Spotify prevails as EU directs Apple to pay $2B, revise App Store rules

The European Commission has supported Spotify's stance and imposed a hefty fine of nearly $2 billion on Apple for enforcing restrictive App Store policies that violated antitrust laws. The commission found that Apple's actions degraded music streaming apps, excluding Apple Music, and led to increased prices, thereby harming consumers' ability to make informed choices regarding music streaming subscriptions on their devices. 

This marks the first time the European Commission has penalized Apple, with the fine exceeding initial expectations by fourfold. Apple, however, disagrees with the decision and plans to appeal, arguing that there is no evidence of consumer harm or anti-competitive conduct. 

The body accused Apple of creating unfair conditions by prohibiting app developers from promoting cheaper subscription options outside the App Store, thus preventing users from accessing better deals. This resulted in users potentially paying more for subscriptions and experiencing a degraded app experience. 

The commission highlighted that Apple's practices led to higher costs for around 1.5 million music streaming app subscribers in the European Economic Area and emphasized that the steep fine was necessary to deter such anti-competitive behavior in the future. 

Margrethe Vestager, the body's executive vice president overseeing competition policy, stated that Apple had been abusing music streaming apps for a decade and instructed Apple to cease its anti-steering regulations. Spotify welcomed the decision but expressed concerns about Apple's behavior in markets outside the EU. 

Apple defended its position by stating that developers could already inform users about alternative options and argued that App Store fees support innovation and app development. Apple also highlighted Spotify's dominant market share in Europe and its avoidance of App Store fees by selling subscriptions exclusively on the web. 

Spotify contended that Apple's rules disadvantaged music streaming services by restricting communication with users about upgrades, pricing, promotions, and other benefits not applicable to Apple Music. Apple accused Spotify of attempting to alter App Store rules in its favor and criticized the European Commission's decision to enforce the Digital Markets Act prematurely. 

As Apple prepares to appeal and Spotify explores other markets for potential complaints, the European Commission reiterated that its decision was based on antitrust laws, not the Digital Markets Act. 

Source: Newsroom