Spotify Issues Antitrust Complaint About Apple One

Posted on September 16, 2020 by Paul Thurrott in Apple, Cloud, Music + Videos, Spotify with 38 Comments

Spotify has already issued an antitrust complaint about Apple One, Apple’s bundling of its own online services.

“Once again, Apple is using its dominant position and unfair practices to disadvantage competitors and deprive consumers by favoring its own services,” a Spotify statement notes. “We call on competition authorities to act urgently to restrict Apple’s anti-competitive behavior, which if left unchecked, will cause irreparable harm to the developer community and threaten our collective freedoms to listen, learn, create, and connect.”

As you may know, Apple yesterday announced Apple One, which provides users with access to multiple Apple services, including Apple Music, for $14.99 to $29.99 per month. And while Spotify is just one of many companies now complaining about Apple’s anticompetitive business practices, it was the first to finally get antitrust regulators to take notice. Now, Apple is under investigation by multiple regulatory bodies in the U.S., EU, and elsewhere.

Apple, naturally, disagrees with Spotify’s assessment.

“Customers can discover and enjoy alternatives to every one of Apple’s services,” an Apple statement retorts. “We’re introducing Apple One because it is a great value for customers and a simple way to access the full range of Apple’s subscription services. We’ll be recommending the Apple One plan that saves you the most money based on the subscriptions you already have. It’s perfect for anyone who loves any of our services and wants to get more for less, and it’s especially great for families. Also[,] select services included in Apple One are available to enjoy on non-Apple devices, and you can cancel anytime.”

I suspect we’ll see other companies impacted by Apple One—like cloud storage vendors, game services, video services, and so on—complain about this bundling in the days ahead as well.

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Comments (46)

46 responses to “Spotify Issues Antitrust Complaint About Apple One”

  1. Avatar

    Chris_Kez

    ”Threaten our collective freedoms”? 🙄

    I’m all for making the App Store a better, fairer place but come on with the hyperbole.

    Edit: doesn’t Spotify, the world’s largest music streaming service, offer their own bundle that includes Hulu?

    • Avatar

      yoshi

      In reply to Chris_Kez:


      They did at one point, not sure if they still do. I think it was a student deal. But the difference is, Spotify doesn't own Hulu. It was a mutual thing.

    • Avatar

      jimchamplin

      In reply to Chris_Kez:

      I believe that is called a dog whistle. 😉


      That’s the kind of verbiage that certain people in government and their supporters hone in on. “Our freedom!? Uh oh, better not be taking my freedom! Freedom!!!”


      A different camp will get fired up because “Competitors and consumers are being hurt. How dare they hurt their competition, because that only hurts their own customers! Aaarrrglebargle!”


      I mean, Apple does some pretty crummy stuff and they need to be taken to task for those things. I... don’t really think that this is one of them.


      PS I find it humorous that a huge corporate body like Spotify is going to be all “Won’t somebody think of the developers!?”

    • Avatar

      wright_is

      In reply to Chris_Kez:
      doesn’t Spotify, the world’s largest music streaming service, offer their own bundle that includes Hulu?

      No idea, but Spotify doesn't own its whole distribution chain. Apple has the hardware, the exclusive distribution method and the services on top and now a single subscription for those services.

      For somebody all-in on Apple, a great solution. From a choice point of view, it is strangling the competition out of the market.

      Spotify have to pay 30% of their subscription to Apple, Apple can ignore that 30% in their pricing model, allowing them to undercut the competition. Then you have to calculate in, say, Netflix, FitBit+, a newspaper subscription,cloud storage and a streaming games service (oh, right, that isn't even allowed on iOS), say. All of those probably cost $9 or so a month each, yet Apple bundles all of its versions of those services into a single bundle for under $15. There is no way that all of those services can cut, say, 80% off their subscription, to make an equivalent of the Apple bundle, and still pay Apple 30% of what is left and stay in business...

      As I said above, for somebody who only wants to use Apple services, it is a great choice. But in the long term, it is a strategic move to kill off all competition. This is the same argument that we have with Google, being the major search destination, major advertising platform and providing services which are promoted in their advertising and search results.

      The question is, if Apple is the hardware provider and the provider of the sole way of distributing apps on iOS devices and they are the sole payment provider, taking a 30% cut, should they also be allowed to compete with the apps that are forced to be distributed through the store and pay that 30%?

      Yes, those apps are well integrated into the Apple ecosystem, because only Apple has that level of access, which make the Apple experience smooth. And, because they own the whole chain, they can essentially price all competition out of the market. Is that really good for Apple users in the long term?

      There is merit to the claim and it isn't just hyperbole. It will be interesting to see how the judges argue this.

  2. Avatar

    michael_goff

    I guess complaining is a valid strategy when you can't compete.

    • Avatar

      geoff

      In reply to Michael_Goff:

      Spotify is simply asking to be *allowed* to compete on equal terms.


      At the moment, Spotify must hand over 30% of revenue to their competitor. That's not fair. Obviously.


      Even in the darkest of the Netscape versus Internet Explorer days, Microsoft didn't harvest 30% of Netscape's revenue in order to compete against them.

    • Avatar

      Paul Thurrott

      Come on. Complaining when a monopolist is abusing its market power isn't "not being able to compete," it's the right thing to do.
  3. Avatar

    nbplopes

    I like Spotify. I don’t condone Apple practices on the matter of the App Store.


    Still, they are getting what they saw ... they fed the beast. I remember Spotify craping over Windows Phone ...


    This space needs three players. It was devs that wanted two ... well Microsoft really helped.


    Now it’s a good time to bring Windows Phone Back.

  4. Avatar

    Jorge Garcia

    So, this is "Internet Explorer vs. Netscape" all over again. And, of course Paul is correct that is just the Tim of the Iceberg when it comes to this type of platform monopoly backlash. (Spelling error on "tip" but it was probably a subconscious move so I left it in :)).

  5. Avatar

    Jorge Garcia

    In reply to cavalier_eternal:

    It's the Tyranny of the default. Much easier (and now cheaper) for people to use what is deeply linked to their smartphone platform of choice. Just like the Internet Explorer issue of the 90's if you ask me.

  6. Avatar

    brika

    In reply to lvthunder:

    Yes they are since they are placing rules on it that would make it onerous and difficult.

  7. Avatar

    brika

    In reply to cavalier_eternal:


    Spotify is forced to pay a 30% fee to their competition for customers on that platform. And then Apple uses that revenue to turn around and offer a cheaper product that will harm Spotify's business with their customers on Apple.

    • Avatar

      inkgoshe

      In reply to brika:

      You do know there has to be money made in order for Apple to have the ability to take a cut of it, right? It doesn't cost 30% to be on the store. Like Cavalier said, they only take 30% if you make money from in-app purchase.

      • Avatar

        Paul Thurrott

        Guys. Seriously. That is so simplistic that it's not true. Apple does not "only" take 30 percent if you have in-app purchases. Apple also takes 30 percent when you sell a customer a subscription, and it will take that fee every time a subscription charge is made (monthly/yearly whatever) forever (it turns to 15 percent after one year). If you do offer such a subscription, you as the app maker cannot use a non-Apple payment system and you can't just not offer the subscription from within the app; if you do, you can't even tell your own customers that such a thing exists elsewhere. Furthermore, when you as the app developer make this deal with the devil, you're also handing over interaction with your customers in the app to Apple. Apple's hosting of an app store that benefits the sales of its own devices is a benefit for Apple not a cost. This 30 percent fee thing is just an opportunistic money grab.
  8. Avatar

    elv

    In reply to lvthunder:

    Yes they blocked xbox streaming. Please read before commenting.

  9. Avatar

    ebraiter

    I wonder if Apple Corp. will get involved. They are the business arm for The Beatles and the original deal between the 2 deals was that Apple [the tech company] wouldn't get into the music business. They have and now they are going further.

  10. Avatar

    Jorge Garcia

    In reply to cavalier_eternal:

    If over time, they show an appreciable drop-off in subscribers that can be matched to the time Apple One launches, then I think think that could be at least presented to a court as damages (for them to consider). But yes, they'd have to wait for that to happen first.

  11. Avatar

    crfonseca

    Bundling things and being first to market because they own the platform is pretty much how Microsoft killed off all the Office competitors. And Netscape. And Novell. And...

    But I'm sure Apple doing exactly the same thing will have absolutely no impact on its competitors.

  12. Avatar

    codymesh

    In reply to cavalier_eternal:

    Apple doesn't take a 30% cut in their own music service, where Spotify was forced to increase the price on iOS to make up for the 30% cut making it impossible to compete with Apple on pricing, and now they've resorted to not offer subscribing from iOS altogether just to not to unnecessarily hurt customers.


    Also Apple Music throws up notifications and advertises itself to the user, something no 3rd party app can do.


    Growth is not the absence of damages. Seriously man, you people can't be pretending to not know at this point.

  13. Avatar

    spiderman2

    time to join forces against apple anti competitive practices 

  14. Avatar

    behindmyscreen

    Someone doesn't know what a monopoly is.

  15. Avatar

    red.radar

    I see the obvious concern that spotify is raising. They can't compete with apple music because they can't provide the same value as apple offering cloud storage...gaiming...ect...


    The policy issue is that Apple's product and bundling incentiizes aggressive market consolidation. It makes it hard for these stand-alone services to survive. .... I mean who cares about drop-box once you are a Microsoft 365 subscriber?


    I think bundling is a nefarious issue that needs addressed but I think going through the legal channels isn't going to work. We need new competition laws that address these kind of issues.


    Insurance industry is the worst about this.


  16. Avatar

    jm2016

    This is nonsense. If you really wanted to go after someone on a "bundling case", I would think Amazon is the best target. I've been a prime member since it started out as just shipping and I don't know EVERYTHING that comes with it. Music, Photo storage, video, whatever else is in there... does anyone offer a comparable bundle of services?

    • Avatar

      jgraebner

      In reply to jm2016:

      The difference is that Amazon doesn't also run and tightly control a dominant OS that their competitors have to support in order to survive. I suppose that Alexa might cause them some problems in this area, but that's still much more of a niche than iOS.

    • Avatar

      Chris_Kez

      In reply to jm2016:

      I think Amazon's defense is that, though it is a huge company, it is not technically a monopoly player in any of those bundled verticals. I think it comes closest in E-Books, but really it is leveraging its base of people interested in Prime shipping as the foundation for everything else. And amazingly, they don't have even half of e-commerce in the US. This whole situation highlights the reason why we need reforms in the US around how we define monopolies, encourage competitive marketplaces, and protect consumers. To my mind, Amazon's absolute size gives it far-reaching impact that needs to be checked, legal/technical definitions notwithstanding.

    • Avatar

      crfonseca

      In reply to jm2016:

      Amazon, for all it's *many* faults, doesn't own the platform, so they can't preinstall and force as system default their own services, and doesn't take a 30% cut of it's competitors revenue, on the off chance you ignored the preinstalled apps and can work around the system defaults.


      Apple does.


      Of course, in the early days Apple would simply take down from the App Store any apps that competed with its own, so the fact that they only make them hard to use and take almost a third of their money is already progress.

    • Avatar

      Paul Thurrott

      Apple has been able to quickly steal a lot of share in music streaming thanks to its unfair business practices. Amazon has not.
  17. Avatar

    davidblouin

    So glad i made the switch from Spotify to a competitor...

  18. Avatar

    RobertJasiek

    Please explain: what is Spotify complaining about WRT Apple One and what is the alleged disadvantage for Spotify? I just want to understand. So far, I only understand that Spotify does complain at all about Apple One.

  19. Avatar

    SvenJ

    I'm going to file a class action lawsuit against Spotify. It is the only music service I can initiate with a triple tap on my Surface Earbuds on my Surface Duo. I want my freedom.

  20. Avatar

    scovious

    Apple allows bundles of apps and services, so long as they are the only ones who are offering it. They treat their developers like a free idea tank; they block ideas they can't compete with like Game Streaming and undercut the remaining developers subsidized by the App Store Apple Tax.

    It's almost like Apple has exclusive control of the App Store service to manipulate and undercut the prices of it's competition - or something.

  21. Avatar

    JerryH

    1) Create some also-ran level services

    2) Bundle them together and don't have to pay yourself the 30% vig

    3) Profit while the other, best of breed, services go under

  22. Avatar

    randallcorn

    I like this line: “Customers can discover and enjoy alternatives to every one of Apple’s services,”

    I am thinking along the line of the app store. Third party apps not being allowed because Apple already has something like that?


    Just saying

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