Spotify drags Apple to court over abuse of its in-app purchase system

Apple’s unfair business practices had led Spotify to lodge a complaint with the EU’s antitrust regulators.

In a potentially significant development, Spotify has filed a complaint with the European Commission against Apple saying Cupertino unfair business practices limits rivals to its own Apple Music streaming service.

According to Spotify’s complaint, “Apple’s control of its App store deprived consumers of choice and rival providers of audio streaming services to the benefit of Apple Music”.

The core aspect of Spotify’s charge is that it is forced to pay a 30% fee to Apple for content-based services that uses Apple’s in-app purchase system (IAP).

According to Spotify’s general counsel, Horacio Gutierrez, Spotify was pressurised into using the billing system in 2014, and was forced to raise the monthly fee of its premium service from 9.99 to 12.99 euros, just as Apple Music launched at Spotify’s initial 9.99 price.

Spotify then ceased use of Apple’s IAP system, meaning Spotify customers could only upgrade to the fee-based package indirectly, such as on a laptop.

Under App store rules, Spotify said, content-based apps could not include buttons or external links to pages with production information, discounts or promotions and faced difficulties fixing bugs. Such restrictions do not apply to Android phones, said Spotify.

“Promotions are essential to our business. This is how we convert our free customers to premium,” said Gutierrez.

He went on to add, voice recognition system Siri would not hook iPhone users up to Spotify and Apple declined to let Spotify launch an app on its Apple Watch.

Incidentally, Spotify declined to quantify the extend of the economic damage it believes it had suffered.

“We feel confident in the economic analysis we have submitted to the Commission that we could have done better than we have done so far,” said Gutierrez.

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