Spotify files anti-competitive motion against Apple Music for imposed Apple Store 30% “tax”

Spotify has filed a complaint against Apple to the European Commission citing that Apple is stifling innovation and providing unfair advantages to itself. Spotify feels that they would prefer to operate in a non-discriminative ecosystem where there is an equal opportunity to thrive.

Apple’s payment system’s heavy tax is leading them to raise their prices and offer their service at a price higher than Apple Music. This is indirectly benefitting Apple, says the CEO of Spotify Daniel EK.

“My goal for Spotify is and has always been to reimagine the audio experience by giving consumers the best creativity and innovation we have to offer. For that to be a reality, it is my firm belief that companies like ours must operate in an ecosystem in which fair competition is not only encouraged, but guaranteed,” said Daniel EK in this blog post announcing their complaint on Apple’s App Store.

The main issue for Spotify lies in the 30% fee that Apple levies on Spotify and other applications that facilitate purchases through Apple’s payment system. This tax exists for applications that provide services online. Because of this, Spotify has to rise its tariffs for premium memberships. These raised prices make Spotify more expensive than Apple Music, it’s rival.

If Spotify opts out of using Apple’s payment system, then they are subjected to a series of restrictions, both technical and experience wise. Furthermore, they were disabled from sending emails to customers. The App Store prevents Spotify and other competitors from building support and functionality in Apple’s other services like Siri, HomePod and Apple Watch.

Services like Uber and Deliveroo don’t have to pay the 30% tax as their applications provide services outside the application and the application is merely a mediator.

On the whole, Spotify is asking for all applications to have equal competition, consumers not to be locked in with certain payment systems and that App Store shouldn’t have control over communication with users.

“After trying unsuccessfully to resolve the issues directly with Apple, we’re now requesting that the EC take action to ensure fair competition,” said Daniel EK.

The European Commission is a regulatory body that works towards keeping the competition fair and prevent discrimination. Spotify tried to resolve issues with Apple and had failed to arrive at any meaningful solution. It has then opted this complaint as a last resort.