Spotify vs Apple, Apple’s Response

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This past week has been an interesting one between Spotify, the worlds largest streaming music platform, and Apple, one of the worlds largest mobile operating system makers.

Spotify released a statement early this week stating that Apple is using its platform to impact Spotify and its earning potential negatively. Spotify argues that it has to pay Apple 30% royalties when users sign up for a subscription in-app, something users of Apple Music do not have to do.

Apple today has broken its silence and released their statement on the matter. Apple's statement highlights 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.”

Apple's statement also highlighted that many Spotify users are using the free version of the app, or premium subscribers are getting free access to the service through a partnership with the mobile carriers. These users do not have to pay for the service, and thus Apple doesn't make any money from these users.

"Let’s be clear about what that means. 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."

"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."

This statement from Apple isn't going to end the matter between the two companies, but it's sure going to add fuel to the fire as this matter continues into the future. Spotify has filed an antitrust complaint against Apple in Europe this week so we will have to see how that plays out.

Its possible Apple could work on a new pay split system when it comes to the App Store in the future, but for right now its all uncertain what will happen.

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