Update 3:25 p.m. – Spotify’s response.
The European Commission, the executive arm of the European Union (EU), has fined Apple 1.8 billion euros. The company allegedly unfairly hindered other music streaming service providers on its platform. For example, they could not inform users about cheaper alternatives outside the Apple ecosystem.
Services like Spotify pay Apple a 30 per cent commission for purchases their users make from iOS apps. The streaming services pass this extra cost on to their users, but Apple does not allow them to inform their customers of lower subscription costs through alternative channels, such as their own websites.
Unfair, the European Commission (EC) now rules. This practice would have imposed additional costs on millions of users and unfairly benefited Apple’s music service. That was quickly the more advantageous alternative. Spotify filed the case with the Commission in 2019. After investigation, the latter ruled that there was indeed an abuse of power.
Deterrent effect
When users subscribe outside the Apple ecosystem, they can still use the service on their devices. However, the services were prohibited from reporting anything about that in the app. They were also not allowed to link to alternatives and were even prohibited from contacting new users (e.g., via mailing campaigns) about cheaper versions of the subscriptions they had just taken out.
This is the first time the EC has imposed such a fine on Apple. In its communication, the Commission says it hopes this high amount will act as a deterrent. The company must also improve its life and give the other services more space.
Spotify: ‘Strong message, but we look forward to follow-up action’
Spotify said in a response that the commission is sending a “powerful” message with the fine. “No company, not even a monopolist like Apple, should abuse its power to control how other companies interact with their customers,” the company said. According to the streaming service, the EC put “consumers first” with the decision.
Nevertheless, Spotify has little confidence that Apple will be impressed by the fine. “Apple has ignored laws and court rulings in other markets before. We therefore look forward to the follow-up steps that will hopefully provide a clear and conclusive solution to the unfair practices Apple has employed for so long.”
Apple disagrees with the European Commission’s ruling and says it will appeal.
Also read: ‘EU preparing a 500 million euro Apple fine’
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