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Apple hits back at Spotify’s accusations of anticompetitive behavior
Apple Inc. has hit back at Spotify Technology AB’s claims that its App Store rules are anticompetitive, escalating a war of words potentially on track to draw regulatory scrutiny.
Spotify submitted an antitrust complaint to the European Commission earlier this week over what it argues is unfair treatment by the iPhone maker toward outside app developers. The filing is confidential, but the company has made its main claims public. Spotify is taking issue with a number of App Store rules related to app monetization and user experience.
In a statement released this morning, Apple presented responses to most of the music streaming provider’s claims, starting with its allegations that its service has been unfairly constrained on iOS. Spotify is charging that the iPhone maker has made a habit of rejecting its software updates without proper justification. Apple didn’t go into specifics about the approval process but said it has greenlighted nearly 200 of Spotify’s updates over the years.
The music streaming provider’s other main criticism has to do with transaction processing. Apple doesn’t support third-party payment systems for in-app purchases and allows only iOS apps to use its own IAP service, taking a 30 percent cut on sales.
Spotify described this fee as unfair in its complaint, adding that certain companies such as Uber Technologies Inc. are exempt from paying it. Apple fired back by pointing out that 84 percent of apps don’t pay any transaction fees since it takes only a cut from sales of digital goods. The iPhone maker also took the opportunity to note that its base rate of 30 percent drops to 15 percent after the first year of an annual app subscription.
But it’s the criticism Apple didn’t address that may prove the most potent. The fact that it bars developers from using outside payment processing systems for in-app transactions has been described as “garden variety anticompetitive exclusion” by one legal expert. Analysts at KeyBanc Capital Markets Inc. echoed this sentiment in a recent memo, saying that Spotify’s antitrust complaint has a meaningful chance of prompting regulatory action against Apple’s App Store policies.
Photo: atmtx/Flickr
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