Apple Formally Responds to Spotify’s Accusation, Says It Earns Revenue from Only 0.5% of Users

BY Mahit Huilgol

Published 24 Jun 2019

The ongoing battle between Apple and Spotify has taken a new turn. Earlier this year, Spotify had filed a complaint against Apple with the European Commission. Spotify also launched a campaign aided with a website titled “Time to Play Fair.” Apple has now responded to Spotify in the form of new filing with the European Commission.

In the filing, Apple accuses Spotify of knowingly presenting false information with respect to the fees it pays Apple in the form of App Store commission. A bit of context, on March 2019, Spotify had accused Apple of charging as much as a 30 percent fee. According to the latest filing by Apple, Spotify is not paying 30 percent fee on any of its subscribers.

Apple has detailed that Spotify offered the ability to sign up for a subscription via the iOS app. This method has been enforced only from 2014 to 2016. Apple had levied 30 percent fee for the first year and then it transitioned to a 15 percent fee each year. Apple claims all the subscribers that Spotify has gained via the iOS app are beyond the 1-year subscription time frame.

Apple further substantiated its stand by adding that Spotify only pays Apple fee on a little over 0.5 percent of its total subscribers. In other words, Spotify has nearly 100 million paying subscribers and Apple says that they acquired 680,000 users via the iOS app. The math tells us that only 0.68 percent of Spotify subscribers have been acquired via the iOS app.

This is the first time Apple has formally responded to Spotify’s claims. The previous response was aimed at clearing the air publicly and lacked revenue statistics. It will be interesting to see how Spotify responds to the filing. Meanwhile, it seems like Apple’s battle with Spotify is treading similar to its battle with Qualcomm.

[via CNET]