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The CEO of Spotify has welcomed the company’s antitrust victory over Apple, but has warned that EU regulators must do more to ensure that net neutrality is delivered both on paper and in practice.
On Monday (March 4), the European Commission issued a €1.84bn fine to Apple for abusing its dominant position in the distribution of music streaming apps and subscriptions to iOS users.
The commission found that Apple had applied restrictions on app developers that prohibited them from informing consumers about alternative and cheaper ways to subscribe outside the Apple billing system.
These restrictions violate “anti-steering provisions”, the commission found, and are therefore illegal under EU antitrust rules.
“It had an impact on millions of EU consumers, who were not able to make a free choice as to where, how and at what price to buy music streaming subscriptions,” said Margrethe Vestager, commissioner for competition.
Long march to victory for Spotify
The ruling represents a success for Spotfiy, which filed the original complaint against Apple in 2019.
But Daniel Ek, co-founder and CEO of Spotify, has said the battle against Apple — the “giant Goliath” — for internet neutrality in the EU is not over yet.
In a video statement published after the ruling was issued, Ek said that Apple has a “history of skirting the rules” even after regulators have ruled against the company.
“It's done so in many territories around the world — Japan, South Korea, the Netherlands, just to name a few — where Apple has lost similar cases,” he said.
“And basically it decided to ignore the ruling or vaguely comply, but not really comply with the spirit of whatever the court decided needed to happen.”
Ek noted that Apple’s response to the EU’s Digital Markets Act (DMA) has so far fit this pattern.
As covered by Vixio, the DMA is expected to challenge the dominance of the “gatekeeper” technology firms whose core platforms act as a nexus between customers and businesses.
Six companies have been designated as gatekeepers so far — Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft — and 22 “core platform services” have been designated.
Source: European Commission
Compliance in name only
In January, Spotify referred to Apple’s latest App Store and in-app payments rules, which were introduced to comply with the DMA, as a “total farce”.
For example, for large apps such as Spotify, Apple has slashed its commissions on in-app payments from 30 to 17 percent, or 10 percent for recurring subscription payments.
But at the same time, Apple has also introduced a new €0.50 download fee, which is charged to the developer each time a user downloads or updates the app.
“Under the false pretence of compliance and concessions, they put forward a new plan that is a complete and total farce,” Spotify said of Apple’s new rules.
“Essentially, the old tax was rendered unacceptable under the DMA, so they created a new one masquerading as compliance with the law.
“From the beginning, Apple has been clear that they didn’t like the idea of abiding by the DMA. So they’ve formulated an undesirable alternative to the status quo.”
In his response to the commission’s ruling, Ek said he is pleased with the ruling, as it proves that some of Apple's previous conduct was illegal.
However, he also said that regulators need to do more to ensure that the DMA lives up to its goal of ensuring openness in digital services.
“Through the DMA, we really need to open up [the app ecosystem] so that truly we can have an open internet, where more developers can succeed by competing on a level playing field,” he said.
“That's ultimately what we want here at Spotify, and that's why we keep on fighting this.
“And even though today may seem like a great win, it might actually just be a very small step in the right direction.”
Netflix joins Spotify in breaking up with Apple
For the time being, Spotify will remain beyond the reach of Apple’s commissions regime for in-app payments.
In July last year, Spotify announced that users will no longer be able to pay for its Premium subscription plans using the Apple billing system within the iOS app.
Instead, users have to go to Spotify’s own website and make the payment directly. (This applies to users in all jurisdictions.)
Last week, Netflix became the latest large iOS app to follow in Spotify’s footsteps by also retiring in-app payments via Apple in all jurisdictions.
“Apple billing for Netflix is not available to new or rejoining Netflix customers,” the company said in a statement.
“If you are trying to sign up on your Apple mobile device, you can go to Netflix.com on a mobile browser and use a different payment method.”
