Apple Music is rapidly catching up to Spotify. But is Apple breaking anti-competitive laws to win?
Depending on which study you read, Apple actually has more active users than Spotify. And this part is less disputed: after just two years on the market, Apple Music is already half the size Spotify (which started in 2008). All which suggests that Apple Music could easily become the biggest streaming platform as early as 2018.
That is, before Spotify gets to go public. And before it becomes a billion-dollar company with billionaire investors.
Now, Spotify is crying foul — against both Apple and its less successful rival, Google (at least in music). In a memo dated May 4th and leaked over the weekend, two Spotify’s top executives have requested regulatory action against two the largest behemoths in online media: Apple and Google.
Specifically, the memo was signed by Spotify CEO Daniel Ek and counder Martin Lorentzon. Others in the music space inking the memo were Deezer CEO Hans-Holger Albrecht and its founder & CTO, Daniel Marhely.
Oddly, neither Apple nor Google are specifically named in the memo. Though it’s hard to imagine who else this memo is referring to (outside possibly Facebook).
Collectively, both Apple and Google control nearly 100% the entire mobile app space. That means that both companies theoretically have the power to crush a rival streaming platform overnight if they so desire (or at least severely handicap them).
That creates a massive vulnerability for Spotify and its investors, and it forms a core argument in the letter. Here’s a quick excerpt:
Our collective experience is that where online platforms have a strong incentive to turn into gatekeepers because their dual role, instead maximizing consumer welfare, they can and do abuse their privileged position and adopt B2B practices with adverse consequences for innovation and competition. These practices range from restricting access to data or interaction with consumers, biased ranking and search results to lack clarity, imbalanced terms and conditions and preference their own vertically integrated services.
And here’s the full letter.