Spotify: Apple won't approve our iOS app update because it doesn't want the competition

midian182

Posts: 6,648   +59
Staff member

Apple Music may be gaining more paid subscribers every day, but the current king of the music streaming services – Spotify – claims that the Cupertino company is using underhand tactics to stifle the competition.

Spotify’s general counsel sent a letter to Apple’s lawyers this week that says the iPhone maker is “causing grave harm to Spotify and its customers” by not allowing the latest version of its app onto the iTunes store.

The letter goes on to state that Apple cited “business model rules” as the reason why it won’t approve the updated app. It claims Apple is demanding Spotify reintroduce in-app billing via iTunes, which means a 30 percent commission on all subscription fees.

Spotify had been taking that extra 30 percent out of its subscribers’ pockets by charging $13 per month on iOS instead of usual $10. In July 2015, the streaming company sent emails to iPhone customers urging them to sign up directly to its website and avoid the higher fee.

Late last year, Spotify ran a promotion that offered new users a three-month subscription for $0.99 if they signed up through the main site. Spotify general counsel Horacio Gutierrez says that Apple threatened to pull the app from its store if the company didn’t stop advertising the offer to iPhone owners. Spotify stopped the promotion, but it also turned off the iTunes billing option in the iOS version of its app, leading to the current situation.

Gutierrez says the move is a sign of anti-competitive behavior on Apple’s part.

This latest episode raises serious concerns under both U.S. and EU competition law. 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 its recent worldwide developer conference, Apple revealed that developers of subscription-based apps would start getting a better deal; instead of the traditional 70/30 split, Apple’s cut was dropping to 85/15. But it seems that Spotify still isn’t satisfied with this.

Spotify currently has around double the number of subscribers as Apple Music. Should the dispute eventually see the app pulled from the iTunes store, it’ll be interesting to see what effect it has on both services’ subscriber numbers.

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davislane1

Apple uses anti competitive practices??? NOOOO!!! I can't believe that. Now where did I stash the Valium. :(

One day a major corporation will come up with a creative way to stifle competition and everyone will say, "Wow. That was pretty slick."

Until then, the response will always be the same: "...and?"
 

m4a4

Posts: 2,283   +2,482
TechSpot Elite
How is this for anti-competitive practices?
Seeing as the appstore is the only legit way to get apps onto an iOS device, expecting a subscription through the appstore for a service that's not exclusive to the iOS device is scummy at best. And then they won't approve the app because Spotify wants to handle the subscriptions on their own (and Spotify should for parity across platforms).

As for the anti-competitive part of it, how can they compete on the iOS store when their cut is 70% (or soon 85%) of the subscription? To get the same amount as apple gets from it's competing service's subscription, they'd have to pass the cost to the customer (like they have in the past), but then their service is more expensive. They can't fairly compete when apple has the advantage (not only with pricing, but with approval).
 

cliffordcooley

Posts: 12,690   +6,051
Seeing as the appstore is the only legit way to get apps onto an iOS device, expecting a subscription through the appstore for a service that's not exclusive to the iOS device is scummy at best.
I didn't mean to question whether it was or not. I was basically agreeing with the article in the form of a question. Sorry for the confusion.
 

Skidmarksdeluxe

Posts: 8,645   +3,289
One day a major corporation will come up with a creative way to stifle competition and everyone will say, "Wow. That was pretty slick."

Until then, the response will always be the same: "...and?"
That'll never happen. Cutting the competitions throat is the accepted, tried and true way of doing things, not to mention the cheapest, easiest way.
 

ghostf1re

Posts: 414   +265
Companies like Apple don't believe in innovation anymore as their primary selling point. They just want pure domination of the entire market so they can continue to fill their massive coffers. This is terrible publicity for them. I'm glad I distanced myself from Apple 4 years ago.
 

roberthi

Posts: 456   +139
Hey Spotify! Here's an idea, how about you come up with your own ecosystem and quit whining. Your service is crap anyway.
 

roberthi

Posts: 456   +139
Just another reason to add to the already long list of why to avoid the apple ecosystem.... oh wait, it's already there.

It's not new for apple, but I'm glad Spotify is calling them out on it.

Calling them out on what? It's Apple's own built ecosystem that Spotify wants in on. It's simple...get with the program or get out.
 

m4a4

Posts: 2,283   +2,482
TechSpot Elite
Calling them out on what? It's Apple's own built ecosystem that Spotify wants in on. It's simple...get with the program or get out.
So if Microsoft decided to do something like this for Windows, it would be get with the program or get out?
 
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Darth Shiv

Posts: 2,152   +752
How is this for anti-competitive practices?
Seeing as the appstore is the only legit way to get apps onto an iOS device, expecting a subscription through the appstore for a service that's not exclusive to the iOS device is scummy at best. And then they won't approve the app because Spotify wants to handle the subscriptions on their own (and Spotify should for parity across platforms).

As for the anti-competitive part of it, how can they compete on the iOS store when their cut is 70% (or soon 85%) of the subscription? To get the same amount as apple gets from it's competing service's subscription, they'd have to pass the cost to the customer (like they have in the past), but then their service is more expensive. They can't fairly compete when apple has the advantage (not only with pricing, but with approval).
Just to be clear, Apple is reducing their cut from 30% to 15% (emphasising that is their cut and not that's not the vendor cut).

I do agree that Apple is within their rights to take a cut considering the vetting they do and assurances they give on applications. The question is how much is too much? Halving their cut shows they have been gouging the market for a while.
 
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m4a4

Posts: 2,283   +2,482
TechSpot Elite
Just to be clear, Apple is reducing their cut from 30% to 15%.

I do agree that Apple is within their rights to take a cut considering the vetting they do and assurances they give on applications. The question is how much is too much? Halving their cut shows they have been gouging the market for a while.
I mentioned the 30% to 15%.
But I don't believe apple should force subscriptions through their store (specifically when the app doesn't rely on it being on iOS). I'd say that you should be able to buy the subscription on the services site and use it on many devices without hindrance.
Heck, apple doesn't even allow a place to enter promo codes cause it might unlock paid features lol
 

mbrowne5061

Posts: 1,806   +1,039
Does spotify allow/play apple music? Why not? Because it doesn't want competition?

Because music royalties for iTunes/Apple Music are completely separate from the royalties for Spotify. If you want to take on someone over that piece of anti-competition, go after the record industry, not service providers.
 

roberthi

Posts: 456   +139
So if Microsoft decided to do something like this for Windows, it would be get with the program or get out?

Sure, but then we're talking about MS...who basically did just that in the 80s and 90s by pushing other businesses out of competition illegally and got sued for it.
 
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DelJo63

Allegation w/o evidence, but sure good marketing - - just look at the responses above. Aint it fun to bash the 'other guy'? :grin: