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Spotify files complaint against Apple with the European Commission

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Spotify has filed a complaint against Apple with the European Commission (EC), the regulatory body responsible for keeping competition fair and nondiscriminatory. According to Spotify, 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, Spotify has now requested that the European Commission take action to ensure fair competition.

“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,” Daniel Ek, founder and CEO of Spotify, said.

Daniel EK explained in a blog post, Apple requires that Spotify and other digital services pay a 30% tax on purchases made through Apple’s payment system, including upgrading from Spotify’s free to its premium service. If Spotify pays this tax, it would force the streaming company to artificially inflate the price of the Premium membership well above the price of Apple Music. And to keep its price competitive for its customers, that isn’t something Spotify can do.

As an alternative, if the streaming giant choose not to use Apple’s payment system, forgoing the charge, Apple then applies a series of technical and experience-limiting restrictions on Spotify. For example, Apple limits Spotify’s communication with its customers—including their outreach beyond the app.

“In some cases, we aren’t even allowed to send emails to our customers who use Apple. Apple also routinely blocks our experience-enhancing upgrades. Over time, this has included locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch,” Ek said.

He added, “We aren’t seeking special treatment. We simply want the same treatment as numerous other apps on the App Store, like Uber or Deliveroo, who aren’t subject to the Apple tax and therefore don’t have the same restrictions.”

Here’s what Spotify asked for, in its blog-post:

  • First, apps should be able to compete fairly on the merits, and not based on who owns the App Store. All apps should be subjected 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.

“We want the same fair rules for companies young and old, large and small. It is about supporting and nurturing the healthy ecosystem that made our two companies successful in the first place. Consumers win and our industry thrives when we’re able to challenge each other on fair footing. That’s what competition on the merits is all about,” Ek concluded in his blog.

Along with its complaint with the European Commission, Spotify has also launched a website,  TimeToPlayFair.com in order to gather momentum for its fight against Apple.

 

 

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