Apple Faces Potential 500 Million Euro Fine From European Union Over Spotify Complaint





The European Union may slap Apple with a 500 million Euro fine for breaching competition laws over complaints filed by Spotify five years ago.

The fine, which equals $539 million, would be one of the biggest fines a big tech company has been issued from the European Union, according to the Financial Times. The penalty stems from a formal complaint Spotify made in 2019, which alleged Apple tried to stifle competition between music streaming apps. Apple doesn’t let companies bill for services through a company’s app, but instead has customers pay through the Apple App Store’s billing services — which includes a cut owed to Apple itself.

Spotify said it had to increase the monthly subscription cost to cover the 30% commission fee Apple charges apps to operate on its App Store. The price increase would make Spotify more expensive than Apple’s own competing service, Apple Music.

The European Union has new rules surrounding fair competition called the Digital Markets Actt, which largely target Big Tech companies such as Apple and Meta. The European Union passed the rule in 2022 to encourage fair business practices, and companies must show compliance by March 6.

The Digital Market Act aims to prevent big companies from gatekeeping digital content, which Spotify claims Apple is doing in this instance with in-app payments. The new legislation strives to open competition for various digital interactions, such as messaging and payment options, and essentially break up digital monopolies established by the big names in tech. Last month, Apple unveiled its new App Store policy for in-app purchases, which Spotify quickly ripped.

The European Union is expected to make its judgment in March. While a large figure, it’s still less than initially proposed. The European Union considered issuing the maximum penalty of 10% of Apple’s annual global turnover, or about $40 billion. The decision will ban Apple from blocking music services from alerting users of cheaper alternatives outside the App Store. 

However, the European Union cut some of the charges facing Apple, such as its Apple in-app payment system last year. 

“We’re pleased that the Commission has narrowed its case and is no longer challenging Apple’s right to collect a commission for digital goods and require the use of the In-App Payment systems users trust,” said an Apple spokesperson after the European Union’s decision in 2023. “The App Store has helped Spotify become the top music streaming service across Europe, and we hope the European Commission will end its pursuit of a complaint that has no merit.”

Spotify filed the complaint in 2019. At the time, Spotify’s CEO and founder, Daniel Ek, said the rules “purposely limit choice” and “stifle innovation” at users’ expense. 

The European Union issued a Statement of Objections in 2021. Many of the original claims were dropped, such as the In-App Purchase claim. It has since focused the case on anti-steering rules alleging Apple restricted apps from letting users know about cheaper subscription alternatives outside the App Store, violating European Union competition laws. The Commission won’t challenge Apple’s right to collect a commission for digital goods.

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