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Main » Spotify Files EU Antitrust over Fee in the Apple App Store

Spotify Files EU Antitrust over Fee in the Apple App Store

16 March 2019

The tax does not apply if people subscribe through a non-Apple device, such as on a desktop, and then use the service afterwards on an Apple device.

Apple controls both the iOS platform and its app store... which gets seedy when you consider that it also competes directly with some apps sold through that store (think: Apple Music vs. Spotify).

"Spotify is largely on the right side in both facts and principle, which creates risk that App Store policy terms will be forcibly changed in a way that negatively impacts Services revenue and Apple's brand", KeyBanc analyst Andy Hargreaves wrote in a note to clients. Chief Executive Daniel EK said they are left with no choice but to inflate their prices to absorb the 30 percent "tax" cut made by Apple. 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.

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The complaint asserts that, while the companies initially had a "symbiotic relationship" in 2009, once Apple became a direct competitor with its own Apple Music service, "their restrictions (on Spotify's app) started to become more frequent and extreme", Horacio Gutierrez, general counsel of Spotify told the Financial Times.

Technical and experience-limiting restrictions are imposed on Spotify that makes it hard to communicate with customers if they choose not to use Apple's payment system, Ek added. The announcement also comes with a spiffy new Spotify-branded site called Time to Play Fair.

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. And after Warren, it is Spotify who is chanting the same slogan - Apple is trying to eliminate competition. In some cases, we aren't even allowed to send emails to our customers who use Apple.

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The complaint was prompted by "an accumulation of increasing restrictions that we believe are extreme", he said. What the streaming music service wants, it claims, is to be free of the "Apple tax" in the same way that apps like Uber and Deliveroo are. "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.

Consumers win and our industry thrives when we're able to challenge each other on fair footing.

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Spotify Files EU Antitrust over Fee in the Apple App Store