On Sunday, the Financial Times reported that Apple is potentially facing a €500 million ($539 million) fine from the European Commission. The allegations suggest that Apple gave preferential treatment to its own music streaming service, Apple Music, over competitors like Spotify within the App Store.
In 2019, Spotify, a Swedish audio streaming platform, filed a complaint claiming that Apple Music wasn’t paying royalties to its parent company and was receiving unfair advantages compared to third-party services.
Apple denied these accusations, but the European Union remained skeptical, considering fines of up to 10% of Apple’s global revenue, potentially reaching around $40 billion. This has the potential to significantly impact the tech industry.
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The central issue revolves around the “Apple tax” imposed on Spotify, amounting to 30% of all transactions, equivalent to $3 for each $10 Premium subscription. Apple argued that this rate applies only in the first year, later reducing to 15%. However, concerns persist about its impact on returning customers who unsubscribe and then resubscribe.
Apple claims Spotify’s success is due in part to its availability as a “free” app on the App Store. However, developers still incur fees for using the developer account, contradicting the concept of “free” access.
Additionally, Apple claims Spotify’s success is due in part to its availability as a “free” app on the App Store. However, developers still incur fees for using the developer account, contradicting the concept of “free” access.
In January of this year, Spotify informed its EU customers of upcoming changes, promising a new experience with transparent subscription pricing, promotions, and in-app purchases.
The ongoing conflict has also hindered Spotify’s ability to introduce in-app purchases. If Apple complies with the Digital Markets Act (DMA), European users could be the first to access this new feature, adding another layer to the ongoing dispute between the two companies.