Spotify yesterday filed an antitrust complaint against Apple with Europe’s competition watchdog, saying App Store’s 15-30 percent levy on iOS subscriptions is unfair and anti competitive. The lawsuit could set a major precedent because it might radically shake up the App Store economics should Apple be found guilty of anticompetitive behavior.
Spotify CEO Daniel Ek said Apple’s terms of business “purposely limit choice and stifle innovation at the expense of the user experience” because the company is acting as both “a player and referee to deliberately disadvantage other app developers.”
“First, apps should be able to compete fairly on the merits, and not based on who owns App Store,” Ek underscored. “We should all be subject to the same fair set of rules and restrictions—including Apple Music.”
Apple’s fees prompted Spotify to charge its subscribers an increased fee of $13 per month to be able to collect about $10 per month (after Apple’s cut) that it charges normally.
The problem is, Ek says, Apple does not make life any easier for programmers who opt for selling subscriptions outside of their app because of “a series of technical and experience-limiting restrictions” that the company imposes on them.
“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,” he continued.
Here’s Spotify’s message to Apple…
One of Apple’s stupid rules requires that developers who offer subscriptions on the web must not promote nor even mention them in their app. That’s why the Netflix app, which bypasses iTunes billing, lets you sign in with existing credentials but offers no information whatsoever on where and how a subscription can be purchased online.
Apple’s made $156 million in revenue over the past 4 years from Spotify, says Business Insider:
Spotify is both a competitor and a nice little side-earner for Apple, with the Swedish streaming service handing over $156 million in subscription fees to the iPhone maker over the past four years.
According to estimates given to Business Insider by app analytics company Sensor Tower, Spotify made $670 million from subscribers on iOS between 2015 and 2018. Thanks to Apple’s levy on in-app purchases and subscriptions, Spotify was forced to hand over about a fifth of that revenue to Apple.
Ultimately, 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,” accordion to Ek’s blog post.
Learn more about this case via Spotify’s micro-site at timetoplayfair.com.
It’s unclear if the European probe might spur a parallel antitrust investigation back in the States, but it’s certainly plausible given the growing complaints of Big Tech and Senator Elizabeth Warren’s wide-reaching new plan to break up major companies, including Apple.
What do you think about Sptofiy’s complaint?
Is there any merit to Spotfiy’s claim of Apple’s anti-competitive behavior or is the company simply jealous that Apple Music has been catching up in terms of paid subscribers?
And should US regulators be aiming at Apple over this, do you think?
Let us know by leaving a comment below.