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article imageSpotify accuses Apple of using App Store 'weapon' to block update

By James Walker     Jul 1, 2016 in Technology
Apple recently rejected an update to Spotify's iOS app, refusing to approve the new version and preventing it getting to users. Spotify now alleges Apple made the move to stifle competition and hurt its business, increasing the growth of Apple Music.
Apple is said to have turned down the update because Spotify was advertising a promotion for new subscribers from within its app. It advertised a deal where new members could sign up to Spotify Premium for $0.99 if they went to its own website.
According to Apple, this contravenes existing App Store policies that prohibit apps from directing users to external services to start a subscription. Apple requires all apps use the subscription billing system built into iTunes for such purposes. The company takes a 30 percent cut of all transactions made using iTunes.
Recode reports that Spotify isn't happy with this restriction. In a letter sent to Apple's lawyers on June 26, Spotify general counsel Horacio Gutierrez alleged that Apple is using the App Store approval process "as a weapon to harm competitors." Gutierrez argued that Apple's demand that Spotify use iTunes if it wants to "acquire new customers and sell subscriptions" goes against U.S. and E.U. competition law, raising "serious concerns."
From Spotify's perspective, Apple is using its tight controls over the App Store to regulate the music market. By blocking an update to Spotify's app, potentially breaking competition rulings in the process, Apple gives its own Apple Music service an unfair advantage.
"It continues a troubling pattern of behaviour by Apple to exclude and diminish the competitiveness of Spotify on iOS and as a rival to Apple Music, particularly when seen against the backdrop of Apple's previous anticompetitive conduct aimed at Spotify," said Gutierrez in the letter. "We cannot stand by as Apple uses the App Store approval process as a weapon to harm competitors."
Spotify has been using Apple's iTunes-based billing system for several years. It has always passed on Apple's cut of the income to customers though, explaining why Spotify costs $13 a month from iTunes but $10 a month everywhere else.
Since Apple's launch of Apple Music last year, Spotify has begun to advise customers to use its own site to buy subscriptions. It does not want to be reliant on a competitor's platform to gain users and income. This culminated in the launch of the $0.99 offer advertised in the app, giving potential new customers an attractive deal if they go straight to its website.
Apple told Spotify to stop informing users of the promotion. The company was forced to comply when threatened with removal from the App Store and has now suspended the advertisement campaign. It has also disabled its iTunes billing option though, leading up to the current situation that sees Spotify and Apple on the point of heading to the courts.
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