Apple Hits Back at the Accusations Made by Spotify

Joann Johnston
March 15, 2019

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.

It's a little freakish to see Apple respond to Spotify by way of a public press release, but regardless, Apple's statement doesn't really leave much hope for an amicable resolution to Spotify's complaint.

Spotify, launched a year after Apple unveiled its first iPhone in 2007, said on Wednesday the company unfairly limits rivals to its own music streaming service.

The fruity cargo cult said Spotify "seeks to keep all the benefits of the App Store ecosystem without making any contributions to that marketplace". Apple says that it has cleared almost 200 Spotify app updates which resulted in over 300 million downloads.

"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. It said that it has approved almost 200 app updates, and "the only time we have requested adjustments is when Spotify has tried to sidestep the same rules that every app follows". Spotify and Apple Music both now charge customers $9.99 per month for its premium subscription.

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In the wee hours of Friday, Apple hit back with a sharply worded blog post that said the music streamer had cloaked 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", although it did not substantively address Spotify's claims or even mention the European Commission. This central tension gives Tim Cook's behemoth what Ek calls "an unfair advantage at every turn"-whether by disallowing apps from promoting discounts, or by imposing the so-called "Apple tax".

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. Apple countered that the revenue sharing at that level only applies during the first year of an annual subscription - Spotify, it said, "left out that it drops to 15 percent in the years after". It said that 84% of apps in the store pay nothing to Apple when they were downloaded or used. Or Apple is right to charge a certain fee for the uptake of the App Store? When all of that is taken into account, Apple says, "only a tiny fraction of their subscriptions fall under Apple's revenue sharing model". "Spotify is asking for that number to be zero".

"The majority of customers use their free, ad-supported product, which makes no contribution to the App Store", Apple said.

"In a long statement published on its website, Apple laid out why it thinks Spotify wants to keep all the benefits of a free app on the App Store, without being free".

Just this week, Spotify sued music creators after a decision by the US Copyright Royalty Board required Spotify to increase its royalty payments. "We think that's wrong". Now Apple has taken a similar point-by-point approach in its rebuttal. "Underneath the rhetoric, Spotify's aim is to make more money off others' work".

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