Apple Says Spotify Only Pays 15% Fee on About 0.5% of Subscribers in Response to App Store Complaint
Apple has filed a response to Spotify's anticompetitive complaint about the App Store in Europe, noting that Spotify pays Apple a 15 percent commission for only about 0.5 percent of its paying subscribers, according to CNET.
That figure equates to around 680,000 users who subscribed to Spotify through its iOS app, via Apple's in-app purchase system, between 2014 and 2016. This is because Apple only collects a 30 percent commission for the first year of a subscription, at which point the fee drops to 15 percent.
Apple's response comes three months after Spotify announced it had filed an antitrust complaint against Apple with the European Commission over unfair App Store practices. Spotify took particular issue with Apple charging a 30 percent "tax" on App Store purchases, calling it "discriminatory":
Apple requires that certain apps pay a 30% fee for use of their in-app purchase system (IAP) – as is their prerogative. However, the reality is that the rules are not applied evenly across the board. Does Uber pay it? No. Deliveroo? No. Does Apple Music pay it? No. So Apple gives the advantage to its own services.
Apple only charges a commission on in-app purchases tied to digital goods, which is why apps like Uber and Deliveroo are exempt.
Apple also forbids Spotify and other developers from alerting users that they can sign up for a subscription or complete a purchase outside of its iOS app, and disallows Spotify from advertising deals to its customers in the app or by email, as these practices would circumvent Apple's in-app purchase system.
Apple has faced increasing scrutiny as of late over the way it runs its App Store. In response, Apple said the App Store "welcomes competition," noting that it was created to be "a safe and trusted place for customers to discover and download apps" and "a great business opportunity for all developers."
Apple previously labeled Spotify's complaint as "misleading rhetoric" and claimed that "Spotify wants all the benefits of a free app without being free."
European Commission regulators will now review Apple's response as part of its probe.
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Top Rated Comments
If the vast majority of Spotify customers are paying through their website, then how can they possible argue that Apple is a monopoly or abusing their position?
I assume this is the issue? just get rid of this passage ...
Spotify publicly announced the number of paid users (https://newsroom.spotify.com/2019-04-29/spotify-reports-first-quarter-2019-earnings/), and Apple knows the number of Spotify subscribers on iOS. It's simple math.
This is Apple's response to the court, so if they are lying they would be in a lot of legal trouble.
Sure, Spotify doesn’t use every single one of those features, but Apple makes these services available to all developers to use. That’s not free.
If it was so easy to run a platform, Spotify can go fork Android.