Published: Thu, May 09, 2019
Electronics | By Kelly Massey

Apple could face an European Union investigation over complaint from Spotify: FT

Apple could face an European Union investigation over complaint from Spotify: FT

EU's competition commission chose to launch the investigation into Apple's conduct after surveying customers, rivals and others in the market. Regarding the 30 percent royalty, Apple says that's only for the first year of an annual subscription, and that Spotify conveniently leaves out that it drops to 15 percent in the years after.

The case centres around the way Apple take a cut of 30 percent from all subscription fees made via its Apple Store. Spotify is very much being proactive in its battle with Apple, and has lodged a complaint with the European Union over Apple's business practices. "If we pay this tax, it would force us to artificially inflate the price of our Premium membership well above the price of Apple Music", he wrote. The confrontation came amid Apple's efforts in new business areas that compete with third-parties on its platform, such as music streaming services.

Back in March, music-streaming giant, Spotify launched "It's time to play fair" campaign where the company laid out reasons that revealed how Apple wasn't allowing competitors a fair.

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While Spotify has a total of 217 million monthly active users worldwide, Apple Music only has 50 million users from around the globe.

He further went on explaining, "As an alternative, if we choose not to use Apple's payment system, forgoing the charge, Apple then applies a series of technical and experience-limiting restrictions on Spotify". Spotify in turn said that Apple routinely blocked a few of its product upgrades like integration with the Apple Watch and the Siri digital assistant.

Apple responded to Spotify's complaint by saying that it has "approved and distributed almost 200 app updates on Spotify's behalf, resulting in over 300 million downloaded copies of the Spotify app". "Spotify is asking to keep all those benefits while also retaining 100 percent of the revenue". EU's regulators haven't exactly been shy when it came to imposing large fines on tech companies over antitrust regulations breaches.

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