Spotify and Apple Antitrust Claim

| May 22, 2019 | Firm News |

Swedish audio streaming platform Spotify is the latest company to file an antitrust claim against technology giant, Apple, based on its alleged unfair business practices. Spotify and Apple Music are two major players in the music streaming industry, which allows music listeners instant access to music on their mobile devices. Spotify provides music streaming services to over 207 million active users in over 75 countries. It is estimated Apple Music has over 56 million users.

Apple’s Alleged Unfair Advantage

Apple’s iOS platform users purchase apps through the Apple-owned App Store preinstalled on every Apple device. Third-party app creators must give Apple 30 percent of the profit from every in-app purchase, driving up the prices of any third-party apps and making it much harder for these other entities to compete against Apple. This can be especially problematic when Apple has its own apps, such as Apple Music, which provides similar services to a third-party competitor such as Spotify. Since Apple owns the iOS platform that the phones use, it can drive up the prices against App Store competitors such as Spotify.

It also remains difficult for competing app platforms to market their services without using the Apple payment system. Companies opting out of Apple’s payment system often face technical issues and Apple-imposed restrictions on the experiences provided to users. Many industry insiders are critical of Apple’s unfair advantage in owning both the iOS platform and the App Store, which appear to heavily favor Apple Music integration for ease of use and affordability.

European Commission Complaint

Spotify recently filed a complaint with the European Commission to review Apple’s conduct in the music streaming sector. The complaint alleges Apple intentionally limits users’ choice and discourages innovation through its App Store by blocking updates for third-party apps and limiting the ability of third-party platforms to connect to Apple-owned products including Siri, HomePod, and AppleWatch. Spotify further alleges direct competitors with Apple apps are targeted, unlike other third-party apps such as Uber or Deliveroo, which are not subject to the Apple 30 percent tax.

European antitrust regulators have been more likely to impose larger fines on large technology companies like Apple for this type of behavior. Apple has responded to the European Commission complaint by denying disparate treatment of third-party app companies, pointing out companies like Uber or Deliveroo earn revenue through advertising and therefore do not compensate Apple at all. Apple continues to assert a desire for the creation of even more independent apps for its customers.

Assistance with Antitrust Claims

Companies may find themselves involved in an antitrust claim when there are allegations of industry monopolies or intentional limiting of free competition. Antitrust claims often involve complex legal issues requiring knowledge of federal and state regulations. Handling an antitrust matter without the assistance of an experienced business lawyer can place parties at a significant disadvantage during legal proceedings. Contacting an experienced antitrust lawyer for help navigating this complex area of the law should be the first step for parties involved in antitrust claims.

Philadelphia Business Lawyers at Harty Law Group Handle Antitrust Matters

If you are involved in an antitrust dispute, the experienced Philadelphia business lawyers at Harty Law Group are here to help. With offices conveniently located in the Old City District of Philadelphia, we proudly serve business clients throughout Pennsylvania and New Jersey. To schedule an initial consultation with an experienced Philadelphia business lawyer today, call us at 267-383-3899 or submit an online inquiry form.