The EU is preparing to initiate a formal antitrust investigation against Apple following Spotify's official complaint, reports the Financial Times . Spotify claims that Apple uses its App Store to stifle innovation and limit consumer choice in favor of its own Apple Music service.
Following Spotify's complaint in March, the EU surveyed customers, rivals and others before deciding to initiate a formal investigation "in the coming weeks," reports FT .
Spotify CEO Daniel Ek is particularly concerned about the "Apple tax", for which Apple takes a 30 percent cut on every Spotify subscription registered through the App Store during the first year, and then 15 percent of each year thereafter. "If we pay this tax, it would obligate us to artificially inflate the price of our Premium membership far above the price of Apple Music," Ek said in a March blog post. On the contrary, not to pay the fiscal results in "a series of technical restrictions and limiting the Spotify experience," complains Ek, as limiting communications with Spotify customers. Spotify's complaint says Apple unfairly targets music subscriptions with the tax, but not apps like Uber or Deliveroo, for example.
Ek also accused Apple of blocking Spotify from implementing "experience improvements" related to Siri, HomePod and Apple Watch for the benefit of Apple Music.
"Spotify would not be the business that they are today without the App Store ecosystem," Apple said in response. "Apple connects Spotify with our users. We provide the platform through which users download and update their application. We share critical software development tools to support the construction of Spotify applications. And we created a secure payment system, it is not a small company, which allows users to have faith in transactions within the application. Spotify is requesting to keep all those benefits and at the same time retain 100 percent of the revenue. "
It is likely that the investigation will take years to resolve If Apple is found to have acted illegally, the EU could fine the company up to 10 percent of its global revenues, Google's antitrust bill in the EU now stands at € 8.2 billion ($ 9.3 billion), for example, Apple could also end the investigation early by changing its behavior.