Spotify and Apple are unsheathing their claws. Apple recently rejected a recent update to the Spotify iOS app, and Spotify claims that Apple is using its App Store approval process as “a weapon.”
Spotify General Counsel Horacio Gutierrez argued that Apple rejected a new version of their app due to an anti-competitive business model. He claimed that Apple wanted Spotify to use the company’s billing system in order to sell subscriptions. Apple charges a monthly fee of up to 30% for the use of that system. Spotify charges an additional $2.99 for in-app subscriptions to avoid the “App Store tax”.
The update currently causing the Spotify-Apple debate
Gutierrez remarked, “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 anti-competitive conduct aimed at Spotify.” Apple naturally has rebuked these claims of anti-competitiveness.
General Counsel Bruce Sewell insisted that Spotify had replaced its in-app purchase feature with a signup account feature in order to circumvent Apple’s in-app purchase rules. Sewell contended that Apple’s in-app purchase feature has existed for some time and that Spotify has gained 160 million downloads since being introduced in the Apple Store.
Sewell also noted that Apple has introduced a new revenue split model that benefits developers and services such as Spotify. Previously Apple received 30% of the revenue from app purchases while the creators received 70%. After a year of paid service with a subscription, a 85/15 share split will now kick in. All subscriptions are eligible, and according to Apple, Spotify will make more money this way.
Sewell commented, “We did not alter our behavior or our rules when we introduced our own music streaming service or when Spotify became a competitor. Ironically, it is now Spotify that wants things to be different by asking for preferential treatment from Apple.”
As of July 3rd, the issue between Spotify and Apple has yet to be resolved.