Apple hit back at Spotify Thursday evening in response to recent criticism and regulatory action from the music streaming service. It said that Spotify sought to “keep all the benefits” of the App Store ecosystem without making a contribution.
Fighting the Apple Tax
Spotify has complained both to the EU Commission and publicly via CEO Daniel Ek about what it called the Apple Tax. Apple takes 30% of each transaction made on third-party products in the App Store, for the first year. This drops to 15% after that. Spotify alleged that taking this cut gave Apple an unfair business advantage.
However, in a statement, Apple said that after Spotify had “used 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.”
The statement also noted Spotify’s recent court case with artists. It said that the streaming service continues to “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.”
Tackling Criticism Head On
Taking on some of the claims directly, Apple said it had “approved and distributed nearly 200 app updates on Spotify’s behalf, resulting in over 300 million downloaded copies” of its app.
It said that it had reached out regarding Siri and AirPlay 2 support, and been told by Spotify it was working on that functionality. It also pointed out that the app is “deeply integrated into platforms like CarPlay.” Comments regarding the Apple Watch were described as “surprising” given Spotify is the top-rated Watch Music app.
Apple also pointed out that “84% of the apps in the App Store pay nothing to Apple when you download or use the app.” It said this was not discrimination, but “by design.” That included supporting ad-driven games as well as physical good and other sales made outside of the App Store environment.
Elsewhere, the statement said:
A significant portion of Spotify’s customers come through partnerships with mobile carriers. This generates no App Store contribution, but requires Spotify to pay a similar distribution fee to retailers and carriers. Even now, only a tiny fraction of their subscriptions fall under Apple’s revenue-sharing model. Spotify is asking for that number to be zero.
While the responses are fair and accurate, there is one allegation that was not tackle directly. Mr. Ek said Wednesday that Apple has an advantage as it gets all the revenue from an Apple Music subscription. His firm does not and, to get the same level of profit, would have to charge more. This, he alleged, gave Apple an unfair market place advantage.