Spotify Only Pays App Store Commissions on 0.5% of Its Premium Subscriptions, Apple Says

Several months ago, Spotify formally lodged an antitrust complaint against Apple in the European Union.

The Swedish music streaming company accused its rival of taking a 30% “fee” on the App Store.  This fee, claimed top executives, stifles creativity and innovation while Apple readily promotes its own music streaming service.

Anghami and Deezer joined Spotify in the complaint.

Siding with Spotify, a Deezer spokesperson person wrote,

Companies should be able to compete through innovation, content, and customer focus.  Right now, that’s not the case.  iOS and Apple users who love music streaming are disenfranchised, with higher fees and less realistic options as a result.”

Elie Habib, Anghami’s co-founder, added,

I think the entire music streaming industry stands behind Spotify in this battle – because it’s blatantly anti-competitive.

The Cupertino tech company quickly fired back, stating Apple has offered to work with Spotify.  The Swedish company’s CEO, Daniel Ek, hasn’t shown any interest.

That didn’t stop the European Union from launching an investigation into Apple’s practices, however.  The Department of Justice has also launched a similar investigation.

Now, the Cupertino tech company has responded.

Spotify wants to have its cake, and eat it, too.

As part of its rebuttal earlier this year, Apple said 84% of all developers on the App Store don’t pay a dime.  The company also doesn’t directly compete with Spotify.

Taking a swipe at its rival’s increasingly bitter fight against songwriters, the Cupertino tech company wrote,

We share Spotify’s love of music and their vision of sharing it with the world.  Where we differ is how you achieve that goal.

Underneath the rhetoric, Spotify’s aim is to make more money off others’ work.  And it’s not just the App Store that they’re trying to squeeze — it’s also artists, musicians, and songwriters.

According to documents seen by German newspaper Der Spiegel, Apple argues Spotify has operated on “misleading numbers.”

The Cupertino tech company, for example, had only collected the 30% commission when its rival allowed subscriptions through its iOS app.  During that time, Spotify only signed up 680,000 customers.  Since 2016, however, the Swedish company changed that model, forcing iOS users to subscribe to Premium through its own website.

In short, Spotify only pays the App Store 15% after the first year of a subscription for new customers.  In fact, now that Spotify has 100 million users, the App Store commission has only applied to 0.5% of its worldwide subscribers.

Basically, Spotify hasn’t paid Apple a dime for iOS subscribers in the past three years.  But of course, Spotify didn’t tell you that.

 


Featured image by aisletwentytwo (CC by 2.0).

3 Responses

  1. Anonymous

    That doesn’t make Apple’s 30% fee right. Also, the 0.5% number is a bit misleading, as the total subscriptions include Android, PC, PS4/Xbox, car, and other non-Apple devices.

    • ex Music Service CEO

      Apple’s 30% cut in year 1 is definitely anti-competitive. It is abuse of dominant position, clear and simple.

      Water takes the easiest route downhill, and so do internet users. Falsely inflating the price to cover off Apple’s TAX (who likes taxes?) makes Spotify’s brand look bad, and slows down conversion. It similarly makes Apple’s service (which is crap) look more attractive.

  2. Anon

    I find the writing of the article to be odd… Why do you keep referring to the companies as, “the Swedish company” and “the Cupertino tech company”? What are you trying to say? What’s your angle?