Apple wields its App Store as a cudgel to stifle innovation, weaken competition and unfairly tax its rivals, Spotify CEO Daniel Ek said in a post Wednesday, after the world's biggest music streaming service filed a complaint with European regulators.
The 30% cut Ek's referring to is commonly known as "Apple tax", and Apple has been sued over it before. "We believe Spotify is largely on the right side in both facts and principle, which creates risk that App Store policy terms will be forcibly changed in a way that negatively impacts Services revenue and Apple's brand", KeyBanc analysts wrote in a note to clients. That would be $9.99 a month for individuals, $14.99 a month for families with up to six members, and $4.99 a month for verified students.
He said that if Spotify chooses not to use Apple's payment system, to avoid paying the commission, the company applies "a series of technical and experience-limiting restrictions" on consumers running its streaming service on the rival tech company's devices.
Spotify founder and CEO Daniel Ek shared a post today in which he revealed that Spotify has taken action against Apple, writing, "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".
Examples cited include limiting communications with Spotify customers and "routinely" blocking app upgrades.
"It's why, after careful consideration, Spotify has filed a complaint against Apple with the European Commission (EC), the regulatory body responsible for keeping competition fair and nondiscriminatory". But Apple takes a 30% commission on all sales made through the app store - including music streaming subscriptions - which Spotify and many other third-party app developers have long complained is an unfair "tax".
Consumers should have a real choice of payment systems, and not be "locked in" to one particular service.
Spotify ran an ad campaign in 2016 to try and get users to sign up for its premium service directly on its own site, bypassing the app store. If the complaint snowballs into regulatory action against the App Store - and the European Union has demonstrated an eagerness to take on tech's abuses of power lately - it could have implications for the business fortunes of many apps you use every day. Ek insists that Spotify isn't seeking special treatment in filing this motion. 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.