In a move with implications for app makers everywhere, Spotify is asking EU antitrust officials to investigate Apple, and its control over the music streaming industry.
Although Spotify and Apple have bickered for years, filing a complaint with the European Commission (EC) was not a decision that Spotify founder-CEO Daniel Ek made lightly.
“After trying unsuccessfully to resolve the issues directly with Apple, we’re now requesting the EC take action,” Ek said in a blog post.
Among other offenses, “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,” said Ek.
Ek takes particular issue with Apple requiring Spotify and other digital services to pay a 30% tax on purchases made through its payment system.
If Spotify chooses not to use Apple’s payment system, the tech titan then applies what Ek calls “a series of technical and experience-limiting restrictions” on the service. “For example, they limit our communication with our customers … including our outreach beyond the app.”
It’s not likely a coincidence that Spotify’s request comes amid growing calls for tech industry regulation around the world.
Indeed, U.K. policymakers recently called on the Competitions and Market Authority (CMA) to conduct a comprehensive audit of the top digital platforms.
Back home, Sen. Elizabeth Warren recently launched a crusade to break up the country’s tech giants, which she believes have amassed far too much power and influence. In theory, Apple CEO Tim Cook has expressed an openness to government regulation.
“Generally speaking, I am not a big fan of regulation,” Cook said during an interview with Axios on HBO. “I’m a big believer in the free market. But we have to admit when the free market is not working. And it hasn’t worked here.”
Analysts warn that what Spotify is asking for could seriously sting Apple, as the Swedish streaming giant makes a convincing case.
“We believe 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,” according to an analyst note from KeyBanc.Regarding Apple’s 30% tax on third-party services, KeyBanc analysts say it serves “no practical purpose other than to force competitive services into higher cost structures and unfairly tax service activity on the iOS platform.