Spotify: Apple contributes to unfair competition with App Store conditions
Spotify founder Daniel Ek states in a blog post that Apple contributes to unfair competition with certain conditions of the App Store. He is dissatisfied with a number of issues and has filed a complaint about Apple with the European Commission, the EU competition watchdog.
Daniel Ek says Spotify has discussed its dissatisfaction with Apple about some of the terms of the App Store, but has not been able to work it out with the Cupertino company. As a result, Spotify has decided to file a complaint with the European Commission. The music company wants the Commission to take action ‘to ensure fair competition’.
Spotify argues that Apple has introduced rules for the App Store in recent years that limit choice and stifle innovation. According to Ek, this is at the expense of the user experience. It is also a thorn in the side of Spotify that Apple is not only an involved party in this situation, but also an arbitrator. This allows Apple to “consciously disadvantage” other app developers, according to the company.
Ek writes that it is ‘in theory’ no problem that Apple manages the iOS platform and the App Store, and at the same time is a competitor for services such as Spotify. However, Spotify’s CEO says Apple continues to favor itself at the expense of others. As a concrete example, Ek cites that Spotify and other services must pay thirty percent on purchases made through Apple’s payment system, including an upgrade from the free version of Spotify to the Premium version. “Paying this tax actually forces us to artificially inflate the price of the Premium membership to a level well above the price of the Apple Music service.”
In the blog post, Ek writes that not paying this thirty percent is not an option, because according to him Apple then “imposes a number of technical and experience-limiting restrictions”. He cites, as an example, a limitation of communication with Spotify’s customers to the point that no emails should be sent to Spotify customers who use Apple. Also, Apple would routinely block upgrades. As a result, Spotify and other competitors to Apple services are excluded from Siri, HomePod and the Apple Watch, says Ek.
He emphasizes that he does not want special treatment for Spotify, but only the same treatment as other apps in the App Store. He also mentions Uber and Deliveroo, which, according to Ek, do not have to pay the ‘Apple tax’ and therefore do not have to deal with restrictions. The CEO also emphasizes that he does not see this issue as a Spotify versus Apple problem, but that in general he wants a “healthy ecosystem” with fair rules for all companies.
The company has expressed three wishes or demands, which have probably been submitted to the European Commission in some form. First of all, Ek wants apps to be able to compete on their merits, that all services must follow the same fair rules and that App Store ownership should not play a role. He also wants consumers to have a ‘real choice’ for the payment system and not be more or less forced to use ‘systems with discriminatory rates, such as Apple’s’. Finally, Ek wants app stores in general not to be able to control the communication between services and their users. Spotify has published a timeline on this matter.
A European Commission spokesperson told the WSJ that the complaint has been received from Spotify and that it is being reviewed in accordance with standard procedures. Apple has not yet responded to Spotify’s current criticism.
Spotify’s complaint may lead to an investigation by the Commission, in which, in extreme cases, a fine may be imposed. The Commission has already done this at Google before; that company was fined EUR 4.34 billion in July last year, because, according to the EU, it abused its dominant position with Android.