All Posts
Daniel Ek, Founder & CEO of Spotify, says the Big Tech firms can do more to support European startups to scale. Read more in our new report: Innovation Drivers: Tracking Big Tech’s Support For European Startups.
The following are excerpts from an interview conducted with Daniel Ek, Spotify’s Founder and CEO, for the release of this report.
When I started Spotify 18 years ago, there was such a tailwind behind technology that it was less important to compete for market share; it was all about expanding the market.
Google was helping other companies with their cyber security; Facebook was even lending its engineers to Twitter. Everyone wanted to win for the right reasons and it was a more sustainable ecosystem.
Today, there are many more startups and there’s more talk about entrepreneurship being a force for good. But there’s also more power concentrated in the biggest tech companies than ever before, and the focus is on taking market share from each other.
We’re all public companies driven by our shareholders, but the risk is that the easiest way to ensure stability and please shareholders is by stifling competition and innovation.
3 Key Regulatory Changes to Drive the Growth of European Tech
I’m against a massive amount of regulation that stops innovation. We’re asking for just enough so that we can have a level playing field.
For example, you can build a better smartwatch than the Apple Watch, but if it doesn’t work with the iPhone, that’s going to be a massive barrier. The Big Tech companies build ecosystems of software and hardware that interact together, and when they lock these ecosystems, they stifle competition.
It’s about being able to communicate with customers and not have your business model hijacked by someone in between.
With this in mind, we’re calling for three key regulatory changes to drive the growth of the European tech ecosystem:
- Allow app developers to provide consumers with direct and seamless ways, like in-app links, to purchase cheaper-priced goods, free of charge
Currently, Apple’s rules, for example, prevent app developers from providing customers with a direct link to easily purchase offerings or subscriptions without incurring Apple’s taxes. And only in Europe is there now even the opportunity to share pricing details and offers in the app. This means iPhone customers are left in the dark on even the most basic information. - Allow customers to choose whatever payment method they prefer.
Customers should not be forced to use a company’s payments system if they don’t want to. We want the ability to offer alternative payment options to give customers choice. - Allow access to the same APIs as the platform owner when competing downstream.
We want all companies to have access to the same APIs and capabilities to integrate with products like the Apple Watch. This would prevent Apple, or other major companies, from unfairly advantaging their own competing service – for example, Apple Music – by restricting competitors’ access and functionality.
Big Tech & Startups: Building European Tech Winners
Big Tech firms don’t mind if you’re small because you’re not competition for them. My main concern is what happens once you’re no longer a startup, but a fast-grower and potential competitor.
In China, Alibaba and Tencent are investing in potential competitors to create partnership opportunities. In Europe, Big Tech should be spending more time and effort on helping companies scale, including at the grassroots level.
The key to competing with Big Tech is to create something that customers love and want to have a relationship with. If you do that, then I’ve found that many of these big companies will want to work with you.
People talk about the American dream, but it’s time for us to build our European dream as well. Our goal for Europe is to have our own winners creating amazing products that people use and love.
If you look at who’s leading AI at the Big Tech companies, you’ll see Europeans at the helm. Many of the greatest thinkers and innovators come from Europe. We have to be mindful of not losing them.
How far do the Big Tech firms support European startups? Download our new report to find out.
