CEO Daniel Ek says paying the 30 percent “Apple tax” in the App Store forces Spotify to “artificially inflate” its prices compared to Apple Music
Spotify filed an antitrust complaint against Apple with the European Commission on Wednesday, blasting the tech giant for an “unfair advantage” that allows it to price its services below its competitors.
Spotify chief Daniel Ek said in a blog post Apple stifles its competition by charging a 30 percent tax to digital services on its App Store, forcing Spotify to “artificially inflate” the price of its plans — putting it at a disadvantage against Apple Music, its chief rival, in the process. Ek said not paying the tax is unfeasible, too, since it would severely limit Spotify’s tech capabilities on iPhone.
“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,” Ek said. “After trying unsuccessfully to resolve the issues directly with Apple, we’re now requesting that the [European Commission] take action to ensure fair competition.”
A rep for Apple Music did not immediately respond to TheWrap’s request for comment. Apple launched Apple Music in 2015. The streaming service had 56 million customers at the end of 2018, while Spotify reported last month it has more than 200 million monthly users, including 96 million paying customers.
Ek said its unfair that Spotify has to pay the “Apple Tax” while other apps like Uber aren’t impacted.
He said Spotify is seeking two things with its filing:
— “First, apps should be able to compete fairly on the merits, and not based on who owns the App Store. We should all be subject to the same fair set of rules and restrictions–including Apple Music.”
— “Second, consumers should have a real choice of payment systems, and not be ‘locked in’ or forced to use systems with discriminatory tariffs such as Apple’s.”
Ek added app stores shouldn’t be able to interfere with communication between apps and users. Spotify’s filing with the European Commission comes a few months after Netflix stopped allowing users to sign up through the App Store, allowing the streaming powerhouse to forego paying Apple its 30 percent cut. The move, according to data from Sensor Tower, would take more than $250 million away from Apple, considering Netflix grossed $853 million on the App Store last year.