Digital Music Europe strongly supports the European Commission’s efforts to address unfair commercial practices from online platforms. We urgently need a targeted and meaningful Regulation to create a playing field between platforms and services, and to protect consumer choice and innovation in Europe.
1- European digital music services: disruptive innovation, global leadership
Digital Music Europe (DME) represents leading European digital music innovators. Deezer, Qobuz, SoundCloud and Spotify are music streaming companies that have revolutionised how people discover, enjoy and experience music across the world. DME also represents B2B services. 7digital is a leader in end-to-end digital music solutions, powering services for a variety of B2B clients and their customers globally, and Soundcharts offers the first playlist monitoring solution.
Digital music is driving the music sector’s growth in Europe and globally, generating much-needed revenue streams for creators and artists. Beyond discovering, distributing and promoting music, we provide new tools for artists to grow and understand their audience.
2- What we mean by platforms’ “unfair practices”, and why they matter
Together with a vast number of businesses, digital music services rely on a small number of large online platforms to reach their customers. For us to succeed, we need a fair playing field.
When platforms turn from “gateways” to “gatekeepers”, they hinder access to online services and information, hamper innovation and reduce consumers’ choice. In some instances, platforms may use their privileged position to restrict, rather than improve, access to the enterprises that depend on them.
This is particularly acute when the platform controls access to a downstream market and competes directly with businesses that rely on the platform to reach customers.
Harmful unfair practices include:
- Unilateral and unpredictable changes to a platform’s terms and conditions;
- Blocking or restricting the flow of information and communication between business customers of the platform and their consumers;
- Arbitrarily removing third-party services; and
- Limiting consumer choice, for example in relation to payment methods.
These practices are today most evident for mobile applications, where app stores are the prevailing method of accessing digital music. More than 80% of users access music streaming services through a mobile app. In the future, digital music will be increasingly offered through Intelligent Voice Assistants (IVAs), which simplify the interaction with our users, but could be misused to preference a platform’s own service over third-parties.
3- We need targeted and meaningful legislation at the European level
Currently, there are no effective and timely ways for businesses that rely on online platforms to challenge systemic unfair practices in Europe or any other jurisdiction.
A targeted Regulation is therefore urgently needed to ensure a level playing field for European digital music services, and to protect consumers and promote innovation. Legislation will rebalance the playing field and provide predictability and transparency for all stakeholders, including consumers.
The EU forthcoming platform-to-business Regulation should require platforms to operate consistently with three important principles:
- Consumer choice, including choice of default setting for specific services accessed over the platform;
- Non-discrimination, in technical and economic terms; and
- Interoperability between the platform and downstream competing services, including access to interface specifications and data.
The Regulation should pay particular attention to vertically integrated online platforms; that is, platforms that compete directly with on-line business’ services in downstream markets, such as providing streaming music services. In these situations, the platform has both the incentive and ability to favour their own service, and make it more difficult for the third-party to compete.
An effective process at the EU or national level to ensure compliance with these principles is indispensable.
We urgently need a targeted and meaningful Regulation to avoid harmful business practices, to protect consumer choice and to support innovation in Europe.