Tag: European commission

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

March 4, 2024

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.

A Letter to the European Commission on Apple’s Lack of DMA Compliance

March 1, 2024

Ahead of the European Union’s DMA implementation deadline next week, Spotify and many EU companies sent the following letter to the European Commission today raising concerns about Apple’s lack of compliance.

 

Mrs. Margrethe Vestager
Executive Vice-President – A Europe Fit for the Digital Age
European Commission

Mr. Thierry Breton
Commissioner for Internal Market European Commission

Dear Executive Vice-President, Dear Commissioner,

We are 34 companies and associations operating across a wide range of digital sectors, including aviation, publishing/press, gaming, commercial radios, audio streaming, applications software, communications, marketing, payment, fintech, crypto and marketplaces. Together, we represent tens of thousands of businesses of all sizes and we serve hundreds of millions of customers across Europe.

We are very concerned that Apple’s proposed scheme for compliance with the Digital Markets Act (DMA), as communicated on 25 January 2024, will not meet the law’s requirements therefore inhibiting our ability to deliver the benefits of the DMA to consumers as soon as possible.

Apple’s new terms not only disregard both the spirit and letter of the law, but if left unchanged, make a mockery of the DMA and the considerable efforts by the European Commission and EU institutions to make digital markets competitive.

There are a myriad of elements in Apple’s announcement that do not comply with the DMA. We take this opportunity to highlight some of the most obvious and egregious:

  • Apple is offering app developers an unworkable choice between staying on its current terms – which are manifestly not compliant with the DMA – or opting into new terms, implying that only app developers opting into the new terms will benefit from the DMA. This is a false choice and merely adds unnecessary complexity and confusion. Neither option is DMA compliant and both options would simply consolidate Apple’s stronghold over digital markets.
  • The new fee structure in the proposed new terms seems designed to maintain and even amplify Apple’s exploitation of its dominance over app developers. With a hefty transaction fee and a Core Technology Fee (CTF), few app developers will agree to these unjust terms. These fees will deter app developers from providing seamless in-app experiences for consumers, and will hamper fair competition with potential alternative payment providers.
  • Apple claims “the changes include new controls and disclosures, and expanded protections to reduce privacy and security risks the DMA creates.” This is masquerading unfounded privacy and security concerns to the detriment of user choice. Apple’s approach – such as the introduction of “scare screens” – will merely mislead and degrade the user experience, depriving them of real choice and the benefits of the DMA.
  • To succeed, the DMA must create opportunities for real competition, including alternative app stores and sideloading. New app stores are critical to driving competition and choice both for app developers and consumers. Sideloading will give app developers a real choice between the Apple App Store or their own distribution channel and technology. Apple’s new terms do not allow for sideloading and make the installation and use of new app stores difficult, risky and financially unattractive for developers. Rather than creating healthy competition and new choices, Apple’s new terms will erect new barriers and reinforce Apple’s stronghold over the iPhone ecosystem.

The European Commission’s response to Apple’s proposal will serve as a litmus test of the DMA and whether it can deliver for Europe’s citizens and economy.

In the absence of materially different proposals from Apple, we urge the European Commission to take swift, timely and decisive action against Apple, to protect developers and benefit consumers and do so as soon as the DMA obligations apply. This is the only way to guarantee the DMA remains both credible and delivers competitive digital markets.

Yours sincerely,
The Signatories

EU Companies
Adevinta
Beonex
Blockchain.com
Cafeyn
Deezer
Epic Games
iconomy
Mustang
Paddle
Parula
Proton
Schibsted
37signals
SkyDemon
Spotify
Threema
Uptodown
Vipps MobilePay

EU Associations
Alliance Digitale
Association Européenne des Radios (AER)
Classifieds Marketplaces Europe (CME)
Digital Content Next (DCN)
Digital Music Europe (DME)
European DIGITAL SME Alliance
European Games Developer Federation (EGDF)
European Fintech Association (EFA)
European Magazine Media Association (EMMA)
European Newspaper Publishers’ Association (ENPA)
European Publishers Council (EPC)
France Digitale
Internet Economy Foundation (IEF)
News Media Europe (NME)
Sveriges Tidskrifter
Tidningsutgivarna

Apple’s Proposed Changes Reject the Goals of the DMA

January 26, 2024

For almost five years – 1,782 days – we have been asking the European Commission to take action against Apple. In a world that values competition and innovation, we found it unacceptable to stand by and allow gatekeepers like Apple to go unchecked.

So you can imagine our excitement when the Digital Markets Act (DMA) was created and passed into law to once and for all put an end to this unfair stifling of innovation disguised by Apple as security protections. We were proud of Europe for leading the way and assumed that Apple would have no choice but to comply with the letter and the spirit of the law. 

But as Apple has just shown the world, they don’t think the rules apply to them. 

Apple is nothing if not consistent. While they have behaved badly for years, this takes the level of arrogance to an entirely new place. Under the false pretense of compliance and concessions, they put forward a new plan that is a complete and total farce. 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. This is why many of the most popular developers will never be able to choose it. And for the developers who feel like they have no other alternative, it’s a path that will punish their success. Let’s explore a few elements of Apple’s new demands:

  1. A completely new 0.50 cent Euro fee per download, every year, in perpetuity, to Apple for just allowing developers to exist on iOS – This is extortion, plain and simple. If Apple’s already charging a commission of 17% (and 10% for recurring payments) on digital goods purchased, why would they also need to charge an annual flat fee for every user? For any developer wondering if this might work for you, you need to have less than a million customers and essentially sign up for not growing in the long run. From our read of Apple’s proposal, a developer would have to pay this fee even if a user downloaded the app, never used it and forgot to delete it. This will hurt developers, potential start-ups and those offering free apps most: How will a developer pay Apple back if its free app goes viral – multiple millions of accounts install that free app, and then that developer owes Apple millions? And this would be just the beginning, because Apple changes its rules all the time. There’s nothing in the law prohibiting Apple from increasing that 0.50 cent Euro to 1 or 10 Euro over time.  
  2. Apple is still charging a 17% rent on developers for existing in the App Store if they offer alternative payment methods or link out to their own website– Apple is making a developer’s choice between the status quo and this new program as difficult as possible. Apple is now saying, ‘sure, we’ll let you link out or offer your own payment methods… but you still owe us a commission for even doing that (plus that new flat 0.50 cent Euro fee).’ This combination of fees means that, in most instances, if your app is popular, you would pay the same or even more to Apple than under the prior rules. Apple is making the DMA hurt even more for developers, throwing them an unworkable alternative that will stifle their businesses immediately.
  3. Apple is offering alternative app stores – but are they really? Spotify, like so many other developers, now faces an untenable situation. Under the new terms, if we stay in the App Store and want to offer our own in-app payment, we will pay a 17% commission and a 0.50 cent Euro Core Technology Fee per install and year. This equates for us to being the same or worse as under the old rules. And if we managed to remove our app from the App Store and only existed in the Alternative App Store, that would still not work. With our EU Apple install base in the 100 million user range, this new tax on downloads and updates could skyrocket our customer acquisition costs, potentially increasing them tenfold. This, as we have to pay on every install or update to our free or paid app, even for those who no longer use the service.

The only conclusion is: Apple is forcing developers to stay with the status quo – This alternative that offers no alternative at all completely negates the goal of the DMA. The European Commission designated Apple as a gatekeeper because of their excessive fees and anti-competitive terms. Apple has proposed an unworkable alternative that developers would have to be locked into until the end of their businesses. Essentially, Apple is rendering the DMA’s goals of offering more choice and more control to consumers useless.

In the hours since Apple dropped this update, developers have frantically plugged in their businesses’ numbers into Apple’s online ‘fee calculator’ only to see their worst fears confirmed. Apple has the control and they are confident that the European Commission will let them keep it. 

Earlier this week, thanks to the clear language in the DMA, we shared how we plan to offer customers in the EU more choice, more control and better experiences. Today, that future is less clear. And it comes down to a fundamental question: Will the European Commission follow through with its intent to right-size Apple’s abuse of power? Or will the DMA be nice in theory, but in practice, have no substantive meaning for most developers?

All that is required is enforcing the very law many worked so hard to accomplish. The ball is in your court, European Commissioners, and once and for all you must reject this blatant disregard of the very principles you worked so hard to establish.

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.

It’s Time To Act. The Internet Economy Depends on It

September 16, 2022

Spotify CEO Daniel Ek Speaking at an event in Brussels

In March 2019, Spotify took the bold step of filing a complaint against Apple with the European Commission for anti-competitive behavior and abuse of dominance in the music streaming market. For years, Apple has consistently tilted the playing field in favor of its own services to disadvantage rivals, stifle innovation, and make it harder for companies like Spotify to compete. 

But it’s not just Spotify who’s impacted.

Nearly every consumer now owns a smartphone and uses it as their primary means of accessing services on the internet, which means everyone is impacted, putting the internet economy at risk. 

Fast-forward to today, and the European Commission, while having built its own strong case against Apple over the last few years, still hasn’t brought the case to conclusion. This is especially problematic as we’ve seen Apple seek to circumvent or outright defy regulations in other markets around the world in order to evade meaningful changes to their behavior.  

This is why Spotify CEO Daniel Ek—joined by Global Head of Public Affairs Dustee Jenkins, General Counsel Eve Konstan, and others from our team—traveled to Brussels, the seat of the Commission, for a full day of meetings and events earlier this month. This included time with key Commissioners to ask that they deliver a robust decision against Apple as soon as possible, because the internet moves fast, and every day that passes without any action erodes companies’ ability to innovate on behalf of consumers—not just in Europe, but around the world. Remedies must be levied to drive impact. Otherwise, Apple will have no real incentive to change. 

But the Apple case wasn’t the only issue on our agenda. We shared our thoughts around the remarkable work the Commission has done to advance Europe’s digital economy, and the leadership role it has taken with the recent landmark tech regulations of the Digital Markets Act (DMA) and Digital Services Act (DSA). While we applaud these efforts, we don’t see the DMA specifically as a substitute to the case we filed in 2019. Instead, we view it as a much-needed complement and believe that a decision on our case is still key to ensuring significant and lasting change. 

We also spent time with students at Vlerick Business School, where Daniel discussed leadership, the importance of healthy debate, the challenges of continuous innovation, and Spotify’s relentless focus on speed and building culture and resiliency. He also talked about his desire to unleash Europe’s entrepreneurial potential and the role of business in driving meaningful solutions to some of society’s biggest issues. And realizing this is only possible when there is a level playing field. 

The day concluded with a Spotify-hosted reception that featured a fireside chat with Daniel moderated by renowned Brussels-based commentator Shada Islam and a musical performance by award-winning Belgian singer-songwriter and RADAR artist Meskerem Mees. During the conversation, Daniel reaffirmed just how critical it is to keep fair competition at the top of the Commission’s agenda, given the billions of developers and consumers who are at the mercy of gatekeeper platforms like Apple. 

Fair and open platforms enable better consumer experiences and allow developers to innovate, grow, and thrive. Spotify believes we have a duty to ensure that we’re helping to pave pathways to success for start-ups out there just looking for a shot. So we’ll continue to engage on these topics and advocate for an ecosystem in which fair competition is not only encouraged, but guaranteed. 

To learn more, please visit TimeToPlayFair.com