Spotify has filed a complaint with European regulators arguing that Apple limits choice and competition in its app store, giving its own music streaming service an unfair advantage over rivals. Apple's app store is an important distribution platform for Spotify. But Apple takes a 30% commission on all sales made through the app store – including music streaming subscriptions – which Spotify and many other third-party app developers have long complained is an unfair "tax". "Apple requires that Spotify and other digital services pay a 30% tax on purchases made through Apple's payment system, including upgrading from our free to our premium service," said Daniel Ek, Spotify co-founder and chief executive, in a blog post. "If we pay this tax, it would force us to artificially inflate the price of our premium membership well above the price of Apple Music. And to keep our price competitive for our customers, that isn't something we can do."
Apple has hit back against Spotify after the latter filed a complaint against the iPad and iPhone maker with the EC, alleging that Apple's App Store is anti-competitive and limits customer choice. Earlier this week, Spotify founder and CEO Daniel Ek revealed the complaint, filed with the European Commission (EC), which is based on the premise that new rules introduced by Apple impact the App Store and have caused the platform to "purposely limit choice and stifle innovation at the expense of the user experience." Ek claimed that Apple's App Store now acts as a means to "deliberately disadvantage other app developers" in order to benefit Apple itself. "Apple operates a platform that, for over a billion people around the world, is the gateway to the Internet," the CEO said. "Apple is both the owner of the iOS platform and the App Store -- and a competitor to services like Spotify. In theory, this is fine. But in Apple's case, they continue to give themselves an unfair advantage at every turn."
Apple is bracing itself for a formal antitrust investigation by Brussels after the iPhone maker was accused by the music streaming service Spotify of anti-competitive behaviour. Margrethe Vestager, the European commissioner for competition, is said to be poised to launch an inquiry over claims that one of the world's most valuable companies has behaved unlawfully by abusing the dominant position of its of its app store in the market. Spotify, which has reached 100 million paying subscribers, alleges that Apple, one of its fiercest rivals alongside Amazon, is using the store to favour its own Apple Music service. Apple charges digital content providers such as Spotify a 30% fee for using its payment system for any subscriptions sold in its App Store. The Financial Times reported on Monday that the European commission had decided there were grounds for a formal investigation, following a complaint filed by Spotify in March, and that an announcement could be expected within weeks.
Millions of people are ditching their music collections and opting in for music streaming subscriptions. Here's how to choose the right one for you. Apple Music may have gotten a nice win in its battle for music streaming supremacy against Spotify, the title of the most popular streaming service in the U.S. According to the Wall Street Journal, Apple has overtaken the Swedish streaming giant as the most popular service in the U.S. Citing anonymous sources, the Journal reports that Apple had over 28 million paid subscribers in the U.S. at the end of February, 2 million more than Spotify's 26 million. USA TODAY has reached out to both companies, but neither has responded yet. The report comes as the battle between the two giants continues to intensify.
Music streaming service Spotify has filed a complaint against Apple with the European Commission over App Store rules that give Apple an "unfair advantage at every turn," the company CEO Daniel Ek announced in a blog post Wednesday. In the post, Ek claims that Apple's App Store rules make it hard for Spotify to compete with Apple's own Apple Music on a level playing field. "Apple requires that Spotify and other digital services pay a 30% tax on purchases made through Apple's payment system, including upgrading from our Free to our Premium service. If we pay this tax, it would force us to artificially inflate the price of our Premium membership well above the price of Apple Music," writes Ek. The 30% cut Ek's referring to is commonly known as "Apple tax," and Apple has been sued over it before.