"Courtesy Exchange": the essence of the conflict between the two most famous streaming companies

    In mid-March, Spotify turned to the European Commission with a complaint against Apple. This event was the culmination of the “undercover fight” that the two companies have been waging for a long time. Photo c_ambler / CC BY-SA

    A series of reproaches

    According to the streaming service, the corporation discriminates against applications of other companies to promote Apple Music. The full text of the complaint filed in the EU is not available, but Spotify launched a website called Time to Play Fair - " Time to Play Honestly" - which indicated the main complaints against the apple corporation. Here are some of them:

    Discrimination tax. Application developers for the App Store pay a commission on each purchase made by users within the service (the so-called In-App Purchases). However, not everyone pays the “fee”. For example, the rule does not apply to Uber and Deliveroo, but applies to Spotify and some other streaming services.

    Spotify founder explains in an open letter, that premiums are also levied on premium accounts. As a result, the company is forced to increase their value.

    Obstacles to communication. According to the rules of the App Store, companies may abandon the payment infrastructure of Apple. But then they lose the opportunity to send their users notifications about promotions and special offers.

    UX damage. Spotify customers cannot purchase premium subscriptions in the app. To complete the purchase, they have to make it in the browser.

    Difficulty updating apps. If the App Store decides that an update for a third-party application does not meet any requirements, it is rejected. As a result, users are missing out on important innovations.

    Closed ecosystem.By Apple’s decision, Spotify cannot be launched on HomePod speakers. In addition, Siri services are not integrated into Spotify - again, by the decision of the apple giant.

    In response to allegations, Apple posted a response. In it, representatives of the IT giant denied the statements of Spotify. In particular, they said that the App Store had never specifically prevented updates to the streaming platform, and work on integrating Spotify with Siri was actively underway.

    Conflict of companies caused heated discussionon social networks among application developers. Some of them sided with Spotify. In their view, a number of App Store rules really impede healthy competition. Others considered that the truth is on the side of Apple, as the company provides its infrastructure to developers and has the right to receive money for this.

    Apple and Spotify Conflict History

    The conflict between the two companies lasts from 2011. It was then that Apple introduced a fee of 30% for the sale of subscriptions within applications. A number of streaming services immediately opposed the innovation. Rhapsody threatened a possible exit from the App Store, and Spotify refused In-App Purchases. But representatives of the latter claim that Apple, by various methods, forced the company to integrate into the payment infrastructure. In 2014, Spotify surrendered, and they had to increase the cost of subscription for iOS-users.

    In the same year, Apple acquired the audio equipment manufacturer Beats Electronics and Beats Music, and a year later, the corporation launched its own streaming service. According to some reports, before its release, the IT giant urged major music labels to “put pressure” on other streaming services. This case even caught the attention of the Department of Justice and the US Federal Trade Commission.

    Photo by Fofarama / CC BY The

    conflict was continued in a year. In May 2016, Spotify once again abandoned In-App Purchases. In response, the App Store did not accept the new version of the Spotify app. In 2017, Spotify, Deezer, and several other companies filed their first complaint to the EU antitrust authority about platforms that “abuse their privileged position”. The complaint did not mention the name of the IT giant, but from the context it followed that it was about him.

    In the fall of that year, Spotify and Deezer wrote a letter to Jean-Claude Juncker, President of the European Commission (EU). In it, they talked about the difficulties that large international corporations create for smaller organizations. Nothing is known of Junker's answer to date.

    Other cases

    In November 2018, the U.S. Supreme Court heard the case in a lawsuit filed by a group of iPhone users back in 2011. It says that Apple violated federal antitrust laws by imposing 30 percent developer fees. However, the matter is far from complete and may be returned to the first instance for consideration.

    This year, Kaspersky Lab filed a complaint against Apple with the Russian Federal Antimonopoly Service. The App Store demanded to limit the functionality of the application for parental control. Experts linked this requirement with the fact that Apple had a similar application last year .

    It is not yet known how the current conflict between Spotify and Apple will end. The European Commission will stop its investigation if the IT giant proves that it has the right to establish different conditions for streaming services. But experts suggest that the trial will be delayed. A similar situation occurred with Novell's complaint against Microsoft: the lawsuit was filed in 2004, and the case was closed only in 2012.

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