DANIEL EK: I launched Spotify in the UK 15 years ago. But I fear I couldn’t do that today because Apple and Google are barriers to innovation | Daily Mail Online
As the founder of Spotify, a company launched here in the UK 15 years ago this month, I am often asked about our ‘journey’ – and it’s been an interesting one.
I distinctly remember sitting in our makeshift London office when we first launched and the early data coming in showed that listeners couldn’t get enough of the UK artist Coldplay.
Just months later, the band were the first UK artists to reach over 1 million monthly streams. Today the love for British exports has only grown.
Two of the three most-streamed tracks in the world are by British artists: Ed Sheeran (Shape of You) and Lewis Capaldi (Someone You Loved), which have a massive 6 billion streams between them.
While there are more start-ups than ever, there is also more competition from the massive players. Pictured, Daniel EK, founder and CEO of Spotify
Today, Apple and Google are not just players, they are the rule-makers and gatekeepers of the mobile internet. Pictured, Tim Cook, chief executive officer of Apple Inc
The digital landscape, too, has transformed since Spotify’s inception. On the one hand, it’s been an incredibly positive force.
While there are more start-ups than ever, there is also more competition from the massive players.
This surge in competition is good for everyone and serves as a stimulant for innovation, compelling every company to continually enhance our offerings and sharpen our edge – all to the benefit of consumers.
However, a fundamental shift has altered the digital arena: power has become concentrated in the hands of a select few – specifically in mobile, the primary way most people access the internet.
This shift undermines the internet’s original promise of being an open, democratic platform.
Today, Apple and Google are not just players, they are the rule-makers and gatekeepers of the mobile internet, controlling how more than 5 billion global consumers interact online.
But it doesn’t have to be this way. There is a solution making its way through Westminster that could alter the trajectory of a country I have long admired.
This UK bill, the Digital Markets, Competition and Consumers Bill (DMCC), would work to redefine how businesses can compete, grow and thrive on the internet – cementing Britain’s status as a hub for innovation and an incubator for tech.
The Bill ensures that companies like Apple will have to compete fairly for consumers’ business. It will give consumers more choice, allow smaller tech businesses to grow and compete with larger players, and make the UK a world-leading tech marketplace.
Despite this, a few of the companies who would be most affected by this bill, including Apple, have taken to criticising the Digital Markets Bill as anti-innovation, implying it will somehow hurt business and investment in the UK.
To no one’s surprise, these companies are aggressively fighting this action.
In fact, the Prime Minister has faced intensive lobbying from Apple to either kill the bill or water it down, rendering it essentially ineffective.
It is our view that when competition is fair, everyone wins – consumers, companies and the country. Pictured, stock photo of Spotfiy logo
There is a solution making its way through Westminster that could alter the trajectory of a country I have long admired. Pictured, stock image of Google logo
This gives them a free pass and means the status quo continues at the expense of everyone else. But when has competition, and letting UK companies have a fair chance at it, been bad for business? It’s always been the opposite.
Apple is both the architect of the iOS ‘ecosystem’ and its largest inhabitant. T
he company charges an excessive 30 per cent tax and imposes prohibitive rules on developers, many of whom helped build iOS into what it is today.
And increasingly, Apple considers these developers to be among its fiercest challengers.
Instead of letting consumers decide which company wins, Apple has taken their choice away by prioritising its own services as it tries to increase its profits.
The bustling marketplace of today’s internet has created the right environment for many digital companies to be born.
But the real obstacles emerge when founders seek to grow their new enterprises and build their customer base.
The present mobile environment is a far cry from the more open and level playing-field that existed when I started building companies.
It also makes me wonder whether launching a venture like Spotify would even be feasible today. My guess is no.
It is our view that when competition is fair, everyone wins – consumers, companies and the country.
That’s why it’s crucial that the government passes a strong bill, giving consumers greater choice and control over their digital lives, and why we’re urging the UK to show leadership on this issue.
The UK stands out because it has a rare combination of significant global influence while being independent enough to be nimble. This is a unique advantage. The UK is an epicentre for business and has produced many of the biggest thinkers and pioneers the world has ever seen.
Other global governments have been trying to set rules like the DMCC, but Apple has spent millions in country after country lobbying to stop those laws from taking effect.
If Parliament passes a robust version of the Digital Markets Bill, Apple will no longer be able to use its market power at the expense of UK innovators.
There is no room to wait for someone else to solve this problem; and if you are expecting these big tech companies to step up and simply do the right thing, that’s not going to happen.
While Apple has long been unwilling to share any detailed breakdown of its App Store profits, all indications point to the fact that it has generated at least $100 billion thanks to the high 30 per cent tax it imposes on innovators here in the UK and around the world.
How many more start-ups would have succeeded and grown into successful businesses if Apple wasn’t extracting this rent and reaping massive rewards at the expense of the broader tech economy?
This is not a complicated issue and our asks of Apple are simple.
1) Eliminate the tax and play fair. Spotify has to pay 30 per cent for every new subscriber who wants to sign up via the App Store, which Apple’s music service doesn’t have to pay, making it impossible for us to be price-competitive against it. And at every turn, Apple biases its own service.
2) Alternatively, allow other app stores or alternative download methods, which already exist on Apple computers where we’re not held hostage to that 30 per cent fee. Offering other payment methods would make the marketplace genuinely competitive.
3) Allow Spotify to communicate to our customers about cheaper alternatives, key updates or new deals they could benefit from inside of our app.
So while this all probably feels very straightforward and in the best interest of consumers and local businesses, Apple has been unwilling to even consider the most basic of changes because it fears losing lucrative profits, its stranglehold over the UK tech economy and its grip on its biggest competitors.
I know the UK has many priorities and chief among them is being a great home for innovation.
So while there are many ideas under consideration, the Digital Markets Bill has the promise to be one of the most powerful tools the UK can offer its growing tech industry.
It also gives the UK the power to maintain its status as a tech trailblazer and inspire others around the world. It’s not ‘anti-tech’, and it’s not even ‘anti-Big Tech’.
The Digital Markets Bill is good for consumers, good for business and good for the UK, and it’s time for those ideals to carry the day.