The European Commission might impose a fine of €500 million ($539 million) on Apple, as reported by The Financial Times on Sunday. Allegations claim that the US company has deliberately promoted Apple Music on the App Store instead of other music platforms like Spotify.
Spotify filed a complaint against Apple with the European Commission in 2019, accusing Apple Music of not paying royalties to the parent company and not being subjected to the same harsh conditions as third-party services.
Apple responded to Spotify’s complaints with a rebuttal that didn’t appear to be very convincing.
Initially, the EU intended to fine Apple up to 10% of its global turnover, which would have amounted to about $40 billion and caused major upheaval in the tech industry. The key issue is that Spotify has to pay a 30% transaction fee to Apple (in this case, $3 for every $10 Premium subscription). While Apple claims this only applies to the first year of subscriptions and drops to 15% after that, it still impacts returning customers who unsubscribe and then resubscribe later on.
Apple has also argued that Spotify wouldn’t have been successful without the “free” app on the App Store, but developers still have to pay a fee to use a developer account.
You’re about to experience a new Spotify if you live in the EU. One where you can see all subscription pricing, promotions or deals, and even make purchases, all seamlessly within the app. Find out what this means for you: https://t.co/j1hYRC3S5c pic.twitter.com/p1GDY6PNdd
— Spotify News (@SpotifyNews) January 24, 2024
The conflict is also one of the reasons why Spotify has not introduced in-app purchases. Users in Europe might be the first to experience this feature if Apple complies with the Digital Markets Act (DMA). However, this is another area of conflict between the two companies.
