Spotify says Apple has rejected a new version of its iPhone app in an effort to block competition to its own Apple Music service. In a letter sent to Apple’s top lawyer, the company’s general counsel Horacio Gutierrez says that Apple is “causing grave harm to Spotify and its customers” by not allowing this update.
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Apple cited “business model rules” and demanded that Spotify use Apple’s billing system if “Spotify wants to use the app to acquire new customers and sell subscriptions.” Apple doesn’t require subscription services to use its own iTunes billing service, but it doesn’t allow third parties to use an alternate payment system within its apps.
Apple charges a monthly fee of up to 30 percent for those who do use its billing system, but also discourages third parties from promoting alternate subscription options.
In response to those rules, the streaming music app has long used Apple’s billing system but passed Apple’s fees onto the customers, charging those who subscribe through iTunes $13 USD a month instead of $10 USD a month for those who subscribe outside. The company also recently renewed its promotion of offering new subscribers the chance to get three months of the service for $0.99 USD if they signed up through Spotify’s site. In response, Apple threatened to remove Spotify from its App Store unless the company stopped advertising this promotion to iPhone users. Spotify then decided to stop advertising the promotion, but it also turned off its App Store billing option, leading to this current conflict.
“It continues a troubling pattern of behavior by Apple to exclude and diminish the competitiveness of Spotify on iOS and as a rival to Apple Music, particularly when seen against the backdrop of Apple’s previous anticompetitive conduct aimed at Spotify … we cannot stand by as Apple uses the App Store approval process as a weapon to harm competitors.”
Spotify has now distributed copies of its letter to Congressional staff. Senator Elizabeth Warren criticized Apple, Amazon and Google for “anticompetitive practices,” saying, “Apple has long used its control of iOS to squash competition in music.”