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Apple CEO Tim Cook said it was more than clear that services such as the Apple iOS were an essential part of the company's future as consumers hang their devices longer and longer. between upgrades. When Spotify filed an antitrust lawsuit against Apple this week, it took a direct hit against the tech giant's strategy. Apple has now refuted the accusations of Spotify.
Spotify is subject to reproach with the App Store for many years. Apple charges applications for fees for "digital goods and services purchased in the application". In the case of a subscription service such as Spotify's premium advertising-free plan, these fees are 30% for the first year and 15% for each additional year. . Most applications that bill for digital services are occupying and increasing fees. IOS being a walled garden, it is not possible to offer an alternative place to download an application with purchases avoiding Apple's fees.
However, if a company is big enough to take the risk, it is possible to encourage users to enter their payments via a web browser and then associate their accounts to the application without transferring fees to Apple. This is the approach that Spotify and Netflix have decided to adopt.
But Spotify is tired of giving users an inconvenient way to sign up and pay for premium service. The company announced this week that it has filed antitrust litigation with the European Commission, accusing Apple of anti-competitive behavior. In response to Spotify's CEO blog article, Daniel Ek, explaining his positions, Apple released his rebuttal on Thursday.
Apple's blog is spending a lot of time explaining its philosophy about the app store, and has a long history of making developers accountable and creating a platform from scratch, in other words, window wrapping arguments. Regarding the details, Apple immediately denied some of Spotify's claims.
For its part, Spotify claims that because it does not use Apple's payment system, it is systematically penalized by technical and experiential limitations. Ek explained that "over time, this involved locking Spotify and other competitors of Apple services such as Siri, HomePod and Apple Watch." Apple has actively encouraged Spotify to extend its reach to Siri and AirPlay 2 and to have the company "work on it". As for Apple Watch, he said that this statement was "particularly surprising" because the Spotify Watch app is currently the number one application of the Watch Music category. Apple has clearly stated its position stating: "Spotify is free to create applications for our products and platforms and compete with our competitors, and we hope they will."
Apple then criticized some other claims of Spotify, but did not respond to a few points. Ek is complaining that "many other applications on the App Store, such as Uber or Deliveroo," do not have to pay "Apple Tax". In this regard, Apple's policy is to charge only "purchased digital goods and services". inside of the app ", not services that are offered to the outside world in the real world. Whether or not it should apply its fees to everyone regardless of their source of income is a subject that needs to be debated.
But as VentureBeat points out, the most blatant omission from Apple's blog post is that it does not mention Apple Music at all. The essence of Spotify's argument is that it is in direct competition with Apple's music streaming service, but the 30% fee is forcing it to inflate its prices. Since Apple does not have to pay any fees, Spotify considers that it has an unfair competitive advantage.
Apple did not immediately respond to our request for comment on this story, but a Spotify spokesperson sent us the following statement:
All monopolists will say that they have done nothing wrong and will argue that they care about the best interests of their competitors and consumers. Thus, Apple's response to our complaint to the European Commission is not new and fully meets our expectations.
We filed our complaint because Apple's actions harm competition and consumers and are a blatant violation of the law. This is evident in Apple's belief that Spotify users on iOS are Apple customers and not Spotify customers, which is at the heart of the problem with Apple. We respect the process that the European Commission must now undertake to conduct its review. Please visit www.TimetoPlayFair.com for the facts of our case.
The fact is that Apple is leading this war on several fronts. In the coming months, the Supreme Court is expected to rule on a similar case, according to which, in the absence of another iOS app store, the 30% fee is a hidden tax for consumers, because developers must integrate them into their fees. pricing. It seems like Apple wants to focus its arguments on the store as a whole rather than directly attacking points regarding its own applications.
Aside from the fact that this is probably the best angle of view of Spotify, Apple may want to avoid the argument Apple Music because it is also faced with the calls of Senator Elizabeth Warren to "break" the App Store. Although Apple was a minor goal of Warren's technology policy proposals, she believes the company should not be allowed to put its own products in its exclusive store, as it can hinder competition through practices described by Spotify. "Either they run the platform or they play in the store," Warren told The Verge. "They can not do both at the same time."
Previously, I argued that the benefits of Apple's App Store approach outweighed the disadvantages. I still think this is true and if you do not like the Apple method, you can use the many other devices available on the market. But I must admit that the specific case of Spotify has an understandable merit. And it is possible that the uncompromising attitude of the European Commission against antitrust laws will work in favor of Spotify. Although the cases are slightly different, European regulators found that Google's inclusion of the pre-installed Chrome browser on Android devices gave it an unfair advantage.
Everyone pushes Apple against the wall, the company is sinking more and more into the sector of service fees. Later this month, it will host an event that should include the launch of Apple magazine and video streaming platforms. The focus on these services has been focused on whether people want it or whether Apple can offer enough quality content to compete. The real question could be whether Apple needs to change all of its business model in order to even exploit these platforms.
[Apple via Reuters]
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