Apple defended itself against Spotify’s claims that its App Store policies harm competition, as it was reported the European Commission (EC) is considering opening an investigation.
Spotify filed an action arguing Apple is using its position to give preferential treatment to its own Apple Music service, which gives it an “unfair advantage at every turn”. Apple, for example, takes a cut of revenue from digital subscriptions and also limits Spotify’s integration with products such as Siri and HomePod.
In a statement, the US-headquartered company said that “after using the App Store for years to dramatically grow their business, Spotify seeks to keep all the benefits of the App Store ecosystem – including the substantial revenue that they draw from the App Store’s customers – without making any contributions to that marketplace”.
It noted that at the same time, the music service is “making ever-smaller contributions to the artists, musicians and songwriters who create it – even going so far as to take these creators to court”.
Spotify this week sued music creators in the US after a decision by the Copyright Royalty Board that it should increase its payments, which Apple said “isn’t just wrong, it represents a real, meaningful and damaging step backwards for the music industry”.
Apple addressed a number of Spotify’s specific criticisms.
In response to the argument that Apple is blocking access to products and updates on its app, it said it had approved and distributed nearly 200 updates on Spotify’s behalf, resulting in more than 300 million downloads.
Apple also said it had “reached out to Spotify about Siri and AirPlay 2 support on several occasions, they’ve told us they’re working on it, and we stand ready to help them where we can”.
With regards to Apple’s business model for digital goods and services purchased within the app, where the company takes 30 per cent of revenue, it said Spotify omitted to mention that after the first year this figure falls to 15 per cent, and argued that “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”.
Reuters reported that, following Spotify’s complaint, European Competition Commissioner Margrethe Vestager said the EC was “considering” opening a probe, which is hardly a surprising statement. But she noted that, if it concluded Apple has a market-dominating position, the case would be “comparable to our proceedings against Google”, which was on the receiving end of a hefty fine in 2018.
The EC recently found Apple was not market dominant with its Apple Pay service, but did state it would look deeper if it received official complaints.