Published: Sat, March 16, 2019
Money | By Ralph Mccoy

Spotify files complaint against Apple over 'unfair' App Store rules

Spotify files complaint against Apple over 'unfair' App Store rules

Spotify started encouraging customers to boycott in-app purchases for its own Premium subscription in 2015.

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).

Apple's power as a platform hasn't yet triggered antitrust concerns in Europe, EU Competition Commissioner Margrethe Vestager told reporters in Austin, Texas, on March 10, before Spotify's complaint became public.

The music streaming service, like many others, has an issue with the 30 percent cut Apple charges on App Store revenue.

The 30 percent cut has always been a sticking point for app providers and Apple. Ek says that if Spotify were to pay this tax it would be forced to "artificially inflate" its prices "well above the price of Apple Music", causing harm to the company's business. This again hurts Spotify's chances severely as consumers are far more likely to opt for a service - read Apple Music - that would have a more universal appeal across more device types.

A spat between the companies that operate two of the biggest music streaming services in the world has landed at the doorstep of the European Union, which has been taking an increasingly tough stance lately against antitrust-related issues involving U.S. tech companies.

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Because Spotify uses an alternative payment system, Apple punishes Spotify by applying restrictions to Spotify such as limiting its communication with its customers, he added.

How Apple handles that dual role of gatekeeper to iOS and also an app and services provider is part of Spotify's justification for its complaint to the European Commission (EC), according to the firm.

He writes that Apple continues to give themselves an unfair advantage at every turn. Spotify passed the so-called "Apple tax" onto consumers.

Of course, Spotify is not the only one who has been burned by Apple's practices. "After trying unsuccessfully to resolve the issues directly with Apple, we're now requesting that the [European Commission] take action to ensure fair competition".

Spotify couldn't avoid that 30 percent cut, or negotiate a smaller fee with Apple. "This is how we convert our free customers to premium", Gutierrez said. 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. Instead, the company is asking for fair set of rules that apple to everyone on the App Store, including Apple itself.

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