Apple Faces Further Charges in EU Antitrust Case Triggered by Spotify

[MacRumors]

Apple will face additional antitrust charges in the European Union related to a music streaming probe triggered by a complaint from Spotify, Reuters reports.

The charges are part of an ongoing investigation by the European Commission into accusations of anti-competitive conduct in the music streaming market from Spotify and suggest that the EU is strengthening its case against Apple amid growing scrutiny into big tech across the region.

In 2019, Spotify filed a complaint with the European Commission, alleging that Apple enforces App Store rules that "purposely limit choice and stifle innovation at the expense of the user experience," accusing the company of "acting as both a player and referee to deliberately disadvantage other app developers."

In particular, Spotify highlighted that Apple's 30 percent commission on App Store purchases, including in-app subscriptions, forces the music streaming service to charge existing subscribers $12.99 per month for its Premium plan on the App Store, just to collect the $9.99 per month it usually charges.

It is proposed that this gives Apple an "unfair advantage," since Spotify is unable to fairly compete with Apple Music's standard $9.99 per month price within the ‌App Store‌. If Spotify chooses not to collect payments via the ‌App Store‌, Apple purportedly "applies a series of technical and experience-limiting restrictions" on the company. It is also said that Apple was "locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch," thereby making Apple Music a more attractive option for subscribers.

In April 2021, the investigation found Apple to be in breach of EU competition law. Apple denied allegations of anti-competitive behavior, and said at the time of Spotify's complaint that its rival was using "its financial motivations in misleading rhetoric."

An individual familiar with the matter speaking to Reuters said that the European Commission now intends to set out extra antitrust charges in a supplementary statement of objections, which are normally used when an EU competition enforcer has changed parts of its case or obtained new evidence. The additional charges will reportedly be issued in the coming weeks.

Article Link: Apple Faces Further Charges in EU Antitrust Case Triggered by Spotify

 

[Powerbooky]

OK... you can sign up with HBO Max without going through the App Store. And Spotify can't?
Also... a lot of ISP plans offer Spotify as an additional package. No App Store in between.

In other news... products are priced differently in different stores. People are outraged.

 

[Agit21]

Good. Long overdue.

 

[SoldOnApple]

The problem, for Spotify, is that removing in app purchases and forcing customers to visit Spotify.com to pay, that actually costs them more money than it saves them. Offering in app purchases increases subscription rates above 30% because of the convenience. Presumably in an alternate reality where Spotify has a monopoly on smartphones, Spotify would be willing to let Apple sell their subscription service through the Spotify app store with no fees at all?

 

[JoshBoy]

Maybe Spotify should invest in billions of dollars and create their own phones, laptops and speakers……… as well as software design.

 

[Appleman3546]

This one will be harder to fight than the epic case, as it is in Europe and involves a direct rival

 

[@Brett]

European company complains to EU law makers about unfair playing field with American company whilst boasting about being the biggest music streaming service. Please. This should have been thrown out. Greed puts and simple. Do we need to make a case of the deals spotify makes. Fact is you can sign up for Spotify online so no unfair advantage. Of course they are free to make their own OS.

 

[gnipgnop]

It is proposed that this gives Apple an "unfair advantage," since Spotify is unable to fairly compete with Apple Music's standard $9.99 per month price within the ‌‌App Store‌‌. If Spotify chooses not to collect payments via the ‌‌App Store‌‌, Apple purportedly "applies a series of technical and experience-limiting restrictions" on the company.

----

Spotify was required to provide financial records as part of this complaint and those records proved that Spotify was simply lying about it's competition with Apple. Less than 1% of Spotify's iOS subscribers were paying through the App Store AND those subscriptions were subject to the 15% commission.

 

[Mr. Dee]

Like they say about Britney, ‘Leave Apple Alone’

 

[DEMinSoCAL]

It is proposed that this gives Apple an "unfair advantage," since Spotify is unable to fairly compete with Apple Music's standard $9.99 per month price within the ‌‌App Store‌‌. If Spotify chooses not to collect payments via the ‌‌App Store‌‌, Apple purportedly "applies a series of technical and experience-limiting restrictions" on the company.

----

Spotify was required to provide financial records as part of this complaint and those records proved that Spotify was simply lying about it's competition with Apple. Less than 1% of Spotify's iOS subscribers were paying through the App Store AND those subscriptions were subject to the 15% commission.

If that is indeed true (where is the source?), then what does Spotify have to gain from filing this complaint? Sort of like me suing a grocery store I don't shop at for price gouging.

 

[swingerofbirch]

Apple will face additional antitrust charges in the European Union related to a music streaming probe triggered by a complaint from Spotify, Reuters reports.

The charges are part of an ongoing investigation by the European Commission into accusations of anti-competitive conduct in the music streaming market from Spotify and suggest that the EU is strengthening its case against Apple amid growing scrutiny into big tech across the region.

In 2019, Spotify filed a complaint with the European Commission, alleging that Apple enforces App Store rules that "purposely limit choice and stifle innovation at the expense of the user experience," accusing the company of "acting as both a player and referee to deliberately disadvantage other app developers."

In particular, Spotify highlighted that Apple's 30 percent commission on App Store purchases, including in-app subscriptions, forces the music streaming service to charge existing subscribers $12.99 per month for its Premium plan on the App Store, just to collect the $9.99 per month it usually charges.

It is proposed that this gives Apple an "unfair advantage," since Spotify is unable to fairly compete with Apple Music's standard $9.99 per month price within the ‌App Store‌. If Spotify chooses not to collect payments via the ‌App Store‌, Apple purportedly "applies a series of technical and experience-limiting restrictions" on the company. It is also said that Apple was "locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch," thereby making Apple Music a more attractive option for subscribers.

In April 2021, the investigation found Apple to be in breach of EU competition law. Apple denied allegations of anti-competitive behavior, and said at the time of Spotify's complaint that its rival was using "its financial motivations in misleading rhetoric."

An individual familiar with the matter speaking to Reuters said that the European Commission now intends to set out extra antitrust charges in a supplementary statement of objections, which are normally used when an EU competition enforcer has changed parts of its case or obtained new evidence. The additional charges will reportedly be issued in the coming weeks.

Article Link: Apple Faces Further Charges in EU Antitrust Case Triggered by Spotify

They would have to charge $14.27 per month to collect $9.99 per month with a 30% cut to Apple.

Amount to charge=x

(.7)=70% remaining

9.99=revenue

(.7)x=9.99

x=14.27

Source: College dropout

 

[Ethosik]

If I make peanut butter, how can I possibly compete with target on their brand peanut butter if it’s $2 and I need to sell mine for $3!

Seriously these price comparisons are just ridiculous. Go to any store. Any two similar products are priced differently. If your product needs to cost more, you need to make it BETTER than the competitor. Apple does this every day. Cheaper Android exists. Cheaper Dell PC exists. How can Apple possibly compete?

 

[User 6502]

It is proposed that this gives Apple an "unfair advantage," since Spotify is unable to fairly compete with Apple Music's standard $9.99 per month price within the ‌‌App Store‌‌. If Spotify chooses not to collect payments via the ‌‌App Store‌‌, Apple purportedly "applies a series of technical and experience-limiting restrictions" on the company.

----

Spotify was required to provide financial records as part of this complaint and those records proved that Spotify was simply lying about it's competition with Apple. Less than 1% of Spotify's iOS subscribers were paying through the App Store AND those subscriptions were subject to the 15% commission.

The point is that many Apple Music subscribers might consider Spotify if its cost was the same as apple musics and if they could subscribe more easily. Apple did indeed create more friction or cost for those who want to use services from other suppliers. This can be acceptable in the Wild West (the us) but in Europe it’s a no no, and apple won’t be allowed to continue this behaviour. Or they could leave the eu market, which I suspect they won’t be doing as it’s the biggest common market area in the world.

 

[Sophisticatednut]

It is proposed that this gives Apple an "unfair advantage," since Spotify is unable to fairly compete with Apple Music's standard $9.99 per month price within the ‌‌App Store‌‌. If Spotify chooses not to collect payments via the ‌‌App Store‌‌, Apple purportedly "applies a series of technical and experience-limiting restrictions" on the company.

----

Spotify was required to provide financial records as part of this complaint and those records proved that Spotify was simply lying about it's competition with Apple. Less than 1% of Spotify's iOS subscribers were paying through the App Store AND those subscriptions were subject to the 15% commission.

This is false. Spotify have removed the ability to purchase subscriptions in the app since 2016. That’s over 6 years ago.

The 1% today is grandfathered in. Before 2016.

 

[Sophisticatednut]

They would have to charge $14.27 per month to collect $9.99 per month with a 30% cut to Apple.

Amount to charge=x

(.7)=70% remaining

9.99=revenue

(.7)x=9.99

x=14.27

Source: College dropout

It’s actually 9.99* 1.3= 12.99

 

[FSMBP]

The problem, for Spotify, is that removing in app purchases and forcing customers to visit Spotify.com to pay, that actually costs them more money than it saves them. Offering in app purchases increases subscription rates above 30% because of the convenience. Presumably in an alternate reality where Spotify has a monopoly on smartphones, Spotify would be willing to let Apple sell their subscription service through the Spotify app store with no fees at all?

I think that's their argument...They should be able to provide the same price with the in-app purchase without Apple taking their 30% cut. However, Apple can offer their consistent price for in-app for Apple Music (but obviously Apple they doesn't get 30% taken away).

Normally, Apple has a good argument for stuff like this...Since they don't host Spotify's service, why should they get a cut for an in-app subscription? Seems like an unfair way for Apple to always have a leg-up on competing services in terms of pricing.

 

[rme]

The point is that many Apple Music subscribers might consider Spotify if its cost was the same as apple musics and if they could subscribe more easily. Apple did indeed create more friction or cost for those who want to use services from other suppliers. This can be acceptable in the Wild West (the us) but in Europe it’s a no no, and apple won’t be allowed to continue this behaviour. Or they could leave the eu market, which I suspect they won’t be doing as it’s the biggest common market area in the world.

These EU shakedowns (that's what they are) remind me of the Wild West.
And the EU isn't the biggest market. It's becoming less significant by the year. The Chinese and US economies are bigger nowadays.

 

[FSMBP]

It’s actually 9.99* 1.3= 12.99

Yeah but 70% of 12.99 is 9.09...They would need to charge $14.27 to get down to 9.99 after 30%.

 

[randyhudson]

It’s actually 9.99* 1.3= 12.99

This checks out...

 

[willyx]

Maybe Spotify should invest in billions of dollars and create their own phones, laptops and speakers……… as well as software design.

Or may be sue Apple and win, yay!!!

 

[swingerofbirch]

It’s actually 9.99* 1.3= 12.99

They take a 30% cut of whatever Spotify charges.

What you're showing is a 30% price increase on $9.99, not what you'd have to charge to have $9.99 remaining after a 30% cut.

Because they're not taking a fixed amount but rather a percentage, the absolute amount they take increases with the cost of the product/service.

If I can't explain this well, just try subtracting 30% from 12.99 and see what you end up with.

It's not $9.99.

 

[User 6502]

These EU shakedowns (that's what they are) remind me of the Wild West.
And the EU isn't the biggest market. It's becoming less significant by the year. The Chinese and US economies are bigger nowadays.

The eu common market is the largest trading block in the world to my knowledge. If things have changed recently might be the second (or let’s say even the third), but it doesn’t change the general concept that apple might not want to leave it unless they fancy losing a ton of money.

 

[ksec]

Enough with this nonsense

Listen to the wisdom and courage on Macrumors, PULL OUT OF THE EU.

 

[DEMinSoCAL]

They take a 30% cut of whatever Spotify charges.

What you're showing is a 30% price increase on $9.99, not what you'd have to charge to have $9.99 remaining after a 30% cut.

Because they're not taking a fixed amount but rather a percentage, the absolute amount they take increases with the cost of the product/service.

If I can't explain this well, just try subtracting 30% from 12.99 and see what you end up with.

It's not $9.99.

Math is hard (for some people).

 

[DEMinSoCAL]

This checks out...

It checks out if you wan to increase $9.99 by 30%. You'll come up short if you need $9.99 after taking 30% off of $12.99.