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.

Top Rated Comments

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24 weeks ago
Apple just shot down their entire antitrust case.

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?
Rating: 36 Votes
24 weeks ago
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.

I assume this is the issue? just get rid of this passage ...
Rating: 25 Votes
24 weeks ago

What an utterly pathetic response from Apple, I’d also like to know where it got these facts from? Did they steal them from Spotify? Or make them up or base them on unverified sources?

Oh well if you make a joke of the European competition commission they’ll be more then happy to make a joke out of you!


You need to calm down.

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.
Rating: 20 Votes
24 weeks ago
I can't wait for this complaint to go away regardless of the outcome. I have no horse in this race but Spotify looks so petty over this. I have a hard time believing this is good publicity.
Rating: 18 Votes
24 weeks ago

It's free to operate for Apple, premium or not.



Except, running and maintaining a platform costs billions of dollars every year: App store editorial, app store reviews, server costs of delivering apps, Xcode, API development and maintenance, CloudKit, iCloud drive, push notifications, research and development, MapKit, macOS notary services, app store analytics, in app purchase servers, TestFlight services, etc...

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.
Rating: 16 Votes
24 weeks ago
Apple Music pays 0% to Spotify, but Spotify pays 15% to the competition on users still subscribed (which gets passed along to consumers to make Apple Music a cheaper competitor) and Spotify is forbidden by the App Store executive committee from telling users about a competitive alternative to the App Store subscription that drives up the price (which would level the playing field on competitor pricing)...I guess what Apple is saying is that if you want to play ball on Apple's turf, you have to let the home team (Apple) start with two home runs
Rating: 14 Votes
24 weeks ago

Apple just shot down their entire antitrust case.

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?


That wouldn't account for any users that didn't end up signing up because it wasn't simple to do within the Spotify app, since this is due to Apple's stupid rules, this case is still extremely relevant.
[doublepost=1561396941][/doublepost]Apple's response is nothing more than PR and full of absolute lies. Apple should be ashamed of themselves.
Rating: 11 Votes
24 weeks ago
In other words... Spotify has lied to the court! Not good for Spotify!
Rating: 8 Votes
24 weeks ago

I think Spotify removed the ability to sign up for premium within the app so no new sign-ups are going through Apple. I'm not positive on this though.


Correct.

I think people are overlooking the fact, Spotify is complaining that they cant compete with Apple Music if they had to. There is no "entrance" to Spotify via Apple without going through Web Sign up, and Apple disallow Web Links from Within the Apps. We also don know how many Sportify users are on iOS.

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.

I assume this is the issue? just get rid of this passage ...


Again part of the issues this is Anti Competitive and doesn't sit well with EU. Had there been a third OS or Ecosystem this point would have been mute, but unfortunately technology and software is a Winner takes all industry.
Rating: 7 Votes
24 weeks ago
It's always funny seeing these comments on threads like this, and just how far people bend over for Apple.


Apple just shot down their entire antitrust case.

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?

Ummmm because Apple forces Spotify to give Apple a cut even though all the media serving heavy lifting is done by Spotify servers? It doesn't matter how many people subscribe through iAP - the entire premise that Spotify owes Apple anything even though, to Apple, Spotify constitutes nothing more than a free app from a serving heavy lifting perspective.

It would be helpful for MacRumors to include Apple's response from March, I am including it below.

Of note: "Spotify wants all the benefits of a free app without being free."

https://www.apple.com/newsroom/2019/03/addressing-spotifys-claims/

Except Spotify is effectively free. It's free to operate for Apple, premium or not. Apple isn't doing any of the media serving for Spotify.

That 100% needs to be the deciding factor on whether companies owe 15% on iAP - is Apple actually providing anything beyond hosting the app on the App Store? If not, then this is just money grabbing, just like they do with us as consumers each year as the Apple product prices spiral out of control.
Rating: 6 Votes

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