Spotify accuses Apple of stifling competition after seeing its iOS update rejected

By , Jun 30, 2016

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Apple is leveraging the power of its ecosystem to harm competition, as well as the fact that it writes the rules governing third-party development and screens apps submitted to App Store editors, said Spotify.

Re/code is reporting that Apple won’t approve a new version of Spotify’s music-streaming iOS client because it doesn’t want competition for Apple Music, its own $9.99 per month subscription music service.

“We cannot stand by as Apple uses the App Store approval process as a weapon,” wrote the Swedish startup in a letter sent this week to Apple’s top lawyer Bruce Sewell.

Apple is “causing grave harm to Spotify and its customers” by rejecting an update to the Spotify for iPhone app, reads the letter. Spotify contends that Apple is defending the eyebrow-raising app rejection on grounds that it does not use the iTunes billing system.

Specifically, Apple demanded that Spotify use the iTunes billing system if it “wants to use the app to acquire new customers and sell subscriptions.”

Apple’s rules governing subscription services demand that all in-app subscriptions sales be subjected to the thirty percent cut. While Spotify for iOS has used Apple’s billing system for years, the firm recently increased its standard $9.99 per month subscription to $12.99 within the iOS app.

Spotify also launched a counteroffensive by reviving its promotional campaign which offered new subscribers the chance to get three months of the service for $0.99 if they signed up via Spotify’s own website, The campaign reportedly provoked Apple to threaten to remove the app from the App Store store unless Spotify stopped telling iPhone users about the promotion.

Spotify stopped advertising the promotion.

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Spotify also price-matched Apple Music’s $14.99 monthly plan for families.

Last month, however, the iPhone maker tweaked in-app subscription rules, cutting its share of proceeds in half to fifteen percent, but only if developers keep customers subscribed for more than a year.

The problem is, Apple also prohibits app makers from providing external links to purchase subscriptions outside of the app. Although Apple doesn’t require subscription services to use iTunes billing, if a sale takes place within an app it must go through iTunes and consequentially be subjected to the new fifteen percent tax.

Unlike Google, Apple doesn’t permit subscription services to use an alternate payment system within the app. Spotify has distributed copies of its letter to some Congressional staff in Washington, D.C, prompted Senator Elizabeth Warren to accuse Apple, Amazon and Google for “locking out smaller guys and newer guys”.

Warren thinks that Apple “has placed conditions on its rivals that make it difficult for them to offer competitive streaming services” that compete with Apple Music.

She also didn’t mince words commenting on Google’s business model. In her view, the company uses “its dominant search engine to harm rivals of its Google Plus user review feature”.

And Amazon, Warren continued, “uses its position as the dominant bookseller to steer consumers to books published by Amazon to the detriment of other publishers.” That line drew a succinct commentary from Daring Fireball’s John Gruber.

“It’s hilarious that she cites Amazon’s dominance of the e-books market, but it’s Apple that is paying out a $400 million settlement,” Gruber wrote. “To me that’s a perfect example where government oversight power was turned into a political weapon”.

RELATED: How to cancel your Spotify Premium subscription

Spotify, of course, agrees with Warren’s take.

“Apple has long used its control of iOS to squash competition in music, driving up the prices of its competitors, inappropriately forbidding us from telling our customers about lower prices, and giving itself unfair advantages across its platform through everything from the lock screen to Siri,” said Jonathan Prince, who runs communications and public policy for Spotify.

“You know there’s something wrong when Apple makes more off a Spotify subscription than it does off an Apple Music subscription and doesn’t share any of that with the music industry,” he said.

“They want to have their cake and eat everyone else’s too.”

Earlier in the month, Spotify surpassed a hundred million users and has thirty million paid accounts versus half as many subscribers for Apple Music.

Are you a Spotify believer or a fan of Apple Music and its tight integration with iOS and the rest of Apple’s ecosystem?

Source: Re/code

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  • Chindavon

    So, if I read this right, if Spotify follows the rules to get approved for the update, then, Apple will approve it?

    • TechnoBuff

      Supposedly Yes…. But it is anti-competitive basically.
      In which when taken to court, Apple might not win… There are whole set of laws when it comes to monopoly and competition, that doesnt subscribe to the fact that because its your platform, you can do whatever to your competition especially if you are playing in the same field

      • Chindavon

        I don’t know. Sounds like sour grapes. Apple provide’s a market place, distribution channel, advertising to that marketplace, and spends billions supporting and building the App Store. Prices and rules can be steep, but if they don’t like it, they can try and do all these things themselves.

      • TechnoBuff

        Because you provide a marketplace does not mean you can stifle competition in your marketplace, Microsoft learnt that lesson pretty quickly.
        There are rules when it comes to competition, let us see how this plays out.

  • Gabriel Anaya

    I’m on the Apple Music train. They had the best family plan far before Spotify ever did, which Spotify only copied not too long ago. 30$ a month for only 5 people was quite ridiculous in comparison. I’m a firm believer in Apple Music but this is quite discouraging. Apple is being pretty damn sour here.

    • Carldini

      You’re a dummy Gabby

    • Carldini

      You think Apple invented the streaming music service? Who copied who?

      • Blip dude

        Can you please quote where he actually said that he thought Apple invented streaming music?? I ain’t defending because all streaming service share a common flaw BTW.

      • Carldini

        Sebastian totally removed it…

  • askep3

    About Apple getting better access to the lock screen and Siri, now devs can give their apps Siri features, but even without that Apple doesn’t have to give devs access to any of these features because it’s their platform.

  • igobythisname

    I subscribe to both Apple Music & Spotify… Spotify > Apple Music all day! This news makes me sad & upset with Apple! SMH~

    • Why both? They essentially do the same thing.

      • techfreak23

        There is music that is available on one platform and not the other. I currently have a Deezer (which I get for free through work), Spotify, and a Tidal (also free) subscription. For example Spotify has all of Red Hot Chili Peppers’ collection while Deezer does not. Tidal has Prince’s entire collection and, along with Deezer, FLAC format which is higher quility. Spotify by far has the best interface out of all of the streaming services, even though they took a step back recently by switching from a sliding view controller to a tab bar controller. Spotify Connect is also pretty great because you can seamlessly switch playback on different devices.

  • :D

    It does seem unfair that links to Spotify’s own website aren’t even allowed for making purchases outside of the app

  • Phil Randle

    I don’t see how this should be Apple’s fault. There are literally hundreds of apps on the AppStore in the same situation.

    There is NOTHING stopping Spotify from using there own money and running and advertising campaigning outside of the app stating that you can sign up with a discount through the website, this happens with most other services Hulu, Netflix, Stan in Australia.

    If they were an item of clothing, selling there clothing to a retailer. That retailer then sells their OWN item of clothing cheaper then Spotify’s, on Spotify’s logic that retailer should now be paid nothing to host, sell and distribute Spotify’s item of clothing and Spotify will take the free rent, promotion and all the sales so that it’s even.

  • Anonymous

    If you want to party in the devils house you need to play by his rules.

  • BlackSheep_dsg

    the lack of competition harms us as consumers, but it also effects the companies that get sidelined, people lose their jobs as the businesses go under .

    even Apple will lose out as their will be no companies to push Apples Innovation, they’ll stagnate( which seems to be already happening)

    I’m not saying it will happen in this case, but Apple is trying it’s hardest to get rid of all it’s competition, which is just bad for everybody

  • Kyle Mayer

    I moved from Spotify to Apple Music because of their terribly designed apps for desktop. They are extremely battery inefficient because i think they write their ui in html and render it a web browser engine. Pathetic. The integration issue also contributed.

  • techfreak23

    Definitely still a Spotify subscriber. Apple Music blows the interface even with the redesign in iOS 10. It’s too complicated. I’m actually a little pissed with Spotify though because they recently changed their design from a sliding view controller to a tab bar controller. That tab bar takes up so much valuable real estate. Love Spotify Connect, their library of music, and the 50% student discount.

  • credulousgeek

    Spotify is being a cry baby Apple is a new contender in this game tho but Apples subscription plans are pretty nice even discount for students now.Spotify never coup up with the competition yesterday was spotifys monopoly today if Apple is making the same with some good services then why cry spotify grow up spotify I would say but Apple must allow for fair game rules.

    • Vinnie Bones

      Uhm it seems to me Apple is the one that’s afraid of a little competition. It’s not a fair game whe you’re provoking another company to stop advertising or else… Apple is just butthurt they’re losing the streaming battle, and let’s face it.. Their new UI is still trash compare to Spotify, heck I’d even take Google Music over that mess.

      • credulousgeek

        I just hate its over priced subscription the rest is fine Apple music works pretty well then spotify.

  • Aric Bolf

    I don’t use either because their clients are much more complicated to use than Pandora.