The music streaming company accused Apple of limiting choice for customers by acting as both a vendor, with Spotify competitor Apple Music, and as a referee simultaneously, with the App Store app marketplace. Spotify said Apple's position deliberately puts other app developers at a disadvantage.
"After trying unsuccessfully to resolve the issues directly with Apple, we're now requesting that the European Commission take action to ensure fair competition," Daniel Ek, Stockholm native and founder and CEO of Spotify, said in a statement.
Spotify's stock was down slightly to $145.05 on Wednesday morning, while Apple shares were up 0.9% to $182.49.
Ek said Apple requires app developers to pay a 30% "tax" on purchases made using Apple's in-app purchase system, even when customers are upgrading from a free version to premium service. Spotify said it was forced to raise prices on its premium membership well above those for Apple Music in response to Apple's cut, making Spotify less competitive.
Democratic presidential candidate Elizabeth Warren has proposed breaking up large tech companies, specifically in cases where they both own a popular platform and sell things on that platform. [link]
Spotify General Counsel Horacio Gutierrez told Reuters that 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 in 2015.
Spotify also said other popular apps in the App Store aren't subject to Apple's commission and don't have restrictions in communications with customers, which Spotify was subjected to after it chose not to use Apple's app payment system.
"We aren't seeking special treatment," said Ek. "We simply want the same treatment as numerous other apps on the App Store, like Uber or Deliveroo, who aren't subject to the Apple tax and therefore don't have the same restrictions."
Among Spotify's specific complaints against Apple are unfair app competition due to Apple's ownership of the App Store, lack of choice of payment systems for App Store customers, and restrictions on communications with customers, among others.
"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 told Reuters. Spotify has not yet disclosed what monetary damages it incurred as a result of the matter.
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