We've Got Hollywood Covered
|

Apple Fires Back at Spotify: Music Streamer Wants to ‘Squeeze’ Its Competitors and Artists

Tech giant says it is ”wrong“ that the music streamer wants to benefit from the App Store without paying its fair share

We’ve got an old fashioned tech fight on our hands. Apple shot back at Spotify late Thursday night, saying the music streamer has been “misleading” the public while spending much of the past week lambasting Apple’s “unfair advantage” against its competitors, adding that Spotify is looking to take advantage of the App Store in the same way it’s taken advantage of artists in recent years.

At the heart of the matter is Spotify’s complaint that Apple charges its competitors a 30 percent “Apple tax” anytime users upgrade their service within the App Store. Spotify CEO Daniel Ek said earlier this week that Apple forces the world’s biggest music streamer to “artificially inflate” its prices — putting it at a disadvantage compared to Apple Music, its chief rival.

Spotify stopped paying the fee in 2015, opting to have its customers upgrade their service outside the App Store. Apple, in its response, said Spotify wants to “keep all the benefits” of the App Store without contributing to its upkeep.

“We share Spotify’s love of music and their vision of sharing it with the world. Where we differ is how you achieve that goal,” Apple said in its response. “Underneath the rhetoric, Spotify’s aim is to make more money off others’ work. And it’s not just the App Store that they’re trying to squeeze — it’s also artists, musicians and songwriters.”

The company response comes after Apple had stayed mum for the last two days. On Tuesday, Spotify filed an antitrust complaint with the European Commission against Apple, and on Wednesday, Ek said in Berlin Spotify’s relationship  with Apple had turned from something that was “mutually beneficial” to something that was “completely unsustainable.”

Apple said Spotify’s framing of the cut it receives from apps has been wrapped in “misleading rhetoric.”

“The only contribution that Apple requires is for digital goods and services that are purchased inside the app using our secure in-app purchase system,” Apple said. “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.”

Spotify left out other important information, according to Apple, including that most of its 207 million subscribers only use the free version of its service. (Apple Music has gained 56 million paying customers, compared to 97 million for Spotify, since launching four years ago.) Apple argued much of Spotify’s success is due to the App Store — and failing to contribute part of its revenue is unethical.

“Spotify wouldn’t be the business they are today without the App Store ecosystem, but now they’re leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs. We think that’s wrong,” Apple said.