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Apple slams Spotify's claims about its App Store being unfair

Key Points
  • In statement published Thursday, Apple said Spotify is seeking all the benefits of a free app, without being free.
  • "Spotify wouldn't be the business they are today without the App Store ecosystem," Apple said.
  • Spotify filed a complaint with the European Commission this week claiming the App Store deprives consumers of choice and imposes unfair fees on competitors.
Apple CEO Tim Cook speaks at the Anti-Defamation League's "Never is Now" summit in New York City, December 3, 2018
Brendan McDermid | Reuters

Apple refuted Spotify's complaints that its App Store creates unfair competition, saying the music streaming company's goal is to "make more money off others' work."

Spotify filed a complaint with the European Commission earlier this week, claiming the App Store deprives consumers of choice and imposes unfair fees on competitors, giving its Apple Music service an advantage over rivals.

In statement published Thursday, Apple said Spotify is seeking all the benefits of a free app, without being free.

"Spotify wouldn't be the business they are today without the App Store ecosystem, but now they're leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs. We think that's wrong," Apple said in the statement.

Spotify's complaint centers around a 30 percent fee Apple charges developers on most in-app purchases made through the App Store. The Sweden-based music streaming company said Wednesday the fees make it impossible to keep its prices competitive with Apple Music.

In its statement, Apple slammed Spotify's "misleading rhetoric," saying 84 percent of the apps in the App Store pay nothing to Apple when you download or use the app. It also pointed out that the 30 percent fee drops to 15 percent after the first year of an annual subscription. The fees are commonly referred to as a "tax" Apple imposes on app developers, but Apple characterizes it as a revenue share model for the App Store.

Apple said it provides Spotify with "critical software development tools" and a secure payment system that "allows users to have faith in in-app transactions."

"Spotify is asking to keep all those benefits while also retaining 100 percent of the revenue," the statement said. Apple also added Spotify's complaint that it had been blocked from products like Apple Watch were "especially surprising."

"The only time we have requested adjustments is when Spotify has tried to sidestep the same rules that every other app follows," the statement said.

Apple's response intensifies the fight between the two tech companies trying to win over customers in the music streaming business. Apple Music launched in 2015 as a direct competitor to Spotify, which has captured 96 million paid subscribers around the world.

Spotify shares closed 2 percent lower on Thursday while Apple shares closed 1 percent higher and are currently trading 0.5 percent higher in pre-market.

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