Apple has responded to claims made by Spotify that it is not operating a “level playing field” on its App Store.
The main arguments put by Spotify and its boss Daniel Ek are that Apple charges a 30 per cent royalty fee on any Premium subscriptions made through its app on iOS, and also doesn’t allow Spotify to advertise or incentivise free subscribers to become Premium members by pointing to an external site.
At the same time, Apple Music has, it claims, posted promotions on its own app for paid subscriptions. Apple also doesn’t have to pay itself royalties, of course.
Spotify calls the 30 per cent fee an unfair “tax”.
Apple’s response was swift, claiming that the rules enforced on Spotify apply to every app on the App Store. It counters that Spotify wants all the benefits of being a free app on iOS, including the use of Apple APIs and ecosystem, but doesn’t want to contribute financially in return:
“Apple connects Spotify to our users. We provide the platform by which users download and update their app. We share critical software development tools to support Spotify’s app building. And we built a secure payment system – no small undertaking – which allows users to have faith in in-app transactions. Spotify is asking to keep all those benefits while also retaining 100 percent of the revenue,” it said in a statement.
Apple also claims that Spotify failed to reveal that, while initial royalties on in-app subscriptions are 30 per cent, they drop to 15 per cent for every year after the first.
The last comment made by Apple is perhaps the most stinging. It refers to Spotify, Google, Amazon and Pandora’s appeals against paying more royalties to artists for every track played. Apple Music is not part of the appeal process:
“We share Spotify’s love of music and their vision of sharing it with the world. Where we differ is how you achieve that goal. Underneath the rhetoric, Spotify’s aim is to make more money off others’ work. And it’s not just the App Store that they’re trying to squeeze – it’s also artists, musicians and songwriters.
“Just this week, Spotify sued music creators after a decision by the US Copyright Royalty Board required Spotify to increase its royalty payments. This isn’t just wrong, it represents a real, meaningful and damaging step backwards for the music industry.”
We suspect this war of words has only just begun.