The streaming war between Apple Music and Spotify is heating up.
Spotify has spent the past week coming under fire for its efforts to combat a proposed 44% rise in mechanical royalty rates. The streaming giant tried to distract from the controversy by introducing a new subscription bundle offering Hulu for free, but the music industry isn’t letting the company slide, and a statement posted to its blog earlier this week didn’t make matters any better.
Today, March 15, Apple issued a lengthy statement regarding Spotify. The comments were made in response to Spotify’s new complaint to the European Commission regarding Apple’s so-called ‘app tax,’ but the tech company also took shots at their competition’s war against raising royalty rates.
“Just this week,” Apple wrote, “Spotify sued music creators after a decision by the US copyright royalty board required Spotify to increase its royalty payments. This isn’t just wrong, it represents a real, meaningful and damaging step backwards for the music industry.”
Elsewhere in the statement, Apple claims Spotify was masking its “financial motivations in misleading rhetoric about who we are, what we’ve built and what we do to support independent developers, musicians, songwriters and creators of all stripes,” but it did not substantively address Spotify’s claims or even mention the European Commission.
Those claims, which became public on March 13, were made against Apple’s ‘app tax’, which sees the Cupertino company charge a 30% commission on in-app digital purchases via the iOS App Store. That percentage then falls to 15% in a streaming subscription’s second year.
Spotify co-founder and CEO, Daniel Ek, said: “If we pay this tax, it would force us to artificially inflate the price of our Premium membership well above the price of Apple Music. And to keep our price competitive for our customers, that isn’t something we can do.”
Elk added, “Apple also routinely blocks our experience-enhancing upgrades. Over time, this has included locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch.”
Apple’s blog post on the situation denied Elk’s claims. “We’ve approved and distributed nearly 200 app updates on Spotify’s behalf, resulting in over 300 million downloaded copies of the Spotify app. The only time we have requested adjustments is when Spotify has tried to sidestep the same rules that every other app follows.”
Spotify, in a statement issued shortly before noon on Friday, fired back against Apple’s latest comments. A representative for the company said, “Every monopolist will suggest they have done nothing wrong and will argue that they have the best interests of competitors and consumers at heart. In that way, Apple’s response to our complaint before the European Commission is not new and is entirely in line with our expectations. We filed our complaint because Apple’s actions hurt competition and consumers, and are in clear violation of the law. This is evident in Apple’s belief that Spotify’s users on iOS are Apple customers and not Spotify customers, which goes to the very heart of the issue with Apple. We respect the process the European Commission must now undertake to conduct its review.”