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Spotify Files Complaint Against Apple With the European Commission Over 30% Tax and Restrictive Rules (spotify.com)
Spotify today filed a complaint with EU antitrust regulators against Apple, saying the iPhone maker unfairly limits rivals to its own Apple Music streaming service. Spotify CEO Daniel Ek writes in a blog post: 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. After trying unsuccessfully to resolve the issues directly with Apple, we're now requesting that the EC take action to ensure fair competition. Apple operates a platform that, for over a billion people around the world, is the gateway to the internet. Apple is both the owner of the iOS platform and the App Store -- and a competitor to services like Spotify. In theory, this is fine. But in Apple's case, they continue to give themselves an unfair advantage at every turn.
To illustrate what I mean, let me share a few examples. 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. As an alternative, if we choose not to use Apple's payment system, forgoing the charge, Apple then applies a series of technical and experience-limiting restrictions on Spotify.
For example, they limit our communication with our customers -- including our outreach beyond the app. In some cases, we aren't even allowed to send emails to our customers who use Apple. Apple also routinely blocks our experience-enhancing upgrades. Over time, this has included locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch. We aren't seeking special treatment. We simply want the same treatment as numerous other apps on the App Store, like Uber or Deliveroo, who aren't subject to the Apple tax and therefore don't have the same restrictions.
To illustrate what I mean, let me share a few examples. 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. As an alternative, if we choose not to use Apple's payment system, forgoing the charge, Apple then applies a series of technical and experience-limiting restrictions on Spotify.
For example, they limit our communication with our customers -- including our outreach beyond the app. In some cases, we aren't even allowed to send emails to our customers who use Apple. Apple also routinely blocks our experience-enhancing upgrades. Over time, this has included locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch. We aren't seeking special treatment. We simply want the same treatment as numerous other apps on the App Store, like Uber or Deliveroo, who aren't subject to the Apple tax and therefore don't have the same restrictions.
Summary of fees to sell physical goods on Amazon:
- $480 per year for a seller to be on its platform
- 15 percent of each order's total, including shipping but excluding sales tax, or $1.00 per order, whichever is higher
- 3 percent of sales tax
Apple charges each seller only $99 per year, and it has no $1 minimum fee per order. I imagine the $1 minimum fee has something to do with credit card and ACH debit processors taking a 30 cent fee per transaction.
Paid apps and in-app purchases on Amazon Appstore have a similar fee structure to Apple (source), though without the $99 per year fee:
- 20 percent for movie and TV subscription IAPs within Android apps
- 30 percent for paid apps and all other IAPs, including paid Alexa skills
Not really.
Apple is trying to have its cake and eat it too.
Apple can either be the gateway to ios or it can be the music provider. But being both is anticompetitive.
If apples service can compete with a 1.3 multiplier then ok. But not ok without.