Because, according to the EU Commission, Apple violated competition law, the US company has to pay a billion-dollar fine. This also brings the dispute between Spotify and Apple to a new dimension.
Apple is said to have abused its market position by selling music streaming apps to iOS users and is now paying a fine of more than 1.8 billion euros for it. This emerges from a press release from the European Commission.
The company restricted app developers from informing iPhone and iPad users about cheaper alternatives in the area of music subscriptions. According to EU antitrust regulations, this is an illegal procedure.
Point for Spotify in the dispute with Apple
Spotify complained to the EU about Apple in 2019 because the tech giant also secured a share of sales from in-app purchases – initially 30 percent and after one year 15 percent. The EU Commission also criticized this in 2021.
In January 2024, Apple changed this regulation: the 30 and 15 percent became 17 and ten percent. However, the percentages only apply if app developers do not use Apple's payment system – otherwise three percent are added. Spotify will see itself confirmed in the dispute with Apple by the judgment and the high fine.
Why does Apple have to pay a fine?
Developers can use the App Store to distribute their applications to iOS users throughout the European Economic Area – and only there. This puts Apple in a position of power from which the company can define and control all policies.
Now the EU Commission has decided that Apple is hindering competition through certain terms and conditions. For example, developers are prohibited from informing iOS users about subscription prices outside of the app in their apps.
In addition, they are not allowed to inform iPhone and iPad users how the costs differ between in-app and other subscriptions. Background: Sales also take place via Apple's in-app payment process. Posting links to app developers' websites where subscription alternatives are listed is also prohibited.
EU decision after almost four years of dispute between Spotify and Apple
Following the formal procedure launched in June 2020, the Commission decided in Brussels on March 4, 2024 that the above provisions constitute unfair trading conditions in breach of Article 102(a) of the Treaty on the Functioning of the European Union (TFEU).
The terms and conditions worked for almost ten years. As a result, many iOS users could have paid significantly more for music streaming subscriptions. Especially since Apple has charged providers high commissions, which in turn have led to higher subscription prices.
The duration and severity of the violation as well as the total turnover and market capitalization determined the amount of the fine. In addition, Apple is said to have provided false information during the process. Reasons for deterrence also played a role in the sentence.
For Apple, this may not be the end of the issue, as people and companies affected by the anti-competitive behavior could now sue for damages before the courts of the member states.
Also interesting:
Source: https://www.basicthinking.de/blog/2024/03/04/streit-zwischen-spotify-und-apple-darum-verhaengt-die-eu-eine-milliardenstrafe/
