Apple Responds to Spotify EU 'Tax' Complaints, Says Streamer Pays App Store Fees on Less Than 1% of Users
The tech giant wrote it only receives revenue from Spotify for 0.5% of its premium user base.
Apple has fired back at Spotify's claims that its 30% share of App Store revenue subscriptions is a "tax" with hard numbers. In a filing with the European Commission on Monday (June 24), Apple wrote that it only receives revenue from Spotify for 0.5% of its premium user base and for those users Spotify only pays 15% of revenue, not the 30% the streaming platform pointed out in its own European Commission filing earlier this year.
In the filing, Apple said Spotify does not pay 30% of revenue on any subscriptions to Apple and noted Spotify acquired those users -- 680,000 customers, according to Apple's filing -- between 2014 and 2016. Apple also stated it is not paid by Spotify for any customers the streaming service has acquired in the last three years.
Apple's App Store rules stipulate that subscription services must pay 30% of their revenue from users who sign up for a subscription through an app to Apple in the first year, but that number decreases to 15% in subsequent years, which is how Spotify ends up paying less than the 30% number it's been touting. Spotify allowed users to sign up directly through its iOS app from 2014 through 2016, which is why Apple isn't collecting any revenue from Spotify for new customers it acquired since that time.
The battle between Spotify and Apple over its App Store fees has been going on since 2015. A week after Apple Music launched in 2015, Spotify sent out emails to customers with iPhones noting that they could save $3 a month if they bypassed signing up through Spotify's iOS app. (Spotify charged $13 a month for its premium subscription through the App Store, compared to $10 a month through its website.) Then in 2016, Spotify sent a letter to Apple's lawyers claiming Apple was delaying app updates and had caused "great harm to Spotify and its customers."
"We aren't seeking special treatment, Spotify CEO Daniel Ek said in a blog post after the company filed its complaint with the European Commission back in March. "We simply want the same treatment as numerous other apps on the App Store, like Uber or Deliveroo, who aren't subject to the Apple tax and therefore don't have the same restrictions."
Apple responded to Ek and Spotify a day later in a blog post, claiming, "Spotify wouldn't be the business they are today without the App Store ecosystem, but now they're leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs. We think that's wrong."