Tech

Spotify Applauds New Bill in Congress That Would Oust Apple's App Store Tax

App Store
Jakub Porzycki/NurPhoto via Getty Images

App Store

"Absent action, we can expect Apple and others to continue changing the rules in favor of their own services," Spotify chief legal officer Horacio Gutierrez said, "and causing further harm to consumers, developers, and the digital economy."

A new bipartisan bill introduced Wednesday (Aug. 11) aims to crack down on the so-called "Apple Tax" that developers pay to list their apps on Apple and Google's app stores, with Spotify among the bill's vocal supporters.

The Open App Markets Act, led by Sens. Marsha Blackburn (R-Tenn.), Richard Blumenthal (D-Conn.) and Amy Klobuchar (D-Minn.), intends to protect developers and bring more competition to the app store market. Currently, developers must pay Apple and Google between 15% and 30% of revenue made through in-app purchases in order to list their apps on the companies' app stores, thanks to the companies' practices of requiring that developers use their in-app payment processing systems. The bill would prohibit companies that own app stores with more than 50 million U.S. users from making this a requirement.

Spotify head of global affairs and chief legal officer Horacio Gutierrez -- who testified during a Senate Judiciary hearing examining the issue in April -- took to Twitter to applaud the initiative, thanking the congress members for their "courage and resolve in holding Apple and other gatekeeper platforms accountable for their unfair and anti-competitive practices." Spotify has been one of the most vocal critics of Apple's App Store system, calling its tax on in-app purchases "discriminatory" and even accusing Apple -- which of course has its own streaming service, Apple Music -- of rejecting bug fixes and other enhancements to Spotify's product.

"These platforms control more commerce, information, and communication than ever before, and the power they exercise has huge economic and societal implications. We urge Congress to swiftly pass the Open App Markets Act," Gutierrez said in another tweet. Finally, he added: "Absent action, we can expect Apple and others to continue changing the rules in favor of their own services, and causing further harm to consumers, developers, and the digital economy."

The bill includes other provisions to prevent app stores from disadvantaging developers, including protecting developers’ rights to tell consumers about lower prices and offer competitive pricing. The full text of the bill can be found here.

"The gatekeeper power that corporate behemoths now exercise over the app economy is harming consumers and competition," Federal Communications Commission (FCC) Commissioner Brendan Carr said in a press release. "This legislation is a thoughtful way to eliminate those harms while promoting innovation."

In response to the bill, Apple cited the essential role its App Store plays in the tech industry. "Since our founding, we’ve always put our users at the center of everything we do, and the App Store is the cornerstone of our work to connect developers and customers in a way that is safe and trustworthy," said a company spokesperson in a statement. "The result has been an unprecedented engine of economic growth and innovation, one that now supports more than 2.1 million jobs across all 50 states. At Apple, our focus is on maintaining an App Store where people can have confidence that every app must meet our rigorous guidelines and their privacy and security is protected."