A complaint filed by Spotify back in 2019 is finally coming to bite Apple because the EU believes that the latter is using its power and leverage antitrust business practices to keep the competition at bay. Assuming the investigation checks out, the California-based giant will have to pay a fine of 500 million Euros, which converts into approximately $538 million.
Spotify’s complaint stated that it had to raise its monthly subscription to cover the 30 percent fee that Apple charges to remain on its App Store
The investigation from EU officials commenced nearly five years ago after Spotify stated that it has to continue paying Apple a 30 percent fee to remain listed on the App Store. With this move, Spotify was forced to charge subscribers more than what they had to pay for Apple Music, thereby limiting competition and enabling customers to choose a different service for less. Spotify CEO Daniel Ek has previously stated Apple is acting as both a player and referee to put its competitors at a distinct disadvantage over other app developers.
According to the Financial Times, five individuals with intricate knowledge of the investigation stated that the antitrust watchdog is expected to announce a fine against Apple early in March. The fine will seemingly be accompanied by a ruling that Apple broke EU laws with its App Store rules by stifling competition. As part of the ruling and fine, Apple faces being banned from preventing music streaming services from advising customers that they could get a better deal elsewhere than the App Store and the in-app Purchases system.
Apple spokesperson Hannah Smith had earlier responded to Spotify’s complaint and said that the company’s App Store helped the music streaming service become the top dog across Europe and hopes that the EU will end its investigation since the complaint has no merit. The timing of this ruling coincides with Apple’s efforts to follow the Digital Markets Act, which allows sideloading of third-party app stores and other rule changes that affect regions covered under the EU’s umbrella.
This will also include Apple offering alternative payment services to developers. The entire Europe is a massive market for the Cupertino giant, so it will have little choice but to comply since a $538 million fine is a chump change compared to the $33.9 billion profit that Apple netted during its Q1 2024 earnings call.
News Source: Financial Times
About the author: Omar Sohail is a reporter and analyst for Wccftech's mobile section, specializing in the technology and business of the mobile industry. His expertise lies in the intricate hardware supply chain, covering developments in semiconductor manufacturing, chip lithography, and camera sensor technology.
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