Spotify said it is not suing songwriters).
Despite the fiery response, Apple said it wants to continue creating new opportunities for companies, like Spotify, to use its platform to “grow the next big app” idea.
“We’re proud of the work we’ve done to help Spotify build a successful business reaching hundreds of millions of music lovers, and we wish them continued success – after all, that was the whole point of creating the App Store in the first place.”