Spotify is only paying App Store fees on a tiny fragment of its Premium subscribers, according to Apple, as the fight between the two music streaming giants rumbles on.
In response to Spotify8217;s antitrust complaint over the perceived unfair nature of the fees for billing via iTunes, Apple said Spotify only pays a 15% cut of the subscription fee for 0.5% of its paying customers, who subscribed between 2014 and 2016.
That, according to Apple, represents 680,000 subscribers in total. Apple also claims Spotify is not paying the higher rate of 30% (which Apple charges for the first year of subs) on any of its subscriptions. That8217;s because Spotify hasn8217;t used Apple8217;s in-app billing for the last three years.
The music streaming pioneer filed the complained in the European Union with CEO Daniel Ek calling it a 8220;tax8221; Apple uses to damage competition in the marketplace. Ek reckons it gives Apple an unfair advantage because the fees don8217;t apply to Apple Music.
8220;First, apps should be able to compete fairly on the merits, and not based on who owns the App Store. We should all be subject to the same fair set of rules and restrictions—including Apple Music,8221; Spotify said.
8220;Second, consumers should have a real choice of payment systems, and not be “locked in” or forced to use systems with discriminatory tariffs such as Apple’s.
“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,” the blog post says.
“Spotify wouldn’t be the business they are today without the App Store ecosystem, but now they’re leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs. We think that’s wrong.”
It8217;s not clear yet whether the European Commission is going to do anything about Spotify8217;s allegations, but the response makes clear that Apple will come out fighting.
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