Apple has responded to Spotify’s complaint that Apple is being anti-competitive by charging a cut of App Store purchases — including subscriptions.
In an impassioned statement, Apple points out how many jobs have been created through the App Store. This has amounted to payments of “more than $120 billion for developers.” It also criticizes Spotify for wanting to take advantage of the reach that the App Store makes possible, without wanting to give anything back.
“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. At the same time, they distribute the music you love while making ever-smaller contributions to the artists, musicians and songwriters who create it — even going so far as to take these creators to court.”
The statement then takes Spotify to task for some of its “misleading rhetoric.” Apple points out that 84 percent of apps in the App Store pay nothing to Apple by dint of not charging users. Apple also notes that, while Spotify has discussed the 30 percent cut that Apple takes, this drops to 15 percent in the second year for subscriptions. Spotify apparently wants to pay Apple nothing for subscriptions taken via the App Store.
“Let’s be clear about what that means. Apple connects Spotify to our users. We provide the platform by which users download and update their app. We share critical software development tools to support Spotify’s app building. And we built a secure payment system — no small undertaking — which allows users to have faith in in-app transactions. Spotify is asking to keep all those benefits while also retaining 100 percent of the revenue.”
Apple finally hammers home its message by arguing that Spotify would not be where it is today without the App Store. “They’re leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs,” Apple writes. “We think that’s wrong.” To back up this point, it notes that Spotify recently filed a lawsuit after a decision by the US Copyright Royalty Board required Spotify to increase its royalty payments.
Good Apple vs. Bad Spotify?
Positioning this as being Apple fighting the good fight against evil corporation Spotify is a bit simplistic. (Apple has, after all, been criticized for some of the same things with regards to payments to creatives.) However, it does raise some valid points about the importance of the App Store platform and what this means.
With Apple’s focus on Services increasing, it’s no surprise to see Apple fighting its corner so publicly. While Spotify’s spat could just be seen as a battle between two streaming giants, it potentially has larger ramifications. Just yesterday, the European Competition Commission said that it was considering whether Spotify’s Apple complaint could warrant an official regulatory investigation.