Apple 1 Spotify 0 for now
● Apple dismissed on Friday Spotify’s accusations of anticompetitive behaviour, saying the Swedish music streaming giant was trying to enjoy the benefits of its online market without paying the cost of its upkeep.
Spotify filed a complaint with the EU Commission that took issue with restrictions Apple places on apps that don’t use the payment system on its App Store, from which Apple takes a 30% cut. “At its core, the App Store is a safe, secure platform where users can have faith in the apps they discover and the transactions they make,” said 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,” it added.
Spotify complained that paying the Apple fee made its charge to premium subscribers uncompetitive compared to Apple Music. But if it circumvented payments via the App Store, Spotify said it faced technical restrictions with Apple blocking updates.
Apple said the 30% share of revenue applies for the first year, and then drops to 15%, and it makes Spotify’s free app available to consumers free of charge. It added it had made nearly 200 app updates on Spotify’s behalf, resulting in more than 300-million downloads of Spotify’s app. It said Spotify is the top Apple Watch app since Spotify submitted it in September last year.
“Spotify wouldn’t be the business they are today without the App Store ecosystem, but they’re leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs. We think that’s wrong,” Apple said.
There is no guarantee the EU will investigate following Spotify’s complaint. It receives around 40 formal complaints a year and only a handful end up in fines or measures being imposed on companies. However, EU competition chief Margarethe Vestager tweeted on Thursday following an appearance of Spotify CEO Daniel Ek at a conference: “Strong message by @eldsjal CEO of @Spotify: We need a level playing field for fair competition.” — AFP