Spotify vs. Apple

“Spotify has lashed out at Apple calling it ‘anticompetitive’ for rejecting an update to its iOS app. The music streaming service feels that this move by Apple will ‘cause grave harm to Spotify and its customers’. The company’s General Counsel Horacio Gutierrez has sent a letter to Apple accusing it of stopping the update under the garb of the App Store approval process, in order to protect its own interests. […]  “This latest episode raises serious concerns under both US and EU competition law. It continues a troubling pattern of behaviour 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” Gutierrez reportedly said in the letter.”

Apple says: Spotify is trying to remove its in-app purchase option in favor of sign-up feature “intended to circumvent Apple’s in-app purchase rules.” Apple says the company is trying to ask for user emails with the intention of moving purchases online, which led to the update’s rejection.

The crux of the matter is Apple’s 30 percent cut for App Store software, which is a stipulation for any third-party developer wishing to sell a paid app or charge for in-app purchases, such as a Spotify subscription. According to Apple’s billing system, third-party subscription apps cannot use anything other than iTunes as payment method. If the apps do use iTunes, they need to pay Apple 30 percent from their overall revenue. Spotify feels this restriction takes away a lot from its profit margin, and even hampers its overall user base . While Spotify charges $10 for subscription from its users outside of Apple’s ecosystem, from iOS users it charges $13 to account for Apple’s cut.

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