Two days after Spotify announced that it had filed a complaint against Apple against the European Commission about anti-competitive practices, Apple today gave its own kind of response.
In a long statement on its site titled "Tackling the Spotify Claims", Apple continues and dismantles some of the key points of Spotify & # 39; s allegations about the operation of the App Store, regarding app approval times stores, the actual savings on subscription revenues and Spotify & # 39; s increase due to its presence on iOS.
At the same time, Apple carefully takes away all questions from Spotify: Spotify has filed a case with the European Commission to investigate the company for anti-competitive practices and in particular to consider the relationship between Apple and Spotify (and by an app maker) in terms of it actually offers a level playing field, specifically in the context of building and expanding Apple Music, a proprietary product that competes directly with Spotify on the platform that Apple owns.
In fact, Apple does not mention the European Commission, nor the lawsuit, even in its 1100+ word pronunciation. Here's what it includes:
– App Store updates. Spotify has accused Apple of having kept the app informed of updates to its apps and doing so intentionally affects its ability to effectively distribute its service. The company made 173 updates for its apps on iOS, and while Apple does not speak transparently about how long it takes to approve changes, it notes that Spotify has had more than 300 million downloads of its app and "the only time "We've requested is when Spotify has tried to bypass the same rules that every other app follows."
It also says it has worked with Spotify to bring it to more platforms and devices – although it did not claim to be one of Spotify's specific claims, that Apple's HomePod is the only home speaker where Spotify is currently unavailable.
– App store prices. The crux of Apple & # 39; s belief is that Spotify wants to use the benefits of being an app that generates revenue in the store, without paying anything for it, to live rent-free.
Apple points out that 84 percent of the apps in the App Store can actually be used free of charge (many of them will be supported by advertisements) and in those cases they really pay nothing to Apple. But it is believed that Apple should get a discount if you start using its platform to make money. The question has always been how much Apple should be cut.
The development of the company for payments is a difficult business for Apple. In some ways that is a blessing. It centralizes your billing information in one trusted location, which ultimately ensures a safe experience. In others it is a curse: it imposes a particularly strict set of rules and commissions that everyone must follow and gives developers or customers no choice as to how to make and execute payments within apps.
Apple notes that in the case of Spotify the company gives a wrong view of App Store commissions on a number of points. At the moment, Apple is taking a 30 percent discount on subscriptions in the first year, but after that it brings that down to 15 percent. Spotify could not mention that change in commission, but only focused on the 30 percent figure that makes Apple look particularly greedy.
It also notes that many Spotify customers use the free version of the product and do not pay for subscriptions. And since Spotify has attempted to move more of its billing to its site instead of the app, claims to lose money under Apple's terms and a lack of choice to pay, you need to pay in-app payments from Using Apple to pay for subscriptions and other goods in apps – are not valid: "Even now, only a small portion of their subscriptions fall under Apple's revenue-sharing model. Spotify requests that that number is zero," it notes.
What Apple is not responding to is that Spotify identifies a number of other apps that appear to have features to enable payments that do not go through Apple's billing, and Apple is not transparent about how it chose it. (Some might say that purchases of physical goods, such as via Amazon, may bypass Apple's in-app payment platform, but that would not explain why Uber is also exempt: that is Spotify's logic to describe in-app payments as a "discriminatory tax.")
– Apple Music versus Spotify. The complaint filed with the European Commission and antitrust accusations are not the only two things that Apple does not address in its response. It also gives no mention of its own music product, Apple Music, which competes directly with Spotify. At the end of the day, this is probably the biggest threat to Spotify and the strongest card in a case that he could try to make for anti-competitive behavior.
Apple does say, "We share Spotify & # 39; s love for music and their vision to share it with the world", and instead go after Spotify directly in the bar: the own problems of the music streaming service for those who do business want to do platform.
"Spotify & # 39; s goal is to make more money from the work of others. And it's not just the App Store they're trying to squeeze – it's also artists, musicians, and songwriters," notes it, recent suit against music makers filed by Spotify after the US Copyright Royalty Board required Spotify to increase its royalty payments. "This is not only wrong, it represents a real, meaningful and harmful step backwards for the music industry," Apple notes.
Rely on antitrust
Indeed, while the case is ongoing and sealed, Spotify has summarized many of his key points in a site that he promotes Time of Play Fair. But to be whole It is clear that some of us are having trouble calling Spotify exactly an underdog.
Apple is one of the largest and most profitable companies in the world, and Spotify is still working to prove the long-term financial viability of music streaming as a business model. But Spotify is also & # 39; the world's largest music streaming company, and in reality, both have had much of the accusation about how they influence those using their platforms – app publishers for Apple; musicians and those in related areas for Spotify – for their better financial gain.
In my opinion, the best approach to Spotify would be to maintain this debate and to bring its case to the European Commission at the highest possible level. A number of examples are already known of how regulators in Europe have broken companies or business models, applying different practices in the name of promoting better competition: telecom, internet access, computer and mobile operating systems, advertising and television are among the areas where it has already been proven that it will not compete on the platform first, but those who try to use it, especially in cases where the platform companies happen to compete directly with their customers: where those who own the playing field are forced to set conditions for visiting athletes who ensure that they receive the same treatment as the home team.
This case would be the first time that app stores are viewed under the same conditions, a sign of how pervasive they have become.
In that respect, Apple seems to paint a very specific image for the public through some of Spotify's claims to rebut its own – an image that we also remember when it presents its case to regulators: Spotify is not really a small company and it has certainly benefited from, not failed, due to the fact that he was in the Apple App Store. That is a key image that distracts Apple – if it is successful – from being seen as a monopoly and then being forced to change its practices.