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Apple responds to Spotify over anticompetitive claims

Apple responds to Spotify over anticompetitive claims


The music streaming war heats up

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Apple has responded to Spotify's claims that it is intentionally rejecting the streaming service's app to prevent it from competing with Apple Music, saying Spotify is asking for "preferential treatment" in the App Store's approval process. Apple general counsel Bruce Sewell sent a letter, obtained by BuzzFeed News, to Spotify general counsel Horacio Gutierrez outlining the company's stance and calling into question Spotify's claims of anticompetitive behavior.

"We find it troubling that you are asking for exemptions to the rules we apply to all developers, and are publicly resorting to rumors and half-truths about our service," Sewell wrote. "There is nothing in Apple’s conduct that 'amounts to a violation of applicable antitrust laws.' Far from it," he adds. "I would be happy to facilitate an expeditious review and approval of your app as soon as you provide us with something that is compliant with the App Store’s rules." Apple says Spotify is trying to remove its in-app purchase option in favor of sign-up feature "intended to circumvent Apple's in-app purchase rules."

Apple and Spotify are fighting over the App Store's 30 percent cut

The crux of the matter is Apple's 30 percent cut for App Store software, which is a stipulation for any third-party developer wishing to sell a paid app or charge for in-app purchases, such as a Spotify subscription. Spotify has spent a great deal of time devising workarounds to this, including a $0.99 three-month promotion if users sign up via its website instead of through its iOS app. Spotify has in the past opted to pass on the extra cost to consumers by charging $13 a month for its Premium service when purchased inside the app, instead of the $10 a month it costs if you sign up online. Allegedly, Spotify went one step further and decided to remove that $13 option altogether. In its place, Apple says the company is trying to ask for user emails with the intention of moving purchases online, which led to the update's rejection.

Spotify originally sent a letter to Apple on June 26th accusing the company of "causing grave harm to Spotify and its customers" over the rejection of Spotify's latest update. "This latest episode raises serious concerns under both US and EU competition law," Gutierrez wrote at the time. "It continues a troubling pattern of behavior by Apple to exclude and diminish the competitiveness of Spotify on iOS and as a rival to Apple Music, particularly when seen against the backdrop of Apple’s previous anticompetitive conduct aimed at Spotify … we cannot stand by as Apple uses the App Store approval process as a weapon to harm competitors."

Apple points to its new App Store revenue split

Apple says these claims are unfounded. The company points to its new App Store revenue split, which allows sellers of subscriptions to keep 85 percent of revenues instead of the typical 70 after a consumer has paid for a year. "We understand you want special treatment and protections from competition," Sewell writes, "but we simply will not do that because we firmly adhere to the principle of treating all developers fairly and equitable."