Apple's and Spotify's continuing disagreements seemed to be coming to an end earlier this week when Spotify filed a competition complaint against Apple with the European Commission. In this complaint, Spotify argued that Apple Music has an unfair competitive advantage because Apple controls the iOS App Store. There are a few reasons why Spotify thinks so, but most importantly, that Apple withholds 30% of the revenue from all app fees, including monthly subscriptions made through the App Store's in-app purchase system – one Distribution of revenue from Apple's own apps obviously not exposed.
Spotify also argued that Apple had wronged it in its search for a revenue stream by preventing Siri's integration with the Spotify service and blocking app updates. When Apple Music abandoned and accepted the app rules for buying in-app apps, Apple Music was introduced at a lower price that Spotify was unable to achieve due to the revenue sharing model in the App Store. In the end, Spotify said that all third-party apps should follow the same rules, asking why Uber rides are not subject to the Apple tax, but Spotify subscriptions.
READ MORE: Spotify Drops the Cartel Bomb on the "Apple Tax" Today, Apple has answered this complaint in a press release published on its website. "After years of using the App Store to dramatically expand its business, Spotify strives to capture all the benefits of the App Store ecosystem, including the significant revenue that App Store customers make without contributing to this market "Apple explains, before plunging deeper into some specific counterpoints.
In response to the claim that Apple had withheld app updates and integration with platforms such as Siri and AirPlay 2 as punishment for Spotify, who wished to circumvent the Apple IAP rules, the company noted that it was "almost Delivered 200 App Updates for Spotify This resulted in over 300 million downloaded copies of the Spotify app. "Apple also claimed that Spotify has been notified several times about Siri and AirPlay 2 support, only Spotify was working on such integration.
Apple then claims Spotify "wants to take full advantage of a free app without being free." The company said that 84% of apps ultimately pay nothing to Apple before listing how apps can make money without Apple making a cut. It states that it does not charge apps that only earn their money through advertising, and that apps that sell physical goods such as driving and grocery delivery are not subject to the 70/30 revenue split.
It has been noted that the majority of Spotify customers are either free users or subscribers of premium accounts through contracts with their mobile service provider (or other promotions such as those recently announced at Hulu). Taking all this into account, Apple says "only a tiny fraction of their subscriptions fall under Apple's revenue model."
It is here that we begin to see that Apple is a little dissatisfied. He says Spotify wants to maintain all the benefits it derives from the App Store – a platform that connects users, app development tools and secure payment systems. while also keeping 100% of the turnover for itself. "Spotify would not be the business they are today without the App Store ecosystem, and they are now using their scale to help maintain that ecosystem for the next generation of app entrepreneurs," said Apple. "We think that's wrong."
In completing its response, Apple cited Spotify's recent lawsuit against the US Copyright Royalty Board, saying it was ultimately a "damaging step backwards" for the music industry. In contrast, Apple claims that its goal is "to grow the cake" and to create more opportunities for companies, artists, developers and entrepreneurs through the App Store.
It's a little bizarre when Apple responds to a public press release on Spotify. Nevertheless, Apple's statement does not leave much room for hope for a consensual resolution of Spotify's complaint. We'll see where it goes from here, but by that time, that conflict had been in the making for a long time. So do not be too surprised if it gets uglier in the future.