Spotify Files European Antitrust Complaint Against Apple

Streaming music giant Spotify has filed an anti-competition complaint against Apple with the European Commission, the regulatory body of the European Union.

“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,” Spotify CEO Daniel Ek said in a Wednesday blog post. “After trying unsuccessfully to resolve the issues directly with Apple, we’re now requesting that the EC take action to ensure fair competition.” 

Continued Ek: “Apple operates a platform that, for over a billion people around the world, is the gateway to the Internet. Apple is both the owner of the iOS platform and the App Store — and a competitor to services like Spotify. In theory, this is fine. But in Apple’s case, they continue to give themselves an unfair advantage at every turn.”

The Spotify boss cited an example. “Apple requires that Spotify and other digital services pay a 30 percent tax on purchases made through Apple’s payment system, including upgrading from our free to our premium service,” he said. “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.” He added: “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. For example, they limit our communication with our customers.”

Ek argued that Spotify isn’t looking for “special treatment,” but wants “the same treatment as numerous other apps on the App Store, like Uber or Deliveroo.” 

He outlined Spotify’s requests this way: “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.”

Horacio Gutierrez, Spotify’s general counsel and vp, on a call with reporters said the two companies started their relationship in 2009 as a “symbiotic” one, but it has since become “far less pleasant.” He argued that Apple is now acting as “player and referee,” which has given it an incentive to “disadvantage” select services that compete with it. The executive said Spotify is looking for “a level playing field.” He mentioned that on the Google Play Store, for example, the company isn’t forced to use Google’s pay system.

Gutierrez didn’t share how big a financial hit Spotify thinks it has taken due the Apple App Store rules, but said the company would be even more successful than it has been if Apple hadn’t implemented a “tilted” playing field.

The general counsel declined to comment when asked whether he expects other digital players, such as Netflix, to join the complaint, but said other companies are “equally frustrated.”

Asked if Spotify will bring a similar complaint in the U.S., Gutierrez said: “At this point, we are focused on this action.”

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