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Discover why Spotify is calling Apple’s €1.84B antitrust fine a ‘powerful message’ and why the next steps are crucial.

Spotify applauds the European Commission’s €1.84 billion punishment on Apple for anticompetitive streaming music activities, issued today. The streamer termed the punishment a “powerful message” that “a monopoly like Apple” cannot “wield power abusively” to influence how other firms interact with consumers.

“Today’s decision is a turning point in the fight for consumer internet freedom. Spotify said on its corporate blog that the European Commission (EC) has found Apple’s consumer communication restrictions illegal.

The firm was apprehensive about Apple’s response despite the EC verdict supporting Spotify and other streamers. Apple has committed to fight the verdict, while Spotify says “the details matter.”

“Apple routinely defies laws and court decisions in other markets. We’re excited about the next measures to hopefully end Apple’s longstanding unethical practices, Spotify stated.

Apple effectively circumvented the EC’s Digital Market Act restrictions, which allowed developers to start separate app shops and handle their own payments to boost app store competition. Apple’s approach was to charge iOS developers who accepted its new DMA regulations the Core Technology Fee to recover its lost income.

Spotify may worry that Apple may again circumvent any new regulations if not clearly stated.

The Financial Times estimated the penalties at €500 million. They were correct about the choice, but not the price.

Spotify and other smaller streamers like Deezer have complained about the App Store’s revenue model and restrictions for years. Spotify launched its antitrust complaint against Apple in 2019, which led to the EU’s 2020 App Store inquiry. In April of the following year, the EU announced its complaints, accusing Apple of distorting streaming service competition.

Spotify argues Apple’s regulations “muzzled” it and other streaming music services from interacting with users via their applications about membership upgrades, promotions, discounts, and other benefits. Apple said that Spotify wanted “limitless access to all of Apple’s tools” despite not paying.

The App Store commission system, which costs iOS developers 15% to 30% on digital service subscriptions like streaming music, is part of the problem. (Subscriptions decline 30% to 15% in year two). Spotify said that Apple’s “30% tax” was unreasonable and that Apple’s restrictions blocked developers from alerting app users of cheaper, alternative payment methods. Spotify wants to attract users to its website so they could pay for the membership without a commission.

Last month, Apple revealed that Spotify pays Apple nothing for the services that have enabled them create, maintain, and distribute its app with Apple consumers in 160 countries. It said that Spotify has never decreased its costs despite providing memberships online. Spotify held 56% of the European music streaming market, compared to Apple Music’s 11%.

Spotify, like Apple, provides a free, ad-supported service and a subscription plan, enabling it to gradually convert free users into paying ones. As Apple has repeatedly stated, 85% of App Store developers don’t pay Apple because they don’t offer “digital goods and services”—a distinction that loses significance when you consider how Uber, Airbnb, and others use Apple’s platform to sell their products.

Spotify stated the case will continue after the EC fine.

“Our work will not be done until we succeed in securing a truly fair digital marketplace everywhere, and our commitment to helping make this a reality remains unwavering,” it stated. In a video post on X, Spotify CEO Daniel Ek added that “Apple has a history of skirting these rules,” referring to cases like the Dutch antitrust order, where Apple ignored the penalty and allowed the fine to increase for half a year before resolving its concerns.

The Coalition for App Fairness, which includes Spotify, Deezer, Epic Games, and others, also commented on the sanctions.

“Today the European Commission sent a clear message that Apple’s anti-steering policies, which prevent developers from communicating directly with consumers, are anticompetitive and illegal,” said CAF Executive Director Rick VanMeter. “Apple’s app developer restrictions have stifled innovation, raised prices, and limited consumer choice for too long. We congratulate the Commission for this important first step toward iOS device competition. To build a fair and open mobile app economy that benefits customers and developers, more work is needed. The Digital Markets Act will be implemented in less than 48 hours, and consumers and developers throughout Europe are depending on the Commission to compel meaningful compliance from Apple and Google to guarantee the app store ecosystem benefits from the legislation.

Juliet P.
Author: Juliet P.

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