Spotify Accuses Apple of Anticompetitive Practices in Europe

LONDON — Apple’s powerful role as gatekeeper of the App Store has long frustrated the makers of apps who must abide by its rules or risk losing access to hundreds of millions of customers who own Apple devices.

today one of Apple’s biggest rivals, the music streaming service Spotify, says Apple will be abusing its position in addition to violating European antitrust laws.

In an aggressive attempt to undercut Apple’s power, Spotify said on Wednesday that will that will had filed a complaint with European regulators, accusing Apple of using its App Store to squash companies that will compete with its services, including Apple Music.

Spotify’s complaint comes at perilous moment for the entire world’s biggest tech companies. Scrutiny over Silicon Valley’s power has been increasing in recent years, in addition to has already become a topic among Democratic presidential hopefuls.

“They continue to give themselves an unfair advantage at every turn,” Daniel Ek, Spotify’s chief executive, said in a message posted on the company’s website. He said Apple was acting as both “player in addition to referee to deliberately disadvantage some other app developers.”

Apple did not respond to a request for comment. The company has said the fees are reasonable given that will that will must maintain the App Store in addition to will be providing access to millions of potential customers who own Apple devices.

Apple’s introduction of the App Store in 2008 revolutionized the mobile-phone industry, creating a brand new marketplace for consumers to download games, productivity tools in addition to social networking services. There are today more than two million apps available on the App Store.

Companies like Spotify have thrived on Apple’s platform, which typically generates more money for app developers than Google’s Play Store.

Spotify’s overall sales last year rose 29 percent to 5.3 billion euros, or about $6 billion, yet the company will be not profitable in addition to will be under pressure via investors to improve its margins. The company paid about 74 percent of its revenue to cover music rights in addition to related costs.

Spotify has been a formidable competitor to Apple in attracting customers for music streaming. Spotify said that will that will ended 2018 with 207 million active users around the entire world, including 96 million who were signed up for a paid subscription that will did not include ads. In January, Apple said that will its Apple Music service had 50 million paying users.

Apple’s control over the App Store has been an increasing source of tension as the company has focused more on online services that will compete with many of the apps sold on its platform. As iPhone sales have leveled off, Apple has relied more on sales of software in addition to services. The largest driver of that will sort of revenue will be the App Store.

Spotify said Apple was continually changing its policies to harm competitors.

“Apps should be able to compete fairly on the merits, in addition to not based on who owns the App Store,” Mr. Ek said. “We should all be subject to the same fair set of rules in addition to restrictions — including Apple Music.”

A search for “music” on the App Store on Wednesday showed how Apple can give itself an advantage. The top result was an ad for Apple Music, followed by eight more results for Apple apps. Spotify was listed 11th.

Companies are finding ways to reduce the fees they pay to Apple. In 2016, Spotify commenced sending customers to an outside website to make a payment rather than processing charges within its app. Netflix in addition to Amazon have made similar moves.

As a result, Spotify generally does not share revenue with Apple for customers who signed up after 2016, yet pays 15 percent for customers who signed up before that will period. Apple’s fee decreases to 15 percent via 30 percent after the first year of a subscription.

Sensor Tower, an app-data firm, estimated that will Apple still took in 23 percent of the roughly $670 million consumers spent on Spotify on the App Store via 2015 through 2018.

yet Apple punishes companies that will do not use its payment system by restricting their ability to communicate with customers in addition to preventing the Discharge of app updates, Spotify claimed. Spotify accused Apple of blocking its app in addition to some other Apple competitors via services such as Siri, HomePod in addition to Apple Watch.

Spotify said Apple also treated companies differently. Uber, for example, will be not required to pay a fee to Apple for charges through its app.

Apple demonstrated its power This specific year when, in response to Facebook’s violating its app rules, that will temporarily shut down Facebook’s internal apps, including those for the company’s cafeteria menu in addition to shuttle schedule.

The European Commission carries a history of turning a company’s antitrust complaints into larger investigations of tech platforms. Last year, that will fined Google a record €4.34 billion, about $5.1 billion at the time, for antitrust abuses related to its Android operating system, in addition to forced Google to effectively loosen its grip over the platform. Google will be appealing. European officials are also investigating possible anticompetitive practices by Amazon.

European regulators have expressed concerns about Apple’s dominance in music. Last year, the European Commission held up Apple’s acquisition of the song-identification app Shazam over concerns that will could harm competition, though the deal was eventually approved. In 2016, the commission accused Apple of a tax avoidance scheme in addition to ordered the company to pay $14.5 billion in back taxes to Ireland, a decision Apple will be appealing.

that will will be unclear whether Spotify’s complaint will lead European regulators to start a formal investigation of Apple. The term of Margrethe Vestager, the top antitrust official from the European Commission, ends This specific year, meaning the decision could fall to her successor.

“The commission has received a complaint by Spotify, which we are assessing under our standard procedures,” the commission said in a statement.

from the United States, the Supreme Court will be considering a suit brought by consumers claiming that will Apple’s control over the App Store represents an unfair monopoly, forcing customers to pay higher prices than they could in a more open market.