Spotify has a new plan to combat Apple in Brussels.
The Swedish music streaming service said on Wednesday that it has complained to the European Commission’s antitrust enforcers that Apple unfairly favors its own music services over rivals.
One of its main criticisms is that Apple can command a 30 percent tax on companies such as Spotify through the company’s in-app payment system.
At heart, Spotify’s complaint centers around Apple’s dual role as both a digital distribution channel, with its own operating system iOS and app marketplace App Store, and as a music streaming provider: Apple Music.
Spotify claims that Apple uses its “complete control over access to its App Store to deprive consumers of choice and disadvantage rival providers,” Spotify’s General Counsel Horacio Gutiérrez said.
Spotify argues that Apple started to impose restrictions limiting its ability to operate in the market
Apple did not respond to requests for comment.
The dual role is “fine,” Spotify Chief Executive Daniel Ek wrote. “But in Apple’s case, they continue to give themselves an unfair advantage at every turn.”
Platforms acting as marketplaces for business users while offering competing goods or services is an increasing focus of many antitrust investigations, mostly against Google and Amazon.
Now Spotify has joined the battle.
“In all these situations, we talk about vertically integrated services where one company controls the marketplace and tries to steer consumers toward their products or services,” said Agustín Reyna, from the European consumer association BEUC. “The problem is that they are in a position in which we expect them to behave more neutrally, and not to favour their own services,” he added.
Apple can command a 30 percent tax on companies such as Spotify through the company’s in-app payment system| Eric Thayer/Getty Images
The Commission confirmed receipt of the complaint and said that it would “assess” whether to open an investigation.
Liaisons dangereuses
Spotify argues that Apple started to impose restrictions limiting its ability to operate in the market as early as 2011, in order to help the launch and the development of its own music streaming service.
“Even though we were successful as a company growing our business, we could have been even more successful,” Gutiérrez said.
“The most significant of the restrictions unilaterally imposed by Apple was the mandatory exclusive use of Apple’s [In-App Purchase],” its own payment system that Spotify originally sought to avoid, Gutiérrez said. Eventually, the Swedish company adopted Apple’s payment system in 2014, and paid 30 percent of the revenues created through the app.
Apple also limited Spotify’s ability to communicate with customers via the app, and blocked app improvements and upgrades when the company decided to opt out of Apple’s payment system in 2016, according to Gutiérrez.
Spotify is not alone in its fight against the Silicon Valley giant. “We support Spotify’s view,” said a spokesperson for Deezer, a French music-streaming app. “We want a fair playing field so that companies have to compete through innovation, content and customer focus.”
Apple, Google and Amazon are still allowed to give preferential treatment to their own services on their platforms.
The French company does not have plans to file a complaint but will monitor the developments, the spokesperson said.
Nothing new under the sun
In 2016, Spotify started building an antitrust case against Apple, arguing that the iPhone maker is limiting access to its music-streaming app in an effort to promote Apple Music.
Spotify then changed its strategy, turning to lobbying alongside other European companies. In 2017, the companies asked the European Commission to regulate the relations between tech giants and their business users with a legislation. The “imbalance” between online platforms and downstream business is too great to be resolved by competition law enforcement, the companies argued at the time.
The music-streaming app has changed tack, however, and has now resumed the competition approach, after the results of EU negotiations on the legislation regulating platform-to-business relations proved disappointing for the company.
Daniel Ek, chief executive officer of Spotify | Drew Angerer/Getty Images
Only transparency requirements survived the negotiations between the European Parliament and EU countries in the final text, after national governments made it clear they wouldn’t agree to stricter requirements.
Apple, Google and Amazon are still allowed to give preferential treatment to their own services on their platforms. Commissions are also still permitted, despite Spotify’s effort to obtain a ban on such practices. References to “fair terms and conditions” were scrapped.
The Observatory on the Online Platform Economy will be in charge of monitoring the relations between platforms and businesses.
For Spotify, that does not do the job.
“The moment a platform starts tilting the playing field with the specific intent of disadvantaging competitors … that’s the moment regulators need to intervene,” Gutiérrez said.