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Spotify Accuses Apple of Using App Store Approval Process as a 'Weapon to Harm Competitors'

Spotify and Apple are embroiled in a major dispute, which Spotify is today taking to the court of public opinion. Spotify submitted a new version of its app to the App Store, following a decision to eliminate the option to purchase a subscription through Apple, and Apple has rejected the update.

In response, Spotify wrote a letter to Apple's legal team on June 26, portions of which have been shared by Recode. Spotify's letter, which it shared yesterday with Congressional staff in Washington, D.C., accuses Apple of causing "grave harm" to Spotify by rejecting the app update.

spotify app
The details on the rejection are somewhat murky, but Spotify claims Apple denied the app update and demanded Spotify use Apple's billing system if it "wants to use the app to acquire new customers and sell subscriptions." Spotify was using its iOS app to highlight a promotion offering new Spotify customers three months of service for $0.99, something Apple didn't like.

Apple reportedly forced Spotify to stop advertising the promotion in the iOS app or face the removal of the app from the App Store. Spotify stopped the advertisements, but also decided to stop offering App Store subscription options, a move that's led to the current disagreement between the two companies.
"This latest episode raises serious concerns under both US and EU competition law," Gutierrez wrote. "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."
At issue is the 30 percent cut that Apple takes from App Store subscriptions, which has caused Spotify to charge $12.99 for subscriptions purchased through the App Store, a $3 premium over subscriptions purchased on the web and $3 more than the price of Apple Music. Apple does not force apps to use its billing system, but it also does not allow apps to offer other purchase options. As stated in the App Store guidelines:
Apps may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than IAP. [...]

Auto-renewing subscriptions should only be offered using in-app purchase and may only be used for periodicals (e.g. newspapers, magazines), business apps (e.g. enterprise, productivity, professional creative, cloud storage), media apps (e.g. video, audio, voice, photo sharing), and other approved services (e.g. dating, dieting, weather).
Apple in the past had a battle with Amazon and other book sellers over its App Store rules, which resulted in Amazon, Barnes and Noble, and Kobo removing an in-app book store purchase options from their apps. Apple has never relented on the issue, even years later.

Apple recently announced plans to tweak its subscription policies to take a smaller 15 percent cut from subscribers who stay subscribed to a service for more than one year, but Spotify says those changes don't "get to the core of the problem."

Though Apple has rejected Spotify's update, options to purchase Spotify subscriptions in the Spotify app for iOS devices have been gone since the end of May, removed via a backend update. At the current time, it is not possible to purchase a subscription through the Spotify app, and the Spotify app is not able to direct customers to purchase a subscription on the web.

Top Rated Comments

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41 months ago

Sorry, Spotify, but if you don't like it, feel free to design your own phone and develop your own operating system.

This is the most ridiculous pro-apple response regarding this dispute. Why people continue to repeat it is beyond me.
Rating: 119 Votes
41 months ago
Sorry, Spotify, but if you don't like it, feel free to design your own phone and develop your own operating system.
Rating: 73 Votes
41 months ago
Let me sell in your shop but I will charge my customers somewhere else, is this what they are asking or I am wrong?
Rating: 59 Votes
41 months ago

This is the most ridiculous pro-apple response regarding this dispute. Why people continue to repeat it is beyond me.

It's because it's true. Apple pays for server space for the App Store, Apple pays developers to continue updating the operating system, Apple pays people to approve apps, and all of those services make the App Store possible. We're supposed to believe Apple should offer all of that for free so Spotify can make money, especially for a service which Apple itself directly competes? It's not a pro-Apple response, it's a pro-"how to run a business" response.
Rating: 53 Votes
41 months ago
Apple runs parts of its business in a completely anticompetitive manner. Freezing competitors out is a case in point, so is an elaborate list of exotic approval rules. Those aspects need to be investigated and if supported by evidence, then prosecuted appropriately. Apple isn't above the law.
Rating: 48 Votes
41 months ago

This is the most ridiculous pro-apple response regarding this dispute. Why people continue to repeat it is beyond me.

Almost as ridiculous and arguing that Apple needs to give a direct competitor something for nothing.
Rating: 45 Votes
41 months ago
I mean it is kind of a ******** policy. Apple should allow apps to redirect outside the App Store for sign up if they are gonna charge a premium for signing up within the app.
Rating: 36 Votes
41 months ago
This is crap. Without the iPhone, spotify is a fraction the size they are now. Apple is not causing them grave harm.... Apple made them rich. If they don't like the terms, go develop the SpotifyPhone.
Rating: 33 Votes
41 months ago
Oh boy, here we go again. Not only is Spotify wrong, but they cant even decide what their actual opinion is. They really need to sit down with everyone working at Spotify and come up with a consistent view point. A mere week or so ago Spotify said
"Nevertheless, Spotify recently said that Apple Music has helped, not hurt, its business. Since Apple Music launched on June 30, 2015, its European rival has grown at a faster pace ('') than beforehand. Spotify has now surpassed Skype as the most lucrative European startup, with an estimated valuation of roughly $8.5 billion."It's great that Apple is in the game. They are definitely raising the profile of streaming. It is hard to build an industry on your own," Jonathan Forster, a vice president and one of its first employees, told Reuters in an interview.
"Since Apple Music started we've been growing quicker and adding more users than before."

Hmmm, a vp of Spotify has a pretty straight forward-pro Apple stance. Meanwhile over on the other side of the office........
Spotify's head of communications and public policy Jonathan Prince took the opportunity to lambaste Apple in a statement given to Recode.
"Apple has long used its control of iOS to squash competition in music, driving up the prices of its competitors, inappropriately forbidding us from telling our customers about lower prices, and giving itself unfair advantages across its platform through everything from the lock screen to Siri (''). You know there's something wrong when Apple makes more off a Spotify subscription than it does off an Apple Music subscription and doesn't share any of that with the music industry. They want to have their cake and eat everyone else's too."

HELLOOOOO!!!!!! Sounds like Spotify vp Jonathan Price needs to speak with Spotify's head of communications and public policy Jonathan Prince. They need to get their story straight.
Rating: 31 Votes
41 months ago
Its a very interesting argument, and there are good points and bad points from both camps.

Wearing the Apple Hat:
It costs time and money to develop and provide the App store and App distribution network. Its entirely reasonable to expect that paid apps help pay for this via a portion of their purchase price.

To use the Brick and Mortor storefront analogy into play: Apple is the shopping mall. if you want to run a store in the shopping mall, and use real-estate, you have to pay for that. In return, the Shopping mall takes care of the hydro of the building, access to and from, parking, etc, etc.

Wearing Spotify hat:
After initial App download, Apple isn't involved in the Spotify application or delivery of streaming music. Why should they continue to require 30% of each and every months subscription fee? Apple is not involved in the delivery of content. Its not their network or bandwitdh and its no longer using the App store. Why should Spotify be required to continued to pay 30% of every single user's months subscriptions? Especially since with 30% taken off the top by Apple, There is absolutely no way of staying competitive in the streaming industry when Apple's own music streaming service isn't subjected to a 30% and can afford the 9.99 pricepoint
Rating: 24 Votes

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