Apple says Spotify Does Not Pay for Growing Digital Music Business via App Store

In response to the European Commission’s imposition of a $2 billion penalty following complaints from streaming giant Spotify, Apple has issued a news statement defending its practices.
Apple iphone 12 5G smartphone in SingaporeThe European Commission declared that the App Store has acted as a barrier to competition in the digital music market. Despite finding no credible evidence of consumer harm, the Commission asserted that the market is flourishing and competitive.

The primary proponent of this decision, and the main beneficiary, is Spotify. Stockholm, Sweden-based Spotify commands a 56 percent share of Europe’s music streaming market — more than double their closest competitor’s. Spotify has more share on iOS than they do on Android.

Apple, in its statement, expressed pride in supporting Spotify’s growth, along with developers of all sizes, since the inception of the App Store over 15 years ago.

Contrary to claims of anti-competitive behavior, Apple highlighted that the vast majority of developers, around 86 percent, do not pay any commission. It clarified that developers pay when users purchase a paid app or an in-app digital good or service. Spotify does not pay fees to Apple for its success.

If a developer sells physical goods, serves ads in their app, or just shares an app for free, they don’t pay Apple anything. The same is true if a developer sells a subscription on the web for users to buy, before they use it in an app on their device. Music app developers can even include information about other offers available outside of their app, along with a link directing users to a website to create and manage their account.

Apple underscored the relationship it shares with Spotify, detailing various forms of assistance provided, such as engineering support, access to APIs, and expedited app reviews.

Despite Spotify’s significant market dominance and utilization of Apple’s tools and technologies, the company pays no fees to Apple, opting to sell subscriptions on its own website.

Last year, there were nearly 160 million digital music subscribers — up from 25 million in 2015 — a staggering 27 percent growth rate per year.

Companies like Google, Amazon, Deezer, SoundCloud, and Apple compete for customers every day — but Spotify stands at the top.

The Spotify app has been downloaded, redownloaded, or updated more than 119 billion times on Apple devices. It’s available on the App Store in over 160 countries.

Spotify’s desire for further concessions from Apple was highlighted, with the streaming giant seeking to alter App Store rules to its advantage, despite existing options available to reach potential customers.

Apple criticized the European Commission’s decision, arguing that it is not supported by evidence of consumer harm or anti-competitive behavior. It suggested that the decision is aimed at enforcing new regulations before they become law.

Spotify can access Apple’s more than 250,000 APIs — and uses 60 of our frameworks — so their apps can connect with Bluetooth, send notifications, play audio in the background of a user’s device, and more.

Spotify has used our beta-testing tool, TestFlight, for almost 500 versions of their app to experiment with new features and capabilities.

App Review team has reviewed and approved 421 versions of the Spotify app — usually with same-day turnaround — and frequently expedites reviews at Spotify’s request.

When a user opens the Spotify app, listens to music on their commute, or asks Siri to play a song from their library, everything just works.

Like many companies, Spotify uses emails, social media, text messages, web ads, and many other ways to reach potential customers. Under the App Store’s reader rule, Spotify can also include a link in their app to a webpage where users can create or manage an account.

Apple introduced the reader rule years ago in response to feedback from developers like Spotify. And a lot of reader apps use that option to link users to a webpage — from e-readers to video streaming services. Spotify could too — but they’ve chosen not to.

Instead, Spotify wants to bend the rules in their favor by embedding subscription prices in their app without using the App Store’s In-App Purchase system. They want to use Apple’s tools and technologies, distribute on the App Store, and benefit from the trust we’ve built with users — and to pay Apple nothing for it.

Apple announced its intention to appeal the decision, emphasizing its long-standing commitment to supporting job growth and fostering innovation across Europe.