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Internet Giants Like Apple and Google 'Abuse Their Privileged Position', Says Spotify CEO (cnbc.com)

Giant companies like Apple and Alphabet's Google "can and do abuse their privileged positions," according to a letter sent to the European Commission by music streaming service Spotify, rival firm Deezer and Rocket Internet, among others. From a report: "Our collective experience is that where online platforms have a strong incentive to turn into gatekeepers because of their dual role, instead of maximizing consumer welfare," the CEOs wrote. In one part of the letter, the CEOs said examples of platforms turning into gatekeepers include them "restricting access to data or interaction with consumers, biased ranking and search results to lack of clarity, imbalanced terms and conditions and preference of their own vertically integrated services."

54 comments

  1. Well he would, wouldn't he? by Hognoxious · · Score: 3, Funny

    n/c

    --
    Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    1. Re:Well he would, wouldn't he? by Anonymous Coward · · Score: 2, Insightful

      It is human nature to abuse privilege once it is attained. There is simply no good reason not to.

      Morality is for chumps.

    2. Re:Well he would, wouldn't he? by Anonymous Coward · · Score: 1

      He would.

      I find some of the arguments rather silly. If I run a services company that offers email, a blogging platform, and a video service, then OF COURSE I am going to promote my own services over those of other people. I don't see anything wrong with it.

      Imbalanced terms and conditions seem to apply to every company. I cannot imagine that Spotify is innocent here. Certainly not anything unique to Google.

      Also, while the choices are slim, I do not HAVE to use Google for search. Bing may not be as good, but it does exist. We really could use more competition in that space, but algorithms are algorithms - I've seen accusations of bias, but it only seems to happen with political content (Google definitely leans left, but not so badly that you are unable to find other points of view).

    3. Re:Well he would, wouldn't he? by Karlt1 · · Score: 1

      restricting access to data or interaction with consumers,

      Apps being sandboxed and not being allowed to access features on my phone without explicit permission is a feature not a bug.

  2. It's called capitalism... by Anonymous Coward · · Score: 0

    It relies on disruption, otherwise it always becomes monopolistic, it's just inevitable.

  3. OK. by Dog-Cow · · Score: 1

    And, so?

    Hasn't every single company that has ever been in a similar position done exactly the same?

    By the way, something isn't abuse because you don't like it. Apple and Google use their position to further their position. They are not abusing it because that would mean they were abusing themselves, and that doesn't even make sense.

    1. Re:OK. by Anonymous Coward · · Score: 0

      He's saying Apple and Google use their 100% dominance in one market (the market for selling app downloads) to exert undue control in another market (the market for selling music downloads).

      Might not be illegal in the USA but it's one of the component definitions of an abusive monopoly in the EU (and a very useful one too).

      He'd have to prove it, but I think he's saying he can.

    2. Re:OK. by Anonymous Coward · · Score: 0

      Two dominant companies that happen to compete with each other in the same space in question both have 100% dominance?

    3. Re:OK. by Dog-Cow · · Score: 1

      Google has no monopoly on app downloads for any platform or market. This complaint from the CEO is just a rant that companies with more resources are more successful than those with fewer.

  4. It is their consumer given claim :-\ by Anonymous Coward · · Score: 0

    Whaatduyawithyaa?

  5. Vertical integration by imgod2u · · Score: 2

    Wasn't Microsoft slapped with an anti-trust suit in the 90's for the same vertical integration? Seems like Google preferring Google Music and Apple pushing Safari on iOS would be equivalent.

    There are advantages, of course. Integrated platforms can be tested together to guarantee they work well. But it also does stifle competition.

    1. Re:Vertical integration by Anonymous Coward · · Score: 0

      Microsoft wasn't sued for "vertical integration". They had a monopoly over the desktop market and bundled Internet Explorer and Windows Media Player into Windows making them the default applications. The idea was to destroy Netscape and any other competitors so they could get a leg up on internet services while protecting their desktop market.

      Apple and Google have default apps installed but you can easily install others and neither company forces you to use their services (ok - Apple does force you to use the App Store, but Apple in no way is a monopoly power in the smartphone market)

      Spotify is just whining because they don't make money and they have serious competition now. But neither Apple or Google have a monopoly over digital music streaming.

    2. Re:Vertical integration by known_coward_69 · · Score: 1

      M$ was sued for bundling IE into Windows and running Netscape out of business. Of course those were the days when Netscape Navigator was $50 each install, in theory. Imagine paying $50 for Chrome

      last I heard apple only charges you if you sell digital stuff through their app store

    3. Re:Vertical integration by R3d+M3rcury · · Score: 1

      Apple in no way is a monopoly power in the smartphone market [...]

      True. But it certainly has monopoly power in the iPhone Apps market.

      Microsoft insisted that they did not have a monopoly in the personal computer market. After all, Apple was there. But Microsoft did have a monopoly in the Intel-based PC market. At the time, Apple used PowerPC processors, so they couldn't claim that Apple was a competitor.

    4. Re:Vertical integration by Anonymous Coward · · Score: 0

      > Wasn't Microsoft slapped with an anti-trust suit in the 90's for the same vertical integration?

      There's nothing wrong with vertical integration. If there was, companies like SpaceX (which bring as much of their supply and manufacturing chain as is possible in-house) would not be permitted to operate.

      There is -however- a problem with _anticompetitive_ vertical integration. The difference can be subtle, but the core test is the answer to the question "Does this vertical integration significantly harm or _unfairly_ obstruct the wider market for goods and services?". If the answer to that question is "Yes", the integration is anticompetitive.

      Microsoft deliberately shut out competitors. Sometimes by providing privileged and/or _deeply_ discounted access to Microsoft goods and services contingent on exclusive sales agreements. Other times by simply refusing to provide any access to MSFT goods and services unless such agreements were in place. Still other times, MSFT knowingly provided erroneous and/or misleading documentation with the intent to disrupt the efforts of other companies that authored Windows software that competed with MSFT-authored software that performed similar functions (c.f. Novell, Lotus, WordPerfect, and innumerable others).

      Take a week or two and read FedGov's filings in the MSFT antitrust case. The behavior they describe is pretty good benchmark for anticompetitive behavior.

    5. Re:Vertical integration by kqs · · Score: 1

      That's not quite right.

      Microsoft did not have a monopoly on personal computers, but all you need is "monopoly power" which they did have, They had more than 90% of the market, including OS/2, Macs, etc.

      Apple has no monopoly power with their app store; far less than 50% of smartphones can use their apps. Google's app store works on many more phones, though the amazon app store (and many others) weakens the argument, Maybe both together?

      But installing the Spotify app on any iOS or android phone is almost no effort, so this complaint does sound like sour grapes.

  6. Net neutrality by NReitzel · · Score: 4, Insightful

    If you think things are bad now, just wait until there is no regulation on net neutrality.

    --

    Don't take life too seriously; it isn't permanent.

  7. Well, Duhh by WheezyJoe · · Score: 3, Insightful

    It is human nature to abuse privilege once it is attained. There is simply no good reason not to.

    Morality is for chumps.

    Mod parent up. and I'll add that if Spotify's CEO had dominant market share, he'd be abusing a little too.

    ..and if he didn't, the Board would fire him for, essentially, leaving free earnings on the table - costing them money. Unless there's some pesky government regulation that'll fine you or throw you in jail, you're a fool NOT to take full advantage.. 'cause someone else will.

    --
    Take it easy, Charlie, I've got an Angle...
  8. I'm confused... by Anonymous Coward · · Score: 0

    Doesn't Spotify allow Pandora to stream through their interface? Apple Music? I'm pretty sure Spotify doesn't use its privileged status to require lower rated music makers to pay more than big name stars either.

  9. Duh... by 101percent · · Score: 1

    Don't hate the player, hate the game.

  10. DNC donations by Anonymous Coward · · Score: 0

    Microsoft wasn't sued for "vertical integration". They were sued because they didn't donate to the DNC. The lawsuit said they had to change their ways and split up. After the suit, they donated heavily to the DNC and since have not changed their ways or been split up.

    Google and Apple already both donate heavily to the DNC. There is nothing wrong with them because of that.

    In other industries...
    Fender guitar, who supports the DNC and is based in a union friendly state with union workers is left alone.
    Gibson guitar, who doesn't support the DNC and doesn't have union workers was raided by the Obama administration and had millions of dollars worth of material seized for doing the exact same things as Fender.

    Wish it were a joke or exaggeration, but that is the point of the Federal government now. Punish those who don't support the DNC.

    1. Re:DNC donations by Anonymous Coward · · Score: 0

      And you never really hear anyone complain about the $30+ million payday that Al Gore received from Apple after being a core proponent of the suit against Microsoft (which directly benefited Apple).

  11. Oh, grow a pair by earnil · · Score: 2

    If you don't like doing business with Google or Apple don't do business with them. You can also invest those millions and millions of dollars into creating your own successful mobile phones and operating systems and reap the benefits.

    But of course it's cheaper to whine to EC to help you make more money.

    Unfortunately, EC wouldn't wait a second to stick their stinking fingers into another industry.

    If I want to sell my product through retailer, of course he will ask for part of the money. I'm using his infrastructure after all. And if he asks too much, then I simply wouldn't do business with him. And if he's only retailer on the market, yeah, that sucks. But either your product is so good that it will create a significant downside for retailer to not have it or if it doesn't maybe my product is not so good after all. That's called doing business. If you want to drag government regulation into it, well done for helping to destroy another functioning market,

    1. Re:Oh, grow a pair by Anonymous Coward · · Score: 0

      If you don't like doing business with Google or Apple band together and change the law.

      Companies don't have a god given right to do business at all. They are allowed to under various companies acts.

      Companies should more often be stripped of their "limited liability" status recursively through any limited liability vehicle so the ultimate beneficiaries' wealth can be confiscated based on a court decision.

      That would be the death sentence for any publicly listed company and would be a real deterrent.

    2. Re:Oh, grow a pair by earnil · · Score: 1

      Companies are in the end just bunch of people working together to deliver certain goods or services. If we end up in a situation that I'm not able to freely exchange money, goods or services with other people of my choosing we will be living in a world without freedom.

      So, it's not indeed god given, but it's essential to freedom that we're able exchange goods and services without 3rd party's approval. It's not a coincidence that first target of communists was private entrepreneurship.

      Also I don't see any problem with limited liability, as everyone is aware of it up front. Limited liability is one of the greatest economic inventions of all time since it precisely removes the threat of ruining yourself forever by failing in a business venture. If removed you'd destroy drive to innovation - or rather, you'd limit it to people that are already rich and can afford to risk the failure. Poor people without capital would be extremely disadvantaged by that.

    3. Re:Oh, grow a pair by Anonymous Coward · · Score: 0

      If you don't like doing business with Google or Apple band together and change the law.

      So if artists don't like doing business with Spotify should also band together and change the law?

      Be careful what you wish for, Spotify, you are fighting to gain monopoly position yourself.

    4. Re:Oh, grow a pair by Anonymous Coward · · Score: 0

      This is a ridiculous comment. It ought to be apparent by now that the barriers to entry into the mobile phone/OS market are so high that we are in an oligopoly situation and we won't get new entrants. Millions of dollars just aren't enough.

      Because of that oligopoly, the market is not fully free or functional. Google and Apple do have the power and we need to worry about how they abuse it. There aren't other options.

  12. Difference between paternalism and abuse by goombah99 · · Score: 4, Interesting

    I fully agree that in general walled gardens are bad. But in specifics I disagree. With google, and even more with facebook, the purpose of the wall is sell access to the cattle inside. With apple, I feel like the purpose of the wall is to protect the sheep from predators. perhaps I'm deluding myself but I feel like I see signs that apple isn't selling me out as a product in every possible way. The result of course is that apple has to make a profit some other way. Charging more for their devices is one way, and Taking a cut on apps is another. And to do that they have to prevent other ways of selling apps. On the flip side, I do feel a lot safer installing apps on my iphones than I do on my androids. Most of my rationale for paying more for apple products rests on peace of mind and lack of complexity.

    Thus my feeling is apple uses it's power paternalistically, and google is more of the chicken farmer approach where the chickens don't know they are going to be put in a pie.

    --
    Some drink at the fountain of knowledge. Others just gargle.
    1. Re:Difference between paternalism and abuse by TWX · · Score: 2

      If Apple did a better job of actually protecting their users I might agree with you, but remember, one of those huge nude celebrity photo theft scandals was based on iCloud data being compromised en masse. On top of that, Apple provides textbook examples of vendor lock-in, creating their own versions of things like communications software with no compatibility for non-Apple devices, so that once one get accustomed to using said applications, it's much harder to leave and one has to continue paying the Apple Tax.

      No single vendor is perfect. Once big in the market, every vendor attempts to manipulate the market itself. Apple is no different.

      --
      Do not look into laser with remaining eye.
    2. Re:Difference between paternalism and abuse by Anonymous Coward · · Score: 0

      one of those huge nude celebrity photo theft scandals was based on iCloud data being compromised en masse

      Because the users were phished. What system protects its users from that? Hell, Google ignored 6 year old POCs for people creating web apps named after their own products, leading to last week's OAuth worm.

    3. Re:Difference between paternalism and abuse by gnasher719 · · Score: 1

      If Apple did a better job of actually protecting their users I might agree with you, but remember, one of those huge nude celebrity photo theft scandals was based on iCloud data being compromised en masse.

      You probably know yourself that this is nonsense. There is no evidence whatsoever that iCloud was ever hacked. There is plenty of evidence that "celebrities" were careful with their choice of passwords.

    4. Re: Difference between paternalism and abuse by Brockmire · · Score: 1

      No, they were susceptible to trivial brute force attacks for years. They only implemented 3 basic security measures after the first celeb leak dump. They didn't have brute force countermeasures in place. Their iCloud infrastructure has been reverse engineered by at least two groups, who publicly stated they should not have been able to do that. It was only on the later celeb dumps that were deemed phishing.

    5. Re:Difference between paternalism and abuse by Anonymous Coward · · Score: 0

      I fully agree that in general walled gardens are bad. But in specifics I disagree. With google, and even more with facebook, the purpose of the wall is sell access to the cattle inside. ...

      Cattle gotta have a place to piss & crap.

  13. So.. by fluffernutter · · Score: 1

    So the people who have a 'screw you' attitude all the time don't see a problem with this, and the people who try to play fair get it. No surprise there. Fortunately there are still enough people who haven't given up on fair play that we still have a livable society. We could not have a society without them.

    --
    Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
    1. Re:So.. by earnil · · Score: 1

      I genuinely wonder what is fair on demanding to use someone else's infrastructure on your own terms? It's not like Google or Apple were given those things, they build it on their own for huge amounts of money and with significant investment risks. I would see a point for example if there is a infrastructure build from public money, then yes, but we're talking private investment here.

    2. Re:So.. by fluffernutter · · Score: 1

      If it were truly an open market like retail clothing then I would say no. But there are only so many large companies that can be the most influential search engine, or the social media site that everyone is on. The problem is that the internet game is one of critical mass and once you achieve that critical mass and are king of the hill, it isn't business sense keeping you afloat, you can ride on the fact that you happened to be the one to luck into that gap and you became prosperous. Unless it can be proven that anyone could follow Google or Facebook's footsteps at this point and compete one on one, society is being done a disservice because let's face it, if someone indexes their business on both Bing and Google and Bing is fair but Google is not, most people will not be seeing the index because most people use Google and there is nothing the business owner can do about that. The model is really close to any other utility actually, and a water or electricity company cannot simply choose to deliver more water to a wealthy area that will pay more for it.

      --
      Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
    3. Re:So.. by Dog-Cow · · Score: 1

      Forcing outcomes is authoritarian. As long as Apple and Google played by society's rules in establishing their positions, they've done nothing wrong. It's no more fair to force Google to give prominence to Spotify than it is for Google to use their prominence to promote their own services.

    4. Re:So.. by Anonymous Coward · · Score: 0

      Untrue. It's not enough to play by society's rules in establishing their positions. They also need to play by society's rules once they get into those positions.

    5. Re:So.. by fluffernutter · · Score: 1

      So you're saying the price of water should go up until only the most wealthy can afford it. Interesting.

      --
      Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
  14. Incorrect by s.petry · · Score: 2

    Microsoft was sued because they performed numerous illegal acts. Bundling IE was not a problem, but claiming it had to be part of the Kernel was a lie, as Microsoft repeatedly attempted to claim in court. Raising prices for people who also installed and configured Netscape was anti-competitive. Forcing vendors to install IE prominently and not install a current version of Netscape or lose the ability to sell any MS product was anti-competitive.

    The problem was not vertical integration, the problem was abuse of monopoly powers to destroy competition. Repeatedly lying to courts didn't help, but didn't result in additional (or enough) punishment.

    I'm pretty sure Groklaw is still around, who had a great repertoire of State/Gov vs. Microsoft cases. Not only the findings, but the evidence and arguments as well.

    --

    -The wise argue that there are few absolutes, the fool argues that there are no probabilities.

    1. Re:Incorrect by Anonymous Coward · · Score: 0

      Bundling IE was not a problem, but claiming it had to be part of the Kernel was a lie, as Microsoft repeatedly attempted to claim in court.

      The bulk of IE is mshtml.dll, which is a core component of Windows, and is/was the rendering engine for a number of other critical parts of the OS. If the request was "remove IE entirely", then that will, in fact, break Windows. The issue finally got resolved when someone demonstrated that all they really wanted was for Microsoft to remove the shortcut.

  15. Pot calling the kettle black by Anonymous Coward · · Score: 0

    As much as I like Spotify I've got to say they would (and probably do) behave no differently when in the same 'priveleged' gatekeeper of music position.

  16. The obvious solution by Anonymous Coward · · Score: 0

    I'm sure they wouldn't mind if suddenly those search/service giants simply gave them a higher ranking than all of their competitors (as I'm sure they have before). As long as they're being upfront about their connection to the service (not setting up shell companies, avoiding mentioning they're the owner, etc) and providing competitors a reasonable ranking I don't see the issue with search giants delving into other services. Expecting them to stay out of other markets is like telling Ford they can't put GPS in their cars so the aftermarket GPS market doesn't suffer.

  17. Abusive parents by swb · · Score: 1

    I think app store restrictions have always been primarily about protecting Apple's control and only incidentally about user security. I think Apple initially did have a vested interest in making the app store something less than a security train wreck, if only to get the platform off the ground and not scare away mass adoption.

    But many of the restrictions were only coincidentally about security and quite often it seemed like it was just protecting their turf or ideas they had but weren't ready to introduce yet.

    I expect they will get worse as iPhone revenue growth stalls and they turn to services to restore growth. There's not many services they can introduce that don't already have well-entrenched competition.

  18. Shill much? by s.petry · · Score: 1

    The judge in the case was not stupid, and removed the binary to prevent IE from running which Microsoft claimed would prevent Windows from running. Typical shill, not only openly lying but hiding from accountability.

    --

    -The wise argue that there are few absolutes, the fool argues that there are no probabilities.

  19. WAIT A MOMENT. by ckatko · · Score: 1

    You mean the SAME people we've "trusted" to tell us what is and isn't "fake news" are also ones who abuse their power?!

    WHY? Color me surprised!

  20. Re:No more ad "GOLD" for JOOgle... apk by Anonymous Coward · · Score: 0

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    News at 11.

  21. So....Spotify, take care of this problem then by Anonymous Coward · · Score: 0

    It's great that Spotify wants to deal with companies that "abuse their privileged position". But until they address the issue of how large the "Your Music" collection can be (limited to 10,000 "items" - which can be tracks, but if you save an entire album, it takes an entry for the album as well - so you never get 10,000 tracks saved, but in the low 9,000's - not really enough to be useful with their awesome discovery features).

    Upvote here: https://community.spotify.com/t5/Live-Ideas/Increase-maximum-songs-allowed-in-quot-Your-Music-quot/idc-p/1623675#M108676
    Google allows 50K tracks (not "items"), and Apple Music allows 100K tracks.

    Spotify's limit is far, far too small, and their excuse for not fixing it is about as lame as it gets - it boils down to "we'd rather have it suck for 1% of our users than be 'ok' for 100%'. As if allowing me to save 100K tracks is going to affect other users' experience - and if it does, that's a piss-poor design that should be fixed.

    1. Re:So....Spotify, take care of this problem then by desdinova+216 · · Score: 1

      I'm guessing that's something to do with the RIAA?

    2. Re:So....Spotify, take care of this problem then by KozmoStevnNaut · · Score: 1

      Do you really have 10.000 all-time favorite tracks? If you're habitually saving whole albums, why not make playlists instead (those have separate 10.000 song limits from "My Music") or simply follow the artist, if you like the majority of their albums?

      When I started using Spotify, I tried saving alle the music I had in my MP3 collection, and quickly ran into the limit. It made me realize how few tracks I actually considered favorites, and how few tracks I actually played on a regular basis. Don't worry, the music is still there even if you don't save it to "My Music".

      --
      Eat the rich.
  22. That's business by Anonymous Coward · · Score: 0

    1. Business as usual.
    2. Compete or die.
    3. ?
    4. Profit

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