For the past two days, we’ve followed Spotify massively criticize the system of rules and collection of Apple inside the App Store [1, 2]. As we reported, the streaming Sweden filed with the European Commission (EC) a complaint against Apple that echoed the criticisms on a Spotify page.
Now it was the Cupertino giant’s turn to put its mouth on the trombone, or better, on the web. In a note, Apple not only countered Spotify’s accusations but also cited the importance of the App Store for the growth (and recognition) of the service, in addition to poking it with one of its (great) most recent controversies.
Initially, Apple pointed out that both the iTunes Store (launched 16 years ago) and the App Store (opened 11 years ago) were designed to be trusted places where users could discover and buy new quality content.
Regarding its app store, the company said that, in essence, developers – from start-up engineers to larger companies – can be sure that they are playing under the same set of rules, including those that compete with Apple on some aspect because they “make the company better”.
This all leads us to Spotify’s allegations against Apple: according to the Cupertino giant, what the streaming of songs is demanding is something very different. After using the App Store for years to “dramatically increase its business”, Apple argued that Spotify wants to “maintain all the benefits of the App Store ecosystem without making contributions to this market”.
Spotify has every right to determine its own business model, but we feel compelled to respond when Spotify engages its financial motivations in misleading rhetoric about who we are, what we build and what we do to support independent developers, musicians, composers and creators of all styles.
Updates and restriction to products / services
On the charge that it was blocking updates to the Spotify app, Apple clarified that it approved and distributed approximately 200 updates to the Swedish software, which resulted in downloads of more than 300 million copies of the app. According to Apple, app fixes are requested only when Spotify “tries to avoid the same rules that all other apps follow”.
As for the alleged restrictions on Apple products and services, the company stressed that it works with Spotify frequently to help bring their service to even more devices and platforms. In that sense, Spotify had (and has) every opportunity to be present in more Apple products, which highlighted:
- When we contacted Spotify about support for Siri and AirPlay 2 on several occasions, they told us that they are working on it and we are ready to help them wherever we can.
- Spotify is deeply integrated with platforms like CarPlay and has access to the same application development tools and features as any other developer.
- We find Spotify’s claims about the Apple Watch especially surprising. When Spotify submitted its Apple Watch app in September 2018, we reviewed and approved the app using the same process and speed that we took with any other app. In fact, the Spotify app for the Apple Watch is currently the number 1 app in the Music category.
Subscriptions and charges
Regarding the charge of 30% on the value of subscriptions made by the App Store, Apple clarified that 84% of the applications sold in its store do not pay anything to the company. Thus, it requires the contribution only of digital goods and services that are purchased within the application, from its internal purchasing system.
Apple also said that Spotify “left out” the fact that this charge drops to 15% after the first year of subscription, in addition to some information about the functioning of its business:
- Most Spotify customers use the free, ad-supported version, which does not contribute to the App Store.
- A significant portion of Spotify’s customers are formed by partnerships with mobile operators. This does not generate any contribution to the App Store, but does require the service to pay a similar distribution fee to retailers and operators.
- Even now, only a small fraction of their subscriptions fit Apple’s billing model. Spotify is asking for that number to be zero.
Apple defended itself, saying it helps connect Spotify to its users by providing the platform through which these people can download and update their applications. In addition, it shares development tools to support the app and maintains a secure (no obligation) payment system that allows users to believe in in-app transactions. In the understanding of Apple, Spotify is asking to “keep all these benefits and, at the same time, retain 100% of the revenue”.
Spotify wouldn’t be the business it is today without the App Store ecosystem, but now they are taking advantage of its growth to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs. We think this is wrong.
Relationship with music
Finally, the Cupertino giant stressed that it shares the same love for music as Spotify, but that it differs from that company in the way it tries to achieve that goal. In Apple’s words, «Spotify’s goal with these charges is to make more money from the work of others» (ouch!).
Apple did not miss the opportunity to provoke Spotify with a controversy that had a negative impact on the company. More precisely, she cited the United States Copyright Council’s decision to increase royalties 44% paid to composers – Spotify, in addition to other streaming, appealed; Apple, no.
This is not only wrong, it represents a real, significant and damaging step for the music industry.
The company closed the letter with a peace sign, saying it is proud of the work it has done to help Spotify build a successful business reaching hundreds of millions of music lovers and wishing them continued success, which was, and still is. that is, the purpose of creating the App Store.
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Did the game turn to Spotify? Regardless of who is right or wrong (if that is the case), we will certainly see further developments from this arm wrestling soon.