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Apple's 30% app store commission unfair, Spotify claims

14 March 2019

While Spotify is available for free via Apple, upgrading to its Premium tier service can now only be done via the internet.

Music-streaming service Spotify has filed a formal complaint against Apple this week, claiming that the iPhone maker has violated European Union competition rules by using numerous tactics to try and ice out competitors. The complaint centers on Apple's App Store, which Spotify CEO Daniel Elk said gives Apple's own applications and services-including Spotify competitor Apple Music-"an unfair advantage at every turn". This fee is largely responsible for Apple's $10 billion in services revenue per quarter, with relatively small amounts from licenses (default search engines etc.), subscriptions such as Apple Music, and Apple Pay and Apple Care for the remaining. He mainly blames Apple's store policy.

Chief executive Daniel Ek blasted what he called an "Apple tax" which forces his company to pay a 30 per cent commission for sales made via Apple's payment system. Apple charges the fee to all subscription apps that bill via the App Store.

We aren't seeking special treatment. If Spotify chooses not to use the payment system and avoid the 30 percent charge, Ek said, Apple can complicate matters for Spotify, such as limiting its ability to communicate with customers or blocking upgrades. He continued saying, "For example, they limit our communication with our customers-including our outreach beyond the app". Ek adds that Apple also "routinely blocks our experience-enhancing upgrades".

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Spotify wants the same treatment as other App Store apps like Uber and Deliveroo, "who aren't subject to the Apple tax and don't have the same problems".

"Once Apple became a platform provider, but also a direct competitor, their incentive to disadvantage rival services, like Spotify, became even greater and their restrictions started to become more frequent and extreme", Horacio Gutierrez, Spotify's general counsel, told journalists in a briefing in Brussels on Wednesday.

Ek accused Apple of using the App Store as a way to stifle market competition. Apple did not immediately respond to a request for comment. "We should all be subject to the same fair set of rules and restrictions, including Apple Music".

Spotify said it was forced to "artificially" increase monthly subscriptions for its premium service via the Apple App Store. Also, that consumers should have the choice of using whichever payment system they want within the apps and that developers should not be prevented from communicating with its users when it comes to marketing and promotions. Through their app stores, the two tech giants have for years acted as gatekeepers to iPhone and Android users, dictating how many people shop for apps and pay for their services. That's what competition on the merits is all about.

Apple's 30% app store commission unfair, Spotify claims