Published: Thu, March 14, 2019
Industry | By Dora Warner

Spotify Files EU Complaint Against Apple Over 30 Percent App Tax

Spotify Files EU Complaint Against Apple Over 30 Percent App Tax

Music site Spotify has complained to European Union regulators about Apple, saying that the USA tech giant is abusing its dominant position in music streaming and hurting competition. It argues that Apple both has a vested interest in promoting its own services, such as Apple Music, and the opportunity to potentially limit those of rivals.

The case Ek lays out is a familiar story for anyone frustrated with the App Store, which is the only legit method for installing software on an iPhone. Complicating things, there are plenty of transactions that flow through iOS that Apple doesn't extract it's 30 percent from - rideshare services and food delivery apps, for instance (the most obvious distinction is that these apps facilitate physical purchases, not just the purchase of digital goods and services).

However, if Spotify ditched Apple's payment system.

Founder and CEO of Spotify Daniel Ek has spoken out in a blog post about Apple's rules on the App Store that "purposely limit choice and stifle innovation at the expense of the user experience".

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From there, Ek goes on to lament that if the company decides that situation is too onerous and doesn't want to use Apple's payment system as a way of getting around this, "Apple then applies a series of technical and experience-limiting restrictions on Spotify".

He said that if Spotify pays Apple's tax it would be forced to artificially inflate the price of its premium membership well above the price of Apple music.

Examples cited include limiting communications with Spotify customers and "routinely" blocking app upgrades. 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.

Spotify is also concerned that the company has been "locking Spotify and other competitors out of Apple services such as Siri, HomePod and Apple Watch", wrote Mr Ek. This central tension gives Tim Cook's behemoth what Ek calls "an unfair advantage at every turn"-whether by disallowing apps from promoting discounts, or by imposing the so-called "Apple tax".

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Meanwhile, other developers have also complained about Apple's constantly evolving App Store guidelines, which feels shifting goalposts that the company changes on a whim, often to suit its own interests while claiming to do so on behalf of its users.

Apple has been contacted for comment. Instead, the company is asking for fair set of rules that apple to everyone on the App Store, including Apple itself. He reckons the Apple-licensed "App Store" should remain objectively unbiased with the market place should remain inconquerable.

As I recently shared, competition pushes us to evolve and improve both the customer and creator experience.

On its website about the issue, Spotify said Apple only imposes the 30 percent fee on some apps.

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

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