Spotify Goes To War With Apple

Friday, March 15, 2019    12:47AM / By AngelList Weekly / Header Image Credit: Digital Trends

On March 13, Spotify filed a complaint with the European Commission that accused Apple of violating antitrust laws.

Spotify CEO Daniel Ek summarizes the critique in a blog post, writing:

“Apple operates a platform that, for over a billion people around the world, is the gateway to the internet. Apple is both the owner of the iOS platform and the App Store—and a competitor to services like Spotify. In theory, this is fine. But in Apple’s case, they continue to give themselves an unfair advantage at every turn.”

Among the unfair advantages Ek names are the 30% tax Apple extracts from purchases made through its payment system, the technical restrictions Apple places on companies that elect not to use its payment system, and the technical barriers that Ek say “include (locking) Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch.”

Spotify is not an outlier in its opinion of Apple's behavior, but the fact that its lawsuit was brought to the European Commission highlights one big point: It's going to be messy to make this work in the U.S.

It's not that there isn't momentum behind this cause. Senator Elizabeth Warren recently outlined her plans to regulate tech companies in an article aptly titled, “Here's how we can break up Big Tech.” In it, she offers a comparison of modern tech giants to past antitrust cases—from Standard Oil to more recent examples like Microsoft.

Many in the tech world, unsurprisingly, are skeptical of arguments in favor of bringing antitrust suits against tech giants, at least in the U.S.

As Ben Thompson says, unlike railroad or oil monopolies of old—which built their empires by forming trusts—“Google, Facebook, Amazon, and Apple dominate because consumers like them. Each of them leveraged technology to solve a unique user needs, acquired users, then leveraged those users to attract suppliers onto their platforms by choice, which attracted more users, creating a virtuous cycle.”

Thompson's argument, echoed by many, doesn't contradict antitrust accusations—Thompson himself is critical of Apple's use of the App Store—but it does emphasize how messy it will be for governments to apply century-old antitrust statutes to modern-day tech companies.

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