Elizabeth Warren Hits Apple Music's 'Treatment' of Rivals
Spotify piles on, saying "you know there’s something wrong when Apple makes more off a Spotify subscription than it does off an Apple Music subscription and doesn’t share any of that with the music industry."
Sen. Elizabeth Warren (D-Mass.) took mega-corporations to task on Wednesday, saying in a speech delivered in Washington, D.C. that the consolidation and concentration of various business sectors "threatens our markets, threatens our economy, and threatens our democracy.” The New England democrat, on a break from poking Donald Trump, began her remarks by discussing "too big to fail” banks and the merger-happy airline industry, but later pivoted to the technology sector and three of the world's most powerful companies.
"Google, Apple, and Amazon provide platforms that lots of other companies depend on for survival," she said. "But Google, Apple, and Amazon also, in many cases, compete with those same small companies, so that the platform can become a tool to snuff out competition."
She then offered a trio of examples of said snuffing, beginning with Google, which she pointed out was once accused by Federal Trade Commission staffers of gaming its search results in order to promote Google-branded content over content of its rivals. Though FTC commissioners declined to pursue the accusations, the European Union is moving forward with formal charges in a similar case. "Europeans may soon enjoy better protections than U.S. consumers,” she said.
Warren also took issue with Apple and its "treatment of rival music-streaming companies,” arguing that "while Apple Music is easily accessible on the iPhone, Apple has placed conditions on its rivals that make it difficult for them to offer competitive streaming services.” She’s referring to the 30 percent cut that Apple takes from all purchases made within its App Store, as well as rules barring third-parties from telling potential customers about ways to avoid those surcharges (ex: Spotify costs $12.99/month if you sign up in the App Store; $9.99 if you go directly to the source).
Shortly after Apple Music’s launch last summer, Sen. Al Franken (D-Minn.) sent a letter about the App Store issue to both the attorney general and the FTC, which Warren says is currently investigating and deciding whether to sue Apple for antitrust violations.
Amazon, by comparison, has been using its position as the dominant bookseller to "steer consumers to books published by Amazon to the detriment of other publishers,” adding that the mega-retailer "extracts larger and larger shares of book profits from publishers, which discourages publishing houses from publishing riskier books, or books written by lesser-known authors.”
Warren began her remarks by stressing she loves markets ("I love markets!”) but said it’s crucial for highly successful companies like Amazon and Google to give smaller competitors a fighting chance. "Google, Apple and Amazon have created disruptive technologies that changed the world, and every day they deliver enormously valuable products,” she said. "They deserve to be highly profitable and successful. But the opportunity to compete must remain open for new entrants and smaller competitors that want their chance to change the world again.”
Google refused a request for comment. Representatives from Amazon and Apple did not immediately respond to requests for comment.
Jonathan Prince, global head of communications and public policy at Apple Music rival Spotify, issued the following statement on Warren's speech: "Apple has long used its control of iOS to squash competition in music, driving up the prices of its competitors, inappropriately forbidding us from telling our customers about lower prices, and giving itself unfair advantages across its platform through everything from the lock screen to Siri. You know there’s something wrong when Apple makes more off a Spotify subscription than it does off an Apple Music subscription and doesn’t share any of that with the music industry. They want to have their cake and eat everyone else’s too."
Warren's Entire Speech: