Published: Sat, March 16, 2019
Markets | By Otis Pena

Spotify lodges antitrust complaint against Apple

Spotify lodges antitrust complaint against Apple

Spotify ended support for Apple's in-app subscription payments system for its premium service in 2016.

Music-streaming service Spotify has filed a formal complaint against Apple this week, claiming that the iPhone maker has violated European Union competition rules by using numerous tactics to try and ice out competitors.

Spotify has filed a complaint with European regulators over Apple's "unfair" app store practices, including the 30% commission that Apple pockets with every app purchase.

Spotify says that Apple's hefty cut of App Store revenues, which forces many developers to increase prices, is unfair. In the US, Spotify covers these costs by charging people $12.99 per month for subscriptions completed via the App Store; it's $9.99 if you subscribe directly via Spotify's website and then sign in via the iOS app.

Spotify, which launched a year after the 2007 launch of the iPhone, said on Wednesday that Apple's control of its App store deprived consumers of choice and rival providers of audio streaming services to the benefit of Apple Music, which began in 2015. Spotify also accuses Apple of blocking upgrades or disrupting the Spotify app's function on Apple services in return for not using the payment system.

Spotify has created a site called Time To Play Fair which highlights what Apple does that they deem unfair and the changes that need to happen.

Spotify files antitrust complaint to Brussels against Apple

The primary issues here are the 30 percent cut that Apple takes from nearly every transaction that goes through its system, and the alleged preferential treatment that Apple gives to its first-party streaming option (and direct competitor to Spotify), Apple Music.

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.

Ek also explained that digital services like Spotify have to pay a 30% tax whenever there are purchases made through Apple's payment system, and this includes Spotify users upgrading their Spotify memberships. We simply want the same treatment as numerous other apps on the App Store, like Uber or Deliveroo, who aren't subject to the Apple tax and therefore don't have the same restrictions.

Some companies, like Netflix, have opted out of Apple's 30 percent tax. "After trying unsuccessfully to resolve the issues directly with Apple, we're now requesting that the [European Commission] take action to ensure fair competition".

Consumers should have a real choice of payment systems, and not be "locked in" to one particular service. Ek insists that Spotify isn't seeking special treatment in filing this motion. 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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