Spotify Accuses Apple of Using App Store Approval Process as a 'Weapon to Harm Competitors'

[MacRumors]

Spotify and Apple are embroiled in a major dispute, which Spotify is today taking to the court of public opinion. Spotify submitted a new version of its app to the App Store, following a decision to eliminate the option to purchase a subscription through Apple, and Apple has rejected the update.

In response, Spotify wrote a letter to Apple's legal team on June 26, portions of which have been shared by Recode. Spotify's letter, which it shared yesterday with Congressional staff in Washington, D.C., accuses Apple of causing "grave harm" to Spotify by rejecting the app update.

The details on the rejection are somewhat murky, but Spotify claims Apple denied the app update and demanded Spotify use Apple's billing system if it "wants to use the app to acquire new customers and sell subscriptions." Spotify was using its iOS app to highlight a promotion offering new Spotify customers three months of service for $0.99, something Apple didn't like.

Apple reportedly forced Spotify to stop advertising the promotion in the iOS app or face the removal of the app from the App Store. Spotify stopped the advertisements, but also decided to stop offering App Store subscription options, a move that's led to the current disagreement between the two companies.

"This latest episode raises serious concerns under both US and EU competition law," Gutierrez wrote. "It continues a troubling pattern of behavior by Apple to exclude and diminish the competitiveness of Spotify on iOS and as a rival to Apple Music, particularly when seen against the backdrop of Apple's previous anticompetitive conduct aimed at Spotify...we cannot stand by as Apple uses the App Store approval process as a weapon to harm competitors."

At issue is the 30 percent cut that Apple takes from App Store subscriptions, which has caused Spotify to charge $12.99 for subscriptions purchased through the App Store, a $3 premium over subscriptions purchased on the web and $3 more than the price of Apple Music. Apple does not force apps to use its billing system, but it also does not allow apps to offer other purchase options. As stated in the App Store guidelines:

Apps may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than IAP. [...]

Auto-renewing subscriptions should only be offered using in-app purchase and may only be used for periodicals (e.g. newspapers, magazines), business apps (e.g. enterprise, productivity, professional creative, cloud storage), media apps (e.g. video, audio, voice, photo sharing), and other approved services (e.g. dating, dieting, weather).

Apple in the past had a battle with Amazon and other book sellers over its App Store rules, which resulted in Amazon, Barnes and Noble, and Kobo removing an in-app book store purchase options from their apps. Apple has never relented on the issue, even years later.

Apple recently announced plans to tweak its subscription policies to take a smaller 15 percent cut from subscribers who stay subscribed to a service for more than one year, but Spotify says those changes don't "get to the core of the problem."

Though Apple has rejected Spotify's update, options to purchase Spotify subscriptions in the Spotify app for iOS devices have been gone since the end of May, removed via a backend update. At the current time, it is not possible to purchase a subscription through the Spotify app, and the Spotify app is not able to direct customers to purchase a subscription on the web.

Article Link: Spotify Accuses Apple of Using App Store Approval Process as a 'Weapon to Harm Competitors'

 

[Pbrutto]

These Spotify folks definitely need some preparation h

 

[JonneyGee]

Sorry, Spotify, but if you don't like it, feel free to design your own phone and develop your own operating system.

 

[Tech198]

Weaponize me....!! and Spotify is just wondering about this Now? Is is due to the increases changes that the app process does, spotify is cheesed off with? So, lets do some sort of counter-attack.

 

[brendu]

I mean it is kind of a ******** policy. Apple should allow apps to redirect outside the App Store for sign up if they are gonna charge a premium for signing up within the app.

 

[BvizioN]

Let me sell in your shop but I will charge my customers somewhere else, is this what they are asking or I am wrong?

 

[OSX7]

Cry me a river. I guess that all this sobbing and b******g by Spotify lately means that, despite what all AM haters say, AM is really a threat to Spotify.
Btw. Since when is being on the AppStore a right?

 

[smacrumon]

Apple runs parts of its business in a completely anticompetitive manner. Freezing competitors out is a case in point, so is an elaborate list of exotic approval rules. Those aspects need to be investigated and if supported by evidence, then prosecuted appropriately. Apple isn't above the law.

 

[stopthenonsense]

This is crap. Without the iPhone, spotify is a fraction the size they are now. Apple is not causing them grave harm.... Apple made them rich. If they don't like the terms, go develop the SpotifyPhone.

 

[OriginalClone]

Sorry, Spotify, but if you don't like it, feel free to design your own phone and develop your own operating system.

This is the most ridiculous pro-apple response regarding this dispute. Why people continue to repeat it is beyond me.

 

[kevinpdoyle]

Developing and maintaining a platform costs money, constantly whining about having to pay a tax to that platform does not make it any less so.

 

[duron1984]

Why doesn't Spotify just remove the app from the store? If a platform doesn't support what you want to do then just stop supporting it. It might force iPhone users to eventually switch to Android which in turn might force a change on Apple's end. Don't be afraid to walk away from a bad deal.

 

[stopthenonsense]

Let me sell in your shop but I will charge my customers somewhere else, is this what they are asking or I am wrong?

YUP! Walmart should let me sell my product without any charge for space on their floor.

 

[FSMBP]

Cry me a river.

At first I would agree with you: I was like "Stop whining - Apple is taking care of payments/downloads etc. Just put a Safari link for people to sign up...Oh wait Apple forbids even doing that".

 

[Kaibelf]

I mean it is kind of a ******** policy. Apple should allow apps to redirect outside the App Store for sign up if they are gonna charge a premium for signing up within the app.

Spotify set that price paradigm, not Apple. Certainly you knew that and aren't just lying, right?

 

[JonneyGee]

This is the most ridiculous pro-apple response regarding this dispute. Why people continue to repeat it is beyond me.

It's because it's true. Apple pays for server space for the App Store, Apple pays developers to continue updating the operating system, Apple pays people to approve apps, and all of those services make the App Store possible. We're supposed to believe Apple should offer all of that for free so Spotify can make money, especially for a service which Apple itself directly competes? It's not a pro-Apple response, it's a pro-"how to run a business" response.

 

[Kaibelf]

This is the most ridiculous pro-apple response regarding this dispute. Why people continue to repeat it is beyond me.

Almost as ridiculous and arguing that Apple needs to give a direct competitor something for nothing.

 

[eniaczz]

Apple has deteriorated sooooooooo much

 

[mozumder]

I've never used the app to buy subscriptions. I always went to the website.

is using the app to purchase a subscription really necessary?

 

[andrewsipes]

This is the most ridiculous pro-apple response regarding this dispute. Why people continue to repeat it is beyond me.

Why do you think it is ridiculous?

 

[waitandwait]

This is the most ridiculous pro-apple response regarding this dispute. Why people continue to repeat it is beyond me.

There's nothing wrong with Apple. Spotify can charge users 6.99 if they want to compete with Apple Music at 9.99 or offer no free option just like Apple. They didn't.

Its the same as you put your goods at Walmart. You need to pay Walmart to cover its operational costs too.

 

[Attirex]

Car analogy in 3...2...

 

[smacrumon]

Apple should be focusing its efforts on removing highly addictive excessive in-app purchasing pseudo-gambling designed apps from the App Store. They are the bane of the App Store and much a bigger problem than anything Spotify might or might not be doing.

 

[mwd25]

Oh boy, here we go again. Not only is Spotify wrong, but they cant even decide what their actual opinion is. They really need to sit down with everyone working at Spotify and come up with a consistent view point. A mere week or so ago Spotify said
"Nevertheless, Spotify recently said that Apple Music has helped, not hurt, its business. Since Apple Music launched on June 30, 2015, its European rival has grown at a faster pace than beforehand. Spotify has now surpassed Skype as the most lucrative European startup, with an estimated valuation of roughly $8.5 billion."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."

Hmmm, a vp of Spotify has a pretty straight forward-pro Apple stance. Meanwhile over on the other side of the office........
Spotify's head of communications and public policy Jonathan Prince took the opportunity to lambaste Apple in a statement given to Recode.
"Apple has long used its control of iOS to squash competition in music, driving up the prices of its competitors, inappropriately forbidding us from telling our customers about lower prices, and giving itself unfair advantages across its platform through everything from the lock screen to Siri. You know there's something wrong when Apple makes more off a Spotify subscription than it does off an Apple Music subscription and doesn't share any of that with the music industry. They want to have their cake and eat everyone else's too."

HELLOOOOO!!!!!! Sounds like Spotify vp Jonathan Price needs to speak with Spotify's head of communications and public policy Jonathan Prince. They need to get their story straight.

 

[jameslmoser]

This is the most ridiculous pro-apple response regarding this dispute. Why people continue to repeat it is beyond me.

Exactly. This is not how innovation and progress work. It would not be in the best interest of consumers for every company to develop its own phone and os so you could use their service. It would be like every every website having it own protocol or browser for you to use to access their site, every TV company designing their own video format, or every electronic company designing its own power plug.... obviously this argument can be taken to absurdum, which should be indication enough that it is ridiculous.

 

[khurtwilliams]

I mean it is kind of a ******** policy. Apple should allow apps to redirect outside the App Store for sign up if they are gonna charge a premium for signing up within the app.

Are you saying it be ok if I owned a store for your or someone else to expect to use my store to sell your product or services? Should a retailer be forced to sell a product that it doesn't want to? Can Babies'R Us be forced to sell adult porn magazines?