Apple Music VS Spotify : The ‘Business’ War Continues

And the war of words continues between Spotify and Apple Music.

On March 13, the swedish company Spotify announced via their newsroom in that it was filing an official complaint against Apple’s ‘app tax’ (then this percentage falls to 15% in a streaming subscription’s second year).

Daniel Ek, Founder and CEO of Spotify, explains “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 our 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. And to keep our price competitive for our customers, that isn’t something we can do.”

Denuncing Apple as “monopolist”, Daniel details also in this article what Spotify is asking for :

“We aren’t seeking special treatment. We simply want the same treatment as numerous other apps on the App Store, like Uber or Deliveroo, who aren’t subject to the Apple tax and therefore don’t have the same restrictions. What we are asking for is the following:

  • First, 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.
  • Second, 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.
  • Finally, app stores should not be allowed to control the communications between services and users, including placing unfair restrictions on marketing and promotions that benefit consumers.”

Apple moved very quickly via its own blog on the subject, denying this point.

“We’ve worked with Spotify frequently to help them bring their service to more devices and platforms:
  • 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, the Spotify Watch app is currently the No. 1 app in the Watch Music category.”

They add : “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.”

You can read Apple’s full public response here. ‘To be continued’…

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