It's a little weird to see Apple respond to Spotify by way of a public press release, but regardless, Apple's statement doesn't really leave much hope for an amicable resolution to Spotify's complaint.
That conflict centers around Spotify's longstanding complaint that Apple charges excessive fees, routinely blocks Spotify upgrades and unfairly promotes its own streaming service in its App Store; early Wednesday, Spotify lodged an anti-competition complaint with the European Commission over the matter and CEO Daniel Ek sounded off in a blog post.
Apple's control of its App Store deprived consumers of choice and rival providers of audio streaming services to the benefit of Apple Music, which began in 2015, Spotify added.
"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", the post continued.
Apple said its revenue share is in exchange for connecting a third-party's services to its users, using the App Store billing system, and its developer tools that allow Spotify to build its iPhone and iPad applications.
The statement then takes Spotify to task for some of its "misleading rhetoric". First, the 30% revenue share that Apple gets is for the first year of annual subscription, after which it drops to 15%.
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In the letter, Apple accused Spotify of being stingy, saying they want to enjoy the benefits the App Store ecosystem provides without paying into it.
Apple said that "only a tiny fraction of their subscriptions fall under Apple's revenue-sharing model. Spotify is asking for that number to be zero". Apple also claimed that it's reached out to Spotify about Siri and AirPlay 2 support on several occasions only to be told that Spotify was working on such integration. "In fact, the Spotify Watch app is now the No. 1 app in the Watch Music category".
Spotify sued music creators after a decision by the US Copyright Royalty Board required Spotify to increase its royalty payments. When it did eventually give in and accept Apple's in-app purchases rules, Apple Music launched at a lower price that Spotify couldn't meet because of the App Store's revenue split model. This isn't just wrong, it represents a real, meaningful and damaging step backwards for the music industry.
Spotify has 96 million paid subscribers next to Apple's 50 million. "A significant portion of Spotify's customers come through partnerships with mobile carriers". "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", Apple said. "We think that's wrong". A similar antitrust case about potential overreach in Apple's walled garden-Apple v.
Apple even goes so far ahead to claim that Spotify is trying to make money off other's hard work and this is something it is trying to do not just with the App Store but also with musicians.
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