Spotify Takes On Apple’s Anti-Competitive Behavior in Europe

Photo: Drew Angerer/Getty Images

Music-streaming service Spotify has filed a formal complaint against Apple this week, claiming that the iPhone maker has violated E.U. competition rules by using numerous tactics to try and ice out competitors. The announcement also comes with a spiffy new Spotify-branded site called Time to Play Fair.

“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 wrote in a statement. “After trying unsuccessfully to resolve the issues directly with Apple, we’re now requesting that the [European Commission] take action to ensure fair competition.”

The primary issues here are the 30 percent cut that Apple takes from almost every transaction that goes through its system, and the alleged preferential treatment that Apple gives to its first-party streaming option (and direct competitor to Spotify), Apple Music.

The 30 percent cut has long been a sticking point for app providers and Apple. The most prominent example is Apple’s standoff with Amazon over Kindle e-books, which it wanted a cut of. As a result, for the past few years, it has been impossible for users to buy Kindle books directly through the iOS app. Complicating things, there are plenty of transactions that flow through iOS that Apple doesn’t extract it’s 30 percent from — rideshare services and food delivery apps, for instance (the most obvious distinction is that these apps facilitate physical purchases, not just the purchase of digital goods and services).

Spotify Premium costs ten euros, but when offering subscriptions through in-app purchases, the price went up to 13 euros. Spotify passed the so-called “Apple tax” onto consumers. A case currently before the Supreme Court in the U.S., Apple v. Pepper, is also related to whether consumers can sue a company over the passed-on costs. Spotify no longer allows users to subscribe directly through iOS — and Apple’s policies prevent the company from telling users how to subscribe through other portals.

Spotify also contends that Apple gives its own services an unfair advantage by allowing them to violate rules third-party services must abide by, like sending push notifications offering savings, or preventing the use of iOS APIs to recommend podcasts. Apple “should not be allowed to control the communications between services and users, including placing unfair restrictions on marketing and promotions that benefit consumers,” Ek writes.

The case Ek lays out is a familiar story for anyone frustrated with the App Store, which is the only legit method for installing software on an iPhone. Spotify’s list of grievances, which the EC says it is reviewing, also mirrors much of Senator Elizabeth Warren’s recent proposal for limiting the anti-competitive behavior of big tech companies. Under her proposed rules, Apple would effectively be prevented from competing on the marketplace it runs. “Either they run the platform or they play in the store. They don’t get to do both at the same time,” Warren said at SXSW.

Spotify Takes On Apple’s Anti-Competitive Behavior in Europe