Apple Music and Spotify are at war for our ears, and Spotify is fighting dirty.
Even though Spotify has been outperforming Apple Music, it has filed a complaint against Apple in Europe, claiming it is engaging in anticompetitive behavior. The European Commission will now conduct an antitrust investigation against the company.
But can Apple’s business practices really be classified as anticompetitive?
The App Store provides a platform where Apple users can easily access millions of apps from all over the world. Though Apple offers its own messaging, music and internet browser apps, Facebook Messenger, Gmail, Whatsapp, Spotify and Google Chrome are some of the most downloaded apps in the store.
The company reviews 100,000 apps a week and approves most of the proposals. Spotify claims that Apple is purposely interfering with the app’s user experience. But the App Store has released almost 200 app updates for the music streaming company, and Spotify’s Apple Watch app is currently leading in the watch’s music category.
That doesn’t sound like a company trying to squash its competition.
The vast majority of apps in the App Store pay nothing to Apple. The company only collects a commission on digital goods and services sold within the App Store, since those sales are processed through its proprietary payment system.
Free apps that process subscriptions within the App Store using Apple’s payment processing system (like Hulu or Pandora) pay a 30 percent commission for the first year of that subscription and 15 percent for subsequent years.
Spotify has circumvented this fee by requiring users to subscribe outside the app. An Apple-user who wants to subscribe to Spotify Premium must sign up through the company’s website; afterward, the user can listen to music on the iOS Spotify app. Apple does not collect any commission on these subscriptions.
But now Spotify wants to conduct sales through the App Store without paying for Apple’s payment processing services.
In a blog post, the company’s CEO Daniel Ek wrote that if it were to pay the commission, it would need to raise its prices and therefore couldn’t compete with Apple Music. So Spotify wants to force Apple to either stop collecting commission on in-app purchases or offer other payment options within the App Store.
In other words, it wants to access Apple’s platform, utilize its software tools and use its payment system for free.
The App Store provides a reliable and secure place for apps to conduct transactions. Spotify doesn’t get to call the shots or demand to use Apple’s digital infrastructure for less money, especially since the streaming company is thriving by having users subscribe outside the app.
It’s time that Spotify becomes willing to pay for the services it’d like to use.
Author: Bethany Patterson