Apple Fights Back Against Spotify's App Store 'Tax' Complaints – Investor's Business Daily

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Apple (AAPL) has launched a vigorous defense of its App Store business model in response to Spotify (SPOT) lodging an antitrust complaint against it in Europe.

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The iPhone maker posted a lengthy rebuttal to Spotify’s claims of anticompetitive behavior on its website late Thursday. Apple said the audio streaming service “wants all the benefits of a free app without being free.”

Spotify filed its antitrust complaint against Apple with the European Commission, the European Union’s competition watchdog, on Wednesday. It claims Apple unfairly limits competitors to its Apple Music service through the fees charged by its App Store and through restrictions on third-party app developers.

Stockholm-based Spotify said Apple’s App Store fees amount to a tax on its business and users. The App Store takes a 30% cut of subscriptions sold through its platform. After the first year, the fee drops to 15% when subscriptions are renewed through the App Store.

The App Store also restricts third-party app developers from communicating alternative methods of payment with their subscribers.

Apple App Store Contributed To Spotify’s Success

Apple says the App Store helped make Spotify a success and now it’s seeking to change the rules. It said Spotify “wraps its financial motivations in misleading rhetoric.”

“After using the App Store for years to dramatically grow their business, Spotify seeks to keep all the benefits of the App Store ecosystem — including the substantial revenue that they draw from the App Store’s customers — without making any contributions to that marketplace,” Apple said.

Apple said it has worked with Spotify to bring its service to more devices and users.

“We’ve approved and distributed nearly 200 app updates on Spotify’s behalf, resulting in over 300 million downloaded copies of the Spotify app,” Apple said. “The only time we have requested adjustments is when Spotify has tried to sidestep the same rules that every other app follows.”

The Cupertino, Calif.-based company added, “Spotify wouldn’t be the business they are today without the App Store ecosystem, but now they’re leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs. We think that’s wrong.”

Apple stock rose 1.3% to 186.12 on the stock market today. Spotify stock climbed 1.3% to 141.91.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on personal technology and semiconductor companies.

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