During March 2019, Spotify filed a complaint against Apple to Europe Antitrust Watchdogs. Stating that Apple uses it’s App Store policies to take an edge over it’s competitors. This means that Spotify claims that Apple tries to cut down on Spotify’s earnings and also reduce it’s subscriber base.
Ever since, we did not get any comments from any of the two music giants. Either of them were not ready to talk about the issue. But Apple did release a Public Statement clarifying the issue to it’s investors and users.
Apple Music v/s Spotify War
But today, according to Spiegel, Apple officially comments on the issue and provided a response. The company claims the allegations to be un-just and wrong.
According to Apple’s App Store policies, it charges a 30% commission on the first year subscription fee and 15% hence forth. Apple states that Spotify does not pay that 15% commission on all of their 100 million subscriber base. And without any doubt, Spotify subscriptions do cross one year tenure.
As per CNET, Spotify has 100 million active subscriber base. Out of 100 million, Spotify pays the 15% fees to Apple only on 680,000 users. Which sums up-to 0.68% of the total subscriptions.
Spotify on iOS
However, there is something interesting to notice here. As Apple charges a fee of 30% on subscription via App Store. Spotify allowed it’s users to subscribe to it’s music streaming service via App Store only till 2016. After which, it is not possible for you to do so. Spotify diverted the traffic back to it’s website for the subscribers to subscribe to it’s service.
Spotify stopped using Apple’s in-app payment system since 2016, saying that the fees associated with the service is unfair. Which is the exact reason why Spotify is not paying 30% fees on any of it’s subscription and paying 15% fee on a very small number of subscriptions.
This way, the company has been escaping from the fees / commission to be paid to Apple for the subscribers it gained from App Store users.
As of now, there are a lot things we need to know more about. Over the coming time we will get to know what the European Antitrust Broad has to say about the statement made by Apple. But surely, we do know that Apple Music has surpassed Spotify in active subscriber base and Spotify needs to do something about that.