The ongoing rivalry between Spotify (SPOT) and Apple (AAPL) took a new turn this week after the Swedish music streaming platform filed a complaint with the European Commission, accusing the latter of engaging in anticompetitive practices.
The latest development warrants a prompt response from the iPhone maker, considering the strict action initiated by European regulators in antitrust cases in the past. According to Spotify, Apple took undue advantage of its control over App Store by collecting additional amounts from rival app makers, in the form of tax and fees, depriving customers of their right to choose.
Seeking the intervention of the European antitrust watchdog, Spotify’s chief executive officer Daniel Ek in a social media statement said his earlier attempts to resolve the issue directly with Apple’s management had failed. If found guilty, Apple could face action for imposing unfair rules that put third-party app developers at a disadvantage, thereby denying users the right to avail services at competitive prices.
Spotify’s CEO Daniel Ek in a statement said his earlier attempts to resolve the issue directly with Apple’s management had failed
The complaint highlights the allegedly biased manner in which Apple collected “taxes” of up to 30% from digital services like Spotify, disguising the practice as “revenue share model for the App Store,” while excluding most other apps from such fees. Another charge leveled by Ek is that rival apps have been excluded from Apple’s digital assistant Siri and Apple Watch.
It is a well-known fact that Apple has been making aggressive efforts to grab a bigger slice of the lucrative music streaming market – currently dominated by Spotify – ever since it launched Apple Music about four years ago. It has constantly been on the heels of Spotify, expanding listenership both in the form of paid subscribers and free users.
Related: Listen to Spotify’s Q4 2018 earnings conference call
Last year, European regulators had slapped a $5-billion penalty on Google (GOOGL) for anticompetitive practices involving the Android operating system.
After starting the day’s session notably higher, Apple shares lost momentum as trading progressed. The stock has gained 15% so far this year, continuing its recovery from the recent lows. Spotify shares pared their early gains of the week and traded lower during Wednesday’s session.