Apple faces a €1.8 billion fine from the European Commission following an investigation into Spotify’s complaint regarding App Store practices.
Apple maintains the App Store, established over 15 years ago, fosters a safe environment for users while offering lucrative opportunities for developers. The company emphasizes that 86% of developers incur no commission fees from Apple, with commissions only applying to paid apps and in-app purchases.
Despite starting as a smaller player, Spotify has become the dominant force in the European digital music market, capturing over 50% market share. The market itself has seen tremendous growth, jumping from 25 million subscribers in 2015 to nearly 160 million in 2023.
While opting not to sell subscriptions within its App Store version, avoiding the commission fee, Spotify’s app has been downloaded, updated, or re-downloaded over 119 billion times on Apple devices. Apple acknowledges they provide Spotify valuable tools like engineering support, API access, and TestFlight assistance, for which Spotify pays “nothing.”
The crux of the issue lies in Spotify’s desire, according to Apple, to rewrite App Store rules. While Spotify enjoys access to various marketing channels like email, social media, and web ads, they advocate for embedding subscription prices within their app without using Apple’s In-App Purchase system. In simpler terms, Apple argues that Spotify “wants more.”
Furthermore, Apple reveals that Spotify initiated collaboration with the European Commission in 2015, alleging Apple’s practices hindered competition in the digital music market. Despite Spotify’s growth, the Commission pursued various cases for eight years, failing to demonstrate consumer harm or anti-competitive behavior by Apple.
Apple claims the decision coincides with the upcoming Digital Markets Act, which they will comply with, but believe the decision lacks legal justification under existing competition laws. They intend to appeal the ruling.
Apple emphasizes their long-standing presence in Europe, contributing to over 2.5 million jobs across the continent. While acknowledging respect for the European Commission, they firmly believe the facts do not support the decision and highlight the thriving digital music market as evidence of the App Store’s success.
This complex situation highlights the ongoing debate surrounding platform regulations and the balance between competition and user safety. Ultimately, the appeal process will determine the final outcome and its wider implications for the digital marketplace.