Wednesday, January 18, 2023

Spotify, other app makers, and media companies urge EU antitrust chief Margrethe Vestager to take decisive action against Apple, other digital gatekeepers

Politico's Samuel Stolton reported today (here's a LinkedIn post that contains a link to the actual Politico Pro article) on a letter by several companies and industry associations to European Commission EVP Magrethe Vestager. The subject of the letter, dated January 17, 2023, is "Call for swift and decisive action against anticompetitive practices by digital gatekeepers".

The corporate CEOs among the signatories are:

The following industry associations also signed the letter:

The letter particularly focuses on Apple, which it says "has imposed unfair restrictions on [the signatories'] businesses" that "hamper [their] development and harm European consumers." The signatories generally urge the EU to act against Apple and other digital gatekeepers, also by enforcing as soon as possible the Digital Markets Act (DMA). But what appears to be the most immediate priority here is a call for "a rapid decision in the competition case against Apple for its illegal, anti competitive behaviour involving music streaming services."

As the letter notes, the Statement of Objections (SO) in the Spotify case is "nearly two years old" (it came down right before the Epic Games v. Apple trial in the Northern District of California).

Here's my take:

It is indeed unusual that almost two years after an SO, no decision has been handed down. Normally it takes about a year or less.

The letter correctly notes that Apple's conduct causes problems every day.

That said, no victim of those practices--neither Spotify nor its co-signatories or third-party app makers like me--would benefit from a DG COMP ruling that Apple gets annulled by the Court of Justice of the EU. Apple has vast resources and will exhaust all appeals. The Commission has lost some cases for (partly) procedural reasons. It's key to ensure that Apple cannot make a meritorious argument centered around a violation of its rights of defense and/or on the substance of the case.

According to media reports, EU antitrust chief Margrethe Vestager met with Spotify CEO Daniel Ek a few months ago. For now, I have no reason to believe that the case is going nowhere, but I would agree that things are a bit slow.

Epic Games--represented by Clifford Chance in the EU just like Spotify--brought its own antitrust complaint about two years ago, and its counsel told a reporter that Epic was "joining" the Spotify case. In formal terms, however, that is not the case, and the question is what the Commission is going to do about Epic's complaint.

Clifford Chance's EU antitrust practice needs a new success story, and needs it badly. They brought those high-profile complaints over Apple's conduct, but neither has resulted in a ruling and one has not even given rise to full-blown investigations. Then they're behind that European Superleague Company case, where the Advocate General clearly disagrees with Clifford Chance on the most important questions (such as Clifford's "conflict of interest" mantra), and the way the firm is attempting to litigate the case via conferences is not necessarily advisable.

The letter is a bit premature with respect to the DMA. There will be important things happening this year (designation of core platforms etc.), but actual DMA enforcement won't begin before next year. It appears to me that the letter just tries to put the Spotify-Apple case into a wider context.

The signatories--all of whom are European (at least at the personal level)--are a pretty good group, but I'm not blown away. They're long-standing complainants over Apple's App Store practices. A big part of the problem is that for fear of retaliation, many app makers don't dare to speak out, and that even includes large companies.

I'm underwhelmed by the letter for stylistic reasons as well. For example, the letter twice mentions "softwares", which Wiktionary describes as "[g]enerally an error made by non-native speakers" (it's an uncountable noun).

The open app markets movement is fighting the good fight, but it has room for improvement in various respects.