Tag: Open App markets act

Holding Apple Accountable: The Future of the Internet Economy Depends On It

September 18, 2023

Five years ago, I sat in a conference room with key members of our legal team, several antitrust experts and Spotify founder & CEO, Daniel Ek. The topic at hand: Apple denied Spotify’s app update and sent a new set of restrictions that would once again further limit our ability to conduct business in its app store. After careful consideration and lots of hand wringing, we decided we’d had enough. So weeks later, we took a step that seemed almost impossible but totally necessary: fight back against one of the biggest, most powerful (and beloved) companies in the world to protect the future of the internet economy. 

Of course, we did this because Apple’s practices were harming Spotify, but we also did it because we believe companies should be able to compete to the very best of their ability for the hearts and minds of consumers. And we also believe consumers should have access to all the information they need to make better, more affordable choices for them and their families. Sounds pretty reasonable to me. But sadly, these beliefs are in direct conflict with how companies, like Apple, have built their businesses to benefit their bottom lines. 

This isn’t some empty warning—the world is moving faster than ever. Every day that passes without regulatory intervention, consumers continue paying too much, many developers’ dreams die on the vine under a 30% tax they can’t afford and Apple’s monopolistic roots take an even stronger hold. 

Five years later, while we are finally seeing some momentum in Europe, there has not been enough progress worldwide. Apple has continued to enjoy—and profit from—the status quo while everything else in the world has seemingly advanced forward. In the absence of meaningful government action, Apple gets a free pass to do whatever it pleases and consumers are paying the price. 

This is incredibly frustrating—especially when I think about how many consumers around the world are being impacted. Apple denies consumers’ ability to choose for themselves, forcing them to pay more for apps, limiting their user experience and preventing them from hearing about cheaper options. 

It’s even more frustrating when you realize the actual reason Apple is doing this: to protect their own bottom line. As their product sales continue to slow, their services business becomes even more critical to their financial performance. So to defend their multi-trillion dollar monopoly, they are pouring even more resources into maintaining their stranglehold over the App Store. 

We feel this acutely at Spotify. As a company that always focuses on building a simple, intuitive and seamless experience for users, Apple’s artificial constraints are stifling and we know our users deserve better. 

Recently, we launched audiobooks on Spotify and we were beyond thrilled to connect authors with millions of fans. But Apple stood in the way and our engineers were forced to create a complicated, multi-step process for audiobooks that users don’t want or deserve. It was a subpar experience, that honestly, we were embarrassed to deliver but felt bullied into. (If you want to see what we wanted to deliver vs. what we had to, check it out here.)

But that’s not all. Outside of the audiobooks issue, we can’t do the following things on Apple: 

  • Tell customers what our prices are to upgrade Premium membership options;
  • Let our customers request an email or other communication telling them about the ways they can save money; 
  • Provide our customers with different payment options beyond what Apple mandates (e.g. a credit card or PayPal, etc.); or
  • Deliver new product enhancements or introduce new features to our customers without Apple’s explicit approval. 

In many cases to get these approvals, we first have to share our proprietary strategies with Apple—our competition—and there are no restrictions on what Apple can do with that information. I don’t know about you, but I’d prefer not to be forced to share sensitive business plans with our biggest competitor, giving them insights from which they can copy, learn and gain an unfair advantage. But that’s our reality as well as many other developers who also compete with Apple. 

Apple also picks and chooses which app developers in the App Store have to pay them a 30% tax. Often, customers end up paying this extra cost. In contrast, Apple’s own apps don’t have to pay this tax (like Apple Music), and they come pre-installed on the iPhone so consumers see and pay for Apple’s apps first.

I am proud that Spotify has helped to give a voice to a growing coalition of app developers big and small who are impacted by this behavior. But when does the talking stop and action finally start?

Knowing that Apple is not just going to change on their own volition, regulators in Europe have taken up the mantle to intervene in Apple’s app store dominance. With the passing of the Digital Markets Act (DMA), Europeans may start to feel relief soon, assuming Europe delivers effective enforcement.  

In the UK, Parliament is working on the Digital Markets, Competition and Consumers bill (DMCC), which will similarly target dominant companies like Apple and ideally force them to compete more fairly. I am hopeful that it will have the impact consumers need and deserve. 

And in the US, we also see light on the horizon with Congress poised to reintroduce the Open App Markets Act – a bill that would require Apple to stop its practices that prohibit other companies from providing options for consumers to pay in a variety of ways and letting companies like Spotify talk to customers directly. The fire has also been lit in countries like Japan, South Korea, and Brazil, which are realizing that Apple has been dictating the rules for far too long. 

Someone recently asked if we could win this fight. I truly believe that regulators will make the changes needed for a better and vibrant internet. There is a lot at stake and it goes beyond music, beyond apps, beyond even the companies that exist today. This fight is about shaping the future of the internet.

This all assumes, however, that Apple will take these actions seriously and demonstrate a commitment to changing their ways and allowing for competition that they’ve long avoided. We are working closely with regulators around the world but it will take all of us to ensure real and lasting change is made. 

Visit Time To Play Fair to learn more.

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.