Digital Gabe
Cutting Edge Commentary On All Things Media

Spotify Takes On The “Apple Tax”

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Yesterday Spotify filed an anti-trust complaint with the EU over the 30% charge Apple imposes on subscription-based apps downloaded in its App Store.  Annuity rev from in-app downloads have become an important revenue generator for Apple over the past few years.  But lately publishers are starting to push back against the perpetual 30% fee.    Last August Netflix became the first major publisher to remove itself from the App Store, on the bet that users would still download their app directly from the web, which would save them from paying Apple the 30% vig.

Now Spotify is taking on Apple’s app charge on the basis that the forced fee is a monopoly which artificially raises prices for consumers and inhibits innovation.  According to Spotify CEO Daniel Ek, “If Spotify pays this cut it has to artificially inflate its prices well above the price of Apple Music. But if it doesn’t pay, Apple applies a series of technical and experience-limiting restrictions that make Spotify an inferior experience.”  As you read that quote keep in mind that both Spotify’s and Apple’s base sub price is $9.99/mo – so the claim about price inflation might be a little overstated.

In general the EU is more biased against big tech than the US courts would be, so Spotify is likely to have a sympathetic ear in this filing.  This one will be interesting to watch since it could have an effect on all publishers who have their apps in Apple’s App Store . . . at least in the EU.

 

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