Departure of Spotify’s top lawyer might weaken coalition against Apple

Spotify’s Head of Global Affairs and Chief Legal Officer, Horacio Gutierrez is leaving the company after six years and joining Disney as General Counsel and Secretary. Florian Mueller of Foss Patents believes that Gutierrez’s departure is going to weaken Spotify’s ‘Coalition for App Fairness’ fight against Apple.

The Swedish music streaming company is one of the first to publically call out Apple’s anticompetitive behavior as a rival of Apple Music. In 2020, standing against App Store’s 30% in-app purchases commission, Spotify formed ‘Coalition for App Fairness’ with an alliance with other high-profile aggrieved developers, like Tile and Epic Games.

Spotify on iOS 15

The group alleges that Apple misuses its control over app distribution on iOS and deliberately undermines competing for third-party apps to push its own. “Apple uses its control of the iOS operating system to favor itself by controlling the products and features that are available to consumers. Apple requires equipment manufacturers to limit options, forces developers to sell through its App Store, and even steals ideas from competitors.”

Spotify’s lost a strong in its battle against Apple’s control over the iOS platform 

On the company’s complaint, in April, the European Union regulatory authority charged Apple with violation of its antitrust laws by implementing stifling App Store payment rules, accused it of charging a high 30% commission rate for all in-app purchases to disadvantage third-party music streaming apps, of failing to notify users of alternative payment methods, and other violations. If Apple is found guilty, the Cupertino tech giant would have to pay a $27 billion fine.

Apple

As a developer himself, Mueller accredits the success of Spotify’s fight against the Cupertino tech giant to Horacio Gutierrez and expressed grief over the loss of a strong opposing voice standing up for developers’ rights.

I’m profoundly disappointed because this means the App Store-critical movement loses the most effective and forceful advocate it ever had.

Horacio started writing letters to Apple in which he (rightly, in my opinion) accused Apple of antitrust violations and demanded a change of behavior. At some point, parts of the correspondence were leaked by the parties (first by Spotify, then by Apple) to the media. Those kinds of exchanges are a prelude to formal antitrust complaint. Spotify brought an EU antitrust complaint against Apple a few years after Horacio had joined.

In 2020, the EU launched formal investigations, and this year handed down a Statement of Objections (SO), which is like a preliminary ruling. I’m concerned that it’s “too little, too late” if competition enforcement limits itself to cases in which Apple directly competes with other companies, and Spotify is a subscription business, so any remedies might ultimately not benefit those of us who rely on in-app purchasing. My next app will have a subscription model, but also IAP offerings.

Having said that, a lot of changed. Apple revised its App Store commission rate to 15% – 30% and recently, was awarded a stay on the ruling to allow developers to add links to alternative payment methods on the App Store. So, the coalition’s position might be weakened more by the changes than Gutierrez’s departure.

About the Author

Addicted to social media and in love with iPhone, started blogging as a hobby. And now it's my passion for every day is a new learning experience. Hopefully, manufacturers will continue to use innovative solutions and we will keep on letting you know about them.

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