Business Entrepreneurship Success

Spotify Files Complaint In Europe About Apple’s ‘Unfair’ Fees

Music streaming service Spotify has filed a complaint with the European Commission, alleging that Apple’s App Store is stifling competition.

The company objects in particular to Apple’s 30 per cent fee for allowing content-based service providers to use Apple’s in-app purchase system (IAP).

“Apple requires that Spotify and other digital services pay a 30 per cent tax on purchases made through Apple’s payment system, including upgrading from our free to our premium service,” says Spotify CEO Daniel Ek 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.”

If Spotify chooses not to use Apple’s payment system, says Ek, Apple applies a series of restrictions including limiting communication with customers and blocking upgrades.

“Over time, this has included locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch,” he says.

Spotify is calling for all apps – including Apple Music – to be subject to the same rules, and for consumers to have ‘ a real choice’ of payment systems. It also wants app stores to be banned from  controlling the communications between services and users, including placing unfair restrictions on marketing and promotions that benefit consumers.

The company has also set up a website – Time To Play Fair – detailing all its concerns.

So far, Apple hasn’t responded to the complaint.

Spotify has been complaining about the 30 per cent fee for some time – back in 2015, when Apple Music first launched, it encouraged its users to renew their subscriptions directly, rather than through iTunes, with a $3 per month discount if they did.

This complaint, though, marks a serious escalation of what was until now a fairly low-key fight.

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

The company has submitted an economic analysis to the European Commission which, it says, demonstrates the financial impact Apple’s policies have had on its business. The Commission will now have to decide whether to proceed; any case could take years to resolve.

This article originally appeared on Forbes