The EU Commission is about to impose its first ever fine on Apple, according to a report published this morning by the Financial Times. The fine will be about 500 million euros (about 538 million dollars). The fine will be part of the conclusion of a case that began in 2019 after Spotify filed a formal complaint.
Specifically, the EU believes Apple acted unlawfully by blocking music streaming apps like Spotify from reporting clients about other methods. subscribe to their services and thereby avoid Apple commissions for in-app purchases. These are commonly referred to as App Store anti-steering provisions.
While anti-steering provisions apply more broadly, this EU investigation specifically addresses the impact of App Store policies on music streaming. Essentially, Apple's mandatory fees, as well as restrictions on services to inform users of alternative payment methods, mean that Apple Music is unfairly favored over its third-party competitors. This is the EU's argument in a nutshell.
The upcoming EU ruling won't force Apple to allow alternative in-app payment methods, but it will insist that music streaming app developers be free to link to their website for online subscriptions (where prices could possibly be lower). as they will not be charged fees by Apple).
The EU's decision in the music streaming case is expected to be officially announced in the coming weeks, so we’ then I'll find out all the details.
In 2022, Apple slightly relaxed the anti-control provisions for “reading apps” such as content apps like Netflix or Kindle, allowing them to include one link to their own websites for account management. Spotify is considered a reading app and is therefore subject to this rule.
Naturally, Spotify wants to have free rein to link to its website to promote its subscription levels beyond the limits allowed by the app's rule for reading. The EU investigation also takes into account the impact of Apple's behavior before the rule changes were made.
When the Digital Marketplace Act comes into force next month, Apple will also allow Spotify to use alternative payment methods in the EU, but the company still will equally receive a 17% commission if Spotify remains listed on the App Store, as well as a base commission of 50 euro cents “Core Technology Fee’”; per application installation per year. Spotify CEO Daniel Ek called these terms an unworkable alternative.
