Spotify filed its complaint earlier this week, accusing Apple of not playing fair by charging a 30 percent “tax” on purchases made in the App Store, including when customers upgrade from its free, ad-supported tier to one of its paid plans. According to Spotify, the revenue share is simply too high and would force the company to artificially inflate its premium membership pricing.
Apple fired back by accusing Spotify of “wrap[ping] it’s financial motivations in misleading rhetoric” about Apple as a company, what it has built, and what it does to support developers, musicians, and creators.
“Let’s clear this one up right away. We’ve approved and distributed nearly 200 app updates on Spotify’s behalf, resulting in over 300 million downloaded copies of the Spotify app. The only time we have requested adjustments is when Spotify has tried to sidestep the same rules that every other app follows,” Apple said.
Apple also said that Spotify is seeking the benefits of a free app without being free. As it stands, 84 percent of apps in the App Store pay nothing to Apple when users download them. In such cases, Apple takes a cut of purchases made inside the app.
“As Spotify points out, that revenue share is 30 percent for the first year of an annual subscription—but they left out that it drops to 15 percent in the years after,” Apple added.
Apple went on to explain that Spotify shares a similar cut of revenue with mobile carriers, and that only a “tiny fraction” of its memberships are subject to Apple’s revenue sharing model. Beyond that, Apple accused Spotify of “trying to squeeze” artists, musicians, and songwriters.
“Just this week, Spotify sued music creators after a decision by the US Copyright Royalty Board required Spotify to increase its royalty payments. This isn’t just wrong, it represents a real, meaningful and damaging step backwards for the music industry,” Apple said.
Naturally, Apple’s response to Spotify’s complaint drew another response by Spotify, which defended its position in a statement provided to Billboard.
“Every monopolist will suggest they have done nothing wrong and will argue that they have the best interests of competitors and consumers at heart,” Spotify 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.”
Grab the popcorn, folks, this is getting interesting.
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