Apple’s shift to focus on growing subscription revenues appears to be fueling a bigger regulatory confrontation in Europe. In the latest sign of mounting tensions, Nordic publishing giant Schibsted today published an open letter in support of Spotify’s allegations that Apple is abusing the power of its App Store.
“Apple has tried to profile itself as a more ethical company in terms of data and privacy issues,” the letter says. “But from the perspective of free journalism, the company today constitutes a threat as big as Facebook and Google.”
In March, Spotify filed a complaint against Apple with the European Commission (EC), citing anti-competition practices and a business model that gives Apple an “unfair advantage.”
The letter today was signed by Anna Careborg and Lena K. Samuelsson, publishers at Schibsted news outlets Svenska Dagbladet and Aftonbladet. Their arguments largely mirror those of Spotify:
Previously, it has been possible for us and other newspapers to charge for our products via App Store and build a relationship with our readers and users. Over the past two years, Apple has rejected such solutions. Instead, they take 15-30% of the revenue from all digital content, such as plus subscriptions, which are sold through the apps. Just at a time when some of our magazines are starting to find new digital business models, they use their dominant position to introduce this Apple Tax.
The company is also protesting the lack of access to customer data:
What is even more serious is that Apple does not allow us to have our own relationship with our readers via our apps. Data and customer relationship is confiscated by Apple. This means that we do not know [everyone that] has signed a subscription via the apps and that we therefore cannot follow up with offers, information, or questions about what they would like to read more about.
These two items, coupled with changing rules and a lack of transparency, led the publisher to conclude that regulatory action must be taken. The problems are even more acute in Sweden, where the iPhone has a market share of 48%, they say.
Previously, Apple responded to Spotify’s complaint by saying the music streaming service “wants all the benefits of a free app without being free.”
But part of the issue here is clearly Apple’s decision to launch a competing service in the form of Apple Music. As the company has become more dependent on its services to drive growth, it has leveraged the base of iOS users via its iPhones and iPads to attract Apple Music subscribers.
Over the past few decades, European regulators have frowned upon tech giants using an existing platform to gain an advantage in another product area. Microsoft was rebuked, for instance, for making its Windows Media Player the default service on Windows, harming rival Real. More recently, Google has faced multiple antitrust actions by the European Union for abuses of its search engine and Android platform.
With Apple launching a subscription news service and then a video streaming service this fall, complaints and scrutiny over how it’s using its installed base to enter new media markets will likely intensify.
“Apple is acting today as a whimsical feudal lord who either doesn’t understand — or simply doesn’t care — what its actions are impacting,” the letter says. “If the company is serious about wanting to contribute positively to social development, it should at least try to avoid sabotaging … free journalism.”