Music

Spotify Is Accusing Apple Of Using ‘Discriminatory’ Business Practices To Gain An ‘Unfair Advantage’

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Spotify and Apple Music are the two major players in the streaming music market: While Spotify’s global paid subscriber total of 96 million is nearly double Apple Music’s 50 million, it was reported last summer that Apple Music has more US subscribers. Apple Music is growing quickly, but now Spotify is accusing Apple of using “discriminatory” business practices to give itself an unfair advantage over Spotify.

Spotify founder and CEO Daniel Ek shared a post today in which he revealed that Spotify has taken action against Apple, writing, “My goal for Spotify is and has always been to reimagine the audio experience by giving consumers the best creativity and innovation we have to offer. 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.”

The complaint focused on Apple’s App Store policies, and as an example, Ek talked about how services like Spotify have to pay a 30 percent tax on purchases completed using Apple’s payment system, and how Apple has “routinely” blocked “experience enhancing upgrades” to Spotify:

“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.

As an alternative, 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–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.”

Ek noted that apps like Uber aren’t subject to the “Apple tax,” and that Spotify isn’t looking for special treatment, just equal treatment. He then laid out three changes he would like to see made to Apple’s App Store:

  • “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.”

Read Ek’s full post here.

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