Brussels looks the next battlefield for streaming music. Spotify Technology wants the European Union to look at Apple over the cut of 30 percent of paid subscriptions charged to App Store vendors. (The tax drops to 15% after one year).
While Europe's top antitrust authority, Margrethe Vestager, says it is too early to say whether an investigation will take place would make sense. Spotify is not the only third-party app that performs well with the iPhone's twisted economy, and Apple has not done a good job defending its practices. The case of the Swedish music streaming company is strengthened by Apple being one of its biggest competitors.
But it's hard to feel sorry for Spotify and I doubt many musicians and composers will. Streaming music is a dark and cruel business, and big providers are engaged in the same "win-win-all" approach that has characterized Big Tech for years. This involves the usual burning of large sums of money to corner a market, which is good news for consumers seeking cheap deals, but that is less for the industry's suppliers who are being harmed – in this case the musicians.
When Apple faced Spotify in 2015 with the release of a streaming music service, things would always turn out to be ugly. Apple has been the acceptable face of digital distribution since the turn of the millennium: it created the iTunes download of $ 0.99, invented the iPod to play it and convinced the most fundable artists in history – such as The Beatles – to to participate. Taking over Spotify in its own game was far less innovative. The decision of the Californian giant was to reach the same market using the same business model of Spotify, but with even more money to gain market share.
Being able to charge up to 30 percent of the incomes of its rivals with payments for iPhone apps certainly helps, and Apple's argument that the funds help maintain its technology platform is not very convincing. The company at least is prepared to pay more money to conquer the artists, who are famous for collecting two unique Frank Ocean in 2016.
Crossed a line
In terms of antitrust, it may be that Apple has crossed a cut-off line of signatures. However, many of these streaming companies look like aspiring monopolies – or rather, monopsonias, in which a single buyer is so powerful that they can dictate terms with suppliers.
To be fair, Spotify's profit margins are negative because of the royalties it has to pay to major labels. But the amount that big streamers pay artists down the food chain than Ocean and its laia is laughable. Cellist Zoe Keating recorded her royalties for years, revealing in 2018 that Spotify paid the princely amount of $ 0.005 / stream. Apple Music and Jay-Z's Tidal pay a fraction of a penny more, according to some companies in the industry. In an interview with the BBC, Keating ridiculed the transmission of "mono-culture" as being good only to the main hitters. She has a point.
So while Spotify can get the best of Apple in this particular fight, it's not an angel. His excessive collection of user data has forced his CEO to apologize after a consumer reaction in 2015. It is one of several targets of a complaint under the new and strict data privacy rules of Europe's GDPR. And let's not forget that your own business model tends to dominate the market. An antitrust victory in the battle with Apple would be welcomed to Spotify's shareholders; for suffering musicians, that would mean much less. – Reported by Lionel Laurent, (c) 2019 Bloomberg LP