Spotify files antitrust complaint against Apple with European Commission

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Spotify has filed an official antitrust complaint against Apple in Europe, contending that Apple unfairly limits choice and competition through the rules of its app store.

Spotify founder Daniel Ek outlined the reasons for the complaint in a post on the company’s website Wednesday titled “Consumers and Innovators Win on a Level Playing Field.”

“My goal for Spotify is and has always been to re-imagine the audio experience by giving consumers the best creativity and innovation we have to offer,” Ek wrote.

“For that to be a reality, it is my firm belief that companies like ours must operate in an ecosystem in which fair competition is not only encouraged, but guaranteed.

“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. After trying unsuccessfully to resolve the issues directly with Apple, we’re now requesting that the EC take action to ensure fair competition.”

As an example of Apple’s allegedly unfair practices, Ek cited the 30% tax that Spotify and other digital services must pay on purchases made through Apple’s payment system, including when Spotify users upgrade from Free to Premium packages.

Ek said that that put Spotify in the untenable position of having to raise prices for its customers, which it refuses to do.

The complaint also alleges that Apple routinely blocks Spotify’s upgrades, shutting it out from Siri and other services, and that Apple imposes other restrictions that can make it hard for Spotify to communicate with its users through the app.

Ek insisted that Spotify was not “seeking special treatment” and that “this is not a Spotify-versus-Apple issue.” He said Spotifying was requesting that “the same fair set of rules and restrictions” be applied to everyone – including Apple’s own Apple Music – and that app store users be given a choice of payment systems.

“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,” he wrote.

During a conference call with reporters after the announcement, Spotify general counsel Horacio Gutierrez and outside counsel Thomas Vinje of Clifford Chance generally repeated the talking points in Ek’s statement and the accompanying blog posts, however Gutierrez was asked several times about the timing of the move, considering the dispute began in 2015.

He was also asked whether it was related to other factors, such as Apple’s upcoming new subscription offers, which are expected to include video and news services, or last week’s appeal to the U.S. Copyright Regulatory Board over a rate increase, in which Apple Music is the only major streaming service not participating.

He replied that the situation has “reached a point where we believe that in the absence of regulatory intervention will not just hurt us but also other developers.” He said the timing was “completely unrelated” to other factors and “coincidental,” and that the issues with Apple have been present for a number of years. He also declined to provide insight into whether the company will make a similar move in the U.S.

In answer to a question about whether the matter is really about competition, considering that Apple is much less dominant in Europe than in the U.S., Gutierrez praised Apple, saying

“We ourselves respect and have licensed their products very much, it’s the way they’re behaving in the audio space with their role as the owner of the platform — they’re moving away from the neutrality that a platform is supposed to have.”

 

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