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Spotify calls out Apple's anti-competitive behaviour

15 Mar 2019

Spotify is getting is claws out and going head to head against Apple’s attempts to push its own products before anybody else’s. 

The company has filed a complaint to the European Commission against Apple. The European Commission is a regulatory body that concentrates on making competition both fair and non-discriminatory.

The issue is that Spotify and other digital services have to pay tax on services made through Apple’s payment system. If Spotify doesn’t pay that tax, Apple can stop Spotify from doing a number of other things, including locking Spotify out of Apple services.

According to Spotify founder and CEO Daniel Ek, Apple has restricted its App Store rules that, in his words, “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”.

Because Apple hasn’t cooperated with Spotify on fixing the issues, Spotify is taking the issue even higher.

Ek says that Apple owns iOS and the App Store and it’s also a competitor to Spotify. The trouble is, he suggests, that Apple gives itself an unfair advantage.

“Apple requires that Spotify and other digital services pay a 30% tax on purchases made through Apple’s payment system, including upgrading from our Free to our Premium service. 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. And to keep our price competitive for our customers, that isn’t something we can do.”

Well, what if Spotify chooses not to use Apple’s payment system and forgoes charges? It gets stifled.

“Apple then applies a series of technical and experience-limiting restrictions on Spotify. For example, they limit our communication with our customers—including our outreach beyond the app. 

“In some cases, we aren’t even allowed to send emails to our customers who use Apple. Apple also routinely blocks our experience-enhancing upgrades. Over time, this has included locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch.”

While some may think Spotify is just trying to play its competitor, Ek says the company doesn’t want special treatment. It just doesn’t want to be subject to the Apple tax.

He says that Spotify is asking for:

“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.”

He says that it’s not a Spotify-vs-Apple issue as such – it’s about trying to get the same fair rules for all companies and on the same footing.

“That’s what competition on the merits is all about.”

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