Founder and CEO of Spotify, Daniel Ek, posted “Consumers and Innovators Win on a Level Playing Field” on the Spotify Newsroom. In it, he announces that Spotify has filed a complaint against Apple with the European Commission (EC).
Daniel Ek starts by pointing out that his goal for Spotify is to reimagine the audio experience by giving consumers the best creativity and innovation they have to offer. For that to be a reality, his belief is that companies like Spotify 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.
Here are some key points from Daniel Ek’s post:
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 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.
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 email to our customers who use Apple. Apple also routinely blocks our experience-enhancing upgrades.
Here is what Spotify is asking for:
- 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.
- 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.
- App stores should not be allowed to control the communications between services and users, including placing unfair restrictions on marketing and promotions that benefit customers.
It will be interesting to see what the European Commission decides. If Spotify wins, it could open up the opportunity for other app makers, who are not pleased with Apple, to file their own complaints.