Spotify is taking Apple to EU competition court

'Spotify has filed a complaint against Apple with the European Commission (EC), the regulatory body responsible for keeping competition fair and nondiscriminatory.'

From Daniel EK, CEO of Spotify

My goal for Spotify is and has always been to reimagine the audio experience by giving consumers the best creativity and innovation we have to offer. For that to be a reality, it is my firm belief that companies like ours must operate in an ecosystem in which fair competition is not only encouraged, but guaranteed.

It's why, after careful consideration, Spotify has filed a complaint against Apple with the European Commission (EC), the regulatory body responsible for keeping competition fair and nondiscriminatory. In recent years, Apple has introduced rules to the App Store that purposely limit choice and stifle innovation at the expense of the user experience—essentially acting as both a player and referee to deliberately disadvantage other app developers. After trying unsuccessfully to resolve the issues directly with Apple, we're now requesting that the EC take action to ensure fair competition.

They've also made an adorable video to make their case to the YouTube generation:

Here's what Spotify wants:

• First, apps should be able to compete fairly on the merits, and not based on who owns the App Store. We should all be subject to the same fair set of rules and restrictions—including Apple Music.
• Second, consumers should have a real choice of payment systems, and not be "locked in" or forced to use systems with discriminatory tariffs such as Apple's.
• Finally, app stores should not be allowed to control the communications between services and users, including placing unfair restrictions on marketing and promotions that benefit consumers.

Unsurprisingly, I have some thoughts:

Some quick thoughts:

1. 30% has never been tenable for companies that are already reselling digital goods. No (profit) room for multiple middle-people. Spotify wants to make money packaging and reselling music/audio. Apple wants to make money packaging/reselling apps.

2. The App Store has traditionally picked up the costs associated with hosting/marketing/fulfilling free apps, heavily offset by the profits from paid apps. If all apps can go free, should Apple just suck that up as a hardware value add, or should all apps have a cover charge?

3. Apple is pushing a services narrative. App Store is a huge slice of the services pie. Not only how willing, but how able is Apple to take a massive cut in that revenue by running the App Store as open(er) access (charity)?

4. How far does no rev share access to someone else's market scale? Is it unfair for Microsoft/Nintendo/Etc. to have Mario/Halo/etc. on their own consoles? Unfair for Walmart/Target/etc. to have house brands in their own store empires? Building markets is also non-trivial.

5. I continue to believe music re-packaging isn't a viable long term business regardless. It's a razor-thin margin commodity where everyone has pretty much the same catalog and platform companies can absorb it as a value add. Which is why Gimlet and Anchor.

6. The continued inability to reset default apps, the lack of SiriKit for media — not just music apps, but podcasts, video apps, everything — and other technical limitations are bad for customers... and for Apple. Having to compete for default app and Siri status will only make Apple's first-party offerings stronger.

This is likely to be a long, drawn out, EU-style messy process. So, while we watch it all play out like world's slowest Zamboni crash, let me know what you think.

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