Breaking: Spotify Behind the Government Investigation of Apple Negotiations…

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Spotify recently told subscribers to cancel subscriptions made through the Apple Store, and sign up again using the Spotify website. This would keep Apple from taking 30% of Spotify subscriptions.

These jabs have been going on for a while. Politico reports that Spotify’s DC lobbyists have been lobbying directly against Apple, whichhas a lot to do with the Federal Trade Commission’s informal investigation of Apple.

Jonathan Prince, Spotify’s Global Head of Communications and Public Policy, says:

“The entire music economy is evolving, and we want to make sure it’s evolving in a way that’s good for consumers, rights holders, musicians … the entire business…”

Spotify hired four different lobbying firms in DC. On the other hand, Apple spent $1.2 million lobbying in DC in the first quarter of this year.

 

 

 

Image by Scott Smith, licensed under Creative Commons Attribution 2.0 Generic (CC by 2.0). 

7 Responses

  1. Me

    What’s to stop Apple from removing the Spotify app from the app store?

    Reply
      • J

        Not really. It would just virtually relegate them to one part of the market: android. That’s not anti-competitive at all. Especially when you consider that you can get apps on your iphone that don’t come from the app store.

        Reply
  2. Nat

    In actuality, would Spotify’s free-tier system be more of an anti-trust issue than Apple’s 30% so-called tax. The idea of fair-competition means that one company cannot prevent another from entering the market. I could argue that Spotify is preventing others from offering a service, since it provides a free-tier that would undercut any other service that is required to have a fully-paid subscription service (albeit, Apple in this case). Apple can, in all its glory enter the streaming market. It does not require Spotify’s permission. It just so happens that Apple is a bigger market-base. Another issue is the fact that Artists and Labels have been grumbling all along since Spotify’s free-tier is not working. Perhaps, for them Apple is an alternative. If artists are not getting paid, then the burden falls on Spotify, and not Apple in regard to Anti-trust. Will the consumer be hurt by paid-subscriptions. They should not be. In any market economy, transactions always involve payments between parties to receive goods and services in return for fair compensation. Does Spotify follow these market economics. No! Not really and they continue to post losses from since they began their Service. Why? Because they continually state that they hope to convert the free user to a premium user, but this has not happened in great proportions since Spotify began it’s service. My definition of a free user is one who is actually a free-loader. Free-loaders will not pay, no matter how you try to entice them. It is akin to a welfare-state where society’s children sit in their parents basement collecting welfare and listening to all the music they want because they think that they are entitled and boo-hoo to those that try to make them pay! But little do they realize that they are becoming a huge burden on the Music Industry. What happened to the idea that if you want to help the economy, whether it be the music industry, auto industry, or any industry, then you must pay your dues. Spotify is the one who is actually doing a disservice to the Industry as a whole and not Apple.

    Reply
  3. DavidB

    I don’t think the existence of a free tier on Spotify can be considered anti-competitive if other services are equally able to provide a free tier. It is Apple Music’s choice not to. What might be considered anti-competitive is the way in which Spotify subsidises the free tier by drawing on its large capital reserves. Other, less well resourced, services can be driven out of business while Spotify just swallows the losses. ‘Predatory pricing’ is a well-established form of anti-competitive behavior. According to Wikipedia: ‘Predatory pricing (also undercutting) is a pricing strategy where a product or service is set at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors. If competitors or potential competitors cannot sustain equal or lower prices without losing money, they go out of business or choose not to enter the business’ . Wikipedia goes on to say that predatory pricing is often illegal under competition laws, but difficult to prove.

    Reply
  4. Definitely NOT Anti-Trust Lawyerz...

    Wow.

    There’s almost nothing even remotely correct about any of the anti-trust analysis contained in each and every one of the above comments.

    Reply

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