Apple might be slapped with a €500 million ($539 million) fine by the European Commission, revealed The Financial Times on Sunday. According to the report, the US company is responsible for deliberately pushing Apple Music on the App Store in favor of other music platforms such as Spotify.
The complaint from the Swedish audio streaming platform dates back to 2019 when Spotify complained that Apple Music as a platform is not paying royalties to the mother company and is not facing the same harsh conditions as third-party services.
Apple later attempted to decline the accusations and posted a rebuttal, which didn’t really sound all that convincing.
The EU initially wanted to fine Apple with up to 10% of the global turnover, which would’ve been about $40 billion and would’ve shaken the tech world.
The main issue is that Spotify has to pay the Apple tax, which is 30% of all transactions (in this case, it’s $3 per every $10 subscription for Premium). While Cupertino said this is only for the first year of subscriptions, and then the share goes down to 15%, it does not affect returning customers who unsubscribed and signed up again at a later stage.
Apple also claimed Spotify wouldn’t have been successful if it wasn’t for the “free” app on the App Store, which isn’t free for the developers – they still have to pay a fee to use the 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 the major reason Spotify hasn’t launched in-app purchases. Users in Europe might be first to experience the new feature if Apple complies with the DMA (Digital Markets Act), but this is another wide-open front where the two companies are in conflict.
