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Spotify's EU antitrust complaints can be a serious threat to Apple



  The Apple logo takes corporeal form outside an Apple store.

Apple abuses its control over the iOS App Store to give its own music streaming service an unfair advantage over competitors. Spotify claims in a Wednesday filing with the European Commission.

"Apple has introduced rules to the App Store, deliberately restricting choices and disrupting innovation at the expense of user experience," writes Spotify founder and CEO Daniel Ek. "Having tried to solve the issues directly with Apple, we are now trying to take action to ensure fair competition."

For years, Apple has pushed Spotify to use Apple's In-App Purchase service to collect subscription fees. Spotify has resisted, mainly because Apple takes a huge 30 percent commission. Over time, Spotify says Apple has tightened its app store rules to make it increasingly difficult for app manufacturers to direct users to payment methods outside Apple's ecosystem.

In 201

4, Spotify finally tightened and gave Apple a try. Spotify raised its prices by 30 percent – from € 9.99 a month to € 12.99 a month – to cover Apple's fees.

But in 2015, Apple introduced a Spotify competitor, Apple Music. Apple charged Spotify's old $ 9.99 a month ($ 9.99 a month in the US), putting Spotify in a difficult position. It is difficult to earn a profit competing against an Apple branded service if you also need to transfer 30 percent of your revenue to Apple.

"Spotify has another good cause in Europe," claims Chris Sagers, a legal teacher and antitrust expert at the Cleveland-Marshal College of Law. Apple's efforts to prevent Spotify from circumventing Apple's purchase rules in the app "seem to have a number of anti-competitive exclusions for me," Sagers said. "I also believe it to the European Commission."

Apple takes 30 percent of subscriptions and pillars

It is hardly the first time that a major US technology company has been exposed to antitrust control in Europe. Of course, Microsoft confronted allegations of anti-competitive behavior in both the United States and Europe in the 1990s and early 2000s. More recently, European regulators have beaten Google with billions of billions of dollars to favor their own products in search results and for its Android license policy.

But Apple has not attracted much attention from European competition authorities. (Apple was ordered to organize a cartel of book publishers of US antitrust agencies some years ago). A likely cause: Apple only controls 20-25 percent of the European smartphone market. And competition law tends to focus on companies with a more dominant market position.

In fact, the applicants claim that US regulators would likely lose if they tried to bring Spotify's case against Apple in US courts. But the law is different in the EU, says Sagers. And European regulators can be susceptible to Spotify's arguments.

One major reason is that Apple has been so open about its willingness to prevent Spotify from circumventing Apple's buying rules. Not only does Apple prohibit programs like Spotify from selling content to consumers without using Apple's payment system, the company also prohibits solutions – such as referring customers to an order form on the Spotify website.

When Spotify complained that Apple was pulling its feet, approving a new version of the Spotify's app back in 2016, Apple obviously admitted that disputes over the payment service were a fixed point.

"I am looking forward to a quick review and approval of your app as soon as you give us something consistent with the App Store's rules," Apple General Advisor Bruce Sewell wrote in a 2016 letter to Spotify. "Already since the purchase feature of the app was made available, the App Store rules have banned developers from redirecting customers inside an app to purchase digital content or subscriptions outside of the app to avoid paying Apple's standard commission."

Sewell said Apple had rejected the Spotify's app because the "purchase feature of the app had been removed and replaced with an account sign-up feature that clearly had to bypass Apple's purchase rules in the app. This feature exists only to avoid having to pay Apple for your use of the App Store by emailing customers within hours, instructing them to subscribe to Spotify on its website. "

It is unlikely that the European authorities look good on this kind of behavior, argues Sagers.

"Apple takes exclusionary steps to keep developers paying high fees to have their software on people's phones look anti-competitive," he told Ars. "The European Commission has seemed to be receptive to this kind of theory. And it looks worse when the company also happens to sell competing products."

With all that, we do not know how the European Commission will respond to Spotify's request. "The Commission has received a complaint from Spotify that we assess under our standard procedures," said a spokesman Wired .


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