- Spotify’s CEO announced in a recent blog post, that the company has filed a complaint against Apple in the European Union.
- The company claims that Apple has abused its control over apps in its App Store, stifled innovation, and limited consumer choice for their own benefit.
- They also launched a website to highlight what they call Apple’s “anti-competitive behavior.”
Spotify CEO Speaks Out
Spotify filed an antitrust complaint against Apple on Monday with the European Union, alleging that Apple is hurting innovation and consumer choice with its Apple “tax” and restrictive rules in its App Store.
In a blog post shared Wednesday morning, Spotify’s CEO Daniel Ek said that Apple imposes rules that “purposely limit choice and stifle innovation at the expense of the user experience—essentially acting as both a player and referee to deliberately disadvantage other app developers.”
Ek said his company takes issue with the 30 percent cut that Apple takes from subscriptions made through the Apple Store. He argues that this “tax” is designed to hurt services that compete with Apple’s own music service, Apple Music.
To pay this fee, Spotify says it has to inflate their premium membership prices “well above the price of Apple music.” However, if Spotify refuses to pay the fee, then Apple “applies a series of technical and experience-limiting restrictions” that make Spotify a worse experience. For example, Ek says that Apple limits their communication with customers and in some cases has restricted them from even sending emails to customers who use Apple.
“Apple also routinely blocks our experience-enhancing upgrades. Over time, this has included locking Spotify and other competitors out of Apple services such as Siri, HomePod, and Apple Watch,” Ek continued in the post.
According to Spotify general counsel Horacio Gutierrez, this is not something the company faces in Alpahbet Inc’s Google Play Store, where Spotify is not required to use Google’s payment system.
Time to Play Fair
The European Commission complaint is confidential, so to bring attention to the issue, Spotify has also launched a website called “Time to Play Fair.”
The site is dedicated to explaining Apples “anti-competitive behavior,” and even features a video that breaks down the issue at hand.
Not Just Spotify
Spotify has complained informally to the EU several times about similar issues in recent years. However, this filing is the first official complaint publically registered in the EU against Apple’s App Store.
Concerns over this type of behavior aren’t only expressed by Spotify. Last week, Senator Elizabeth Warren (D-MA) said that if elected president in 2020, she would work to break up big tech companies.
Warren criticized firms like Google, Amazon, and Facebook for operating marketplaces where they also compete against other companies. She argued that this allows them to set the rules in a way that gives them benefits at the expense of others
A spokesperson for the European Commission told The Wall Street Journal that it had received Spotify’s complaint and was “assessing [it] under our standard procedures.”
At this time, it’s unclear what this complaint will mean for the tech giant. However, EU regulators have become increasingly concerned with how technology platforms control the online ecosystem and how they can use their control to their own advantage.
For instance, in 2017 and 2018 the EU hit Google with record fines totaling $7.7 billion for alleged anticompetitive behavior. Then in September of last year, the EU said it was opening an investigation into Amazon to see if the company used data on rival sellers to unfairly compete against them by selling similar Amazon-brand products.
The current European Commission will reach the end of its term later this year, following parliament elections in May. That means they’ll be leaving little time to make any major progress on a new investigation.
Despite that, the complaint is already getting support from other companies. Deezer, another music streaming firm that filed an informal complaint with Spotify in 2017, said Wednesday that they supported Spotify in their antitrust challenge. Deezer added that it looked forward to the commission’s response.
See what others are saying: (The Wall Street Journal) (Bloomberg) (Tech Crunch)
New York Times Staff Stage First Major Walkout in 40 Years
Executives recently projected total adjusted operating profits of up to $330 million by the end of the year, and many workers want a bigger cut of that success.
Over 1,100 Workers Go on Strike
More than 1,100 New York Times employees staged a 24-hour walkout Thursday, the first major work stoppage at the paper in over 40 years.
The union, which is part of the News Guild of New York and claims around 1,400 members, set a contract deadline last week for midnight Dec. 8.
“Today we were ready to work for as long as it took to reach a fair deal, but management walked away from the table with five hours to go,” the union tweeted Wednesday.
“It is disappointing that they are taking such an extreme action when we are not at an impass,” the company said in a statement.
The striking employees include journalists, ad sales workers, designers, news assistants, comment moderators, and security guards. They have wrangled with management for months over pensions, health benefits, remote work requirements, and above all pay.
While the union demanded a 5.5% pay raise in 2023 and 2024, the company countered with a 3% increase, according to The Times.
The parties are also at odds over minimum starting salaries, which the union wants to set at $65,000, and retrospective bonuses for the period since the last contract expired in March 2021.
The Times’ executive editor Joseph Kahn said in an email to staff obtained by Axios that the company “will produce a robust report on Thursday,” but said “it will be harder than usual.”
Media Industry Rocked by Financial Difficulties and Labor Unrest
Several media companies have laid off hundreds of employees in recent weeks due to financial challenges, including CNN, Buzzfeed, and Gannett, but The New York Times is widely considered to be exceptionally successful.
In their latest earnings call, executives projected a total adjusted operating profit of up to $330 million by the end of the year.
Many employees of the outlet argue that they deserve a bigger share of those profits, pointing out that much of it goes toward executive compensation, share buybacks, and dividends.
Thursday’s strike came amid a wave of labor unrest this year at big brands like Amazon, Starbucks, and Apple, as well as other smaller news outlets.
The Fort Worth Star-Telegram and the Pittsburgh Post Gazette are currently on open-ended strikes.
On Nov. 4, over 200 union journalists across 14 Gannett-owned news outlets including the Desert Sun in California and New Jersey’s Asbury Park Press participated in a one-day strike.
In August, nearly 300 Reuters journalists in the United States, also represented by the NewsGuild of New York, staged a 24-hour strike as the union negotiates with the company for a new three-year contract.
See what others are saying: (The Washington Post) (BBC) (Reuters)
Tech Ethicist Tristan Harris Talks Council For Responsible Social Media, TikTok, Twitter, and More
Harris is part of a bipartisan group that is aiming to reform social media for good.
The Council For Responsible Social Media
Tristan Harris, the co-founder of the Center for Humane Technology, understands why many people view TikTok as a harmless app with jokes and dances. Harris, however, sees the Chinese-owned platform as a national security risk.
“During the Cold War, would you have allowed the Soviet Union to control television programming for the entire western world, including Saturday morning cartoons, the ‘Teletubbies’ and ‘Sesame Street?’” he said during an interview with Rogue Rocket.
That’s what he argues is happening with TikTok. The app, which is the most downloaded in the world, is owned by ByteDance, a Chinese tech company with ties to the Chinese Communist Party. Harris says we are “effectively outsourcing our media environment to, in the case of the United States, the number one geopolitical competitor.”
National security issues with TikTok, the extreme polarization caused by Facebook and Twitter, and a slew of other issues are among the reasons Harris and several other bipartisan leaders formed The Council For Responsible Social Media last month.
Co-Chaired by former congressman Dick Gephardt and former Lieutenant Governor of Massachusetts Kerry Healey, the group was made in partnership with the nonprofit IssueOne. Other members include Facebook whistleblower Frances Haugen, former Sen. Claire McCaskill, former Defense Secretary Chuck Hagel, and Harris.
It aims to pressure tech companies and politicians to make social media less harmful in every facet.
“What are the wins we can get on the scoreboard?” Harris explained. “Things like, frankly, banning TikTok or otherwise forcing a total sale of TikTok?…Can we do things like pass the Platform Accountability and Transparency Act?”
The TikTok Problem
When it comes to TikTok, the idea of banning it is not new. Former president Donald Trump attempted to do so in 2020, and earlier this month, a Federal Communications Commission official urged the U.S. to do away with it.
In Harris’ eyes, the threat posed by TikTok looms much larger than just mindless entertainment.
“When we outsource our media environment to a CCP-controlled company, we are effectively outsourcing our voting machine to the CCP,” Harris said. “How do you know who to vote for? Why is it that you know more about Marjorie Taylor Greene and [Alexandria Ocasio-Cortez] than the other hundreds of members of Congress? Because the attention economy rewards certain people to rise to the top.”
Social media apps, TikTok included, favor people that are more likely to be divisive, on either end of the political spectrum. Harris referred to this as “amplifiganda,” something the CCP can use to interfere with another nation’s political and cultural happenings.
“It’s strategically amplifying who are the voices I want to hear from and who are the voices I don’t want to hear from,” he added. “Without firing a single shot, without creating a single piece of new propaganda, I can simply amplify the politicians and videos that I want you to be seeing.”
In China, domestic users receive what Harris calls the “spinach” version of the app, that largely includes educational content, science experiments, and patriotism videos. He says it is very different from the scroll-for-hours version the U.S. and other international markets receive.
Harris, however, does not think this was part of “a deliberate plan” or that there’s a “large mustache that’s being twirled somewhere in China.” Rather, this is just an after-the-fact consequence of TikTok succeeding at being highly addictive, and China simply regulating it for itself.
Banning the app is not the only solution, Harris noted. Officials could also attempt to force a purchase of TikTok. A similar case happened in the past with Grindr. After a U.S. foreign investment commission said the app’s Chinese ownership was a security risk, the dating app was sold to a U.S.-based group.
“And now it’s not that the company is partially in China or partially in the U.S., or the data is on an American server while the design decisions are made in Bejing, it’s not like that,” Harris explained. “They forced the entire sale.”
“Anything less than that with TikTok would be insufficient.”
Despite the numerous issues posed by nearly every social media platform, enacting meaningful change will be no small feat. The Council For Responsible Social Media has outlined several steps it plans on taking, including awareness campaigns and hearings that could inspire action.
On the legislative front, this could involve the passage of the aforementioned Platform Accountability and Transparency Act, which was introduced by bipartisan senators last year and would “require social media companies to provide vetted, independent researchers and the public with access to certain platform data.”
Harris does not think this bill is a cure-all, he does think it should be a no-brainer for politicians to pass.
“It won’t change the DNA of the cancer cell that is social media, it’ll be more like the cancer cell is printing quarterly reports about what it is doing to society, but that’s still a better world than having a cancer cell where you don’t know what it’s doing,” he said.
Many advocates believe transparency is key when it comes to reforming social media, as it educates the general public about what these apps are really doing.
The Future of Twitter
Harris thinks education about social media has inadvertently grown over the last several weeks as billionaire Elon Musk took over Twitter. The process has proven to be quite chaotic, but it has also forced people to learn about Twitter’s problems.
“Twitter has already been a chaos-making, inflammation-for-profit machine. Elon buying Twitter doesn’t change that, he’s just running the inflammation-for-profit machine,” Harris said.
Musk’s acquisition has created a substantial financial bind and forced the mogul into a position where he has to turn engagement and revenue up. This has involved cutbacks on content moderation and laying off staff that worked on trust and safety.
“He has to figure out a way to lower costs and increase revenue, which unfortunately basically moves the whole system into a more and more dangerous direction,” Harris claimed, though he did say he does not view this as a character flaw on Musk’s part, rather just the reality of how these apps operate.
When it comes to fixing the root problems at Twitter, Harris thinks Musk has his eyes on the wrong target by focusing on censorship and free speech.
“It has to do with Twitter being a bad video game in which citizens earn or score the most points by adding inflammation to cultural fault lines,” he explained.
“If we’re playing a video game, and you earn the most points by finding a new cultural war faultline and inflaming it better than some other guy, you’re an inflammation entrepreneur,” he continued. “Turning citizens into inflammation entrepreneurs for profit is how we destroy democracies.”
Harris said that if Musk wants to change Twitter for the better, he has to “change the video game of what Twitter is” so that people are not rewarded for inflammation, but for consensus.
Meta Fined $24.7 Million for Campaign Finance Violations As Profits Fall 50%
A judge found the company violated Washington State’s campaign finance law more than 800 times since 2020 despite having previously settled a lawsuit for identical violations in 2018.
Judge Fines Facebook
A judge in Washington state slapped Meta with a $24.7 million fine on Wednesday after finding it had intentionally violated the state’s campaign finance disclosure laws.
In a statement, Washington Attorney General Bob Ferguson described the judgment as “the largest campaign finance penalty anywhere in the country — ever.”
According to the judge, Meta violated Washington’s Fair Campaign Practices Act 822 times. Each count carries a maximum fine of $30,000.
The law, which was passed in 1972, requires entities that sell political ads to make certain information public, including the names and addresses of ad buyers, the targets of the ads, how the ads were financed, and the total number of views. While TV stations and newspapers have followed this law for decades in Washington, Meta has continually refused to comply with the law, even arguing unsuccessfully in court that the act is unconstitutional because it “unduly burdens political speech” and is “virtually impossible to fully comply with.”
The matter has been a long, ongoing battle for Meta. In 2018, when Meta was still Facebook, Ferguson sued the platform for violating the same law. As part of a settlement, the social media network agreed to pay $238,000 and commit to transparency in political advertising.
At the time, Facebook said it would rather stop selling ads in Washington state than adhere to the law, but it continued to sell ads while also still refusing to comply. Ferguson responded by filing another suit in 2020, which resulted in the Wednesday ruling.
Meta’s Financial Woes
Although $24.7 million may seem like pocket change to a multi-billion dollar corporation, the fines come as Meta is facing unprecedented financial troubles.
Also on Wednesday, the company reported a 50% drop in profits for the third quarter of 2022. The decline follows a recent trend as Meta’s earnings continue to suffer from slowing ad sales, fierce competition from platforms like TikTok, and CEO Mark Zuckerberg’s decision to spend massive amounts of money on developing the metaverse.
In July, the tech giant posted its first-ever sales decline since becoming a public company. Meta’s stock has also nose-dived over 60% this year. The market reacted poorly to the reported drop in profits Wednesday, sending the stock down nearly 20%.
Despite the fact that the past year has been one of the worse ever for the business following Zuckerberg’s decision to rebrand as Meta and go all-in with the metaverse, his commitment remains fervent.
According to reports, during a call with analysts Wednesday, the CEO argued that people would “look back decades from now” and “talk about the importance of the work that was done here” in regards to the metaverse and virtual reality.