Spotify is still complaining about Apple's EU App Store rules

Posted:
in iOS

Spotify continues to complain about an Apple Tax that it doesn't really pay, as it decries Apple's non-approval of its latest update because of a violation of App Store rules.

Spotify logo
Spotify logo



On Wednesday, Apple told Spotify that its app update for users in the EU was not allowed into regional App Store instances due to missing elements. The App Store review process determined that Spotify did not accept the terms of the Music Streaming Services Entitlement.

Apple requires the entitlement to be accepted by streaming services before apps can point users toward a website owned by the developer. This can be used to handle purchases outside of the App Store.

At the time, Apple told Spotify that the streaming service had included links to an external storefront that could be used to buy subscriptions. But at the same time, Spotify hadn't accepted the Entitlement's terms nor submitted a profile for the review itself.

However, in response to the rejection from the App Store review process, Spotify turns the problem into a legal issue in the EU. Specifically, a ruling by the European Commission ordering Apple to stop its anti-steering practices.

In a statement received by AppleInsider on Thursday, Spotify declares "Apple has once again defied the European Commission's decision, rejecting our update for attempting to communicate with customers about our prices unless we pay Apple a new tax."

"Their disregard for consumers and developers is matched only by their disdain for the law," said a Spotify Spokesperson.

Fees and figures



The reference to a "new tax" is about the Entitlement's rules.

Rather than paying the typical 30% App Store transaction fee, services agreeing to the Entitlement must pay Apple a commission of 27% on purchases made through the alternative process. This figure can drop to 12% for Small Business Program participants or the renewal of an auto-renewing subscription beyond its first year.

At this point, Spotify pays little to Apple, given that it removed the ability to purchase a subscription out of the app years ago.

Back in 2019, it was reported that 680,000 users of Spotify were paying 15% of the subscription fee to Apple, and none paid 30% at all. Since Apple's charges for subscriptions cuts in half for the second year and beyond, this meant all Spotify subscribers paying through Apple at the time were long-time users, and that no new subscribers were added in the previous year.

The Spotify CEO keeps hammering on a 30% tax when he complains about the App Store, regardless.

In March, following the European Commission's ruling, Apple said Spotify had a 56% share of Europe's music streaming market, and that it had paid Apple "nothing for the services that have helped make them one of the most recognizable brands in the world."

"A large part of their success is due to the App Store, along with all the tools and technology that Spotify uses to build, update, and share their app with Apple users around the world," the statement continued, adding that Apple was "proud to play a key role supporting Spotify's success."



Read on AppleInsider

Comments

  • Reply 1 of 15
    ssfe11ssfe11 Posts: 32member
    Even the EU must be like…”stop the whining already”. Every parent eventually gets sick and tired of their one constantly complaining child and eventually says “leave me alone”. Then the child goes away. 
    edited April 25 watto_cobra
  • Reply 2 of 15
    avon b7avon b7 Posts: 7,757member
    ssfe11 said:
    Even the EU must be like…”stop the whining already”. Every parent eventually gets sick and tired of their one constantly complaining child and eventually says “leave me alone”. Then the child goes away. 
    I doubt the EU sees things that way. 

    It is likely the EU even agrees with Spotify's stance. 

    It has nothing to do with what Spotify pays or doesn't pay. 
    pulseimages
  • Reply 3 of 15
    jimh2jimh2 Posts: 631member
    Is Spotify the only EU company that at least generates a decent amount of revenue. Seems to me that is all the EU brings to the table.
    watto_cobra
  • Reply 4 of 15
    omasouomasou Posts: 592member
    So tired of these whining companies.

    If it wasn't for the iPhone they wouldn't exist!
    wonkothesaneJinTechwilliamlondonwatto_cobra
  • Reply 5 of 15
    I know it's too much to ask but I wish the press would just not use the term Apple tax for what is a commission. We don't hear about Google and Facebooks privacy tax, Or Microsofts usability tax. The journalism trade is so clit baity these days. Now to get that dang dog off my lawn.
    omasoubaconstangwilliamlondonwatto_cobra
  • Reply 6 of 15
    wonkothesanewonkothesane Posts: 1,729member

    (Body is 10 characters too short)
    omasoubaconstangwatto_cobra
  • Reply 7 of 15
    baconstangbaconstang Posts: 1,114member
    They're complaining? I guess that means they still exist.
    watto_cobra
  • Reply 8 of 15
    jimh2 said:
    Is Spotify the only EU company that at least generates a decent amount of revenue. Seems to me that is all the EU brings to the table.
    Spotify hasn’t made any money since they started. Losses are a couple of hundred million euros every year. Who pays them to stay afloat? Beats me.

    https://www.statista.com/statistics/244990/spotifys-revenue-and-net-income/
    edited April 25 williamlondonwatto_cobra
  • Reply 9 of 15
    tmaytmay Posts: 6,371member
    gunverth said:
    jimh2 said:
    Is Spotify the only EU company that at least generates a decent amount of revenue. Seems to me that is all the EU brings to the table.
    Spotify hasn’t made any money since they started. Losses are a couple of hundred million euros every year. Who pays them to stay afloat? Beats me.

    https://www.statista.com/statistics/244990/spotifys-revenue-and-net-income/
    You mean the Spotify that just laid off 17% of its employees?

    https://www.thestreet.com/employment/spotify-ceo-is-shocked-by-negative-impact-of-recent-layoffs

    Spotify (SPOTCEO Daniel Ek has just revealed that he was surprised by the consequences of the company’s layoffs in December. During a recent earnings calldiscussing Spotify’s first-quarter earnings for 2024, Ek claimed that the decision to lay off 17% of the company’s workforce negatively affected day-to-day operations more than expected. 

    “Another significant challenge was the impact of our December workforce reduction,” said Ek during the call. “Although there's no question that it was the right strategic decision, it did disrupt our day-to-day operations more than we anticipate. It took us some time to find our footing, but more than four months into this transition, I think we're back on track.”


    watto_cobrawilliamlondon
  • Reply 10 of 15
    tmaytmay Posts: 6,371member
    avon b7 said:
    ssfe11 said:
    Even the EU must be like…”stop the whining already”. Every parent eventually gets sick and tired of their one constantly complaining child and eventually says “leave me alone”. Then the child goes away. 
    I doubt the EU sees things that way. 

    It is likely the EU even agrees with Spotify's stance. 

    It has nothing to do with what Spotify pays or doesn't pay. 
    The EU is too vested in the success of Spotify, now the EU's Champion, to change anything now...
    watto_cobra
  • Reply 11 of 15
    Not interested in any alternative store with questionable content and security.
    watto_cobraomasou
  • Reply 12 of 15
    avon b7avon b7 Posts: 7,757member
    tmay said:
    avon b7 said:
    ssfe11 said:
    Even the EU must be like…”stop the whining already”. Every parent eventually gets sick and tired of their one constantly complaining child and eventually says “leave me alone”. Then the child goes away. 
    I doubt the EU sees things that way. 

    It is likely the EU even agrees with Spotify's stance. 

    It has nothing to do with what Spotify pays or doesn't pay. 
    The EU is too vested in the success of Spotify, now the EU's Champion, to change anything now...
    That would be reason for complaint. 

    The EU isn't the protector of Spotify. It isn't about spotify. The EU is the 'leveller of fields' and Apple transfering a commission from one place to another (even if lower) is a deliberate attempt to keep the field lopsided in Apple's favor. 

    I highly doubt the EU will look favorably on this and I very much doubt Apple would be able to plead compliance with a straight face. 


    GoodRiddance
  • Reply 13 of 15
    omasou said:
    So tired of these whining companies.

    If it wasn't for the iPhone they wouldn't exist!
    I'm not sure if you realize it, but these companies are essentially fighting on behalf of their users. If Spotify and other big companies can have an impact on Apple, this is great for both consumers and other app developers. Yes Apple created the iPhone and we should all be thankful for it, but lobbying for more competitive pricing isn't something that should be frowned upon. Apple is one of the world's largest tech companies anyway, we aren't bargaining with a mom and pop shop here.
    williamlondon
  • Reply 14 of 15
    croprcropr Posts: 1,129member
    omasou said:
    So tired of these whining companies.

    If it wasn't for the iPhone they wouldn't exist!

    Is it?.   Less than 20% of Spotify listeners are using an iOS device.  The Spotify app is actively been used on Windows PC, Mac, Linux PC, on Android smartphones, on smart TVs, ...
  • Reply 15 of 15
    davidwdavidw Posts: 2,072member
    cropr said:
    omasou said:
    So tired of these whining companies.

    If it wasn't for the iPhone they wouldn't exist!

    Is it?.   Less than 20% of Spotify listeners are using an iOS device.  The Spotify app is actively been used on Windows PC, Mac, Linux PC, on Android smartphones, on smart TVs, ...

    Not so much the "iPhone" but "Apple Music". But then, Apple wouldn't had released Apple Music, if it weren't for the iPhone.

    After 10 years of streaming music, Spotify wasn't really going any where.  It wasn't until Apple entered into the field that consumers, specially in the US, took notice to paying for a streaming music subscription.  Even Spotify credited Apple for their rapid growth after 2015, the year Apple released Apple Music.


    >"It's great that Apple is in the game. They are definitely raising the profile of streaming. It is hard to build an industry on your own," Jonathan Forster, a vice president and one of its first employees, told Reuters in an interview.

    "Since Apple Music started we've been growing quicker and adding more users than before."<

    Now not sure if Spotify wouldn't exist today, if it weren't for Apple entering into the field. But if the rapid growth they had after Apple released Apple Music in 2015 didn't occur, they probably wouldn't had IPOed in 2018 and gotten the necessary investment income so they could continue to lose as much money every year, as they had since they IPOed.   

    Remember, the US (N. America) is Spotify second largest market behind the EU(Europe) and the iPhone have 55% of the US market share. Plus over 80% market share of the US teens and young adults, the demographics most likely to subscribe to a streaming music service. The US is the country with the most Spotify users. (And maybe the country with the most Spotify subscribers.)

    These Spotify numbers are for "users" and not just "subscribers". But Spotify still benefit greatly from the number of "users" of their ad-supported music tier.



    So iPhone 20% global market share is a moot point.






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