Apple Faces a Landmark 500 Million Euro Penalty from the EU Over Spotify Dispute. In an unprecedented move, Apple is set to incur a hefty fine of 500 million euros from the European Commission, as reported by the Financial Times. This marks the first time Apple will be penalized by the European regulatory body, stemming from a complaint lodged by Spotify in 2019.
Samsung to Power Apple’s MacBook OLED Revolution, Starting 2025
The crux of the dispute lies in Apple’s practices, which the EU deems anti-competitive, particularly in how it has handled music streaming services like Spotify. The core issue revolves around Apple’s restrictions that prevent these services from directing customers to alternative subscription options outside of the App Store, thereby circumventing Apple’s commission on in-app purchases. This policy, often referred to as the App Store’s anti-steering provisions, has been a point of contention.
The EU’s investigation, while broad, zeroes in on the ramifications of these policies on the music streaming sector. It argues that by enforcing a mandatory fee and limiting services from informing users of other payment avenues, Apple essentially gives its own service, Apple Music, an unfair advantage over competitors.
However, the forthcoming EU directive aims to address this imbalance not by mandating Apple to introduce alternative in-app payment systems, but rather by ensuring that developers of music streaming apps can guide users to their websites for subscriptions. This approach seeks to bypass the inflated costs associated with Apple’s in-app purchase fees.
The official announcement of the EU’s decision is awaited in the weeks ahead, promising to shed full light on the details of this landmark ruling.
Interestingly, Apple had already made concessions in 2022 concerning its anti-steering provisions for “reader” apps, such as Netflix and Kindle, by allowing them to embed a single link to their websites for account management. Spotify, categorized under this rule, is poised to benefit from this relaxation.
Furthermore, with the Digital Market Act set to be enacted next month, Apple is expected to extend the option for Spotify and similar services to employ alternative payment methods within the EU. Despite this shift, Apple intends to levy a 17% commission on transactions if Spotify opts to stay within the App Store ecosystem.
