- 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)
Amazon UK Destroys Millions in Unsold Stock a Year, Including MacBooks, Face Masks, TVs, and iPads
Amazon claims the unused products aren’t being dumped in landfills, but an investigation by ITV shows otherwise.
Amazon Destroying Unused Products
A probe by British news outlet ITV has found that one Amazon warehouse in Scotland destroys millions of unsold products every year.
It’s not just perishable items being dumped. The list of discarded products includes Macbooks, iPads, Dyson fans, unopened face masks, TVs, jewelry, unread books, and more.
One anonymous former employee told ITV that the warehouse’s target was to get rid of roughly 130,000 items per week, and on average, about 50% of the items destroyed are still unused and in their shrinkwrap.
“There’s no rhyme or reason to what gets destroyed,” the employee said.
In its investigation, ITV received documents that appeared to back up the employee’s information, with one showing 124,000 items marked to be destroyed in a single week. Meanwhile, ITV noted that only 28,000 items were labelled “donate” during that same week.
Where Are the Discarded Products Going?
It also tracked where the items went after leaving the plant. There, it found Amazon taking some electrical items to a nearby waste management system, but it says the rest was tracked to a landfill site.
Despite that, in a statement, Amazon told ITV, “We are working towards a goal of zero product disposal and our priority is to resell, donate to charitable organisations or recycle any unsold products. No items are sent to landfill in the UK. As a last resort, we will send items to energy recovery, but we’re working hard to drive the number of times this happens down to zero.”
Whether it’s telling the truth or not, what Amazon is doing isn’t illegal. In fact, the reason why it’s throwing so much out seems to be connected to its highly successful business model.
“Many vendors choose to house their products in Amazon’s vast warehouses,” ITV explained. “But the longer the goods remain unsold, the more a company is charged to store them. It is eventually cheaper to dispose of the goods, especially stock from overseas, than to continue storing the stock.”
As climate activist Sam Chetan-Welsh told ITV, “It’s just an unimaginable amount of unnecessary waste. It’s absolutely shocking. Each of these items requires natural resources and carbon emissions and human labor to make.”
“That is why as long as Amazon’s business model relies on this kind of disposable culture, they’re just going to expand, things are only going to get worse, and that is why we need the government to step in and set legislation immediately.”
The report has raised questions about how prevalent this destruction practice is and continues to be at other warehouses — especially given past reporting. In fact, as Prime Minister Boris Johnson said, “It sounds incredible to me and an indictment of a consumerist society. If it’s as you say, we will look into it.”
“Obviously, we don’t like stuff going to landfill under any circumstances that’s why we have the landfill tax and landfill credit scheme, and everything else,” the prime minister added. “I’m afraid it’s one of those things we’re just going to have to look into and get back to you.”
Europe’s Soccer Championship Ends Investigation Into Whether Player’s Rainbow Armband Is “Political”
The Union of European Football Associations will continue a probe into potential discrimination at its matches in Hungary, which passed a major anti-LGBTQ+ bill last week.
Pride Armband Isn’t Political, UEFA Says
The Union of European Football Associations (UEFA) has agreed that a rainbow armband worn by German soccer player Manuel Neuer is not political in nature, according to the German Football Association (GFA).
Neuer wore the band at two official matches during UEFA’s Euro 2020 Championship and once during a friendly match with Latvia to show support for the LGBTQ+ community during Pride month.
Sunday, multiple outlets reported that UEFA was investigating Neuer’s armband as potentially political, possibly because LGBTQ+ rights have become somewhat of a flashpoint topic since the start of the tournament. Since UEFA does not allow players and teams to participate in “political demonstrations” at events, there were concerns the GFA could be hit with a fine.
Later Sunday, the GFA said UEFA would consider the armband “a sign of support for diversity and thus for ‘good cause,’” and because of that, the team would not face any disciplinary action.
Discrimination Investigation at Hungary Games
The same day outlets reported the investigation into Neuer’s armband, they also reported that UEFA was investigating two matches in Hungary for potential discrimination.
At the first match, an anti-LGBTQ+ banner was spotted in the crowd. At the second, Hungarian fans marched with banners that called on players to stop kneeling to protest racism.
Both events come as Hungary passed a bill against “LGBT propaganda” last week. Notably, that law bans the promotion or portrayal of homosexuality and gender reassignment.
In protest of Hungary’s new law, Munich’s mayor has asked the UEFA to allow the city to light up its stadium in rainbow colors on Wednesday when the German and Hungarian teams square off.
See what others are saying: (ESPN) (The Athletic) (Mirror)
Initial Unemployment Claims See First Rise Since April as Fed Estimates Faster Inflation Growth Than Previously Predicted
The Fed also announced that it expects to raise interest rates in 2023, a year earlier than its previous prediction.
Unemployment Claims Rise
The Labor Department reported Thursday that, for the first time in nearly two months, weekly initial unemployment claims increased.
For the week ending on June 12, 412,000 people filed first-time claims. That’s an increase of 37,000 from the previous week’s estimate of 375,000. It’s also the highest that new claims have been in a month.
Still, there are positive signs that the labor market is improving. For example, while last week’s continuing claims were largely unchanged from the previous week, the four-week moving average for continuing claims fell to its lowest level since March 2020.
The Federal Reserve is also optimistic about the labor market eventually returning to form despite the country still being short 7 million jobs. Following a two-day meeting, the central bank predicted that the unemployment rate could fall back to pre-pandemic levels by 2023.
It also expects economic growth to hit 7% this year, up from the 6.5% it predicted in March.
Inflation Will Grow Faster Than Expected
At its meeting, the Fed said it now believes inflation will climb higher than it had previously estimated just three months ago. In March, it predicted inflation would rise about 2.4% this year. As of Wednesday, it’s expecting a 3.4% jump.
That comes on the heels of a report from the Labor Department last week that indicated consumer prices climbed at their fastest rate since 2008 year-over-year in May. Like economists explained then, the Fed said it expects this rise in consumer prices to be temporary.
While the Fed expects the prices for some goods and services to continue to increase over the next few months because of issues such as supply bottlenecks, it also said it believes the labor market will continue to grow since the economy is finally coming out of its massive, pandemic-induced downturn in spending.
Still, as Fed Chair Jerome Powell warned Wednesday, “Shifts in demand can be large and rapid. Inflation could turn out to be higher and more persistent than we expect.”
Powell added that the central bank will keep a close eye on inflation and that it would respond quickly if inflation becomes broader or more persistent than current estimates.
Interest Rates Stay at Historic Lows… For Now
Among other key points from the Fed’s meeting was its decision to move up a projection for an initial interest rate hike from 2024 to 2023. Notably, it also said there could be two rate hikes in 2023.
That then caused some major stock indices like the Dow Jones to initially stumble, though the markets were more mixed Thursday. That’s likely at least partially because the Fed kept internet rates near a historically low zero for the time being, as expected.
Some Republican lawmakers, such as Sen. Rick Scott (Fl.), have argued that the 2023 projection is too slow, saying interest rates need to go up sooner to prevent inflation from rising too much.
In testimony before a Senate committee on Wednesday, Treasury Secretary Janet Yellen said the inflation situation is being monitored “very, very carefully” and that while prices are rising, they’re also moving back toward “normal” levels.