Spotify and Apple Again Clash Over App Store Rules and Fees

[MacRumors]

Spotify has not been able to get Apple to approve an EU app update that added information on subscription pricing and links to the Spotify website, and it turns out that's because Spotify has not agreed to the terms of Apple's Music Streaming Services Entitlement.

A recent antitrust ruling from the European Commission fined Apple nearly $2 billion and mandated that Apple "remove anti-steering provisions" for music apps in the European Economic Area (EEA). As a result, Apple updated its App Store rules with a Music Streaming Services Entitlement that allows music apps in the EEA to inform users of other ways to purchase digital music content or services and to add website links for purchasing digital music subscriptions.

That might sound like a win for apps like Spotify, but Apple requires developers who use the entitlement to pay a 27 percent fee (reduced for subscriptions older than one year and for small businesses) on all website purchases referred by Apple. So if Spotify puts a link in its app and a user clicks it and subscribes, Spotify would owe Apple a 27 percent commission (three percent less than the App Store purchase fee).

Spotify does not currently pay Apple any money, and it does not want to. Directly after the European Commission's ruling, Spotify on March 5 submitted an EU app update that had information on subscription pricing and links to its websites for customers to make purchases. This was prior to when Apple had announced its entitlement plan.

Apple ignored Spotify's app update, and Spotify complained on March 14 that Apple had not "acknowledged or responded" to its App Store submission. Spotify at the time called on the European Commission to force Apple to approve its app update.

Apple kept ignoring Spotify's submission, until today, when Spotify submitted a new version of its app. Spotify said on X (formerly Twitter) that the update has no links and includes just the "bare minimum" on pricing and a mention that subscriptions can be purchased from Spotify, which it claims is acceptable under the European Commission's ruling.

Spotify left out a small detail, though. It turns out that Spotify did not request a Music Streaming Services Entitlement and did not agree to Apple's new terms for the entitlement. The App Store Review Team sent Spotify a letter (via AppleInsider) that says the entitlement is required even though there is no link because Spotify's submission has a call to action to purchase a Spotify subscription on its website.

We are reaching out to let you know about new information regarding your app, Spotify - Music and Podcasts, version 8.9.33.

As you may be aware, Apple created a new Music Streaming Services Entitlement (EEA) for iOS and iPadOS music streaming apps offered in EEA storefronts. The entitlement allows music streaming apps to use buttons, external links, or other calls to action to direct customers to a purchase mechanism on a website owned or controlled by the developer. You must accept its terms before adding any of these capabilities to your app. Please find more information about the entitlement here.

We note that your current submission includes a call to action to purchase a Spotify subscription on your website. As such, you must accept the terms of the Music Streaming Services Entitlement (EEA) and include the entitlement profile in your app for submission. To be clear, this entitlement is required even if your app does not include an external link (nor does it require that you offer an external link). We will, however, approve version 8.9.33 after you accept the terms of the Music Streaming Services Entitlement (EEA) and resubmit it for review.

If you have any questions about this information, please reply to this message to let us know.

Apple says that if Spotify agrees to the terms of the Music Streaming Services Entitlement, it will approve the latest Spotify app update. Without a link to the Spotify website, Spotify would presumably not have to pay Apple a commission because there would be no way for Apple to track clicks from its app to Spotify, but there may be some other part of the entitlement that Spotify is reluctant to agree to.

Apple does not plan to let Spotify include a link to the Spotify website without paying the required 27 percent fee, but adding subscription pricing information without a link does seem to be permitted per the language of Apple's letter to Spotify. In a statement to MacRumors, Spotify said that Apple is defying the EC's ruling.

Apple has once again defied the European Commission’s decision, rejecting our update for attempting to communicate with customers about our prices unless we pay Apple a new tax. Their disregard for consumers and developers is matched only by their disdain for the law.

Spotify has confirmed that it does not plan to opt in to Apple's EU App Store business terms, which are separate from the Music Streaming Services Entitlement and are part of the changes that Apple implemented as required by the Digital Markets Act.

Because Spotify does not want to agree to the EU App Store business terms, it is limited on the features that it can add to its app in the EU. To offer the Spotify app directly from its website in the EU, Spotify would need to agree to the terms and would have to pay a 0.50 euro Core Technology Fee for users that download the app.

Spotify does not let customers sign up for a Spotify subscription in the app as of right now, so it does not have to pay anything. Web-based distribution and linking out to the Spotify website both have associated fees, and Spotify is aiming for a solution where it does not have to pay anything. Though Spotify has a clear path to get its app update approved, the company believes that Apple is breaking European law by charging the 27 percent fee for links and it calls on the European Commission to "enforce its decision."

Article Link: Spotify and Apple Again Clash Over App Store Rules and Fees

 

[GizmoDVD]

Spotify just raised their prices....again.

 

[Think|Different]

Sorry tired of Ek and all this BS. You are owed nothing, it's that simple.

 

[Apple_Robert]

Spotify wants to profit off of Apples services backend and customer base without paying. The real world doesn't work that way and Spotify needs to either pay or remove themselves from Apple services.

 

[Realityck]

Will it ever end?

related

Apple rejects Spotify's update with pricing information for EU users | TechCrunch

The music streaming company said it is not opting into Apple's new DMA changes that charge a "core technology fee" for developers with more than 1 million annual downloads.

techcrunch.com

Spotify said Wednesday that it has submitted a new version of its app for EU users with pricing information and basic site information. Critically, the version doesn’t contain the link to the website.

The music streaming company said it is not opting into Apple’s new Digital Markets Act (DMA) changes that charge a “core technology fee” for developers with more than 1 million annual downloads.

The company said that the new update features bare minimum details that are in line with the European Commission’s ruling.

“Despite Apple’s attempts to punish developers with new fees, we remain committed to giving consumers a real choice in our app at no increased cost. That’s why we have submitted a new update to Apple. It features basic pricing and website information – the bare minimum outlined under the European Commission’s ruling in its music streaming case,” Dustee Jenkins, Spotify’s chief public affairs officer, said in a statement.

“By charging developers to communicate with consumers through in-app links, Apple continues to break European law. It’s past time for the Commission to enforce its decision so that consumers can see real, positive benefits.”

The version is yet to be approved by Apple, so Spotify will still have to wait until it goes live. Once Apple approves this, Spotify’s free users in the EU will be able to see the perks and pricing information of different premium plans.

However, they won’t be able to click on a link to go to the company’s website and buy those plans. Spotify said that the final version will have language indicating that users will need to visit the website via their browsers and buy a plan.

 

[Fuzzball84]

And this will go on and on....

there is so much money involved...

and in the meantime subscription services continue to increase prices... they are a huge cash cow...

Be careful, as before you know it... you're spending upwards of 50 dollars per month on things you may not use often.

 

[agwin27]

Spotify is like that impossible-to-please ex-girlfriend that keeps texting you “AND ANOTHER THING” long after you’ve cut things off due to irreconcilable differences.

 

[mikethebigo]

Spotify wants to profit off of Apples services backend and customer base without paying. The real world doesn't work that way and Spotify needs to either pay or remove themselves from Apple services.

I don't see why Spotify has to pay anything to Apple here. I pay Apple for my device and my services. Spotify doesn't have to pay Verizon every time I stream a song on an iPhone. I pay Verizon. Honestly why does Apple have this special status of being able to triple dip and demand money for everything that touches iOS? They think devs owe them, users owe them, they want to build out advertising revenue, they want people like Google to pay them to be on the platform... they just want to be in every single entity on Earth's pockets and it's gross. They think they deserve it but always conveniently forget the iPhone would be nothing without the rest of the world (the internet/infrastructure, the third party apps on the platform, etc).

 

[agwin27]

I don't see why Spotify has to pay anything to Apple here. I pay Apple for my device and my services. Spotify doesn't have to pay Verizon every time I stream a song on an iPhone. I pay Verizon. Honestly why does Apple have this special status of being able to triple dip and demand money for everything that touches iOS?

If Apple designed and built a shopping mall, should vendors expect to be able to set up shop in that mall rent-free? Despite Apple being on the hook for maintenance, security, insurance, etc?

 

[Apple_Robert]

I don't see why Spotify has to pay anything to Apple here. I pay Apple for my device and my services. Spotify doesn't have to pay Verizon every time I stream a song on an iPhone. I pay Verizon. Honestly why does Apple have this special status of being able to triple dip and demand money for everything that touches iOS? They think devs owe them, users owe them, they want to build out advertising revenue, they want people like Google to pay them to be on the platform... they just want to be in every single entity on Earth's pockets and it's gross.

Because it appears Spotify is wanting to link to outside payment option using Apple's services.

 

[neilpmas]

I don’t get Apple’s plan with this. It’s like they want to get more fines.

 

[Mrkevinfinnerty]

If Apple designed and built a shopping mall, should vendors expect to be able to set up shop in that mall rent-free? Despite Apple being on the hook for maintenance, security, insurance, etc?

If Apple trades in the EU should they just pay their taxes instead of fighting in court for years?

 

[Contact_Feanor]

I don't see why Spotify has to pay anything to Apple here. I pay Apple for my device and my services. Spotify doesn't have to pay Verizon every time I stream a song on an iPhone. I pay Verizon. Honestly why does Apple have this special status of being able to triple dip and demand money for everything that touches iOS? They think devs owe them, users owe them, they want to build out advertising revenue, they want people like Google to pay them to be on the platform... they just want to be in every single entity on Earth's pockets and it's gross. They think they deserve it but always conveniently forget the iPhone would be nothing without the rest of the world (the internet/infrastructure, the third party apps on the platform, etc).

Like you said: you pay Verizon. And you pay Spotify. Two parties get paid, you're paying twice
The way apple sees it: you pay Spotify; Spotify pays apple. Two parties get paid, you're paying once.
The way Spotify sees it: you pay Spotify, nobody pays apple. Only, Spotify doesn't get to decide how Apple monetizes their store. If they don't like it, don't put your wares in the store. Get a Web App instead. They could have done that since before the App Store existed if they wanted to.

 

[thejadedmonkey]

If Apple designed and built a shopping mall, should vendors expect to be able to set up shop in that mall rent-free? Despite Apple being on the hook for maintenance, security, insurance, etc?

If Apple designed a shopping mall, a store should be able to set up shop in a different mall - or on a street side - without paying apple anything at all.

 

[mikethebigo]

If Apple designed and built a shopping mall, should vendors expect to be able to set up shop in that mall rent-free? Despite Apple being on the hook for maintenance, security, insurance, etc?

I pay Apple for the maintenance, security, insurance, etc. I buy their product.

And if Apple built a shopping mall that eventually had 65% of America's shopping running through it, and they still thought they deserved 30% of every transaction, we would rightfully call them nuts.

 

[kevcube]

Holy based, **** those Swedes

 

[Kottu]

I can agree if Apple takes 20-30% for Apps which customers purchase from App Store. But they shouldn’t do the same with subscriptions.

 

[Unregistered 4U]

Spotify just raised their prices....again.

AND lowered their royalty payments! They eventually have to stop pretending there’s any money to be made in streaming music and go get bought like everyone else

 

[babalougots]

I don't see why Spotify has to pay anything to Apple here. I pay Apple for my device and my services. Spotify doesn't have to pay Verizon every time I stream a song on an iPhone. I pay Verizon. Honestly why does Apple have this special status of being able to triple dip and demand money for everything that touches iOS? They think devs owe them, users owe them, they want to build out advertising revenue, they want people like Google to pay them to be on the platform... they just want to be in every single entity on Earth's pockets and it's gross. They think they deserve it but always conveniently forget the iPhone would be nothing without the rest of the world (the internet/infrastructure, the third party apps on the platform, etc).

You're paying Verizon for bandwidth. That's Verizon's cut.

 

[mikethebigo]

Because it appears Spotify is wanting to link to outside payment option using Apple's services.

What Apple services is Spotify using when they include a link to their website to subscribe?

If you mean they are using Apple's app distribution system, it's only because Apple forces them to. If you mean their dev tools, then fine, just charge for the dev tools. When I buy an iPhone, I am buying a complete product which includes the services you think Spotify owes Apple for. That's the part that seems crazy to me. How many different people need to pay Apple for one app experience?

 

[neilpmas]

If Apple designed and built a shopping mall, should vendors expect to be able to set up shop in that mall rent-free? Despite Apple being on the hook for maintenance, security, insurance, etc?

If apple sold me the shopping mall first, then no.

 

[mikethebigo]

You're paying Verizon for bandwidth. That's Verizon's cut.

Yes but Spotify is not, and Verizon is not going to Spotify and saying they need a cut or they will cut off the bandwidth. It is 1:1 - service, payor. Apple wants multiple payors for a single service.

 

[ApAx]

What is it with the European Union/Commission/Economic Area/Zone/Region whatever they call themselves and forcing companies to market/advertise for other companies in competition? Who wants to do business with someone who just funnels you to someplace else?

 

[mossburgercombo]

I don't see why Spotify has to pay anything to Apple here. I pay Apple for my device and my services. Spotify doesn't have to pay Verizon every time I stream a song on an iPhone. I pay Verizon. Honestly why does Apple have this special status of being able to triple dip and demand money for everything that touches iOS? They think devs owe them, users owe them, they want to build out advertising revenue, they want people like Google to pay them to be on the platform... they just want to be in every single entity on Earth's pockets and it's gross. They think they deserve it but always conveniently forget the iPhone would be nothing without the rest of the world (the internet/infrastructure, the third party apps on the platform, etc).

so why should spotify get access to millions of ios users to market their app? apple spemt millons and years to grow their user base so your saying competitors can just freely access and market to apples customers? what and why would a company do that? its like having mcdonalds required to put a burger king poster adverising for it whopper in its store for free. its nonsense.

 

[babalougots]

Yes but Spotify is not, and Verizon is not going to Spotify and saying they need a cut or they will cut off the bandwidth. It is 1:1 - service, payor. Apple wants multiple payors for a single service.

You don't need to use Verizon's bandwidth. You can change carriers. You also can switch to Android. Will consumers be harmed if one chooses to use a third-party app store? Have consumers been harmed? I don't read much about users being harmed. I do read a lot about Spotify and Epic and others bitching but not consumers.