Earlier this week Spotify called Apple out for charging a 30 percent fee for every user that upgrades to Spotify’s Premium service.
While it didn’t at the time, Apple has now responded to the claims made by Spotify founder and chief executive officer Daniel Ek.
“After using 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. At the same time, they 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,” said Apple in a statement.
The revenue Apple refers to in its statement more than likely refers to the advertising revenue Spotify accrues from its free account offering.
Apple then presents its scalpel and cuts Spotify’s argument up right in front of it.
The Cupertino giant says that it has frequently helped Spotify bring its service to Apple users.
“We found Spotify’s claims about Apple Watch especially surprising. When Spotify submitted their Apple Watch app in September 2018, we reviewed and approved it with the same process and speed with which we would any other app. In fact, the Spotify Watch app is currently the No. 1 app in the Watch Music category,” wrote Apple.
So what about that 30 percent App Store fee that Apple takes from apps that let users make purchases within the app?
That turns out to be a lot more complex than Spotify let on earlier this week.
Free apps, apps that earn revenue through advertising, apps that let you make purchases on other platforms and apps that sell physical goods are not charged the aforementioned fee.
The fee Apple charges is supposedly tied to the App Store’s secure in-app purchase system.
“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 explained.
“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.”
As for the complaint that Spotify filed with the European Commission, Apple did not touch on that, instead spending time addressing the claims Spotify made on its Time to Play website.[Source – Apple] [Image – CC BY 2.0 Paul Hudson]