Spotify CEO says platform wouldn’t exist today because of apple
Daniel Ek, the CEO of Spotify, criticizes Apple for its dominance in the tech industry, claiming that he wouldn’t be able to establish the music streaming platform in today’s landscape.
Ek criticized Apple, Google, Amazon, and other big tech companies in an op-ed for the MailOnline. He specifically addressed their treatment of developers and their de facto competitors, highlighting the concerns. Here are the Statments of Daniel EK:
“Today, Apple and Google are not just players, they are the rule-makers and gatekeepers of the mobile internet, controlling how more than 5 billion global consumers interact online,” Daniel Ek wrote.
“The present mobile environment is a far cry from the more open and level playing field that existed when I started building companies,” Daniel EK said.
“It also makes me wonder whether launching a venture like Spotify would even be feasible today. My guess is no.”
If the new rules are violated, companies may face fines of up to 10% of their global revenue. For Apple, this could result in a fine exceeding $39 billion, calculated based on their 2022 earnings.
The submission to the committee stated that these conditions pose a high risk of substantial disruption to the U.K. economy, including a potential reduction in investment.
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‘30% tax on everything’
Ek recently shared his thoughts during a press round, reflecting on the challenges he faced when launching his music streaming platform. Today, the platform is valued at $30 billion and has an impressive 220 million global subscribers.
During an interview with Steven Bartlett on the Diary of a CEO podcast, Ek shared that he initially dismissed the concept of a streaming service due to rampant piracy in the music industry. He went on to describe the rigorous efforts he endured for years, including hair loss and weight gain, to negotiate licensing agreements with major European record labels.
Ek is currently working on convincing the government to expedite the bill that aims to enhance the competitiveness of existing startups in the tech sector. Specifically, Ek’s frustration primarily stems from Apple, which imposes a 30% fee on certain developers, including Spotify, for app sales, in-app purchases, and subscriptions. Additionally, Google also imposes a similar fee on developers using its app store.
Ek wrote in the MailOnline: “How many more startups would have succeeded and grown into successful businesses if Apple wasn’t extracting this rent and reaping massive rewards at the expense of the broader tech economy?”
Approximately 90% of developers on Apple’s app store do not pay a commission to the company. However, European developers who qualify for Apple’s small-business program and sell less than $1 million in digital goods and services are subjected to a 15% commission.
Read more: Spotify is now testing audiobooks
In February, Ek’s pursuit against Apple with the European Commission was narrowed to exclude a request for the removal of charges for digital goods and services. Apple, known for embracing competition, includes Spotify among its most popular third-party music streaming services.
In the dispute, Amazon, another company, challenges Spotify with its streaming service. Meanwhile, Google is constructing its subscription model via YouTube, potentially impacting Spotify’s market share.
Many others, including the Spotify cofounder, have also voiced criticism about the dominance of tech’s major players, which hold trillions of dollars in combined market value.
Elon Musk delayed the launch of Twitter Blue, now X Blue, last year. He blamed Apple’s 30% commission in an exchange on X in October, claiming the fee was “literally 10 times higher than it should be.” Musk referred to it as a “secret 30% tax on everything” that ultimately affected consumers.
The Biden administration, in February, supported Musk’s arguments by recommending that Apple and Google address in-app purchasing limits. This includes mandating developers to use the iOS App Store or Google Play Store for any purchases. Bloomberg reported that both companies disagreed with these recommendations.
