EU to Investigate Apple Over Spotify's Antitrust Complaint

Apple is to be formally investigated by the European Commission after Spotify accused the company of using the App Store to deliberately disadvantage other app developers.


According to a report by the Financial Times, EU competition commission has decided to launch a formal antitrust investigation into Apple's conduct "in the next few weeks" after surveying customers, rivals and others in the market.

Spotify in March filed an antitrust complaint against Apple with the EU in which it argued that the iPhone maker enforced ‌App Store‌ rules that "purposely limit choice and stifle innovation at the expense of the user experience."

Apple swiftly hit back at the accusation, labeling it as "misleading rhetoric" and arguing that "Spotify wants all the benefits of a free app without being free."

Spotify's complaint focuses on Apple's policy of charging a 30 per cent fee on ‌App Store‌ purchases, which means Spotify has to charge existing subscribers $12.99 per month for its Premium plan via the ‌App Store‌ just to collect its standard $9.99 per month charge.

Spotify CEO Daniel Ek claimed that the policy gives Apple an "unfair advantage," since Spotify is unable to fairly compete with Apple Music's standard $9.99 per month price within the ‌App Store‌.

Alternatively, if Spotify chooses not to collect payments via the ‌App Store‌, Ek said that Apple "applies a series of technical and experience-limiting restrictions" on the company. Over time, this has also included "locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch."

The EU can force companies to change business practices they deem unlawful and levy fines of up to 10 per cent of a company's global turnover. However, investigations by the European Commission can take years to resolve unless the companies involved offer to settle the probes by making legally binding agreements to change their behavior.

For further details on each company's stance on the issue, see Spotify's Time to Play Fair website and Apple's press release addressing Spotify's claims.

Top Rated Comments

(View all)
Avatar
18 months ago

Spotify is definitely sounding greedy here, how dare they be held to the same standard as other app makers.

May be because other app makers don’t face a first party competition from Apple
Score: 39 Votes (Like | Disagree)
Avatar
18 months ago
I hope Spotify win! The lengths Apple goes to, to avoid Spotify collecting 100% of their profits is disgusting. I’m glad 100% of my money goes to them, instead of just 70%.
Score: 38 Votes (Like | Disagree)
Avatar
18 months ago

I hope Spotify win! The lengths Apple goes to, to avoid Spotify collecting 100% of their profits is disgusting. I’m glad 100% of my money goes to them, instead of just 70%.

I think you have been out in the Aussie sun a little too long my friend! Do you think, when you walk into a supermarket and see "brand name" products there, that the brands get 100% of the price charged? Of course not, the "retailer" makes a profit because they have invested heavily in infrastructure and building up a customer base which the brand benefits from in exchange for giving the retailer a profit...basic economics...

Now, in terms of Spotify (the "brand name") not being able to compete with Apple (the supermarket "own brand" products) on price...again this is nothing new! Here in the UK you often see a supermarket's "own brand" versions of "brand name" products on sale right alongside, and usually significantly cheaper as well. Those that by the "brand name" do so because they feel it is a better product or because of customer loyalty.

In the Spotify/Apple scenario, Spotify wants to not pay anything to the "retailer" (Apple/iOS App Store) for all of the infrastructure they have developed and the inherent costs (however small they may be) of hosting and fulfilling the downloads, let alone the costs associated with actual payment processing if the monthly subscription is billed through the App Store. They then cite it as anti-competitive behaviour which is just ludicrous! So if Apple decides to price Apple Music at $4.99 per month will Spotify then demand $5 per month per user from Apple because it's "uncompetitive" for Apple to offer a similar product at a cheaper price? Sounds ridiculous doesn't it? But how is that different from exactly what they are proposing now?

Spotify are completely at liberty to price their product/service however they choose, and equally Apple, as a retailer, is completely at liberty to set their own "mark up" on third-party products that they sell on their own store. I would understand the anti-competitive narrative if Apple routinely charged 10% but were charging direct competitors 30%...but that's not what is happening. All apps on the App Store are subject to the same T&C's. Basically, Spotify want all of the benefits of the App Store and the Apple platform but don't want to pay for the privilege of being "stocked" at the App Store.

Not being on the App Store doesn't mean that they can't sell subscriptions. They routinely sell them on their website in fact. But it seems like they want access to all of the Apple customers but don't want to pay for it! Apple has invested billions of dollars in R&D and marketing over the last decade to build its iOS platform into what it is today with the huge user-base that it has. Spotify seems to feel entitled to have access to those customers for free just because Apple creates a competing product. Spotify could just leave the price at $9.99 in the App Store and accept that 30% as a cost of doing business in the same way that most B2C companies have "cost of sale" considerations.

Look at it this way, if they didn't have their app on the App Store and no way for iPhone users to use Spotify on their phone then some percentage of those iPhone users would still subscribe to Spotify (for laptop/browser use) but a good number wouldn't. Let's then say that they put their app on the App Store (at $9.99 per month) and they then pick up an additional 10 million subscribers that they didn't have before. Their revenue will now be $70 million per month more versus not having a presence on the App Store. I would consider that worthwhile but no, they won't be happy with $70 million...they want the whole $100 million because it's "unfair" that Apple can make more money than they do...even though Apple invested huge amounts of money in the tech and the platform...
Score: 37 Votes (Like | Disagree)
Avatar
18 months ago

Do you know what Spotify does? Can you even imagine the amount of data that goes through their servers? Hosting the app is really the least service they'd need.
Their position is that they shouldn't be forced to pay $36/year per subscription when their competitor pays $0 because it controls the platform.

Apple should just allow Spotify to put in the "Subscribe" button that linked out to Spotify.com page so consumers can choose whether they want to pay Spotify directly or not.

No need for bloodshed like this. No need for the 30% cut since the purchase system is handled directly by Spotify.

This is fair and square since Apple Music also put in the giant "Try It Free" button inside the Music app that redirects to AppStore subscription page.
Score: 23 Votes (Like | Disagree)
Avatar
18 months ago
Three post and no "It's their store then can do what they want" yet, may be there's hope...
Score: 21 Votes (Like | Disagree)
Avatar
18 months ago

Spotify is definitely sounding greedy here, how dare they be held to the same standard as other app makers.

Right, not paying 30% for nothing is now considered greedy. Are you a greedy person? I'll be glad to send you my bank details so you can put your money where your mouth is.
Score: 21 Votes (Like | Disagree)

Top Stories

iOS 14 Widgets Offer iPhone Users Creative Home Screen Ideas

Sunday September 20, 2020 8:43 pm PDT by
Updated on September 22nd with hands on video. In iOS 14, Apple introduced ‌the concept of Home Screen‌ widgets, which provide information from apps at a glance. Widgets can be pinned to the Home Screen in various spots and sizes, allowing for many different layouts. Despite the relative lack of...

iPhone 12 Lineup Rumored to Be Named 'iPhone 12 mini,' 'iPhone 12,' 'iPhone 12 Pro,' and 'iPhone 12 Pro Max'

Monday September 21, 2020 5:24 am PDT by
Leaker known as "L0vetodream" has today shared the alleged naming for the upcoming iPhone 12 lineup on Twitter. The tweet proposes that the upcoming iPhone 12 models will be titled "iPhone 12 mini," "iPhone 12," "iPhone 12 Pro," and "iPhone 12 Pro Max." The names likely correspond to the three expected sizes of iPhone 12, with the 5.4-inch model being the iPhone 12 mini, the 6.7-inch model ...

PSA: New Apple Watch Owners Have to Return Entire Device for Ill-Fitting Solo Loop or Braided Solo Loop

Monday September 21, 2020 3:26 pm PDT by
With the Apple Watch Series 6, Apple introduced two new band options, the Solo Loop and the Braided Solo Loop. These new bands are unique because they have no clasps, buckles, or other fasteners, and instead use a stretch design to allow them to pull onto the wrist over the hand. Because these bands are not adjustable, Apple sells each one in nine different sizes to make sure each person...

Hands-On With iOS 14 Widgets, Custom Icons, and Home Screen Setup

Tuesday September 22, 2020 3:25 pm PDT by
Apple with iOS 14 introduced widgets on the Home Screen, leading to unprecedented levels of customization for the iPhone. Combined with Shortcuts that let you change an app's icon, iOS 14 lets you create a whole new look for your Home Screen. Subscribe to the MacRumors YouTube channel for more videos. We've been following along with some of the creative alternative Home Screen designs that M...

Apple Releases First Public Betas of iOS 14.2 and iPadOS 14.2 With New Shazam Control Center Options

Monday September 21, 2020 10:34 am PDT by
Apple today seeded the first public betas of upcoming iOS 14.2 and iPadOS 14.2 updates to its public beta testing group, a few days after seeding the first betas to developers and a little less than a week after releasing the iOS 14 and iPadOS 14 updates. Public beta testers who have signed up for Apple's beta testing program can download the iOS and iPadOS‌ 14.2 updates over the air after ...

Microsoft Announces Outlook for Mac Redesign, Improvements to iOS and watchOS Apps

Tuesday September 22, 2020 8:56 am PDT by
Microsoft has today announced plans to bring a new design to its Outlook for Mac app along with several other improvements and features for Outlook on iOS and watchOS. In preparation for the public release of macOS Big Sur, Microsoft has been testing a new design for Outlook on Mac. The design includes Microsoft's Fluent icons and several design cues from Big Sur such as rounded corners....

Kuo: Apple to Accelerate Adoption of Mini-LED Displays in iPad and Mac Notebook Lineups

Sunday September 20, 2020 10:00 pm PDT by
Increased competition among Apple's suppliers for mini-LED display chips will accelerate the company's adoption of the advanced technology in its iPad and MacBook lineups, according to a new research note from analyst Ming-Chi Kuo seen by MacRumors. Kuo says that while Epistar had been predicted to be the exclusive supplier of mini-LED chips for Apple products in 2021, Sanan Optoelectronics...

Interest in iOS 14 Home Screen Ideas Helps Pinterest Break Daily Download Record

Wednesday September 23, 2020 4:37 am PDT by
Apple's introduction of widgets on the Home Screen in iOS 14 has driven a surge in interest among users looking to customize their iPhone, and that has reportedly had a knock-on effect for Pinterest, whose iOS app has seen record downloads as users flock to its content seeking design inspiration. As reported by TechCrunch, App Store intelligence firm Apptopia was first to note the impact of ...

Apple Releases Eighth Beta of macOS Big Sur to Developers [Update: Public Beta Now Available]

Tuesday September 22, 2020 10:08 am PDT by
Apple today seeded the eighth beta of an upcoming macOS Big Sur update to developers for testing purposes, close to a week after releasing the sixth beta and more than two months after the new update was unveiled at the Worldwide Developers Conference. The macOS Big Sur beta can be downloaded through the Apple Developer Center and once the appropriate profile is installed, subsequent betas...

AT&T Already Working on 6G, Says 5G iPhones Might Not Be 'Massive Event' Due to Economic Uncertainty

Monday September 21, 2020 10:05 am PDT by
Apple's upcoming launch of 5G iPhones might not be a "massive event" due to economic uncertainty amid the global health crisis, AT&T Communications CEO Jeff McElfresh said in a paywalled interview published by CNBC. "I do believe that you will see many of the iPhone subscribers move to upgrade to the device," said McElfresh. "But I wouldn't forecast that it's going to be a massive event. I...