Apple shoots back at Spotify in App Store row

NEW YORK • Apple is refuting talk by Spotify that its business practices are designed to kill off rivals.

The iPhone-maker has fired back at the streaming service's anti-trust complaint, saying Spotify wants all the benefits of its App Store, but without contributing to the marketplace.

Apple said the App Store contributed to Spotify becoming the business it is today, a public company that generates more than US$1 billion (S$1.35 billion) of revenue a quarter.

Spotify, which offers free and paid services, complained to the European Union's powerful anti-trust agency that Apple's 30 per cent cut of revenue was effectively a tax on competitors.

The feud comes as Apple expands by launching new services, moving into areas that compete with third parties on its platform.

Its 2014 acquisition of Beats came as it moved into music streaming and, on March 25, the California-based company plans to unveil video-streaming and magazine services.

In its response to Spotify's complaints, Apple said it does not charge for distributing free apps and takes the 30 per cent only from paid subscriptions on its platform.

That rate drops to 15 per cent for subscriptions of more than a year.

"The majority of customers use their free, ad-supported product, which makes no contribution to the App Store," Apple said.

"Even now, only a tiny fraction of their subscriptions fall under Apple's revenue-sharing model. Spotify is asking for that number to be zero."

Apple said its revenue share is in exchange for connecting a third-party's services to its users, using the App Store billing system and its developer tools that allow Spotify to build iPhone and iPad apps.

"Developers from first-time engineers to larger companies can rest assured that everyone is playing by the same set of rules. That's how it should be.

"We want more app businesses to thrive - including the ones that compete with some aspect of our business - because they drive us to be better," Apple said.

The Stockholm-based, music-streaming service said Apple "routinely blocks" some of its product upgrades, such as integration with the Siri digital assistant and Apple Watch.

Apple described Spotify's claims as "surprising", pointing out that the Swedish company has an Apple Watch app that is ranked as the top app in the wearable App Store's Music section.

Apple said Spotify has informed it of plans to integrate the music-streaming service with Siri and that it is "ready to help" as appropriate.

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A version of this article appeared in the print edition of The Straits Times on March 18, 2019, with the headline 'Apple shoots back at Spotify in App Store row'. Print Edition | Subscribe