Spotify says Apple rejected update over App Store policies, 'causing grave harm' to service
Apple Music competitor Spotify has accused Apple of rejecting an update to its official iOS app, claiming that the iPhone maker has exhibited "a troubling pattern of behavior" that's anti-competitive.
Spotify's allegations were revealed in a letter the streaming music service sent to Apple general counsel Bruce Sewell this week, a copy of which was obtained by Re/code. In the note, Spotify attorney Horacio Gutierrez alleges that Apple's App Store policies are "causing grave harm to Spotify and its customers."
In an effort to gain support for its case, the letter was also provided to U.S. government officials, including Sen. Elizabeth Warren (D-Mass.). The note likely played a part in comments made by Warren this week, accusing Apple of using its platform dominance to hurt competitors like Spotify.
At issue is Apple's share of sales and subscriptions that go through software available on the iOS App Store. For years, Apple has taken a 30 percent cut of all App Store sales, encompassing paid downloads, in-app purchases, and ongoing subscriptions.
In a move that could help the likes of Spotify and others, Apple announced earlier this month that it will take a smaller 15 percent cut of ongoing subscriptions through App Store downloads. However, Apple's 30 percent share is only reduced to 15 percent if a customer maintains their subscription for over a year.
Apple's policies have led companies like Spotify to charge more to customers who subscribe through their official iOS app. Spotify's premium subscription tier costs $10 if a user registers directly through the web, but transactions through its iOS app are charged at $13 per month. Apple also forbids linking to external stores to bypass App Store fees.
While Spotify's letter apparently did not specifically say what changes have been made in the rejected version of its iOS app, it does note that the proposed update was turned down due to "business model rules." Spotify was also informed that they would be required to use Apple's iTunes-based billing system to sell subscriptions through its iOS app.
In Spotify's view, Apple's policy is "a weapon to harm competitors." Like Spotify, Apple offers its own $10-per-month subscription music service, dubbed Apple Music. The latest data has Spotify at 30 million paid subscribers worldwide, while Apple Music reached 15 million paid users as of earlier this month.
Spotify's allegations were revealed in a letter the streaming music service sent to Apple general counsel Bruce Sewell this week, a copy of which was obtained by Re/code. In the note, Spotify attorney Horacio Gutierrez alleges that Apple's App Store policies are "causing grave harm to Spotify and its customers."
In an effort to gain support for its case, the letter was also provided to U.S. government officials, including Sen. Elizabeth Warren (D-Mass.). The note likely played a part in comments made by Warren this week, accusing Apple of using its platform dominance to hurt competitors like Spotify.
At issue is Apple's share of sales and subscriptions that go through software available on the iOS App Store. For years, Apple has taken a 30 percent cut of all App Store sales, encompassing paid downloads, in-app purchases, and ongoing subscriptions.
In a move that could help the likes of Spotify and others, Apple announced earlier this month that it will take a smaller 15 percent cut of ongoing subscriptions through App Store downloads. However, Apple's 30 percent share is only reduced to 15 percent if a customer maintains their subscription for over a year.
Apple's policies have led companies like Spotify to charge more to customers who subscribe through their official iOS app. Spotify's premium subscription tier costs $10 if a user registers directly through the web, but transactions through its iOS app are charged at $13 per month. Apple also forbids linking to external stores to bypass App Store fees.
While Spotify's letter apparently did not specifically say what changes have been made in the rejected version of its iOS app, it does note that the proposed update was turned down due to "business model rules." Spotify was also informed that they would be required to use Apple's iTunes-based billing system to sell subscriptions through its iOS app.
In Spotify's view, Apple's policy is "a weapon to harm competitors." Like Spotify, Apple offers its own $10-per-month subscription music service, dubbed Apple Music. The latest data has Spotify at 30 million paid subscribers worldwide, while Apple Music reached 15 million paid users as of earlier this month.
Comments
"Yes."
"Grave harm?"
"Is there another kind?"
Spotify is not a competitor to Apple, only to Apple's streaming music capability. Sending crybaby comments to government officials is a sign they can't figure out how to compete on their own. They need a delivery platform yet they want to demand how that delivery platform works. Spotify feels they should be able to use mobile platforms for free as does many other developers and some members of our government. Spotify, like others, need to understand that they have to pay to get onto Apple's and other platforms.
http://www.techhive.com/article/2988560/home-players/amazon-wont-sell-apple-tv-and-chromecast-hardware-bans-marketplace-partners-from-selling-them-too.html
Net neutrality is probably one of the few things anyone in gov has got right on tech.
As as others already do this its just Spotify being whiny little bitchies.
Meanwhile Spotify's ratio of free to paid users hasn't changed for years, (especially with Apple Music not even offering a free tier.)
Since their ad-supported "free" tier now has a significantly larger number of users then even a razor thin margin would be seeing a large boost to Spotify's bottom line - it is after all a wholly digital service.
So no I don't buy that Spotify's problems are from competitors acting unfairly or illegally, what's clear to me is that either Spotify can't make good out of a free tier (this proving that their business model was never sound) or they're just trying all of this on as a means to stifle new competitors in this segment - because Spotify has utterly failed to differentiate their service. I'd guess it is the second option, too bad for Spotify that Amazon et. al. will enter this space shortly: competitors who are far more ferocious than Apple and are willing to 100% duplicate Spotify's offer, and then still discount on that.
its pretty clear. you cant walk into the Mall of America and sell magazine subscriptions for free, can you? same thing.
No shit that it's about $$$$ for Apple. Apple is a for profit corporation...what else should it be about? Peanuts? And why shouldn't Apple take a cut for providing a platform that allows Spotify to make money? Do you have an issues with eBay or Amazon taking a cut for allowing people to sell in their marketplace? Spotify should be kissing Apple's ass for providing them a lucrative marketplace instead of complaining. Sounds like sour grapes to me.
Exactly! Well said!