Malcolm Owen
Spotify continues to complain about an Apple Tax that it doesn't really pay, as it decries Apple's non-approval of its latest update because of a violation of App Store rules.
On Wednesday, Apple told Spotify that its app update for users in the EU was not allowed into regional App Store instances due to missing elements. The App Store review process determined that Spotify did not accept the terms of the Music Streaming Services Entitlement.
Apple requires the entitlement to be accepted by streaming services before apps can point users toward a website owned by the developer. This can be used to handle purchases outside of the App Store.
At the time, Apple told Spotify that the streaming service had included links to an external storefront that could be used to buy subscriptions. But at the same time, Spotify hadn't accepted the Entitlement's terms nor submitted a profile for the review itself.
However, in response to the rejection from the App Store review process, Spotify turns the problem into a legal issue in the EU. Specifically, a ruling by the European Commission ordering Apple to stop its anti-steering practices.
In a statement received by AppleInsider on Thursday, Spotify declares "Apple has once again defied the European Commission's decision, rejecting our update for attempting to communicate with customers about our prices unless we pay Apple a new tax."
"Their disregard for consumers and developers is matched only by their disdain for the law," said a Spotify Spokesperson.
Fees and figures
The reference to a "new tax" is about the Entitlement's rules.
Rather than paying the typical 30% App Store transaction fee, services agreeing to the Entitlement must pay Apple a commission of 27% on purchases made through the alternative process. This figure can drop to 12% for Small Business Program participants or the renewal of an auto-renewing subscription beyond its first year.
At this point, Spotify pays little to Apple, given that it removed the ability to purchase a subscription out of the app years ago.
Back in 2019, it was reported that 680,000 users of Spotify were paying 15% of the subscription fee to Apple, and none paid 30% at all. Since Apple's charges for subscriptions cuts in half for the second year and beyond, this meant all Spotify subscribers paying through Apple at the time were long-time users, and that no new subscribers were added in the previous year.
The Spotify CEO keeps hammering on a 30% tax when he complains about the App Store, regardless.
In March, following the European Commission's ruling, Apple said Spotify had a 56% share of Europe's music streaming market, and that it had paid Apple "nothing for the services that have helped make them one of the most recognizable brands in the world."
"A large part of their success is due to the App Store, along with all the tools and technology that Spotify uses to build, update, and share their app with Apple users around the world," the statement continued, adding that Apple was "proud to play a key role supporting Spotify's success."
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15 Comments
Even the EU must be like…”stop the whining already”. Every parent eventually gets sick and tired of their one constantly complaining child and eventually says “leave me alone”. Then the child goes away.
Is Spotify the only EU company that at least generates a decent amount of revenue. Seems to me that is all the EU brings to the table.
So tired of these whining companies.
If it wasn't for the iPhone they wouldn't exist!
I know it's too much to ask but I wish the press would just not use the term Apple tax for what is a commission. We don't hear about Google and Facebooks privacy tax, Or Microsofts usability tax. The journalism trade is so clit baity these days. Now to get that dang dog off my lawn.