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Spotify slams Apple for anti-trust

by on01 July 2016

Expect a court case

Music streaming service Spotify has accused Fruity cargo cult Apple of refusing to approve its iPhone App because its service competes with Apple Music.

In language which looks like an opening shot in an anti-trust case, Spotify has dashed off a missive to Apple’s top lawyer, warning it to sling its hook.

Spotify said Apple is “causing grave harm to Spotify and its customers” by rejecting an update to Spotify’s iOS app. Apple turned down the new version of the app while citing “business model rules” and demanded that Spotify use Apple’s billing system if “Spotify wants to use the app to acquire new customers and sell subscriptions.”

Spotify general counsel Horacio Gutierrez’s letter to Apple general counsel Bruce Sewell on June 26, suggests that Spotify intends to use the standoff as ammunition in its fight over Apple’s rules governing subscription services that use its App store.

Gutierrez pointed out that Apple’s antics raised serious concerns under both U.S. 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.”

Apple doesn’t require subscription services to use its iTunes billing service, but it doesn’t allow them to use an alternate payment system within the app, as Google does. Apple charges a monthly fee of up to 30 percent for those that do use its billing system — and it doesn’t want app makers to use the apps to promote alternate subscription options outside the apps.

Spotify has used Apple’s billing system for years, but passed on Apple’s fee to customers by charging $13 a month instead of the $10 a month the service sells for outside Apple’s store. But when Apple launched its own music service, Spotify became more vocal about encouraging users to pay for the service outside of iTunes.

Spotify has at least double the number of subscribers that Apple Music has.

Last modified on 01 July 2016
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