Spotify Smacks Apple with Antitrust Complaint over Predatory 30% ‘Tax’
Originally published on: CCN
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March 13, 2019
Spotify has lodged a formal complaint with antitrust investigators at the European Commission (EC), over Apple’s “unfair” policies, including a predatory 30% “tax” on its competitors.
Spotify Files Blockbuster Antitrust Complaint Against Apple
The CEO and founder of the Swedish streaming site, Daniel Ek, accused Apple of stifling innovation in the multi-billion dollar music streaming industry and using its dominant market position to suppress competitors.
Daniel Ek, who founded the $26 billion Spotify, which is a direct competitor to Apple’s own Music service, says some of the company’s policies deliberately limit consumer choice and stymie innovation in the space.
He says that because of its ownership of the iPhone operating system, iOS, and the App Store, Apple is giving itself an “unfair advantage at every turn.”
Echoing claims made by US presidential candidate Elizabeth Warren, who last week argued that the government should break up tech giants like Apple, Facebook, and Google, Ek said:
“It’s why, after careful consideration, Spotify has filed a complaint against Apple with the European Commission (EC), the regulatory body responsible for keeping competition fair and nondiscriminatory. In recent years, Apple has introduced rules to the App Store that purposely limit choice and stifle innovation at the expense of the user experience—essentially acting as both a player and referee to deliberately disadvantage other app developers.””
In a blog post Ek says after trying, unsuccessfully, to resolve the issue with Apple directly, he decided to take the next step and ask regulators the EC to step in and take action to “ensure fair competition.”
Daniel Ek: Apple ‘Routinely Blocks’ Spotify
Outlining his reasons for lodging the complaint, Ek says that Apple requires Spotify and “other digital services” to pay a 30% tax on purchases made through the company’s payment system, even if a Spotify listener wants to upgrade from its free to premium service.
He says Apple also “routinely blocks” Spotify services, which he says has led to Spotify being locked out of other services such as voice assistant Siri, HomePod speaker, and wearables, deliberately denying consumers access to Spotify features.
My thoughts on Platform neutrality and how we ensure a level playing field. https://t.co/64xob6mdAN
— Daniel Ek (@eldsjal) March 13, 2019
Now, reiterating comments he made in July last year, Ek is calling for the European Commission to step in and support a “level playing field” so his company, and others, can enjoy the same treatment as Uber and Deliveroo, who he says aren’t subject to the “Apple tax.”
Listing the changes he would like to see implemented, he said:
“First, apps should be able to compete fairly on the merits, and not based on who owns the App Store. We should all be subject to the same fair set of rules and restrictions—including Apple Music.”
“Second, consumers should have a real choice of payment systems, and not be ‘locked in’ or forced to use systems with discriminatory tariffs such as Apple’s.”
“Finally, app stores should not be allowed to control the communications between services and users, including placing unfair restrictions on marketing and promotions that benefit consumers.”
A spokesperson for the European Commission confirmed to CCN a formal complaint had been lodged with them.
“The Commission has received a complaint by Spotify, which we are assessing under our standard procedures.”
Spotify Tells Apple it’s ‘Time to Play Fair’
Spotify was founded in Stockholm, Sweden in 2006, two years before it was launched in 2008. In 2018 the company went public and was listed on the New York Stock Exchange.