Apple Accuses Spotify of 'Resorting to Rumors and Half-Truths', Sets Record Straight on App Rejection

[MacRumors]

Yesterday, Spotify accused Apple of using its App Store approval process as a "weapon to harm competitors" after Apple rejected a Spotify app update, and now Apple has responded to Spotify's accusations to "set the record straight."

In a letter to Spotify lawyer Horacio Gutierrez that was shared by BuzzFeed, Apple's legal head Bruce Sewell says Apple is disappointed with the public attacks and concerned that Spotify is asking for exemptions to rules that apply to all app developers.

There can be no doubt that Spotify has benefited enormously from its association with Apple's App Store. Since joining the App Store in 2009, Apple's platform has provided you with over 160 million downloads of your app, resulting in hundreds of millions of dollars in incremental revenue to Spotify. That's why we find it troubling that you are asking for exemptions to the rules we apply to all developers and are publicly resorting to rumors and half-truths about our service.

Our guidelines help competition, not hurt it. The fact that we compete has never influenced how Apple treats Spotify or other successful competitors like Google Play Music, Tidal, Amazon Music, Pandora or the numerous other apps on the App Store that distribute digital music.

Sewell goes on to say that Spotify's belief it should not have to pay to take advantage of the "benefits of Apple's hard work" is "simply unfair and unreasonable," pointing out that the App Store rules existed long before Apple Music was introduced. He also points out the new revenue split rules for subscriptions, which will see Apple taking a 15 percent cut from customers who have subscribed to a service for more than a year, instead of a 30 percent cut.

Sewell's letter to Spotify ends with some clarification on why Spotify's app was rejected on May 26. Spotify replaced its in-app subscription purchase options with an account sign-up feature Apple says was "clearly intended to circumvent Apple's in-app purchase rules."

Apple notified Spotify about the guideline violation and following discussions with Apple, Spotify submitted a new version of the app on June 10 that incorporated the same sign-up feature asking for customer email addresses to be used to invite customers to sign up for a Spotify subscription on the web, which Apple again rejected.

That feature exists only for the purpose of avoiding to having to pay Apple for your use of the App Store by emailing customers within hours, directing them to subscribe to Spotify on its website. A clear violation of the terms every other developer adheres to. [...]

There is nothing in Apple's conduct that "amounts to a violation of applicable antitrust laws." Far from it. Apple has continued to innovate with lower pricing for our customers, and a new revenue share model for the developers that have helped make us so successful. We understand you want special treatment and protections from competition, but we simply will not do that because we firmly adhere to the principle of treating all developers fairly and equitably.

In Spotify's own letter, sent to Apple on June 26 but made public yesterday, Spotify accused Apple of causing "grave harm" to its business by rejecting the app update. Spotify said Apple's aim was to "exclude and diminish the competitiveness of Spotify on iOS," which "raises serious concerns under both US and EU competition law."

Sewell's full letter to Spotify can be read over at BuzzFeed.

Article Link: Apple Accuses Spotify of 'Resorting to Rumors and Half-Truths', Sets Record Straight on App Rejection

 

[neohavix]

Spotify, the ball is in your court. How do you respond?

 

[alecgold]

Clear, strong and polite reaction from apple. And as it now looks a bit stupid on Spotify.

 

[Ries]

Yeah right, "we firmly adhere to the principle of treating all developers fairly and equitably", all except themselves. Which is their whole point.

Us users have paid plenty for Apple's hard work (Check Apple's profit on iOS devices), stop ****ing us users over by forcing other app providers out by using unfair competition.

 

[bbeagle]

Say you wrote a software package that you sold on the web for $29.

You want the same profit, but you want to sell it at Walmart. Walmart takes a 35% cut. Your software must cost around $49 at Walmart to give you the same profits.

Would Walmart have an issue with your software when someone opened the box there was a note that asked you to 'return this to Walmart - save $20 - and buy it over the web for $29'.

This is exactly what Spotify is doing.

 

[Derekuda]

I feel like Spotify should pull out of the Apple App Store completely. I have a feeling the result would backlash on Apple and not on Spotify. Android owns the mobile market anyways. If anything, it would make more people switch to Android. Anytime you get in between a person and their music, your asking for trouble.

 

[omihek]

Anyone want to head over to yesterday's article to see the conversation about to take place? https://www.macrumors.com/2016/06/30/spotify-app-update-rejected-by-apple/

 

[Mdracer]

POW

 

[gijoeinla]

Dubious says the competitor (Spotify) that before there was ever an Apple Music, it itself was the M O N O P O L Y of the paid streaming market.

This insistence that it, Spotify, should just be able to "use" another platform "at will" and demand special exceptions is.... ludicrous.

Poor poor Spitify.

 

[Ries]

Say you wrote a software package that you sold on the web for $29.

You want the same profit, but you want to sell it at Walmart. Walmart takes a 35% cut. Your software must cost around $49 at Walmart to give you the same profits.

Would Walmart have an issue with your software when someone opened the box it asked you to 'return this to Walmart - save $20 - and buy it over the web for $29'.

This is exactly what Spotify is doing.

No, what Apple is doing is asking for 30% on your electricity bill from your power company, because you downloaded an app on Apple store. basically if you sign up using an app, apple wants 30% of what-ever for providing nothing else than the initial download. And you can't add a signup here in your app.

 

[Rogifan]

Obviously Spotify did what they did on purpose so the app update would be rejected. Are they asking for preferential treatment or are they just looking to start a fight hoping that the court of public opinion (or government intervention) will cause Apple to change their policies?

 

[OSX7]

I love this drama.

 

[TMDR]

I don't hear Apple complain about the harm that Spotify did to the iTunes Store and music downloads in general..?
Spotify, please, you've never made any money, and you never will. Please stop kicking in the legs those that have the power to create a generous platform for artists and distributors (yeah, you read good: screw record companies, they are to be demolished).

 

[DrumApple]

Apple is full of it when it comes to this. They own and run the App Store like the government, with plenty of deceit.

How is it that Spotify isn't labeled as an Essential app when it is the most widely used streaming music service in the world? Oh, because it competes with Apple Music? A dating app like Tinder is labeled as an Essential app, and how much do you want to bet that if Apple were to get into the dating app business they'd sink Tinder down to the bottom of the barrel in a heartbeat.

 

[sudo1996]

I said here before and on the last thread that the "no links outside the app" rule is unfair, but I realized Apple deserves some money for referring customers who are willing to pay, which are more abundant on their platform. Otherwise, they're just hosting Spotify for free (except the trivial dev fee) on their store and sending millions of customers their way for nothing. Apple doesn't have any kind of monopoly power either.

And Spotify would probably earn the same profit, er... loss, either way. Customers can sign up on their site if they want. If the customer buys through Apple, he pays more, Spotify earns the same, and the customer still considers it worth the money. What's the problem?

P.S. Spotify's software on PCs is borderline malware.

 

[6836838]

I downloaded the Spotify App and subscribed via Spotify's website, so I don't really see the issue here.

 

[Rogifan]

Say you wrote a software package that you sold on the web for $29.

You want the same profit, but you want to sell it at Walmart. Walmart takes a 35% cut. Your software must cost around $49 at Walmart to give you the same profits.

Would Walmart have an issue with your software when someone opened the box there was a note that asked you to 'return this to Walmart - save $20 - and buy it over the web for $29'.

This is exactly what Spotify is doing.

But the Spotify app is free. Once it's downloaded on my phone is it still part of the Apple Store? Can Apple successfully argue that Spotify's 30M paying subs are due to iOS platform?

 

[oneMadRssn]

the rules we apply to all developers

All developers other than the ones called Apple, is what he meant to say.

 

[GeneralChang]

Bruce Sewell does really well with stuff like this. Which is why Apple has him on retainer, I suppose.

 

[ChazSch]

I feel like Spotify should pull out of the Apple App Store completely. I have a feeling the result would backlash on Apple and not on Spotify. Android owns the mobile market anyways. If anything, it would make more people switch to Android. Anytime you get in between a person and their music, your asking for trouble.

um.....no

 

[Michael Goff]

No, what Apple is doing is asking for 30% on your electricity bill from your power company, because you downloaded an app on Apple store. basically if you sign up using an app, apple wants 30% of what-ever for providing nothing else than the initial download. And you can't add a signup here in your app.

No, that's not even it. If you think the terms are unfair, you're welcome to become an Android only app. But iOS users are more likely to pay for things, so obviously having the app there is bringing them a lot of money (not enough, obviously, since Spotify is losing money)

 

[wschutz]

Say you wrote a software package that you sold on the web for $29.

You want the same profit, but you want to sell it at Walmart. Walmart takes a 35% cut. Your software must cost around $49 at Walmart to give you the same profits.

Would Walmart have an issue with your software when someone opened the box it asked you to 'return this to Walmart - save $20 - and buy it over the web for $29'.

This is exactly what Spotify is doing.

That logic is incorrect... because it is not black and white as you put it nor Apple is really re-selling anything.

Apple charges every developer for having their apps in the App Store, and such charge lasts for a year. That is the 'fee' to 'sell' apps with Apple.
Then comes the subscription model for which Apple charges that 30% (15%) percentage. Such fee comes after using Apple's services for the subscription model, but developers are free, and should otherwise Apple would be likely charge for becoming a monopoly, to redirect to their webpages and such.
Spotify is not stupid and does the clever thing: pay Apple for having apps, and try to avoid any subscription thru the App Store.

Obviously, if Spotify sells the subscription directly, they answer for it, not Apple. Apple can only answer for the download of the app.

Apple just wants to guarantee some money, which is fair for me as an investor of Apple, but it is not fair to force developers to give Apple always part of their profit if they can find a solution otherwise as I said, Apple becomes a monopoly.
If Apple wants more cash... simple, increase the fee per year, or price according to number of downloads... I'm sure the number of useless apps in App Store would go down and sadly, Apple would not be able to brag about numbers ... oh ****!

 

[Mac21ND]

But the Spotify app is free. Once it's downloaded on my phone is it still part of the Apple Store? Can Apple successfully argue that Spotify's 30M paying subs are due to iOS platform?

Apple isn't arguing all Spotify's customers are from the App Store, Apple's simply saying Spotify has benefited - in some way - from 160 million downloads via Apple's distribution resources.

 

[thisisnotmyname]

Smart. I'm glad Apple responded to this.

 

[omihek]

Apple is full of it when it comes to this. They own and run the App Store like the government, with plenty of deceit.

How is it that Spotify isn't labeled as an Essential app when it is the most widely used streaming music service in the world? Oh, because it competes with Apple Music? A dating app like Tinder is labeled as an Essential app, and how much do you want to bet that if Apple were to get into the dating app business they'd sink Tinder down to the bottom of the barrel in a heartbeat.

Does labeling an app "Essential" lower the 30% cut Apple takes?... I fail to see what your comment has to do with the issue; Spotify wants more money, not more exposure in the App Store.