March 19, 2019

Apple hits back at Spotify in anti-competition row

16 March 2019, 12:56 | Regina Holmes

Apple CEO Tim Cook. Getty

Apple CEO Tim Cook. Getty

In a blog Daniel Ek, co-founder of the music-streaming service, said it had chose to file its anti-trust complaint because Apple had changed App store policies to "purposely limit choice and stifle innovation". The proposition that the App Store offered at the time was incredibly compelling insofar that developers were given access to the entirety of Apple's iOS user base in exchange for a 30% cut of all revenue earned.

In response, Apple addressed each complaint point by point, while criticizing Spotify's treatment of musicians and artists.

"Spotify wants all the benefits of a free app without being free", it said.

Spotify also argued that when it tried to find a way around that revenue split, Apple treated it unfairly by preventing Siri integration with Spotify's service and blocking app updates.

Recently, Spotify published a post in which they accused Apple of gaining an "unfair advantage" over Spotify and other streaming music competition by using "discriminatory" business practices with its App Store.

Apple spelled out its position in clear terms, saying, "Spotify is free to build apps for - and compete on - our products and platforms, and we hope they do". It notes that it doesn't charge apps that make their money exclusively through advertising, and that it doesn't subject apps that sell physical goods like ride-hailing and food delivery to the 70/30 revenue split. When it came to specifics, Apple straight up denied a few of Spotify's claims. Apple described Spotify's claims as "surprising", pointing out that the Swedish company has an Apple Watch app that's ranked as the top app in the wearable App Store's Music section.

Apple is not staying silent in response to Spotify's antitrust complaint with the EU.

Apps that are free to you aren't charged by 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", Apple said in the statement.

However, Apple said Spotify left out the fact that the revenue share after the first year of annual subscription drops to 15 percent. The real question might be whether Apple has to change its whole business model in order to even operate those platforms.

Apple's statement begins with, "We share Spotify's love of music and their vision of sharing it with the world", before distancing itself. "Spotify is asking for that number to be zero". However, it's worth pointing out that the kit does not support third-party audio app integration which explains why you can't tell Siri to play your music on Spotify. "We think that's wrong", Apple claimed.

It went on to point out that the majority of Spotify's customers are either free users or those who signed up for Premium accounts through deals with their carrier (or though other promotions like the one with Hulu that was recently announced).

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

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