Tiff Between Spotify and Apple over Tax

Spotify has filled a complaint against Apple with the European Commission over ‘Apple Tax’ and the companies restrictive rules. The announcement was made on the 13th of March, 2019. Read on to know more about this case.

The Announcement made by Spotify’s CEO –

On 13th of March, 2019, CEO Daniel EK, had announced that “Spotify has filed a complaint against Apple with European Commission, the regulatory body responsible for keeping completion fair and nondiscriminatory. In recent years, Apple has introduced rules to the App Store that purposefully limit choice and stifle innovation at the expense of the user experience-essentially acting as both a player and a referee to deliberately disadvantage other app developers. After trying unsuccessfully to resolve the issues directly with Apple, we’re now requesting that the EC take action to ensure fair competition.”

Spotify and Apple’s Tax Issue

Spotify is a Swedish audio streaming platform founded by Daniel Ek, Martin Lorentzon. The app was launched in the year 2008 on App store of both Android and Apple. It competes against Apple music whereas it also relies on the company for distribution of its app on iOS devices.

The company, like many has an issue with the 30% cut; that Apple has been charging as part of the App Store revenue. It was forced to raise its subscription fee on iOS in order to make up for the 30% cut Apple charged on every sale; this has in fact made the service more expensive than Apple Music.

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The Alternative Solution –

As an alternative, if they choose not to use Apple’s payment system, Apple would then apply a series of technical and experience-limiting restrictions on Spotify; this includes their outreach beyond the app. They were not allowed to send emails to our customers who used Apple.

Daniel had also added that, “Apple also routinely blocks our experience-enhancing upgrades. Over time, this has included locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch”.

Spotify CEO about Apple Tax

Like other company apps such as Uber or Deliveroo on the IOS App Store, which are not subjected to the Apple Tax and the restrictions, Spotify too wants the Tax and the restrictions to be lifted up.

Spotify’s Request from Apple –

The company asks Apple for the following:

  • “First, apps should be able to compete fairly on the merits, and not based on who owns the App Store. We should all be subject to the same fair set of rules and restrictions—including Apple Music.
  • Second, consumers should have a real choice of payment systems; and not be “locked in” or forced to use systems with discriminatory tariffs such as Apple’s.
  • Finally, app stores should not be allowed to control the communications between services and users; including placing unfair restrictions on marketing and promotions that benefit consumers.

Hence Daniel concludes by saying the following over the matter –

“As I recently shared, competition pushes us to evolve and improve both the customer and creator experience. It’s not something we ever have—or will—shy away from. So, let me be clear that this is not a Spotify-versus-Apple issue. We want the same fair rules for companies young and old, large and small. It is about supporting and nurturing the healthy ecosystem that made our two companies successful in the first place.”

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Navaneetha Suresh

Navaneetha Suresh

Navaneetha, commonly known as "nav", loves to read, play badminton, play the keyboard and sing but when she's not doing any of those, she loves to write. What started as a high school hobby to write is now her ongoing passion.

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