Spotify files European Union complaint against Apple's 'anticompetitive' App Store rules

Apple's bombshell and the trillion-dollar question

Apple's bombshell and the trillion-dollar question

Spotify has filed a complaint with European regulators arguing that Apple limits choice and competition in its app store, giving its own music streaming service an unfair advantage over rivals.

Apple's power as a platform hasn't yet triggered antitrust concerns in Europe, EU Competition Commissioner Margrethe Vestager told reporters in Austin, Texas, on March 10, before Spotify's complaint became public. For instance, the HomePod or Apple Watch is only compatible with Apple Music at the moment while Spotify is off bounds on both platforms.

According to Spotify, if it pays this tax, it would force it to artificially inflate the price of its premium membership well above the price of Apple Music. Spotify had 96 million paying subscribers at the last count in February, while Apple Music reportedly had 56 million subscribers at the end of 2018. In 2016, Spotify updated their payment policies to do just that, which caused Apple to respond by restricting app upgrades and limiting customer communication.

Spotify's complaint apart, there also seems to be a consensus building in the United States about the growing clout that several companies has begun to exercise on the masses or the market.

The primary issues here are the 30 percent cut that Apple takes from nearly 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. Spotify is claiming anti-competitive and discriminatory behavior on Apple's part with regards to the operation of the App Store. Spotify has provided an entire timeline of the events, going all the way back to 2010 when Apple started changing the guidelines for its App Store.

Central to Spotify's complaint, filed to the European Commission on Monday, is what it says is a 30 percent fee Apple charges content-based service providers to use Apple's in-app purchase system (IAP). While Spotify is available for free via Apple, upgrading to its Premium tier service can now only be done via the internet.

"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 said.

"All of these actions by Apple make it untenable for us as a competitor, and for us as a player in the global competitive ecosystem, to stand by and not take action", said Mr Gutierrez. Ek insists that Spotify isn't seeking special treatment in filing this motion. We want the same fair rules for companies young and old, large and small.