Spotify unveiled a complaint with the European Commission, the regulatory body of the European Union. It was about the way Apple uses the App Store to allegedly limit choice and stifle innovation.
The complain follows a blog post written by Spotify CEO Daniel Ek who says that Apple has tapped into “discriminatory tariffs” to put them at an advantage over the competition.
The post also explains some of the tactics behind those alleged tariffs. This includes an expensive “Apple tax” of 30 percent through the payment system.
Ek says that if Spotify ends up paying this tax, Apple Music would hold a monopoly on the streaming world in regards to the cost of membership. If Spotify were to actually pay the tax, they could not compete with Apple Music’s lower prices.
However, Ek says if they refuse to pay the Apple tax, then the company puts restrictions on Spotify’s reach. If that’s the case, not paying the tax diminishes users’ overall experience.
Ek cites Apple services such as Siri, HomePod and Apple Watch not being compatible with Spotify’s services.
“My goal for Spotify is and has always been to reimagine the audio experience by giving consumers the best creativity and innovation we have to offer,” Ek says. “For that to be a reality, it is my firm belief that companies like ours 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.”
You can read Ek’s full statement, which includes proposed solutions regarding Apple Music, here.
Now, Apple has defended itself in a statement against Ek. It says that the App Store has “helped create many millions of jobs, generated more than $120 billion for developers and created new industries through businesses started and grown entirely in the App Store ecosystem.”
“At its core, the App Store is a safe, secure platform where users can have faith in the apps they discover and the transactions they make. And developers, from first-time engineers to larger companies, can rest assured that everyone is playing by the same set of rules. That’s how it should be. We want more app businesses to thrive — including the ones that compete with some aspect of our business, because they drive us to be better.”
Apple also rejected Spotify’s claim that they were blocking the company’s access to products and updates.
“Spotify wants all the benefits of a free app without being free,” the statement claims. “A full 84 percent of the apps in the App Store pay nothing to Apple when you download or use the app. That’s not discrimination, as Spotify claims; it’s by design.”
“We share Spotify’s love of music and their vision of sharing it with the world,” the tech giant said. “Where we differ is how you achieve that goal. Underneath the rhetoric, Spotify’s aim is to make more money off others’ work. And it’s not just the App Store that they’re trying to squeeze — it’s also artists, musicians and songwriters.”
You can read Apple’s full statement here.
The Spotify claims come after the company came under fire for their controversial payment appeal. In the face of all the drama, many industry professionals and consumers have spoken out about Spotify and Amazon’s disproportionate pay rates, while relating said disbursements to competitors such as Apple Music.
As previously reported, a proposed increase in payouts would bump a song on Spotify’s pay from .003 cents per stream to .004 cents per stream, an increase of almost 44 percent.
What do you think of the Spotify/Apple dispute? Sound off in the comments below!