Spotify CEO Daniel Ek is especially concerned about Apple's payment policies.
13 Mar, 2019FORTUNE.COM
The battle between Apple and Spotify has intensified.
In a blog post on Wednesday, Spotify CEO Daniel Ek said that his streaming audio company has filed a complaint against Apple with the European Union’s competition watchdog, alleging the iPhone maker of using its App Store to “purposely limit choice and stifle innovation at the expense of the user experience.” In the complaint, which was filed with the European Commission, Spotify said that it doesn’t want to be subject to what Ek calls the “Apple tax.”
At the heart of the complaint is the way in which Apple aapl controls both its App Store experience and payments made to app developers. Apple has an extensive rule book on the features developers can and cannot include in their apps. And it polices the millions of apps in its App Store to ensure they comply. Apple has said that its App Store management ensures a high-quality iOS experience on the iPhone and iPad. Ek, however, says that by having such control over the App Store, the iPhone maker is “essentially acting as both a player and referee to deliberately disadvantage other app developers.”
Ek also takes issue with Apple’s policy that it take a cut of the payments customers made for app purchases or in-app payments. In many cases, that cut is 30% of the revenue an app generates. In his blog post, Ek called the revenue share the “Apple tax.” He said that if a Spotify user upgrades from the company’s free tier to the $10-a-month Premium offering, Spotify needs to pay Apple 30% of that each month.
“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,” Ek wrote. Apple Music costs $10 per month, but since Apple owns it, the company doesn’t need to worry about the 30% charge.
Ek, whose complaints echo those made over the years by other app developers concerned about Apple’s App Store practices, said that Spotify spot is seeking several remedies in its complaint against Apple.
Firstly, he wants to ensure that all apps running on iOS, including Apple’s own programs, are “subject to the same fair set of rules and restrictions.” He also wants Apple to be forced to offer other payment methods for apps, and to stop managing how app developers can market and promote their services to users.
Apple hasn’t yet responded to the complaint and didn’t immediately respond to a Fortune request for comment.