Apple Hits Back at Spotify's 'Misleading Rhetoric' in App Store Complaint
Apple CEO Tim Cook also takes a swipe at Spotify over its recent appeal of an increase in royalty rates: "It’s not just the App Store that they’re trying to squeeze — it’s also artists, musicians and songwriters."
Apple late Thursday responded to music streaming giant Spotify's antitrust complaint in Europe, arguing that the company "wraps its financial motivations in misleading rhetoric" and wants 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."
Spotify on Wednesday unveiled a competition complaint with the European Commission, the regulatory body of the European Union, saying: "In recent years, Apple has introduced rules to the App Store that purposely limit choice and stifle innovation at the expense of the user experience — essentially acting as both a player and referee to deliberately disadvantage other app developers."
Spotify CEO Daniel Ek in a Berlin appearance on Thursday added: "Over time, Apple has put its interest as a competitor ahead of its role as a neutral platform provider."
Apple, led by CEO Tim Cook, in a statement said that its App Store has in its 11 years "helped create many millions of jobs, generated more than $120 billion for developers and created new industries through businesses started and grown entirely in the App Store ecosystem."
Spotify has argued that Apple doesn't provide a level playing field, but disadvantages services, such as Spotify, that compete with its own services. Apple denied that, saying: "At its core, the App Store is a safe, secure platform where users can have faith in the apps they discover and the transactions they make. And developers, from first-time engineers to larger companies, can rest assured that everyone is playing by the same set of rules. That’s how it should be. We want more app businesses to thrive — including the ones that compete with some aspect of our business, because they drive us to be better." The tech giant argued that "what Spotify is demanding is something very different."
Apple rejected Spotify's claim that "we’re blocking their access to products and updates to their app," saying: "We’ve approved and distributed nearly 200 app updates on Spotify’s behalf, resulting in over 300 million downloaded copies of the Spotify app. The only time we have requested adjustments is when Spotify has tried to sidestep the same rules that every other app follows."
It also said that "Spotify wants all the benefits of a free app without being free" and misrepresented the way Apple charges companies via the App Store. "A full 84 percent of the apps in the App Store pay nothing to Apple when you download or use the app. That’s not discrimination, as Spotify claims; it’s by design," Apple said.
It also addressed Spotify's complaint that the likes of Uber and Deliveroo don't get charged by Apple. "Apps that are free to you aren’t charged by Apple. Apps that earn revenue exclusively through advertising — like some of your favorite free games — aren’t charged by Apple. App business transactions where users sign up or purchase digital goods outside the app aren’t charged by Apple. Apps that sell physical goods — including ride-hailing and food delivery services, to name a few — aren’t charged by Apple," the company said. "The only contribution that Apple requires is for digital goods and services that are purchased inside the app using our secure in-app purchase system. As Spotify points out, that revenue share is 30 percent for the first year of an annual subscription — but they left out that it drops to 15 percent in the years after."
Apple concluded by criticizing Spotify's approach to business. "We share Spotify’s love of music and their vision of sharing it with the world," the tech giant said. "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."