Regulation

Spotify, Others Claim Apple, Google Anticompetitive

Fortumo Inks Carrier Billing Deal With Spotify

In a recent letter to the European Commission signed by online music streaming companies Spotify, Deezer and German internet company Rocket Internet, among others, organizations have reportedly accused tech giants of “[abusing] their privileged position” and anticompetitive behavior.

The complaints levied against unnamed tech giants — likely Google and Apple, among others — argue that major operating systems, app stores and search engines have become “gatekeepers” rather than “gateways,” preventing competition from smaller tech rivals.

The letter comes as the commission is debating a move to overhaul digital policy, said The Financial Times. The organization reportedly plans to have new proposals later this year — a means to address major platforms’ potentially problematic contractual clauses.

The European Commission is reportedly considering a number of options, ranging from sector-specific rules to an independent committee that could work to settle disputes between major digital platforms and others.

The letters argue that additional regulation is necessary since competition lawsuits are too costly for smaller internet companies to engage in.

The letter is reminiscent of last summer’s accusation from Spotify that Apple’s App Store policies were anticompetitive. Apple had blocked an update to Spotify’s iOS app, allegedly to thwart any potential competition to its Apple Music service.

Spotify said Apple’s rejection of the revised app raised “serious concerns” under competition law in the United States and Europe, and the move was causing “grave harm to Spotify and its customers.”

Likewise, Spotify had argued last summer that Apple Music has prevented the company from signing big-name artists and blocking access to music via exclusive streaming rights. Apple launched its music streaming service in mid-2015 to compete with Spotify’s model.

This year, Spotify announced it might delay its highly-anticipated IPO until 2018.

Record labels — and, in particular, the big three: Universal, Sony and Warner — take home about half of Spotify’s sales. As of September 2016 — the last time Spotify publicly updated its figures — the company reported that it had cumulatively paid out some $5 billion to music rights holders.

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