Spotify welcomes the European Commission's decision announced today to hold Apple accountable for anti-competitive practices in the streaming music market with a hefty €1.84 billion fine. The streamer said the fine sends a “powerful message” that even a “monopolist like Apple” cannot “abuse its power” to control how other companies interact with customers. He said that.
“Today's decision marks a key moment in the fight for a more open internet for consumers. The European Commission (EC) has made its conclusion clear: Apple's actions to restrict communications to consumers are Illegal,” Spotify shared in a statement on its company blog.
Despite the EC's ruling favoring Spotify and other streamers over Apple, the company remained cautious about how Apple would proceed. The Cupertino tech giant has already vowed to appeal the ruling, with Spotify adding that “details matter” in a case like this.
“Apple has routinely defied laws and court decisions in other markets as well. We therefore look forward to next steps that clearly and decisively address Apple's long-standing unfair practices.” ” writes Spotify.
In particular, Apple has implemented the requirements of the EC's Digital Markets Law, with the aim of fostering new competition in the app store market by allowing developers to launch independent app stores and manage their own payments. was skillfully avoided. But Apple's solution was to charge his iOS developers who accepted the new DMA rules a new surcharge, the Core Technology Fee, as a way to recoup lost revenue.
Spotify is probably worried that Apple will again find a way around the new requirements if not carefully explained.
The Financial Times earlier reported that the fine would be around 500 million euros ($539 million). In the end, their decision was right, but the price wasn't.
The ruling follows years of complaints led by other small streamers, including Spotify and Deezer, over the App Store's business model and related rules. In 2019, Spotify filed its first antitrust complaint against the tech giant, which subsequently led to a formal EU investigation into Apple's App Store announced in 2020. In April of the following year, the EU issued a statement of objection, accusing Apple of distorting competition. in the streaming services market.
Spotify says Apple's rules “prevent” it and other streaming music services from communicating with their customers within the app about how to upgrade their subscriptions, take advantage of promotions, discounts, and other benefits. It has said. Apple countered that while Spotify isn't paying Apple anything, it still wants “unrestricted access to all of Apple's tools.”
Part of the issue here is due to Apple's App Store fee structure, which charges iOS developers between 15% and 30% for subscriptions to digital services, such as streaming music, that they provide to customers. It's nature. (In the second year, the subscription decreases from 30% to 15%). Spotify says Apple's “30% tax” is unfair because Apple's rules prevent developers from informing app users of alternative (and sometimes cheaper) payment methods. They argued that it was causing harm to consumers. In other words, Spotify wanted the opportunity to direct customers to its website, where they could pay for their subscriptions directly, presumably without incurring any fees.
“Spotify pays Apple nothing for the services that help us build, update, and share our apps with Apple users in 160 countries around the world,” Apple said last month. He also stressed that Spotify has never lowered its prices, even though it offers subscriptions through its website. He pointed out that Spotify has a 56% share of the European music streaming market, compared to 11% for Apple Music.
Of course, this isn't a fair comparison considering Spotify offers a free service with ads as well as paid plans like Apple. This allows you to attract many free users to your paid product over time. And, as Apple has repeatedly pointed out, 85% of App Store developers don't pay Apple because they don't provide “digital goods or services.” This distinction loses weight when you consider how services like Uber work. Companies like Airbnb use Apple's platform to acquire and sell their products to customers.
Following the EC's fine announcement, Spotify said the fight is not over.
“Our work will not be done until we succeed in securing truly fair digital markets everywhere, and our commitment to helping make this a reality remains steadfast.” the magazine writes.