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Spotify takes off his gloves in what has been up here a bitter fight behind the scenes with Apple, where he rivals Apple Music but also relies heavily on the company for distribution in its application on iOS devices. Today, CEO Daniel Ek announced that his company had filed a lawsuit against the iPhone giant to the European Commission for having explained how Apple had "introduced into the App Store rules deliberately limiting choice and stifling innovation at the expense of the user experience – acting essentially as follows: both a player and a referee to deliberately disadvantage other application developers. "
While the EC's complaint is confidential, it will not be disclosed publicly, but Spotify has created a public site, Time to Play Fair, which describes in detail how Apple "tipped the scales," to use the words from General Spotify. In his speech, the lawyer Horacio Gutierrez said: "In an ever increasing set of restrictions". The company did not specify the amount of damage, but believes that "we could have had even more success" if the restrictions had not been applied. Notably, on Google Play, Spotify is not obliged to use the Google payment system and is allowed to offer a choice to users. "The situation is completely different."
According to Ek, the complaint and the demand for regulatory interference to ensure fair competition occur "after unsuccessfully trying to resolve the issues directly with Apple". A crucial problem, he said, is the high fees charged by Apple for accepting payments in apps, a rate of 30 he talks about "apple tax".
The basis of Spotify's claim is that the company wants to be treated as "many other apps on the App Store, like Uber or Deliveroo, which are not subject to the Apple tax and therefore are not subject to the same restrictions ".
Gutierrez declined to say if Spotify had spoken with other companies to join the lawsuit. "We know that others also feel frustrated by [Apple’s] restrictions … but we will not talk for them, "he told TechCrunch in response to the question. He added that the EC would likely seek the advice of third parties in its investigation, which could be a means by which other companies could become part of this complaint.
In his blog post announcing the lawsuit, Ek detailed three requests to the Commission: that people are not constrained – "blocked" – to Apple's payment platform and the rates it dictates; that the applications compete on the merits and that the owner of the App Store is clean, Apple Music in particular should be subject to the same rules as Spotify; and finally, application stores should not be able to control communications between users and application publishers, "including unfair restrictions on marketing and promotions that benefit consumers."
This is a huge move for Spotify. Many developers have made noise about Apple's policies, but in general, it gives a lot of power and many people take care to limit the number of complaints filed. Until now, Spotify is the biggest company to have spoken loud and clear, and more specifically, formally a regulatory complaint against the way Apple deals with developers.
This decision underscores the long history of frenzy between the two companies – Spotify relies on Apple for distribution of its application, but both companies are in full competition in the streaming music market, an area that will only worsen Apple is pursuing its strategy of expanding its service and content business to offset slower growth in hardware sales. The company is expected to announce a new range of entertainment services at an event on March 25, although Mr. Gutierrez said the timing was "just a coincidence".
The complaint applies to a variety of business initiatives, not just payments. "We're pretty much on every speaker or laptop, with the exception of Apple," Gutierrez noted at today's press conference.
But Spotify is not the only one to have looked for alternatives while continuing to play in the closed garden of Apple. Netflix, similar to Spotify, bypasses Apple's subscription model, which requires the app developer to pay Apple a fee to ask users to use the service, asking them to pay out of the box. application. It works to a certain extent, but making the payment more difficult will also put some buyers out of the way.
For the moment, Spotify's billing problems will mainly affect subscriptions, which fall under a revenue share of 30/70 (Spotify getting 70%) for the first year, then increase to 85% in the following years. But it can be assumed that this also lays the groundwork that this will become an even bigger problem for in-app purchases of unique items, such as podcasts.
Last month, the company made waves by announcing the acquisition of two startups, Gimlet and Anchor, for approximately $ 400 million, to continue its ambitions in terms of spoken content and diversify its business. more music deals with record companies).
The company continued to see business grow for its existing products. In the fourth quarter, he noted that monthly active users were up 20% to $ 207 million, but he also missed analyst expectations of $ 1.7 billion in revenue.
Although his own video ambitions have not grown too much (beyond) much beyond a small selection of music-related content, he has also partnered with Hulu to expand his offer with bundles. . It could also, at some point, also see Spotify looking to offer more content to the card in addition to subscriptions.
We are now listening to Spotify's teleconference and will update this post as we learn more.
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