Tag: Time to Play Fair

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.