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- Spotify wants Europe’s competition watchdog to examine Apple for the way it runs the App Store.
- Spotify has complained that the App Store’s 30% tax on in-app subscriptions makes it less competitive than Apple’s own streaming service, Apple Music.
- But the obvious question is why Spotify isn’t also going after Google, which also charges a levy for apps on its app store and has a music streaming service.
- The problem boils down to the fact that Apple won’t allow Spotify to advertise that subscriptions are cheaper through its website, not the app.
Spotify has filed an antitrust complaint against Apple with Europe’s competition watchdog, arguing that the way it runs the App Store is anti-competitive.
CEO Daniel Ek complained in an open letter about the fact app makers have to hand over 30% of paid apps, in-app subscriptions, and purchases to Apple. The upshot is that if you pay $9.99 through iTunes for your Spotify account, Spotify has to give $3 of that to Apple.
Spotify argues that it has to raise prices, making it more expensive than Apple’s own streaming service, Apple Music. And, the company said, if it tries to circumvent the 30% levy, it’s punished by Apple.
One obvious question is why the complaint doesn’t also include Google, which similarly charges Android developers to sell content or subscriptions through apps on its Play Store.
A source with knowledge of the matter told Business Insider that the difference is how Apple and Google behave with apps that circumvent their app store fees.
According to Spotify, Apple makes life difficult for any service that tries to get around the 30% fee.
Spotify, for example, asks people to pay for its premium subscription through its website rather than through iTunes. But, Spotify says, Apple won’t actually allow it to advertise those cheaper subscriptions inside the iOS app.
In a Q&A on its complaint against Apple, Spotify said:
"For example, they won’t let us market to our customers who use our app on iOS. So that deal we had for you last month to upgrade to our premium service that would have saved your family a lot of money? Sorry, we weren’t allowed to tell you about it.
"We aren’t even allowed to tell you something as simple as how and where to upgrade to premium via the app. Apple uses compliance with their restrictions as a pretext to block our app updates – whether they are bug fixes or enhancements, making it challenging, and in some cases impossible, to bring you our latest and greatest innovations."
But the same doesn’t exactly apply to Google.
According to our source, Google allows Spotify to offer a choice of payment methods. Likewise, this person said, Google doesn’t prevent Spotify directing its customers to buy a premium subscription through its website, rather than through the app.
Apple hasn’t responded to the filing or the allegations yet.
See Also:
- Spotify has bloodied Apple’s nose once before. Now, it has a chance to cut its $853 billion rival down to size.
- Spotify is going to war with Apple, filing an antitrust complaint over fears it is crushing competitors
- Obama’s former adviser says Silicon Valley giants must release their iron grip on everyone’s data
Source: Business Insider – sghosh@businessinsider.com (Shona Ghosh)