Spotify Hits Apple Music With Complaint Alleging 'Unfair Advantage' (UPDATE)

Spotify believes they're being treated unfairly by Apple, especially in the App Store.


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UPDATED 10:19 a.m. ET: Apple struck back at Spotify's claims, arguing that the streaming service wants to "keep all the benefits of the App Store ecosystem, including the substantial revenue that they draw from the App Store’s customers, without making any contributions to that marketplace."

CEO Tim Cook pointed out in a statement that the App Store has generated more than $120 billion for developers and "many millions of jobs." He also took a swipe at Spotify's stance against increased royalty rates.

"We share Spotify’s love of music and their vision of sharing it with the world," he said. "Where we differ is how you achieve that goal. Underneath the rhetoric, Spotify’s aim is to make more money off others’ work. And it’s not just the App Store that they’re trying to squeeze — it’s also artists, musicians and songwriters."

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As increasingly annoying as the phrase "streaming wars" most certainly is, the description is apt. For the latest move amongst the competition, Spotify has hit Apple Music with a complaint overseas alleging "unfair advantages" in connection with App Store matters.

Wednesday, Spotify founder Daniel Ek announced that—following "careful consideration"—he and his team had decided to file a complaint against Apple with the European Commission (EC). The EC, of course, is responsible for ensuring "fair and nondiscriminatory" competition. Spotify has alleged that they previously tried to resolve their issues directly with the Apple Music team, though those efforts apparently didn't go their way.

"To illustrate what I mean, let me share a few examples," Ek said Wednesday. "Apple requires that Spotify and other digital services pay a 30% tax on purchases made through Apple’s payment system, including upgrading from our Free to our Premium service. 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."

Furthermore, Ek added, not using the Apple payment system would saddle the service with "technical and experience-limiting restrictions" for users.

Ek noted that he doesn't consider what Spotify is asking for "special treatment." Instead, he named other apps (Uber, for example) who aren't affected by Apple’s alleged tax practices. With the complaint, Spotify is hoping for apps to "compete fairly on the merits" in the App Store and for customers to have the option to choose their own payment system. Additionally, Ek said, any app store "should not be allowed" to have a hand in communications between a service and its users.

As reports on Ek’s announcement pointed out Wednesday morning, Spotify's move also notably comes in the wake of a multi-company appeal to a royalty rates increase in which Apple Music is not participating.

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