Why the Spotify antitrust complaint against Apple is crucial for European digital SMEs

  • The European Commission is expected to decide whether it will open an investigation following a complaint against Apple in the coming months

  • Filed in March 2019 by Spotify, the complaint alleged arbitrary restrictions and “taxes” imposed by Apple on competing third-party apps that are distributed via its App Store

  • DIGITAL SME believes that Europe should guarantee fair market opportunities for its SMEs on digital platforms and urges the Commission to investigate the matter

Fair competition is the pillar of our market economy. A level playing field guarantees equal chances for all and promotes growth and innovation. The near-monopoly some tech giants hold with their platforms grant them potentially unfair advantages which threaten the functioning of our economy, particularly in the digital sector.

“Software-producing SMEs, in particular, rely on platforms to sell their products”, explains DIGITAL SME President and software-company CEO Oliver Grün. “Big platforms should not act as referee and player at the same time and unfairly disadvantage their competitors. European institutions must send a clear signal towards dominant platforms now.”

DIGITAL SME encourages the European Commission to consider the position of Europe’s digital enterprises, which strongly advocate for keeping the Platform-to-Business (P2B) market fair and open. Beyond the very important first step of ensuring transparency, European digital businesses have asked for a clear legal framework to prohibit potentially unfair practices by platforms like Apple’s app store. Independent apps like Spotify are forced to use the Apple payment service that charges an outrageous “tax” of up to 30% per transaction. Prohibiting third-party app developers from communicating with their customers, even outside of the Apple ecosystem, is unacceptable.

A “blessing in disguise” to guarantee a fair and open economy

“The complaint against Apple before the Commission’s Directorate-General for Competition (DG Comp) could be a blessing in disguise”, adds DIGITAL SME Secretary-General Sebastiano Toffaletti. “It’s a great opportunity for the Commission to make a clear case for keeping the European economy fair and open for all enterprises to compete in.” Taking action in cases where large companies treat competitors unfairly contributes to a competitive market environment that provides opportunities to newcomers. In DIGITAL SME’s Manifesto for Europe’s Digital Future, we outline what we think is necessary to allow companies to compete fairly.

The stakes are high for Europe’s app developers—particularly SMEs—and for the future of innovation across Europe. As the largest network of ICT small and mid-sized enterprises in Europe, DIGITAL SME calls on stakeholders to join us in our fight for fair competition on platforms. Raising awareness and standing up against dominant platforms works—if we work together. In a similar case, DIGITAL SME intervened as a third party in the Commission’s antitrust case against Android, another dominant platform. In the end, Google was fined €4.2 billion.

We are confident that the Commission will consider all relevant facts and arrive at a fair decision rather sooner than later!

(Photo by Gavin Whitner)