Apple may face EU investigation over Spotify’s complaint that App Store rules ‘purposely limit choice and stifle innovation’ to squash competition, as streaming war heats up
- The EU will investigate Apple after an anti-competition complaint filed in March
- Music streaming service, Spotify, says Apple puts companies at a disadvantage
- Among the complaints are steep fees for using Apple’s payment system
- The EU has shown willingness to take big tech companies to task in recent years
Apple will be the subject of an anti-competition investigation by the European Union according to a report by the Financial Times.
The investigation will focus on allegations by music-streaming platform, Spotify, who filed a complaint with the EU in March.
According to the company, Apple — which offers its own music streaming service called Apple Music — has unfairly used the popularity of its platform to put Spotify and other companies like it at a disadvantage.
This includes it’s operating system, iOS, and the App Store.
Spotify says Apple puts companies at a disadvantage by leveraging its App Store and iOS to lock companies out and charge them lofty fees. File photo
‘In recent years, 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 Spotify founder and CEO, Daniel Ek in a statement from March.
In addition to locking Spotify out of certain devices and features like the iPhone’s voice-assistant, Siri, and Apple’s smart-speaker, the Homepod, the company says it has been forced to contend with unfair financial and marketing restrictions relating to Apple’s App Store.
Specifically, Spotify says, Apple imposes a 30 percent tax on all sales made through its App Store.
If Spotify chooses not to pay the fee, it is then prevented from sending customers promotional and marketing material outside of the Spotify app.
If Spotify were to comply with Apple’s fee and opt-in to Apple’s payment system, it would be forced raise its monthly prices, which the company says would make it non-competitive with Apple’s own streaming services.
Throughout the past several years, the EU has shown a willingness to take big tech companies to task, including Google who was fined $1.7 billion in March for antitrust violations relating the the search giant’s ad practices.
Apple Music has been outpaced by Spotify worldwide. In April, Spotify announced that it has reached 100 million paid subscribers around the globe. File photo
Google’s March fine proceeds a $5 billion violation handed down by the EU last year. In the record-setting violation the EU said that Google abused its Android platform, leveraging its popularity to box out competition.
For Spotify, a successful complaint would represent a major boon for its service which, despite its popularity, has often struggled to achieve profitability. In February, Spotify announced that it turned the first quarterly profit in its 13-year history.
In spite of the company’s struggles to gain profitability, it has far outpaced the subscriber base of its competitors, including Apple.
Last month, Spotify announced that it has reached 100 million paid subscribers and more than 200 million subscribers worldwide. Latest numbers show Spotify’s subscriber base nearly doubles that of Apple’s which reportedly totaled 56 million users last month.
