Spotify exec: The UK must break Apple’s stranglehold on new tech
Apple’s anticompetetive conduct is holding consumer choice in a stranglehold. The Digital Markets Bill has the power to break it, writes Spotify’s Avery Gardiner
When it comes to technology, few names resonate like Apple. It has firmly established itself as one of the most dominant and beloved companies in the world. But behind its polished exterior, Apple has shown it is ruthless when it comes to exploiting its market power for profit – and unfortunately, everyday consumers and small businesses are the victims of its success.
Today, Apple’s ongoing abuses of market power are both legendary and obvious. The European Commission found earlier this month that Apple has been breaking competition laws in Europe for years when it comes to music streaming and fined Apple more than €1.8bn (£1.5bn). Just last week, the US Justice Department sued the digital giant for exclusionary, anticompetitive conduct that hurts both consumers and developers.
For years, Apple has tightly controlled how consumers connect on iPhones with apps, with its consumers unable to get apps from anywhere but its App Store. For developers of digital goods and services, Apple offers two bad options: either use Apple’s in-app payment service and pay a 30 per cent commission to Apple, or, if you want to use a different payment method, you cannot tell customers in-app about prices, promotions or features. In other words: pay up, or we’ll make it hard for you to reach your customers.
To put it simply, consumer choice is in an Apple-shaped stranglehold.
And we know consumers are just as fed up as we are. Recent polling shows nearly 70 per cent of the public think Big Tech companies like Apple have too much power in the digital market, harming both smaller businesses and consumers.
In the UK, thankfully there’s a solution currently making its way through parliament that has the potential to alter the country’s digital trajectory, opening up digital markets to competition and all that flows from it: innovation, lower prices and more choices.
The Digital Markets, Competition and Consumers Bill (DMCC) works to redefine how businesses in the digital sector can grow and thrive – handing control back to consumers and allowing smaller companies to compete with larger players.
The Bill has overwhelming backing from the public, as well as broad cross-party support, with politicians of all colours recognising the need to create fair digital marketplaces.
As the Bill nears its final stages, the government must remain focused on enacting a watertight piece of legislation that truly levels the playing field and gives the next generation of tech talent the environment they need to grow. Not least because Apple has a track record of thinking the rules don’t apply to them and using its deep pockets to try and get around regulation that threatens their market dominance.
Governments around the world have long been trying to pass laws like the DMCC Bill but Apple has spent millions, in country after country, attempting to stop those rules from taking effect. It’s already shown how it likes to respond to attempts to force it to open up to competition (deny, delay, circumnavigate) in places like South Korea and the Netherlands, and we’re seeing in real-time what’s happening now with Europe’s Digital Markets Act.
In the EU, Apple is presenting a fake choice to app developers – either accept the 30 per cent commission fee that Apple charges for in-app purchases or choose even more extortionate terms, including charges for every customer download and update which will make it impossible for developers to scale or for alternative app stores to get a toehold. Under Apple’s new scheme, developers would owe Apple millions if their app goes viral. Apple has made it clear that it doesn’t mind punishing the success of developers big and small.
This can’t be allowed to happen in the UK.
If done right, the DMCC is an opportunity to ensure the UK has competitive markets. Unlike in other countries, the DMCC is designed to craft bespoke solutions to digital giants, creating more precisely targeted rules that will be much harder to ignore or thwart. It will stop dominant players like Apple from being able to abuse their market monopoly at the expense of UK innovators, sending a strong signal that the country is open for business and a global incubator for tech innovation.
Avery Gardiner is Head of Global Competition Policy at Spotify