Technology 3 min read

Spotify Lodges EU Antitrust Complaint to Combat "Apple Tax"

The "Apple tax" does not refer to Apple skirting billions in taxes in 2018. In fact, it refers to discriminatory tariffs placed on non-Apple services that don't comply with its changing App Store rules. Spotify CEO Daniel Ek has filed an official complaint with the EU to expose Apple's antitrust activities.

In a further push to gain superiority in the market, Spotify is taking aim at Apple's Apple Tax policies. ¦ Pixabay

In a further push to gain superiority in the market, Spotify is taking aim at Apple's "Apple Tax" policies. ¦ Pixabay

The General Data Protection Regulation (GDPR) forced many multi-national companies to revisit their digital regulations and practices. You can find the “final text nearly arranged” here if you’d like to read up on it more.

However, European Union (EU) antitrust laws also forced companies to take a closer look at themselves.

In August of 2017, the EU accused Google of breaking antitrust regulations on 3 separate counts. They charged the tech giant with exploiting its own services and even manipulating search results. But the antitrust laws aren’t limited to these kinds of issues.

image of Daniel Ek for article Spotify Lodges EU Antitrust Complaint to Combat the
Spotify CEO Daniel Ek published the blog post outlining what exactly the antitrust complaint is. | WSJ

What is the “Apple Tax” and Why is Spotify Fighting it?

Spotify, plagued by lawsuits, shocked many when it eschewed Wall Street support in its IPO. But now, the streaming platform based in Sweden wants to take Apple to task. As of March 13, 2019, they filed an antitrust complaint against the once innovative tech company.

The press release alleged that Apple harmed consumer choice and stifled innovation using its rules via the App Store. Moreover, Apple takes a 30% cut from App Store subscriptions. This is, as Spotify CEO Daniel Ek calls it, the “Apple Tax”.

The complaint alleges that this further allows Apple to “artificially inflate” prices. If you don’t pay up, Apple then subjects you to “technical and experience-limiting restrictions”.

As applied to Spotify, it affects user experience and blocks experience-enhancing upgrades. This includes shutting out Spotify and other rivals from Apple services such as Siri or Apple Watch.

The below video sends a direct message to Apple: Spotify plans to prioritize consumers.

Though Spotify stands to gain something out of this, the video does seem to put users first. But it points out something very important and similar to the Google case.

Apple Controls the App Store and Thus the Rules

Apple controls the app store and it acts as a competitor to many services. As such, Apple can manipulate users into favoring their services. Or, in this case, charge rivals more for services and using their platform. “This harms fans like you and companies like us,” the video says.

“We aren’t seeking special treatment. 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.”

Ek outlined what Spotify wants out of this process, as well:

  • Fair merit-based app competition
  • Set rules and restrictions that apply to all apps including Apple Music
  • Prioritizing consumer choice
  • Eliminating discriminatory tariffs i.e. the “Apple tax”
  • Removing unfair restrictions placed on promotions and marketing

This complaint marks the culmination of a years-long Cold War between Apple and Spotify.

It started with musicians talking about how much streaming pays them. It exploded when artist  Taylor Swift took aim at Spotify and then started appearing in Apple ads. But the democratization of music availability is, some feel, good for smaller artists trying to gain traction.

Despite concerns over music streaming, many believe it actually prompted the resurgence of vinyl records. After all, we can find CD-quality audio on a streaming platform or even on YouTube. But a vinyl record costs more than a CD or digital download and offers a more unique experience.

Read More: Google Fined 5.1 Billion for Violating the EU Antitrust Rules

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Juliet Childers

Content Specialist and EDGY OG with a (mostly) healthy obsession with video games. She covers Industry buzz including VR/AR, content marketing, cybersecurity, AI, and many more.

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