Wednesday, March 13, 2019

Spotify Files Complaint Against Apple Over Surcharge Tax

Music-streaming service Spotify Technology SA has filed an antitrust complaint in Europe against Apple Inc., a new salvo in the broader battle over how and whether to rein in alleged wrongdoing by tech giants.

The Wall Street Journal reports Spotify’s complaint, filed late Monday to the antitrust arm of the European Union, alleges that Apple in recent years has abused its control over which apps appear in its App Store. The restrictions, Spotify claims, are designed to restrict music-streaming services that compete with Apple’s own Apple Music.

Daniel Ek
Spotify claims that Apple made it difficult for rival subscription services to market themselves to users without using Apple’s payment system, which generally takes a 30% cut of transactions. Spotify’s app doesn’t face the same restrictions on in the Play store run by Alphabet Inc.’s Google, Spotify said. Spotify also said Apple at times rejected security updates of its app and threatened to kick it out of its App Store for allegedly anticompetitive reasons.

Some activists and politicians on both sides of the Atlantic argue that big tech companies have become like utilities, and should be regulated as such. Sen. Elizabeth Warren, the Massachusetts Democrat running for president, went further last week, calling for companies like Inc. and Facebook Inc. to be broken up.

USAToday reports Spotify CEO Daniel Ek says that Apple requires Spotify and other digital services pay a 30 percent tax on purchases made through Apple’s payment system, including upgrading from Spotify’s free to premium service.

“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. And to keep our price competitive for our customers, that isn’t something we can do," Ek wrote.

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