Saturday, 23 March, 2019

Spotify files European Union antitrust complaint against Apple

Spotify CEO Daniel Ek Daniel Ek has been CEO of Spotify since he co-founded it in 2006. Spotify
Katie Ramirez | 14 March, 2019, 14:16

Music site Spotify has complained to European Union regulators about Apple, saying that the US tech giant is abusing its dominant position in music streaming and hurting competition.

Apple should be probed by the European Union's antitrust agency over how it allegedly squeezes rival music streaming services, Spotify Technology SA said, escalating a debate over how Apple takes a cut of sales on its App Store.

"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", Ek said in a statement on the company's website.

Monday's official complaint marks a public escalation in the music-streaming service's long-running battle with Apple.

The CEO pointed out that Apple imposes a 30% tax on purchases made through Apple's payment system and every time users upgrade from Spotify's free to premium service Apple's taxation applies and that forces Spotify to "artificially inflate the price of its Premium membership well above the price of Apple Music".

Invisible to the customer is the fee apple takes when purchasing in the app store or a subscription within an app. Ek insists that Spotify isn't seeking special treatment in filing this motion.

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Spotify began emailing customers in 2015 that they should cancel subscriptions purchased through Apple's App Store.

The main problem here is that Apple not just operates the App Store, but also the competitor to Spotify in the form of Apple Music. Some apps, like Uber or Deliveroo, aren't subject to the Apple fee, according to Elk. "Over time, this has included locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch".

Apple did not immediately respond to calls and texts asking for comment.

Apple controls what's allowed into its app store and how those programs can interact with its users, but it also competes with streaming music providers directly via Apple Music.

Ek points to the revenue share that Apple demands for services that charge customers via apps distributed through the App Store, unofficially known as the "Apple tax". Also, that consumers should have the choice of using whichever payment system they want within the apps and that developers should not be prevented from communicating with its users when it comes to marketing and promotions. He reckons the Apple-licensed "App Store" should remain objectively unbiased with the market place should remain inconquerable. "We should all be subject to the same fair set of rules and restrictions, including Apple Music".

We've reached out to both companies and will update if we hear back. That's what competition on the merits is all about.

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