Spotify recently announced in a blog written by CEO Daniel Ek that it had filed an unfair competition complaint against Apple with the European Commission (EC). The streaming company is claiming that Apple’s App Store stifles competition by “acting as both a player and referee to deliberately disadvantage other app developers.”
Apple has suddenly clapped back at Spotify’s “misleading” complaints that Apple’s App Store abuses its power to stifle competition, accusing the music-streaming giant of wanting a free ride to the disadvantage of smaller developers now that it’s grown into a powerhouse.
“Spotify wouldn’t be the business they are today without the AppStore ecosystem, but now they’re leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs,” Apple said. “We think that’s wrong.”
The feud pits Apple, a gadget giant whose App Store is essential for mobile services to thrive, against the biggest subscription music service in the world and one of the most popular iOS apps. The outcome of their face-off could change what you’re able to buy — and how easily it is to buy things from Apple competitors — on Apple devices and in iOS apps.
Spotify filed an antitrust complaint to European regulators earlier this week, claiming that some of Apple’s practices, like charging subscription companies a 30 percent fee for in-app purchases, abuse the market power of the App Store. Spotify claimed Apple wields the App Store’s power to stifle apps that compete with its other businesses, like Apple Music subscriptions that go head-to-head with Spotify.
On Friday, Spotify responded by maintaining that Apple hurts competition and consumers with its App Store practices “in clear violation of the law.”
“Every monopolist will suggest they have done nothing wrong and will argue that they have the best interests of competitors and consumers at heart,” a spokesman said. “In that way, Apple’s response to our complaint before the European Commission is not new and is entirely in line with our expectations.
It added that Apple’s statements suggesting that “Spotify’s users on iOS are Apple customers and not Spotify customers … goes to the very heart of the issue with Apple.”
Apple bites back
“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,” Apple said in its statement.
Cupertino, California-based Apple disputed the claim that it rejected Spotify app updates and morphed the rules it requires of developers to stifle Spotify competitively.
“We’ve approved and distributed nearly 200 app updates on Spotify’s behalf, resulting in over 300 million downloaded copies of the Spotify app,” Apple wrote. “The only time we have requested adjustments is when Spotify has tried to sidestep the same rules that every other app follows.”
It also characterized many of Spotify’s claims and its rhetoric as misleading. Apple said Spotify’s complaints about the 30 percent fee “left out” that this charge applies for a subscription’s first year only and drops to 15 percent for every year after that. After Spotify indicated it had been edged out of services or devices like Siri, HomePod and Apple Watch, Apple suggested the ball was actually in Spotify’s court. For the Siri digital assistant and the HomePod smart speaker, Apple said it would help in adding support whenever Spotify requests it.
Apple noted that a huge number of Spotify’s customers use the free version of the app, which is supported by ads, or have signed up for premium plans promoted by mobile carriers, neither of which brings in any money for Apple.
“Even now, only a tiny fraction of their subscriptions fall under Apple’s revenue-sharing model,” Apple wrote. “Spotify is asking for that number to be zero.”
Apple and Spotify are two of the most dominant forces in how people listen to music. With 96 million paying customers, Spotify is the world’s biggest subscription streaming music service by members. Apple Music, with more than 50 million subscribers, is its closest competitor.
