The European Commission recently announced a monumental fine of €1.8 billion on Apple for what it deemed to be abusive practices within the music streaming market. This decision comes after years of scrutiny, with Spotify at the forefront of the complaints against Apple’s App Store policies.
Apple: “Spotify wants to bend the rules in their favor.”
The European Commission’s verdict stems from Apple’s alleged exploitation of its market dominance to stifle competition in the music streaming realm. Apple’s restrictive practices, particularly its 30% commission fee on in-app purchases and anti-steering provisions, have been at the heart of the controversy.
Spotify, a major player in the music streaming industry, lodged complaints against Apple, accusing the tech giant of unfairly favoring its own services over competitors=. The crux of Spotify’s grievance lies in Apple’s restrictions on app developers, which prevent them from informing users about alternative and cheaper subscription options outside the App Store.
The European Commission, led by Margrethe Vestager, found Apple guilty of violating EU antitrust regulations by imposing these unfair trading practices. The Commission emphasized Apple’s decade-long exploitation of its market dominance and mandated the removal of App Store constraints to foster a more competitive environment.
In response to the fine, Apple expressed its intent to appeal the decision, arguing that the ruling overlooks the thriving and competitive nature of the music streaming market. Apple contends that Spotify, the primary beneficiary of the ruling, has thrived under the existing App Store framework and pays nothing for the services it leverages. From Apple’s statement:
Spotify pays Apple nothing. That’s because Spotify — like many developers on the App Store — made a choice. Instead of selling subscriptions in their app, they sell them on their website. And Apple doesn’t collect a commission on those purchases.
All told, the Spotify app has been downloaded, redownloaded, or updated more than 119 billion times on Apple devices. It’s available on the App Store in over 160 countries spanning the globe. And there are many more ways Apple creates value for Spotify, at no cost to their company:
- Our engineering helps ensure that Spotify’s apps can work seamlessly with Siri, CarPlay, Apple Watch, AirPlay, Widgets, and more.
- Like every developer, Spotify can access Apple’s more than 250,000 APIs — and uses 60 of our frameworks — so their apps can connect with Bluetooth, send notifications, play audio in the background of a user’s device, and more.
- Spotify has used our beta-testing tool, TestFlight, for almost 500 versions of their app to experiment with new features and capabilities.
- Our App Review team has reviewed and approved 421 versions of the Spotify app — usually with same-day turnaround — and frequently expedites reviews at Spotify’s request.
It takes continuous effort and a lot of investment for Apple to make the tools, the technology, and the marketplace that Spotify uses every day. We’ve even flown our engineers to Stockholm to help Spotify’s teams in person. And the result is that when a user opens the Spotify app, listens to music on their commute, or asks Siri to play a song from their library, everything just works. And again — Spotify pays Apple nothing.
When it comes to doing business, not everyone’s going to agree on the best deal. But it sure is hard to beat free.
As Apple prepares to contest the fine, the tech industry awaits the outcome, which could have far-reaching implications for the future of app distribution and competition within the digital ecosystem. Additionally, the impending implementation of the Digital Markets Act (DMA) underscores the evolving regulatory landscape and its impact on tech behemoths like Apple.
