Apple Says Spotify Seeks to Keep All Benefits of App Store Without Making Any Contributions to Marketplace

Apple today responded to Spotify's recent complaint with the European Commission over its App Store practices in a press release, referring to it as "misleading rhetoric." Apple adds that Spotify "seeks to keep all of the benefits of the App Store ecosystem" but "without making any contributions to the marketplace."

The intro of Apple's press release:
We believe that technology achieves its true potential when we infuse it with human creativity and ingenuity. From our earliest days, we've built our devices, software and services to help artists, musicians, creators and visionaries do what they do best.

Sixteen years ago, we launched the iTunes Store with the idea that there should be a trusted place where users discover and purchase great music and every creator is treated fairly. The result revolutionized the music industry, and our love of music and the people who make it are deeply engrained in Apple.

Eleven years ago, the ‌App Store‌ brought that same passion for creativity to mobile apps. In the decade since, the ‌App Store‌ has helped create many millions of jobs, generated more than $120 billion for developers and created new industries through businesses started and grown entirely in the ‌App Store‌ ecosystem.

At its core, the ‌App Store‌ is a safe, secure platform where users can have faith in the apps they discover and the transactions they make. And developers, from first-time engineers to larger companies, can rest assured that everyone is playing by the same set of rules.

That's how it should be. We want more app businesses to thrive — including the ones that compete with some aspect of our business, because they drive us to be better.

What Spotify is demanding is something very different. After using the ‌App Store‌ for years to dramatically grow their business, Spotify seeks to keep all the benefits of the ‌App Store‌ ecosystem — including the substantial revenue that they draw from the ‌App Store‌'s customers — without making any contributions to that marketplace. At the same time, they distribute the music you love while making ever-smaller contributions to the artists, musicians and songwriters who create it — even going so far as to take these creators to court.

Spotify has every right to determine their own business model, but we feel an obligation to respond when Spotify wraps its financial motivations in misleading rhetoric about who we are, what we've built and what we do to support independent developers, musicians, songwriters and creators of all stripes.
Apple goes on to rebut each of Spotify's accusations listed on its Time to Play Fair website on a point-by-point basis.

Apple says the only time it has rejected Spotify app updates is when Spotify has tried to sidestep the ‌App Store‌ rules. Apple also says it has reached out to Spotify about Siri and AirPlay 2 support on several occasions and approved the Spotify app on Apple Watch with the same process and speed as any other app.

Apple adds that "Spotify wants all the benefits of a free app without being free," noting that the "majority of customers use their free, ad-supported product, which makes no contribution to the ‌App Store‌."
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 says the only requirement for developers is that any digital goods and services be purchased inside the app using Apple's in-app purchase system. Apple takes a 30 percent cut of revenue for the first year of an annual subscription, but says Spotify left out that it drops to 15 percent in the years after.

Apple concludes by saying it shares Spotify's goal of sharing music but has a different view of how to achieve that goal. Apple takes aim at Spotify "suing music creators" after a decision by the U.S. Copyright Royalty Board requiring increased royalty payments, calling it "just wrong," although Spotify already disputed that allegation.

Tag: Spotify

Top Rated Comments

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11 months ago
Apple is right.
Rating: 66 Votes
11 months ago
I am NOT defending Spotify, but the iOS App Store is in-deed Catastrophically Broken !

AAPL Controls the Narrative, & does so to the tune of 100% !

AAPL makes their App Recommendations based-upon "Politics," NOT which apps are best for their Users.

The list goes on & on ...

"App Discovery" of good apps is NON-existent !

How much search filtering does AAPL offer ??? that one is easy to answer, except for keywords, Zero !

AAPL hit $1T USD in market cap last year ... yet, exactly how many (major) App Success Stories have occurred for apps that started life since Cook took over ... I know of NONE !
Rating: 35 Votes
11 months ago
Apple charges 99$ a year to host an app on its platform. What is this charge for? To cover hosting fees?

Then Apple charges 30% of every sale Spotify makes. What is this for? I can't imagine hosting charges to be that high. And Apple makes no contribution to the development of Spotify and its products.

Sure it is Apple's platform and they can do whatever they want with it. But are they being fair?
Rating: 32 Votes
11 months ago
30% is extremely high for hosting a tiny amount of static content in the app store and providing a download. The big thing is this is the only way to get apps. Is that worth 30%?

As consumers, we bought and own the devices. Therefore, we should be able to use them however we want. If that means installing from a 3rd party app store or directly from a developer's website, then so be it. Let us check a box saying we understand that doing so may result in a degraded experience and/or require wiping the device to get technical support, but don't flat out prevent us from doing so.

For businesses, they should be given the chance to compete. The cost to store the data for an app store is small. The cost for providing downloads is small. If someone wants to do an app store and only take 10% or whatever, then they should be given the chance. If Apple is so confident in the value they are providing developers, then it won't matter that there is competition.

The reality is they are abusing their power with the 30%. They could raise it to 90% tomorrow and developers would just have to deal with it. This is the only way to distribute their apps, so they will take some money over no money. I welcome the breakup of stuff like this.

The phone/tablet/whatever is just a computer. Nobody would tolerate this nonsense if Windows didn't allow you to download a program outside of their store. Just because "phone" - doesn't make it right.
Rating: 32 Votes
11 months ago
Ridiculous that they have arbitrary rules like digital items require purchasing through IAP... why? Because then Apple get a cut for nothing.

If you look into this case it's rife with anti-competitive behaviour. Especially true now giving Apple has their own direct competitor that does indeed have unfair advantages.
Rating: 22 Votes
11 months ago
The only solution is to open up the iOS platform so developers can sell directly to end users, or through other 3rd party app stores. This works on the Mac platform, so there is no technical reason iOS cannot also work this way.

Also see:
Rating: 21 Votes
11 months ago

re: "And developers, from first-time engineers to larger companies, can rest assured that everyone is playing by the same set of rules."

Well, we know that isn't true due to the fairly recent Facebook debacle. Any other developer wouldn't have just had a tiny 'slap on the wrist' with their accounts partially froze for a day or two. They'd have been booted from the store. But, Apple knows if they'd have actually been fair, they'd have to deal with upset users... or gasp, potential lost some sales. So, FB is right back at it.

Even better: If you're a large company like Uber, you can willfully violate Apple's privacy rules - and even willfully build in methods to avoid detection.

Smaller developers have been barred from the app store for making honest mistakes. But the Uber CEO will was invited to a "sit down" with Tim Cook. Such behavior is the exact definition of a "Tech Mafia". "Timmy the Cook"

This statement is a huge bald faced lie: "And developers, from first-time engineers to larger companies, can rest assured that everyone is playing by the same set of rules."

I've worked at both very small and very large companies that develop iOS apps, and also as a small independent. Apple treats smaller developers unfairly, and I have witnessed this.

At the large company we were able to get an app update approved in 30 minutes by making one phone call to a person at Apple WHO ANSWERED THE PHONE. The App also was using a non-public API so it was in direct violation of the App Store guidelines.

Apple is ignorant to believe developers don't see this. People move around and share stories.
Rating: 20 Votes
11 months ago
If Apple deserves something for access to a customer base with disposable income why does the company allow any free apps on the App Store. Why doesn’t every app cost something with Apple getting a cut of that sale?

Basically Apple’s argument is they provide the lucrative customer base therefore they should get a cut. OK then why is their cut limited to digital goods? How come Apple’s so-called tax only applies to products and services it is in direct competition with? Why is fair for Spotify to give 30% or 15% of subscriptions purchased in-app but not for Uber? Who cares whether the product or service is consumed on Apple hardware?
Rating: 19 Votes
11 months ago
Neither is right.
Apple - how can Spotify ‘contribute’ exactly? It doesn’t say. What do they want - homemade cake on a Friday afternoon?

Spotify - your software has to live on their competitors platform. If Google Play was a success, you would have the same issue. It will always be hostile. No way around that.

This is two money making enterprises trying to butt heads to make more money from the other.
Rating: 16 Votes
11 months ago

Spotify has every right to determine their own business model,

That is not entirely accurate when you have a business ( Apple Music ) competing against another business with the same baseline cost and additional advantage of non 30% cut. This is perfectly fine in market like US. But I doubt this will sit well in EU. Which is where the complaint is launched.

This isn't the same as Apps, where you could have less developers, or cheaper developers from different countries, the baseline cost are hard to determine. And the productivity and creativity of every individual are hard to measure. But Streaming Music, most of those cost are in Payment to labels. And it would not be hard to justify this cost in court. Again, this would not sit well with EU.

This is an Anti-Competitive advantage, it was all perfectly fine until Apple decide to launch Apple Music. Which I have been saying for years should not have happen in the first place.
Rating: 16 Votes

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