Germany's two top banks in merger talks to create national 'champion'
SAN FRANCISCO: The tug of war between Spotify and Apple has intensified, with the Swedish music streaming service now calling Apple a "monopolist".
Taking exception to Spotify's complaint with the European Union (EU) last week alleging IOS App Store rules to be unfair, Apple slammed Spotify for wanting "all the benefits of a free app without being free".
According a Variety report on Sunday, Spotify said that "Apple's response to our complaint before the European Commission is not new and is entirely in line with our expectations".
"Every monopolist will suggest they have done nothing wrong and will argue that they have the best interests of competitors and consumers at heart," said Spotify which entered the India market in February.
"This is evident in Apple's belief that Spotify's users on IOS are Apple customers and not Spotify customers, which goes to the very heart of the issue with Apple," it added.
Earlier, Apple hit back at Spotify for its anti-trust complaint with the EU. "A full 84 per cent of the apps in the App Store pay nothing to Apple when you download or use the app. That's not discrimination, as Spotify claims," Apple said.
In its complaint with the EU, Spotify said that Apple requires it and other digital services to pay a 30 per cent tax on purchases made through Apple's payment system, including upgrading from a free to premium subscription.
According to Spotify, if it pays this tax, it would force it to artificially inflate the price of its premium membership well above the price of Apple Music. BERLIN: Germany's two biggest lenders, the ailing Deutsche Bank and Commerzbank, said Sunday they would
launch formal talks toward a possible merger that could create a "national champion" in financial services.
Chancellor Angel Merkel's government has been urging the two Frankfurt firms to explore a cross-town tie-up to avoid either one being swal
lowed up by a foreign competitor and to create a muscular player that can finance Germany's export-driven companies.
The lenders, both grappling with painful restructurings after years of falling profits, have long been the subject of merger rumours.
Deutsche Bank said Sunday it was "reviewing strategic options and confirms discussions with Commerzbank", adding that "there is no certainty that any transaction will occur".
Commerzbank said both banks had "agreed on Sunday to start discussions with an open outcome on a potential merger".
If they do tie the knot, they would create a European banking behemoth with some 1.8 trillion euros ($2 trillion) in assets, close to France's largest bank BNP Paribas.
Deutsche Bank's market capitalisation is 16.1 billion euros while Commerzbank's is 8.9 billion euros.
Deutsche Bank's CEO Christian Sewing said in a letter to staff that "we have to assess opportunities as they arise" and that "consolidation in the German and European banking sector is an important topic for us".
"Our stated aim remains to be a global bank with a strong capital markets business — based on a leading position in our home market in Germany and in Europe, and with a global network."
A week ago Finance Minister Olaf Scholz sent up shares in both banks by confirming that "there are talks about the situation as it is" between the lenders, with the government a "fair companion" to the discussions.
On Sunday, his ministry said only that it had "taken note" of the start of formal talks and remained "in regular contact with all sides".
Critics of a potential deal have pointed to both Deutsche and Commerzbank's weakened state in the wake of the financial crisis, saying combining two ailing firms would not produce a healthy one.
"Putting two guys on crutches together doesn't make a sprinter," Markus Kienle of SDK, an association represent- ing small retail shareholders, quipped earlier this year.
Commerzbank is still partowned by the German state, after Berlin had to step in following its 2009 acquisition of troubled Dresdner Bank, and is part-way through a tough restructuring.
Deutsche is also reorganising, and only returned to the black last year after many years spent fighting the financial and legal fallout of its breakneck pre-crisis expansion.
Any potential tie-up would have to overcome a slew of hurdles -- from the headache of marrying the IT systems to dealing with cultural differences between the lenders, and the potential market challenges of recapitalising a giant with feet of clay.
Two German unions last Wednesday firmly rejected the idea of a merger between the top lenders.
Service workers' union Verdi charged the merger would make the combined banks "more attractive for a 'hostile' takeover, for example from France".
It warned that "at least 10,000 further jobs would be in grave danger" on top of thousands already slated to go amid the far-reaching restructuring projects. Nonetheless, marrying off Germany's two biggest private banks would fit with Berlin's new-found fervour to build up such titans.
Economy Minister Peter Altmaier has joined his French counterpart Bruno Le Maire in calling on the EU to relax merger rules and allow the creation of world-spanning businesses, after Brussels rejected a tie-up between Siemens' rail division and French trainmaker Alstom.
European banking supervisors have long urged mergers between lenders to create a more resilient financial sector -- but prefer cross-border marriages to avoid bundling together national problems.
A Frankfurt banking source with close ties to the public sector has said that Berlin clearly wanted to avoid the banks, whose low valuations have made them takeover targets, "falling into the hands of a foreign player".
If they do tie the knot, they would create a European banking behemoth with some €1.8 trillion ($2 trillion) in assets, close to France's largest bank BNP Paribas