Apple reckons Spotify is making mountains out of musical molehills
Spotify is only paying App Store fees on a tiny fragment of its Premium subscribers, according to Apple, as the fight between the two music streaming giants rumbles on.
In response to Spotify’s antitrust complaint over the perceived unfair nature of the fees for billing via iTunes, Apple said Spotify only pays a 15% cut of the subscription fee for 0.5% of its paying customers, who subscribed between 2014 and 2016.
That, according to Apple, represents 680,000 subscribers in total. Apple also claims Spotify is not paying the higher rate of 30% (which Apple charges for the first year of subs) on any of its subscriptions. That’s because Spotify hasn’t used Apple’s in-app billing for the last three years.
The revelation came from Germany’s Der Spiegel (via Reuters) and Spotify is yet to comment on the report.
The music streaming pioneer filed the complained in the European Union with CEO Daniel Ek calling it a “tax” Apple uses to damage competition in the marketplace. Ek reckons it gives Apple an unfair advantage because the fees don’t apply to Apple Music.
Related: Best music streaming services 2019
Spotify wants the same treatment as the likes of Uber and Deliveroo who don’t have to pay the App Store fees on rides or food orders.
“First, apps should be able to compete fairly on the merits, and not based on who owns the App Store. We should all be subject to the same fair set of rules and restrictions—including Apple Music,” Spotify said.
“Second, consumers should have a real choice of payment systems, and not be “locked in” or forced to use systems with discriminatory tariffs such as Apple’s.
“Finally, app stores should not be allowed to control the communications between services and users, including placing unfair restrictions on marketing and promotions that benefit consumers.”
In response to the company’s accusations, Apple pointed out that a fraction of subscriptions are affected by Apple’s revenue sharing rules. Now we know just how many.
“Even now, only a tiny fraction of their subscriptions fall under Apple’s revenue-sharing model. Spotify is asking for that number to be zero,” the blog post says.
“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. We think that’s wrong.”
It’s not clear yet whether the European Commission is going to do anything about Spotify’s allegations, but the response makes clear that Apple will come out fighting.