Spotify Files EU Complaint Against Apple Over 30 Percent App Tax
16 March, 2019, 01:16 | Author: Regina Silva
Apple requires Spotify and other digital services to pay a 30% tax on purchases made through Apple's payment system, including upgrading from a free to premium subscription.
The founder and CEO of Spotify, Daniel Ek, announced today in a blog post (via Gizmodo) that Spotify has filed a complaint against Apple with the European Commission (EC).
Spotify isn't just trying to sway the European Commission but the public as well, as outlined by its video above.
Ek said that that should compete daily on merit, not based on who owns the App Store. "We believe Spotify is largely on the right side in both facts and principle, which creates risk that App Store policy terms will be forcibly changed in a way that negatively impacts Services revenue and Apple's brand", KeyBanc analysts wrote in a note to clients.
Spotify is not the only company to object to the app store practices of Apple and Google, which operates Google Play.
"Once Apple became a platform provider, but also a direct competitor, their incentive to disadvantage rival services, like Spotify, became even greater and their restrictions started to become more frequent and extreme", Horacio Gutierrez, Spotify's general counsel, told journalists in a briefing in Brussels on Wednesday. If Spotify chooses not to use the payment system and avoid the 30 percent charge, Ek said, Apple can complicate matters for Spotify, such as limiting its ability to communicate with customers or blocking upgrades.
A spokesperson for the European Commission confirmed to City A.M. it has received a complaint and will assess it under the standard procedure.
Lastly, app stores should not be allowed to control the communications between services and users, including placing unfair restrictions on marketing and promotions that benefit consumers.
In its complaint, Spotify argues that it should be treated like Deliveroo or Uber, which are not required to hand over 30 percent of money earned on food orders or rides to Apple.
Spotify used to make a lot of money for Apple. Netflix recently stopped allowing iOS users from subscribing to their plans from within the app as they too no longer wanted to pay the Apple tax. Ek says he wants the rules that apply to third-party apps to be equally applied to Apple Music, and that services like Spotify should be able to contact their users as they wish, and not force them to use a single payment system for in-app purchases. He also wants customers to have "a real choice of payment systems".
In addition to taking issue with those rules, Spotify alleges it has been the subject of unfair treatment.
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