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March 13, 2019updated 14 Mar 2019 12:49pm

Spotify Takes Apple to Competition Regulator

"Apps should be able to compete fairly on the merits, and not based on who owns the App Store"

By CBR Staff Writer

Music streaming service Spotify has filed a competition complaint against Apple with the European Commission, saying the company is acting as both “player and referee” and that recent changes to its App Store “purposely limit choice and stifle innovation”.

The landmark decision is just the latest sign that patience is fraying among both policymakers and application developers at the dominance of major platforms like Apple, Amazon and Google, amid growing competition concerns.

Spotify has 207 million users, including 96 million Spotify Premium subscribers, across 79 markets. The decision comes as week after it announced a tie-up with Samsung that will see it pre-installed on Samsung devices as of March 8 this year.

See also: Elizabeth Warren: Break Up “Bullying” Tech Giants, Don’t Let Them Provide Services on Marketplaces They Control

Spotify Founder and CEO Daniel Ek wrote today: “Apple operates a platform that, for over a billion people around the world, is the gateway to the internet.”

“Apple is both the owner of the iOS platform and the App Store—and a competitor to services like Spotify. In theory, this is fine. But in Apple’s case, they continue to give themselves an unfair advantage at every turn.”

spotifyThe complaint comes after US Presidential candidate Elizabeth Warren called for a breakup of Apple, Facebook and Google, saying: “Many big tech companies own a marketplace — where buyers and sellers transact — while also participating on the marketplace. This can create a conflict of interest that undermines competition.”

Spotify Apple Complaint: “Not a ‘Spotify-versus-Apple’ Issue”

Ek added: “Apple requires that Spotify and other digital services pay a 30% tax on purchases made through Apple’s payment system, including upgrading from our Free to our Premium service. 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.”

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Ek said “numerous” other apps on the App Store, like Uber or Deliveroo, aren’t subject to the Apple tax and therefore don’t have the same restrictions.

He said: “What we are asking for is the following: “First, apps should be able to compete fairly on the merits, and not based on who owns the App Store. We should all be subject to the same fair set of rules and restrictions—including Apple Music. Second, consumers should have a real choice of payment systems, and not be “locked in” or forced to use systems with discriminatory tariffs such as Apple’s. Finally, app stores should not be allowed to control the communications between services and users, including placing unfair restrictions on marketing and promotions that benefit consumers.”

Spotify has  filed a complaint against Apple with the European Commission (EC), the regulatory body responsible for keeping competition fair and nondiscriminatory, as a result. Apple has been contacted for comment.

 

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