The fight between Apple and Spotify is getting ugly.
Last week, Spotify, the audio streaming platform, filed a complaint with the European Commission, alleging Apple hasn’t been playing fair in the open marketplace system.
“In recent years, Apple has introduced rules to the App Store that purposely limit choice and stifle innovation at the expense of the user experience — essentially acting as both a player and referee to deliberately disadvantage other app developers,” Daniel Ek, founder and chief executive officer of Spotify, wrote in a blog post, announcing the news that his company had filed the complaint. “After trying unsuccessfully to resolve the issues directly with Apple, we’re now requesting that the EC take action to ensure fair competition.
“Companies like ours must operate in an ecosystem in which fair competition is not only encouraged, but guaranteed,” Ek added.
Spotify competes directly with Apple Music, but the Spotify app is also available on Apple iOS devices.
“In theory, this is fine,” Ek wrote. “But in Apple’s case, they continue to give themselves an unfair advantage at every turn.”
The ceo pointed out that companies selling apps in the App Store are required to pay a 30 percent tax to Apple, which forces businesses like Spotify to raise prices.
“And to keep our price competitive for our customers, that isn’t something we can do,” Ek wrote. Meanwhile, competitor Apple Music has cheaper prices.
Companies that don’t use Apple’s payment system have limited access on the platform.
Even so, Apple said it’s playing fair and responded in a statement to Spotify’s complaint, saying the company is trying to capitalize off Apple’s success.
“After using the App Store for years to dramatically grow their business, Spotify seeks 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….Spotify has every right to determine their own business model, but we feel an obligation to respond when Spotify wraps its financial motivations in misleading rhetoric about who we are, what we’ve built and what we do to support independent developers, musicians, songwriters and creators of all stripes.”
Spotify responded by calling Apple a “monopolist.”
This isn’t the first time Apple’s business practices have come under question.
The long-standing class-action case against Apple and its developer charges in the App Store went before the U.S. Supreme Court last November. In Apple Inc. v. Pepper, iPhone users claimed prices on the platform were too high and since there was nowhere else to buy some apps, it is a monopoly. Apple’s inflated prices for developers trickles down to shoppers.
Apple said the system was fair and the case had no substance since Apple charges app developers a 30 percent fee on the platform — not consumers.
The still-pending case centers on a possible monopoly and could have far-reaching implications on how governments can regulate internet platforms, including fashion marketplaces like Amazon, eBay and Farfetch, if the courts decide in favor of the app users.
But Susan Scafidi, a fashion lawyer and founder of the Fashion Law Institute at Fordham University, said compared with the market for iPhone apps, the fashion marketplace is much more decentralized.
“Even large platforms like eBay and Farfetch face significant competition, which benefits consumers — especially during sale season — so those companies should remain largely unaffected,” Scafidi said.