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Sunday, 3 July 2016

Apple Accuses Spotify of 'Resorting to Rumors and Half-Truths', Sets Record Straight on App Rejection

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Yesterday, Spotify accused Apple of using its App Store approval process as a "weapon to harm competitors" after Apple rejected a Spotify app update, and now Apple has responded to Spotify's accusations to "set the record straight."


In a letter to Spotify lawyer Horacio Gutierrez that was shared by BuzzFeed, Apple's legal head Bruce Sewell says Apple is disappointed with the public attacks and concerned that Spotify is asking for exemptions to rules that apply to all app developers.

"There can be no doubt that Spotify has benefited enormously from its association with Apple's App Store. Since joining the App Store in 2009, Apple's platform has provided you with over 160 million downloads of your app, resulting in hundreds of millions of dollars in incremental revenue to Spotify. That's why we find it troubling that you are asking for exemptions to the rules we apply to all developers and are publicly resorting to rumors and half-truths about our service.

Our guidelines help competition, not hurt it. The fact that we compete has never influenced how Apple treats Spotify or other successful competitors like Google Play Music, Tidal, Amazon Music, Pandora or the numerous other apps on the App Store that distribute digital music."
Sewell goes on to say that Spotify's belief it should not have to pay to take advantage of the "benefits of Apple's hard work" is "simply unfair and unreasonable," pointing out that the App Store rules existed long before Apple Music was introduced. He also points out the new revenue split rules for subscriptions, which will see Apple taking a 15 percent cut from customers who have subscribed to a service for more than a year, instead of a 30 percent cut.

Sewell's letter to Spotify ends with some clarification on why Spotify's app was rejected on May 26. Spotify replaced its in-app subscription purchase options with an account sign-up feature Apple says was "clearly intended to circumvent Apple's in-app purchase rules."

Apple notified Spotify about the guideline violation and following discussions with Apple, Spotify submitted a new version of the app on June 10 that incorporated the same sign-up feature asking for customer email addresses to be used to invite customers to sign up for a Spotify subscription on the web, which Apple again rejected.
"That feature exists only for the purpose of avoiding to having to pay Apple for your use of the App Store by emailing customers within hours, directing them to subscribe to Spotify on its website. A clear violation of the terms every other developer adheres to.

There is nothing in Apple's conduct that "amounts to a violation of applicable antitrust laws." Far from it. Apple has continued to innovate with lower pricing for our customers, and a new revenue share model for the developers that have helped make us so successful. We understand you want special treatment and protections from competition, but we simply will not do that because we firmly adhere to the principle of treating all developers fairly and equitably."
In Spotify's own letter, sent to Apple on June 26 but made public yesterday, Spotify accused Apple of causing "grave harm" to its business by rejecting the app update. Spotify said Apple's aim was to "exclude and diminish the competitiveness of Spotify on iOS," which "raises serious concerns under both US and EU competition law."

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