UPDATED 14:41 EST / MARCH 13 2019

APPS

Spotify files antitrust complaint against Apple, alleging unfair App Store policies

Spotify Technology SA wants regulators to investigate the rules that Apple Inc. sets for outside apps on the App Store.

The music streaming provider, whose service competes with Apple Music, today filed an antitrust complaint against the iPhone maker in Europe over what it describes as unfair business practices. Spotify is accusing the company of unevenly enforcing App Store policies in a way that tilts the playing field against rivals.

The first part of the complaint focuses on the iPhone maker’s in-app payment rules. Apple only allows iOS developers to use its own IAP transaction processing system and takes a 30 percent cut from purchases, but certain companies such as Uber Technologies Inc. don’t have to pay the fee. According to Spotify, that hurts the ability of nonexempt players to compete.

The music streaming provider further argues that developers that choose not to use the IAP system also end up taking a hit from an additional set of restrictions imposed on them by Apple.

“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,” Spotify Chief Executive Daniel Ek (pictured) wrote in a blog post. “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.”

Apple prohibits developers who don’t use IAP from promoting paid offerings such as subscriptions inside their apps. Under this policy, iOS services can’t display any buttons or links that lead to external product pages, even if those pages are only informational in nature. Apple also enforces certain restrictions on what kind of marketing emails developers who operate such services may send to their users.

In addition to taking issue with those rules, Spotify alleges it has been the subject of unfair treatment. The company claims, among other things, that Apple has on multiple occasions blocked it from rolling out app updates without proper justification. Spotify said that in one case, the iPhone maker rejected an update over a promotion that had been approved by its top lawyer a year before.

The company’s decision to file the complaint in the European Union rather than the U.S., where Apple is based, likely has to do with the EU’s track record of pursuing antitrust action against tech giants. The past few years have seen European regulators hand out billions of dollars in fines companies such as Google LLC.

But there’s growing discussion in the U.S. as well about ways to limit the power of large technology companies. Spotify’s move comes shortly after U.S. Sen. Elizabeth Warren, a declared candidate for president, called for a breakup of tech giants, including Apple. In particular, she said she believes companies such as Apple, Google LLC and Amazon.com Inc. shouldn’t be able to run marketplaces for apps or products and also sell their own wares on their platforms.

Photo: Spotify

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