Spotify complains Apple is anti-competitive
Streaming service says app store fee undercuts rival companies
In an escalation of a long-simmering feud between the world’s two largest music platforms, Spotify said Wednesday it filed a complaint with European regulators against Apple, saying it uses its App Store to undercut companies that compete with its services, including Apple Music.
Apple has long frustrated app makers by charging a fee of up to 30 per cent on anything sold through its App Store. Now Spotify is telling the European Commission, an aggressive regulator of the tech industry, that the policies are more than just a costly nuisance, but a “tax” that violates competition laws and merits an investigation.
Apple serves as a make-or-break gatekeeper in the app economy. In order to be available on the App Store and reach the millions of owners of iPhones and iPads, companies must pay a percentage of sales to Apple and meet other guidelines.
The rules have been particularly frustrating for companies such as Spotify that compete with Apple. Spotify and Apple Music are the world’s largest music streaming services.
“They continue to give themselves an unfair advantage at every turn,” Daniel Ek, Spotify’s chief executive, said in a message posted on the Swedish company’s website. He said Apple is acting as both “player and referee to deliberately disadvantage other app developers.”
Apple didn’t immediately respond to a request for comment. The company has said the fees are reasonable given that it must maintain the App Store and is providing access to millions of potential customers who own Apple devices.
The European Commission has a history of investigating online platforms accused of abusing their power. Last year, it fined Google about $5.1 billion (U.S.) for antitrust abuses related to its Android platform, and forced Google to effectively loosen its grip over the software. Google is appealing.
Apple’s introduction of the App Store in 2008 revolutionized the mobilephone industry, creating a new marketplace for consumers to download games, productivity tools and social networking services. There are now more than two million apps available on the App Store.
But Apple’s control over the marketplace has been an increasing source of tension, particularly as the company has shifted its business to focus more on online services that compete with many of the apps sold on its platform. Spotify said Apple is continually changing its policies to harm competitors.
“Apps should be able to compete fairly on the merits, and not based on who owns the App Store,” Ek said.
“We should all be subject to the same fair set of rules and restrictions — including Apple Music.”
Questions about Apple’s dominance in the app market aren’t limited to Europe. In the United States, the Supreme Court is considering a suit brought by consumers that Apple’s control over the App Store represents an unfair monopoly, forcing customers to pay higher prices than they would in a more competitive market.
Spotify in recent years has taken steps to avoid paying Apple’s 30 per cent fee, sending customers to an outside website to make a payment rather than processing charges within its app.
Netflix, Amazon and others have made similar moves.
Spotify said Apple punishes companies that don’t pay the fees, including restricting their ability to communicate with customers and blocking the release of app updates.