Image credit: Austin Distel

The beef between Spotify and Apple has heated up, so why are they in conflict and who is in the right?

For years, Spotify and Apple have been in a conflict over the Apple App Store. The rules of the App Store require that app publishers pay a 30% cut of purchases made within the app, including subscriptions. Spotify haven’t been happy with that.

Their conflict has now gone on for years, with Spotify appealing to the European Commission for action. After years of discussions, the European Commission decided that Apple were breaching EU competition law and charged them.

In a statement made today, Spotify discussed the European Commission’s conclusion that Apple has been behaving unlawfully. Citing rules that prevented Spotify from linking users outside the app to sign up, thereby avoiding Apple’s charges, they wrote: “Apple’s rules muzzled Spotify and other music streaming services from sharing with our users directly in our app about various benefits.”

The European Commission now requires Apple to stop their “illegal” conduct in the EU. But Apple have their own perspective on the matter, which they have also shared today.

Apple’s take on the matter

Apple claim that the European Commission failed “to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast”. They go on to say that “a large part” of Spotify’s success – having a 56% share of Europe’s music streaming market – is down to the Apple App Store.

They reference that the Spotify app has been downloaded, redownloaded, or updated more than 199 million times on Apple devices, and has a higher presence on iOS than they do on Android devices. They reinforce the fact that Spotify pays Apple nothing for their presence in the App Store. This is true, but is also thanks to deliberate decision by Spotify to ensure that users don’t pay a share of their subscriptions to Apple.

Apple write: “The vast majority of developers – about 86 percent – never pay Apple a commission. Today, there are just two circumstances where a developer on the App Store pays Apple a commission. That’s when a user buys a paid app from the App Store or an in-app digital good or service – like subscription or a power-up in game.”

Apple sees this as fair enough. Spotify say that it’s anti-competitive. In fact, Spotify suggest that the European Commission’s ruling is only the beginning, saying: “Our work will not be done until we succeed in securing a truly fair digital marketplace everywhere and our commitment to helping to make this a reality remains unwavering.”

Who is right: Spotify or Apple?

Well, that sort of depends on your point of view. Whilst other companies have criticised Apple’s approach as well, Apple also have a point. They have invested in the development of their tech and offer entry on to the App Store at no cost. Whilst they have strict rules with revenue cuts, as Spotify have shown it is easy enough to work around them and still see success.

Apple write that their is no evidence of harm to consumers or the industry from their practices. They write: “European consumers have more choices than ever in a digital music market that’s grown exponentially. In just eight years, it’s gone from 25 million subscribers to almost 160 million – with more than 300 million active listeners – and Spotify has been the biggest winner.”

However, the European Commission obviously disagrees that this is fair enough. Executive Vice-President Margrethe Vestager is in charge of competition policy and says: “For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store.

“They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem. This is illegal under EU antitrust rules, so today we have fined Apple over €1.8 billion.”

Apple retort: “Eight years of investigations have never yielded a viable theory explaining how Apple has thwarted competition in a market that is so clearly thriving.”

So, who’s really in the right? Well, that’s up to you.