Spotify claims Apple wants 'tax' for in-app pricing tweak

App maker accuses Cupertino of defying EU rules

Spotify claims Apple rejected an update to the popular music streaming app that would have informed users about purchase methods outside of the Apple ecosystem.

The update would have told Spotify users that they could pay through Spotify's own website rather than through Apple's App Store, which charges a commission to app developers whenever a user makes a purchase. The music streaming service had submitted its original app update to Apple on March 5, just after the European Commission (EC) found that the iPhone maker had to allow music apps to offer users payment options outside of the App Store.

"From now on, Apple will have to allow music streaming developers to communicate freely with their own users, be it within the app, or by email, or any other way of communicating," EC executive vice-president Margrethe Vestager said last month. The EC's decision also came with a hearty €1.8 billion ($1.95 billion) fine for Cupertino's shenanigans.

The Digital Markets Act similarly requires Apple to allow third-party app stores on the iPhone and to free devs from the usual 30 percent commission fee if they use a third-party payment method.

However, Spotify's requested app update was ignored for weeks, the company told The Register. On April 5, exactly a month after the update was initially submitted, Apple then introduced its so-called entitlement program for music streaming services, which added some new rules to the App Store game.

"Apple's commission will be 27 percent on proceeds you earn from sales ("transactions") to the user for digital goods or services on your website after a link out (i.e., they tap "Continue" on the system disclosure sheet)," the program's webpage says, "provided that the sale was initiated within seven days and the digital goods or services can be used in an app." Spotify says it wasn't informed directly by Apple about the entitlement program.

Having not heard back from Apple on whether its app update would be pushed through, Spotify said it then decided to submit a new update yesterday which merely informed users they could purchase a subscription through its own website, this time with no link. This is the "bare minimum" that the company is allowed to do per the EC's ruling, according to Spotify.

Apple then promptly rejected this app update, according to Spotify, saying it would need to pay the 27 percent commission fee mentioned in the entitlement program. However, by the entitlement program's own wording, the fee only triggers if users click a link to Spotify's website, which it maintains doesn't exist in the revised app update.

"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," a Spotify spokesperson stated to the media. "Their disregard for consumers and developers is matched only by their disdain for the law."

The app update kerfuffle isn't the first instance of bad blood between Apple and Spotify. In fact, Spotify pushed the EC hard to fine Apple, which retorted in March: "Free isn't enough for Spotify. They also want to rewrite the rules of the App Store – in a way that advantages them even more" after the EC levied the €1.8 billion fine.

While the fine might not smart that much, representing less than 1 percent of Apple's annual revenues, the company may be running the risk of another one. We've asked Apple for comment. ®

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