Recognition: Robert Triggs / Android Authority
- The battle between Spotify and Apple has just intensified, with the former gaining a major victory over the latter in the EU.
- The European Commission accuses Apple of abusing its dominant position in the App Store in relation to music streaming apps.
- Apple, of course, denies the EU’s finding.
If you launch the Spotify app on your iPhone and try to upgrade to a premium subscription, you will be paused. The app simply says, “You cannot upgrade to Premium in the app. We know it’s not ideal. “
The reason this isn’t possible is because Spotify has one of two options: present this warning or allow people to subscribe to Spotify on the app, but 15% of their payments will be forfeited. Obviously, Spotify chose the first option. However, this conundrum is at the heart of the Spotify-Apple battle that is taking place right now.
See also: The best music streaming apps and services for Android
Today the European Commission gave Spotify (via Ars Technica) a big win. It has decided to charge Apple with antitrust violations in the EU for “distorting competition in the music streaming market by abusing its dominant position in the distribution of music streaming apps through its app store Has”.
Apple now has to answer officially. Unsurprisingly, the company denies the charges and is likely to come up with a counter-argument and request an oral hearing.
However, if the EU ultimately decides against Apple, the company could be fined up to 10% of its global sales – that could be tens of billions of dollars.
Spotify vs Apple: what is the beef?
Recognition: Jimmy Westenberg / Android Authority
As most people know, Spotify is a music streaming app. You pay a flat monthly fee and get access to millions of songs to listen to as often as you want. Most people also know that Apple has a nearly identical product called Apple Music.
The problem at the heart of the battle between Spotify and Apple is how Apple’s App Store rules work against Spotify, but not against Apple.
Connected: Tidal vs Spotify: Which is the Better Option for You?
For example, if Spotify gives users the option to subscribe to a premium account in their iOS app, 15% of that user’s payments to Apple will be forfeited. However, if the same person signs up for Apple Music through the same app store on the same device, Apple will get 100% of that user’s payments as obviously no 15% cut is required for themselves.
Therein lies the problem that Spotify – and now the EU – considers unfair and anti-competitive. However, Apple says that Spotify just wants to take full advantage of the App Store (i.e. the ability for millions of people to download the Spotify app to their device in seconds) but doesn’t have to pay for it.
Shouldn’t Apple be allowed to create its own rules for its own shop?
The main problem here is the fact that these two music services are so similar. If Spotify wasn’t a music streaming service and instead a coffee delivery service – something Apple doesn’t offer its own alternative to – it wouldn’t be a problem. Any sane person would say, “Hey, it’s Apple’s store, so it’s Apple’s rules.”
However, Spotify is not a coffee delivery service. What Apple is essentially doing here is to make it more difficult for Spotify to offer its product to consumers, while also making it easier for consumers to purchase a similar product from Apple. In other words, it would cost 15% of Spotify’s App Store-based sales just to be on par with Apple Music. Since Apple owns the App Store and sets the rules, it’s an incredibly basic form of fighting competition. It is for this reason that the EC issued its decision.
Connected: Apple Music: is it worth it? Everything you need to know.
The problem inevitably has to be resolved with a compromise. Unfortunately, it is not clear what that could be. One possible solution could be for Apple not to be able to charge App Store fees for service subscriptions that are too similar to those it also offers. Of course, this would mean Netflix, Google Drive, Google Photos, Fitbit Premium, and all sorts of other companies could use the App Store platform without paying for the privilege. Dating apps, for example, would not be affected because Apple does not have its own dating app.
In the end, the EC will likely have the final say on this. It will be interesting to see how this affects and how it affects iPhones, the App Store and, via proxy, Google and the Google Play Store.