Spotify CEO Daniel Ek Calls Out Apple for ‘Anticompetitive’ Business Practices
Spotify CEO Daniel Ek continued to rip into Apple on Thursday, just one day after the Swedish music streaming service filed an anti-competition complaint against the tech giant with the European Commission.
According to a new report from Variety, Ek today addressed the International Conference on Competition in Berlin, Germany, speaking on behalf of Spotify and reiterating his stance that Apple enjoys an unfair advantage with its App Store “tax.”
“Let’s call this 30 percent revenue-share exactly what it is – a competitor tax,” Ek said on Thursday, according to Variety. “As we all know, iOS and the App Store is the only way to offer our service to anyone with an iPhone or iPad. That’s over a billion people around the world. So not being on their platform is just not an option for us — or really for any competing internet service in this day and age. Apple knows this.”
In its EU complaint, Spotify said that Apple had required all iPhone app makers to use the Apple payment system exclusively for the past eight years. Apple has introduced a 30 percent fee, applied to Spotify and all other digital content providers in the first year after users download their app, for using the payment system. Other apps, such as Uber and Deliveroo, are not subject to the fee, which drops to 15 percent after a year.
Ek said Spotify isn’t able to be “price competitive” with Apple Music because if it wants to have its users upgrade to its Premium service directly through Apple, it must pay the 30 percent premium. He said Spotify’s decision to stop paying the tax in 2015 and only allow customers to upgrade outside of the Apple ecosystem has hampered Spotify.
“Based on our choice not to pay the tax — the result is that our customers must upgrade to Premium elsewhere, such as on their desktop. The catch-22 is that we are not allowed to tell users how to upgrade,” Ek added. “We are essentially faced with a ‘gag order’ that prevents us from communicating with our own customers about our service.”
The Spotify CEO argued that it was time to make a key decision in the music streaming realm. “Do we want a few select, dominant platforms to have the power to strong-arm others and tax the rest of the ecosystem, taking away the ability for smaller companies to effectively compete?” he explained. “Or do we want a healthy ecosystem where real competition flourishes and where consumer choice wins?”
Spotify is under pressure to keep adding subscribers quickly; Apple recently outperformed Spotify as the leading paid music streaming service in the United States, the largest music market in the world. But Spotify is still the world leader in streaming music by a wide margin, with 87 million paid customers globally at the end of 2018.