Spotify files an EU complaint against Apple over unfair Music Competition

Swedish music streaming giant Spotify says it has filed a complaint with the EU Commission against Apple, accusing its US rival of stifling competition in the online music market.

“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,” Spotify said in a statement.

Spotify claims that Apple’s control of its App store deprived consumers of choice and rival providers of audio streaming services to the benefit of Apple Music, which began in 2015.

Central to Spotify’s complaint, filed to the European Commission on Monday, is what it says is a 30 per cent fee Apple charges content-based service providers to use Apple’s in-app purchase system (IAP).

Horacio Gutierrez, Spotify’s general counsel, said the company was pressured into using the billing system in 2014, but then was forced to raise the monthly fee of its premium service from 9.99 to 12.99 euros, just as Apple Music launched at Spotify’s initial 9.99 price.

Spotify then ceased use of Apple’s IAP system, meaning Spotify customers could only upgrade to the fee-based package indirectly, such as on a laptop.  Under App store rules, Spotify said, content-based apps could not include buttons or external links to pages with production information, discounts or promotions and faced difficulties fixing bugs. Such restrictions do not apply to Android phones, it said.

“Promotions are essential to our business. This is how we convert our free customers to premium,” Gutierrez said.

Voice recognition system Siri would not hook iPhone users up to Spotify and Apple declined to let Spotify launch an app on its Apple Watch, Spotify said.

“We feel confident in the economic analysis we have submitted to the Commission that we could have done better than we have done so far,” Gutierrez said.