Recently, Spotify filed a complaint against Apple with the European Commission. Yesterday, Apple posted a statement titled “Addressing Spotify’s claims”. I suspect this will not be the end of the argument between Spotify and Apple.

Apple started by giving a brief history of the iTunes Store and the App Store. After that, Apple begins making a case against Spotify. To be clear, I am personally not on the side of either one of these companies.

What Spotify is demanding is something different. 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.

Here are a few key points from Apple’s post:

• 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.
• When we reached out to Spotify about Siri and AirPlay 2 support on several occasions, they’ve told us they’re working on it, and we stand ready to help them where we can.
• Spotify is deeply integrated into platforms like CarPlay, and they have access to the same app development tools and resources that any other developer has.
• 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, Spotify Watch app is currently the No. 1 app in the Watch Music category.
• Apple claims that Spotify wants all the benefits of a free app without being free.
• 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.
• “The majority of customers use their ad-supported product, which makes no contributions to the Apple Store.”
• “A significant portion of Spotify’s customers come through partnerships with mobile carries. This generates no App store contribution but requires Spotify to pay a similar distribution fee to retails 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.”

Personally, it seems to me that Apple and Spotify are having a disagreement that does not appear to be something that will end soon. I would not be surprised if the result of this spat causes Spotify and Apple to part ways.

Founder and CEO of Spotify, Daniel Ek, posted “Consumers and Innovators Win on a Level Playing Field” on the Spotify Newsroom. In it, he announces that Spotify has filed a complaint against Apple with the European Commission (EC).

Daniel Ek starts by pointing out that his goal for Spotify is to reimagine the audio experience by giving consumers the best creativity and innovation they have to offer. For that to be a reality, his belief is that companies like Spotify must operate in an ecosystem in which fair competition is not only encouraged, but guaranteed.

It’s why, after careful consideration, Spotify has filed a complaint against Apple with the European Commission (EC), the regulatory body responsible for keeping competition fair and nondiscriminatory. 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. After trying unsuccessfully to resolve the issues directly with Apple, we’re now requesting that the EC take action to ensure fair competition.

Here are some key points from Daniel Ek’s post:

Apple requires that Spotify and other digital services pay a 30% tax on purchases made through Apple’s payment system, including upgrading from our Free to Premium service. If we pay this tax, it would force us to artificially inflate the price of our Premium membership well above the price of Apple Music.

If we choose not to use Apple’s payment system, forgoing the charge, Apple then applies a series of technical and experience-limiting restrictions on Spotify. For example, they limit our communication with our customers – including our outreach beyond the app. In some cases we aren’t even allowed to send email to our customers who use Apple. Apple also routinely blocks our experience-enhancing upgrades.

Here is what Spotify is asking for:

• Apps should be able to compete fairly on the merits, and not based on who owns the App Store. We should all be subject to the same fair set of rules and restrictions – including Apple Music.
• Consumers should have a real choice of payment systems, and not be “locked in” or forced to use systems with discriminatory tariffs such as Apple’s.
• App stores should not be allowed to control the communications between services and users, including placing unfair restrictions on marketing and promotions that benefit customers.

It will be interesting to see what the European Commission decides. If Spotify wins, it could open up the opportunity for other app makers, who are not pleased with Apple, to file their own complaints.