Streaming giant Spotify is delivering a strong message to Apple, which is both a partner of sorts and a rival, through a new antitrust suit and related marketing campaign. That message is to play fair, for the benefit of consumers and businesses alike. According to Spotify, Apple is not playing fair by charging a 30 percent "tax" on purchases made in the App Store
"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. And to keep our price competitive for our customers, that isn’t something we can do," Spotify explains.
Spotify's gripe is not solely limited to the 30 percent cut that Apple collects, it also takes umbrage with certain technical limitations that it says do not exist for Apple's own streaming music service.
"For example, they limit our communication with our customers—including our outreach beyond the app. In some cases, we aren’t even allowed to send emails to our customers who use Apple. Apple also routinely blocks our experience-enhancing upgrades. Over time, this has included locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch," Spotify says.
Spotify insists that it is not seeking special treatment, just a level playing field. For example, Spotify claims Apple censors the company from sharing discounts or promotions to iOS users, such as offering three months of Spotify's premium service for $0.99. Spotify also claims that Apple makes it "harder and harder to fix any problems" or deliver "cool stuff" to users, though the streaming service did not offer up any specific examples.
It is somewhat of a unique situation since Apple owns both the iOS platform and the App Store, and is a rival to Spotify through its own Apple Music service. Spotify says that is fine in theory, but in practice, it accuses Apple of giving itself an unfair advantage at every turn.
The lawsuit has been filed with the European Commission, the regulatory body in Europe that deals with antitrust complaints. It has been known to dish out heavy-handed fines to major technology corporations. In 2017, for example, the Commission fined Facebook $122 million over privacy violations in WhatsApp, and slapped Google with a hefty $2.7 billion fine over its search engine and how it handled online shopping searches.
"Consumers win and our industry thrives when we’re able to challenge each other on fair footing. That’s what competition on the merits is all about," Spotify says.