Spotify files antitrust complaint against Apple over its ‘app tax’

Music streaming service Spotify has a filed a complaint with EU antitrust regulators against Apple, claiming the iPhone maker unfairly limits rivals to favour its own music streaming service.

Spotify, which launched in 2007, accused Apple of using its App Store to ”purposely limit choice and stifle innovation at the expense of the user experience,” and “acting as both a player and referee to deliberately disadvantage other app developers”, according to a blog post on Wednesday (March.13th).

Spotify complaint

In the complaint, Spotify CEO Daniel Ek was particularly concerned with Apple charging a 30% “tax” on App Store purchases. This results in Spotify charging existing subscribers $12.99 per month for its premium plan via the App Store just to collect the $9.99 it normally charges.

Ek believes that this gives Apple an “unfair advantage” since Spotify is unable to fairly compete with Apple Music’s standard price of $9.99 per month within the App Store.

“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”, Ek wrote. “And to keep our price competitive for our customers, that isn’t something we can do,” he added.

As an alternative, if Apple chooses not to collect payment via the App Store, Ek said that Apple “applies a series of technical and experience-limiting restrictions” on Spotify.

“For example, they limit our communication with our customers – including our outreach beyond the app,” he wrote. “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 stressed that the company is not seeking any special treatment, but would like to be treated like other apps on the App Store such as Uber or Deliveroo, “who aren’t subject to the Apple tax and therefore don’t have the same restrictions.”

Three rules

As part of its complaint, Ek listed three key rules that it would like the European Commission to enforce. First, he argued that all apps should be subject “to the same fair set of rules and restrictions – including Apple Music”.

Secondly, “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”.

And, finally, he said, “app stores should not be allowed to control the communications between services and users”.

Ek said that the company tried to “unsuccessfully” resolve the issues directly with Apple but now wants the EC to intervene to” ensure fair competition”.

“Let me be clear that this is not a Spotify-versus-Apple issue,” Ek concluded. “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 a fair footing. That’s what competition on the merits is all about.”

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