From Daniel Ek, CEO of Spotify:
Spotify Files Antitrust Complaint Against Apple with the European Commission Over Its ‘App Tax’
Swedish music streaming giant Spotify has filed a formal antitrust complaint against Apple with the European Commission.
According to a new press release, Spotify has filed an antitrust complaint against Apple over the fees it charges for access to the iPhone App Store in a move that could have far-reaching consequences for the media and technology industries.
In a formal competition complaint to Brussels, the Swedish music streaming giant‘s founder accused Apple of abusing its dominance of the smartphone market to “deliberately disadvantage” competitors.
My goal for Spotify is and has always been to reimagine the audio experience by giving consumers the best creativity and innovation we have to offer. For that to be a reality, it is my firm belief that companies like ours must operate in an ecosystem in which fair competition is not only encouraged, but guaranteed.
It’s why, after careful consideration, Spotify has filed a complaint against Apple with the European Commission (EC), the regulatory body responsible for keeping competition fair and nondiscriminatory. In recent years, Apple has introduced rules to the App Store that purposely limit choice and stifle innovation at the expense of the user experience—essentially acting as both a player and referee to deliberately disadvantage other app developers. After trying unsuccessfully to resolve the issues directly with Apple, we’re now requesting that the EC take action to ensure fair competition.
Among the methods Ek said Apple uses to stifle its rivals is the levying of a 30 percent “tax” that Apple place on purchases consumers make from within the music-streaming apps they are using. Ek said the Apple fee drops to 15 percent if a subscriber has been paying for their particular service for a year, but such fees would force Spotify to raise its prices beyond a level it sees as reasonable
“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,” he said. “And to keep our price competitive for our customers, that isn’t something we can do.”
If Spotify was to ditch Apple’s payment system, Ek continues, “Apple then applies a series of technical and experience-limiting restrictions on Spotify.”
When Spotify stopped using Apple’s in-app payment system in the past after it was forced to hike the prices of its premium service, it claims Apple blocked “experience-enhancing” updates, locked Spotify out of services such as Siri, HomePod, and Apple Watch and, in some cases, stopped Spotify from sending emails to customers who use Apple devices.
Ek says that Spotify wants the same treatment as other App Store apps like Uber and Deliveroo, “who aren’t subject to the Apple tax and therefore don’t have the same restrictions.” Spotify has asked that:
- 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.
None of these complaints are new for Spotify, which has pursued regulatory help from both the US and the EU for years. They are also not new for other parts of the media business, like magazine and newspaper publishers, as well as video companies.
It’s an ongoing dispute that occasionally flares up in different parts of the industry: Late last year, for instance, Netflix stopped letting customers sign up via through the App Store because it didn’t want to share subscription revenue with Apple.