Published: Thu, March 14, 2019
Technology | By Lionel Gonzales

Spotify files antitrust complaint to EU against Apple

Spotify files antitrust complaint to EU against Apple

Apple requires that Spotify and other digital services pay a 30% tax on purchases made through Apple's payment system, including upgrading from our Free to our Premium service.

The founder and CEO of Spotify, Daniel Ek, announced today in a blog post (via Gizmodo) that Spotify has filed a complaint against Apple with the European Commission (EC).

Spotify and Apple Music are the two major players in the streaming music market: While Spotify's global paid subscriber total of 96 million is almost double Apple Music's 50 million, it was reported last summer that Apple Music has more United States subscribers.

The case Ek lays out is a familiar story for anyone frustrated with the App Store, which is the only legit method for installing software on an iPhone.

CEO Daniel Ek complained in an open letter about the fact that certain app makers have to pay Apple a 30% tax on paid apps, in-app subscriptions, and purchases.

He then blamed Apple for not providing a robust alternative solution to Apple's payment system.

Spotify's claims, while Europe-based, come just days after USA presidential candidate Elizabeth Warren said she would move to break up Apple for reasons that resonate with Spotify's complaint.

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Technical and experience-limiting restrictions are imposed on Spotify that makes it hard to communicate with customers if they choose not to use Apple's payment system, Ek added. He continued saying, "For example, they limit our communication with our customers-including our outreach beyond the app".

Spotify then ceased use of Apple's IAP system, meaning Spotify customers could only upgrade to the fee-based package indirectly, such as on a laptop. What the streaming music service wants, it claims, is to be free of the "Apple tax" in the same way that apps like Uber and Deliveroo are.

Apple had not responded to a request for comment at the time of publication.

The restrictions, according to Ek, limit Spotify's communication, disallowing the music streaming platform to send emails to its customers who use Apple in some cases.

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. "We should all be subject to the same fair set of rules and restrictions, including Apple Music". When Apple (NASDAQ:AAPL) launched its music service in the European Union, they were able to be both the platform holder as well as a competitor to Spotify.

Ek specifically highlighted the 30 percent fee that Apple charges for app payments made through its system. Through their app stores, the two tech giants have for years acted as gatekeepers to iPhone and Android users, dictating how many people shop for apps and pay for their services.

Consumers win and our industry thrives when we're able to challenge each other on fair footing.

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