Tag: anti-competitive

The U.K. Holds Firm in the Fight for Fair Competition With the DMCC Act, But It’s Not Over Yet

May 24, 2024

For more than a year, the U.K. government has been working to redefine how the internet works in the U.K., giving consumers greater choice and control over their digital lives and empowering small businesses to have a fair shot at competing with online giants. Having been rightly prioritized as the most important bill to be finalized before the U.K. prepares for a general election, the Digital Markets, Competition and Consumers (DMCC) is now law. It promises to revolutionize the U.K. digital landscape, forcing Big Tech companies like Apple to compete fairly for consumers’ business and opening up unprecedented opportunities for creators across the U.K. to thrive.

Done right, the DMCC can have manifold benefits. For consumers, the DMCC makes the digital marketplace more competitive, lowering prices and giving them more choice and control. For businesses and creators, it delivers the opportunities they need to grow, compete, and succeed. And for the U.K. as a whole, it makes the country a more globally competitive and attractive place to do business.

But even with the law now firmly in place, the fight isn’t over. 

As Spotify’s Founder & CEO Daniel Ek points out, “Apple has spent millions—in country after country—trying to circumvent and make a mockery of laws like the DMCC. They’ve already broken rules in the U.S., Netherlands, Japan, South Korea, and Europe. The DMCC has the potential to unlock real competition and growth and Apple must be held accountable in the U.K. because we cannot miss the opportunity to get it right.”

Similar to the DMCC, the E.U.’s Digital Markets Act (DMA) was supposed to end the unfair stifling of innovation that Apple had tried to disguise as security protections. But in response to the law, Apple has purposefully created an alternative to the status quo of the 30% commission fee it charges for in-app purchases. They now force developers to pay Apple a €0.50 fee for every customer download, in addition to a recurring 17% digital goods fee for every purchase made. Under the DMA, developers would now owe Apple millions if their apps were to go viral.

Dustee Jenkins, Spotify’s Chief Public Affairs Officer, said, “We were proud of Europe for leading the way and assumed Apple would have no choice but to comply with the law. But we were wrong—it’s not been enough. This can’t be allowed to happen in the U.K. It would undermine this world-leading piece of legislation, harming consumers and businesses across the country. Learnings have to be taken from Apple’s continued bad behavior around the world and the DMCC has to be implemented quickly and forcefully to break Apple’s stranglehold on the market.”

With the DMCC now enforceable, the U.K. has an Apple-shaped target on its back. For the DMCC to work as those who have designed it intended, the following must also occur:

  • The App Store and iOS should be designated promptly, with this designation being the first focus of the Digital Markets Unit (DMU). Apple themselves have even acknowledged the shortcomings in their App Store to increase competition. App stores are often people’s main gateway to the internet, and the competition regulator has already found that Apple’s anti-competitive behavior is costing U.K. consumers billions.
  • Action should be taken as soon as possible with eyes open to the likelihood that Apple will fight tooth and nail to avoid opening up to competition. The longer this takes, the more this is costing businesses and consumers and threatening the future of U.K. tech innovation.

Importantly, the regulator has political backing to use its powers as robustly as possible to enforce the regulation. 

The DMCC is the first step in giving power back to U.K. consumers. The U.K. now has the opportunity to lead the fight against Apple’s market dominance and show the rest of the world how it’s done.

*Update January 2025: GOV.UK announces SMS investigation into Apple’s mobile ecosystem.

The European Commission Confirms, Apple’s Anti-Competitive Behavior Is Illegal and Harms Consumers

March 4, 2024

Update as of August 14, 2024

While we are still many steps from a level playing field, we are beginning to see progress because of the European Commission’s historic decision on March 4, 2024 which found that Apple violated the EU’s antitrust laws and fined them over €1.8 billion. Starting today, Spotify is opting into Apple’s “entitlement” for music streaming services, created after the European Commission’s ruling. This means we will finally be able to offer something as obvious as it is overdue: iPhone consumers in the EU will now see pricing information for Spotify in the app and the fact that they can go to our website to purchase items directly. 

EU iPhone consumers will now benefit from seeing our end of summer promotional pricing. They’ll also finally be able to see how much a Premium plan of their choosing costs once the promotion ends. Consumers on other operating systems like Android will continue to see this promotion and pricing information as they always have. 

While this is progress, it’s only a small step in the long march towards giving iPhone consumers basic product experiences they expect and deserve in their apps – experiences that users of other phones already enjoy. Unfortunately, Spotify and all music streaming services in the EU are still not able to freely give consumers a simple opportunity to click a link to purchase in app because of the illegal and predatory taxes Apple continues to demand, despite the Commission’s ruling. 

The fight continues. iPhone consumers everywhere deserve basic information about how much things cost, when they can take advantage of great deals and promotions, and where to go to buy those things online. If the European Commission properly enforces its decision, iPhone consumers could see even more wins, like lower cost payment options and better product experiences in the app.

Visit TimeToPlayFair.com to learn more. 

 

Original post:

Today’s decision marks an important moment in the fight for a more open internet for consumers. The European Commission (EC) has made its conclusion clear: Apple’s behaviour limiting communications to consumers is unlawful. This decision sends a powerful message—no company, not even a monopoly like Apple, can wield power abusively to control how other companies interact with their customers.

Apple’s rules muzzled Spotify and other music streaming services from sharing with our users directly in our app about various benefits—denying us the ability to communicate with them about how to upgrade and the price of subscriptions, promotions, discounts, or numerous other perks. Of course, Apple Music, a competitor to these apps, is not barred from the same behaviour. By requiring Apple to stop its illegal conduct in the EU, the EC is putting consumers first. It is a basic concept of free markets—customers should know what options they have, and customers, not Apple, should decide what to buy, and where, when and how. 

While we appreciate the EC addressing this important case, we also know that the details matter. Apple has routinely defied laws and court decisions in other markets. So we’re looking forward to the next steps that will hopefully clearly and conclusively address Apple’s long-standing unfair practices.

From the beginning, the foundational belief of the internet is that it should be a fair and open ecosystem. That belief has fueled growth, innovation and discovery around the world. Today the leading way people access the internet is via their mobile phones. So why should the same principles not apply? And while we are pleased that this case delivers some justice, it does not solve Apple’s bad behaviour towards developers beyond music streaming in other markets around the world. Our work will not be done until we succeed in securing a truly fair digital marketplace everywhere and our commitment to helping to make this a reality remains unwavering.

America Must Take the Lead in the Fight Against Tech Gatekeepers

April 19, 2023

As a Swedish entrepreneur, I’ve long admired the American marketplace, where principles like innovation, competition and initiative reign supreme. It’s home to some of the most successful companies around the world because of these factors. When I founded Spotify almost 17 years ago, I believed in many of these same principles. If you can build a better system and if you work hard enough and innovate like crazy, you might just have a real shot at changing an industry for the better – even one as long established as the music business.

But as any entrepreneur can tell you, building a business is full of twists and turns. While I expected some of these challenges, the one I didn’t anticipate is the ongoing fight for fair competition as the digital marketplace has taken shape.

Last year, Congress had an opportunity to address this very issue by passing the Open App Markets Act, a bill led by Democratic Senator Richard Blumenthal and Republican Senator Marsha Blackburn, which aimed to rein in clear abuses by gatekeepers like Apple. Despite broad bipartisan support and overwhelming approval from the Senate Judiciary Committee, Congress did not take it up before the end of the year. Today I’m in Washington to urge the new Congress to take a leadership role and pass the Open App Markets Act to promote competition by providing basic checks on the anti-competitive behavior that’s harming both developers and consumers.

It’s not easy to decide to go head-to-head with Apple – a company that makes some of the world’s most beloved products. Yet, it’s a choice that we felt we had to make because put simply, Spotify and countless developers across the world want to be able to speak to our customers and compete fairly for their business. Apple prohibits competition by not allowing developers to discuss new products, features, and deals with their own users. For instance, Apple promotes deals for Apple Music to Spotify customers, but denies us the same privilege. What’s even more unbelievable, is that we can’t even tell our users the basics of how to sign up for a Spotify subscription or how to purchase an audiobook. This leaves customers without the ability to make informed choices about the services and pricing options available to them. And we aren’t the only ones feeling this impact. I talk to developers daily being disadvantaged by the small number of gatekeepers controlling the internet. 

Left unchecked, any company doing business through an app store lives and dies at the mercy of whomever is the gatekeeper at the time. It’s like leasing retail space from one of the few landlords in town who can charge a huge rent, change any term of the lease at any moment’s notice, place its own competing store right next to yours, and then prohibit you from sharing any promotional signs or advertisements that may reveal cheaper prices to customers or any benefits that would enhance their experience in any other location.

It’s impossible to deny that the phone and tablet have become the most common gateways to the internet, and Apple played a major role in making this possible. But the internet was never built to be controlled by a small number of dominant players. Under this current system that enables gatekeepers to dictate their own self-serving terms, consumers often end up paying more. Additionally, any aspiring entrepreneur wanting to create a company not beholden to these arbitrary rules really doesn’t stand a chance. 

While I am fortunate that Spotify has been successful despite Apple’s stranglehold, I know that many others aren’t so lucky. In Europe, the Digital Markets Act is a monumental step in the fight for fairness, entrepreneurship, and digital innovation. Other countries, including the UK, South Korea, and Japan, are also pursuing stricter regulations to curb the dominance of gatekeepers. But with no action here in the States, I worry that America risks falling behind, which will ultimately lead to severe consequences for innovation and consumers alike. This is especially troubling given that the United States has long played a leadership role on the global stage and has extolled the values of open competition I believe so deeply in. 

This is why we’ve arrived at an inflection point with a clear choice: To fight for an open, competitive marketplace that fosters creativity and enables entrepreneurs to develop and promote their products, or to continue to allow a handful of companies to hold the keys to the internet and advantage themselves at the expense of others. I’m convinced that Congress passing the Open App Markets Act is the only real path to a fair digital future. Let us seize this pivotal moment to reshape the digital landscape, fostering a future of innovation, collaboration, and fair competition.

European Commission: Apple’s Abuses Harm Consumers

February 28, 2023

The European Commission has once again made it abundantly clear that consumers are the ultimate victims of Apple’s abusive and anticompetitive behavior—and putting a stop to it is a top priority.

Apple’s anti-steering rules, which prohibit Spotify and other developers from telling consumers about deals or promotions through their own apps, mean that users are deprived of opportunities to save money and enjoy a higher quality service. That directly harms consumers.

With each passing day, Apple continues to choke competition and smother innovation. The European Commission today is sending a clear message that Apple must play fair and let competition work. Momentum is on the side of consumers but they deserve final resolution—and soon.

Read Spotify’s Joint Letter with European Companies Calling for Meaningful Regulatory Action Against Apple

January 18, 2023

Apple’s anti-competitive behavior harms hard-working consumers and developers—and the longer we wait, the harder it will become to stop them. Today, Spotify and seven other companies and organizations in sectors including publishing, audio streaming, dating, communications, and marketplaces sent a joint letter to call for meaningful regulatory action against Apple’s long-standing anti-competitive practices in Europe. 

Almost four years ago, Spotify filed a formal antitrust complaint with the European Commission because Apple’s anti-competitive behavior was stifling innovation and harming developers and consumers across Europe and around the world. Since then, little has changed. Apple has been enabled by the lack of decisive action by regulators, who continue to move hesitantly, even in the face of a groundswell of support. 

The clock is ticking. It’s time for regulators to address the ever-growing chorus of complaints against Apple, a critical step in stopping Apple’s continued abuses of its powerful platform. 

Read the letter here and learn more at TimeToPlayFair.com.