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Rocket Internet and Spotify complain in Brussels over Apple and Google

More gatekeepers than gateways are providers like Google or Apple in app stores and search engines. The accusations are not new.

Rocket Internet and Spotify vs Apple and Google

First of all, in our opinion Apple and Google will win. Rocket Internet, Spotify and other companies are complaining to the EU about the alleged abuse of power by Apple and Google through their app stores. In a letter to the EU, the competitors are challenging the major suppliers to take advantage of their “privileged position”, thereby hindering free competition.

However, writing, as the Financial Times reports, is deliberately vague. Apple and Google are not named directly. There is, however, little doubt that these two suppliers are mainly meant.The coalitionaries criticize the fact that some mobile operating systems, app stores and search engines now function more as “gatekeepers” rather than “gateways”.

This would prevent competing offers from companies like Spotify by Google and Apple by exploiting the monopoly position. Representatives of the complaining companies now demand “special framework conditions that regulate the interaction between the platforms and their enterprise users”.

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Google and Apple control over 90 percent of the market for mobile operating systems. Both companies therefore also provide rules for third parties who wish to offer services or products based on these platforms. Suppliers who do not adhere to these requirements are, so to speak, excluded from the market.

Mobile Operating System

The letter now provides new arguments in the debate on the way the EU Commission is to take action in the digital market and thus also whether the antitrust authorities should exercise more regulation in the digital economy or whether the large companies from the Silicon Valley are granted.

In the course of the year, a new directive is planned, which will set the direction of the policy in the future. Options include, but are not limited to, sector-specific regulations, as well as independent arbitration resolutions to settle such disputes between large US companies and the usually much smaller competitors.

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Between Spotify and Apple there were already pre-tensions. For example, the music streaming vendor accuses Apple of not having included the latest version of its own app in the App Store. But also Apple’s price model, which offers Apple developers for paid platforms, seems to disturb Spotify. Since the middle of 2016 Apple has now retained 15 percent of sales. Previously, Apple had demanded 30 percent of developers.

There are currently no comments from Apple and Google. It remains unclear whether the EU antitrust authorities are taking steps in this matter.

It would not be the first time that the Commission is investigating the bundling of the operating system with other services or the influence of the market through Google’s own search engines. Apple was already acquitted of the accusation of foreign music services already once by the EU. In March, the Turkish antitrust authorities also launched a lawsuit against Google for the abuse of the market position with the mobile operating system Android.

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