After Spotify Complains, EU Launches Apple Music Probe

Ruben Fields
May 9, 2019

Investigators in the European Union are reportedly preparing to launch a formal investigation into Apple Inc. and potential anticompetitive practices, according to a report from the Financial Times. As Spotify points out, that revenue share is 30 percent for the first year of an annual subscription-but they left out that it drops to 15 percent in the years after.

Rival streaming company Deezer has echoed Spotify's concerns, and other groups are also anxious about Apple's behaviour but are too afraid to take on Apple, according to the report. Both Apple and Spotify haven't made any comments on the investigation, and it may be a while before any news comes out from both camps.

An antitrust complaint was formally filed by Spotify to the European Commission following Ek's blog post, and now, the Financial Times says the E.U. will confirm dates for a preliminary investigation within the next few weeks.

More specifically it is the fact that Spotify would have to pay Apple 30 percent of each subscription when a user converted from the free version of the music streaming platform to the premium variant. Spotify's complaint alleges that Apple behaved unlawfully and abused its App Store authority to favour its own music service.

Apple Music and Spotify are battling in the streaming music business.

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That royalty rate applies to subscription services like Spotify, but not to apps like Uber.

Apple could also, of course, change its behavior and meet Spotify's demands, which include Spotify being subject to to the same set of rules and restrictions as other apps, including Apple Music.

In response to the allegation leveled against it, Apple said it had approved and distributed almost 200 updates on Spotify's behalf which resulted in well over 300 million downloads of the Spotify app.

This as the penalty for infringing upon trust laws in the region could result in a fine up to 10 percent of Apple's global revenue.

A war of words broke out between the two companies, with Apple claiming that "Spotify wouldn't be the business they are today without the App Store ecosystem".

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