Music

Apple Responds to Spotify EU ‘Tax’ Complaints, Says Streamer Pays App Store Fees on Less Than 1% of Users

Apple Responds to Spotify EU 'Tax' Complaints, Says Streamer Pays App Store Fees on Less Than 1% of Users 1

Apple Responds to Spotify EU 'Tax' Complaints, Says Streamer Pays App Store Fees on Less Than 1% of Users 3

The tech big wrote it solely receives income from Spotify for 0.5% of its premium person base.

Apple has fired again at Spotify’s claims that its 30% share of App Retailer income subscriptions is a “tax” with onerous numbers. In a submitting with the European Fee on Monday (June 24), Apple wrote that it solely receives income from Spotify for 0.5% of its premium person base and for these customers Spotify solely pays 15% of income, not the 30% the streaming platform identified in its personal European Fee submitting earlier this yr. 

Within the submitting, Apple mentioned Spotify doesn’t pay 30% of income on any subscriptions to Apple and famous Spotify acquired these customers — 680,000 prospects, in line with Apple’s submitting — between 2014 and 2016. Apple additionally acknowledged it’s not paid by Spotify for any prospects the streaming service has acquired within the final three years. 

Apple’s App Retailer guidelines stipulate that subscription companies should pay 30% of their income from customers who join a subscription by way of an app to Apple within the first yr, however that quantity decreases to 15% in subsequent years, which is how Spotify finally ends up paying lower than the 30% quantity it has been touting. Spotify allowed customers to enroll instantly by way of its iOS app from 2014 by way of 2016, which is why Apple is not accumulating any income from Spotify for brand new prospects it acquired since that point.

The battle between Spotify and Apple over its App Retailer charges has been occurring since 2015. A week after Apple Music launched in 2015, Spotify despatched out emails to prospects with iPhones noting that they might save $three a month in the event that they bypassed signing up by way of Spotify’s iOS app. (Spotify charged $13 a month for its premium subscription by way of the App Retailer, in comparison with $10 a month by way of its web site.) Then in 2016, Spotify despatched a letter to Apple’s attorneys claiming Apple was delaying app updates and had prompted “great harm to Spotify and its customers.”

“We aren’t seeking special treatment, Spotify CEO Daniel Ek said in a blog post after the company filed its complaint with the European Commission back in March. “We merely need the identical therapy as quite a few different apps on the App Retailer, like Uber or Deliveroo, who aren’t topic to the Apple tax and due to this fact haven’t got the identical restrictions.”

Apple responded to Ek and Spotify a day later in a weblog put up, claiming, “Spotify would not be the enterprise they’re right this moment with out the App Retailer ecosystem, however now they’re leveraging their scale to keep away from contributing to sustaining that ecosystem for the following era of app entrepreneurs. We expect that is improper.”


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