Apple Defends App Store Against Spotify's Antitrust Claims
March 15 2019 - 12:39PM
Dow Jones News
By Tripp Mickle
Apple Inc. defended its practice of taking a 30% cut of sales
through its App Store following criticism from Spotify Technology
SA, escalating a fight between the tech companies as regulators
increasingly scrutinize the industry.
The iPhone maker was responding to an antitrust complaint
Spotify filed earlier this week in Europe, in which the
streaming-music company accused Apple of abusing the App Store to
limit competition against its own Apple Music.
The European company also published an animated video
illustrating how it says Apple limits competitors, and said in a
blog post that Apple had blocked Spotify from its Siri virtual
assistant, HomePod voice-activated speaker and Apple Watch.
In its response, dated March 14, Apple said Spotify wants to
benefit from its service without supporting it. It said it had
reached out to the music company about Siri and that Spotify's
smartwatch app went through the same approval process as those
submitted by other developers. It said nothing about Spotify and
HomePod.
Apple said it wants apps that compete with its services to
thrive. It said it has approved and distributed 200 app updates
from Spotify, resulting in 300 million downloads. It said Spotify
has benefited from the App Store, which reaches some 900 million
iPhones, to grow its streaming-music business.
"Spotify is free to build apps for -- and compete on -- our
products and platforms, and we hope they do," Apple said in its
statement.
Apple said that while it takes a 30% cut of subscription sales
through its App Store, the price is for the first year and drops to
15% in subsequent years.
The back-and-forth between the two tech companies comes as
legislators and regulators wrestle with whether and how to rein in
global tech giants on issues ranging from privacy to taxes to hate
speech.
The European Commission, which said it was assessing Spotify's
complaint, previously ordered Apple to pay back billions of dollars
in tax breaks to Ireland and has fined Alphabet Inc.'s Google for
alleged anticompetitive behavior, among other actions.
In addition to defending its business model, Apple criticized
Spotify for what the iPhone maker claimed are efforts to reduce
royalties it pays the music industry. The streaming-music company
joined other tech companies in appealing a recent ruling by the
U.S. Copyright Royalty Board that increases royalties to
songwriters.
Apple, which launched its own streaming-music service in 2015,
said the appeal would damage artists.
Spotify earlier this week said it had appealed because the
copyright decision would make it difficult to bundle music along
with other media for subscribers.
In addition to the European company's challenge to the App Store
business, the U.S. Supreme Court is expected to rule soon on the
propriety of a lawsuit brought by consumers who allege Apple
illegally monopolized the sale of iPhone apps.
Write to Tripp Mickle at Tripp.Mickle@wsj.com
(END) Dow Jones Newswires
March 15, 2019 12:24 ET (16:24 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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