Days after the European Union slaps Apple with a $500 million fine, it smacks Apple once again with over $2 billion for violating EU competition regulations regarding its music streaming strategy. It states that Apple violated EU competition laws by giving preference to Apple Music over rival services like Spotify.
According to a statement from the European Commission, Apple allegedly barred app developers from “fully informing iOS users about alternative and cheaper music subscription services outside of the app,” giving Apple’s own music platform an unfair advantage.
As per the Commission’s findings, Apple’s actions during the past ten years have resulted in “significantly higher prices for music streaming subscriptions.” Since Apple Music charges a 30% fee to other streaming services that use its service to monetize, it can afford to undercut its competitors without losing as much of a profit.
Apple claims that Spotify has decided not to allow in-app payments for subscriptions on the App Store, despite the ongoing controversy surrounding the 30% membership price, which has prompted businesses such as Spotify and Netflix to remove all payment methods from the App Store.
Moreover, the company says that “free isn’t enough for Spotify. They also want to rewrite the rules of the App Store — in a way that advantages them even more.”
Apple also makes a claim about Spotify’s market position in the EU, stating that “the reality is that European consumers have more choices than ever. Ironically, in the name of competition, today’s decision just cements the dominant position of a successful European company that is the digital music market’s runaway leader.”
Apple vs. Spotify
Spotify released a statement, satisfied with the fine:
“Apple’s rules muzzled Spotify and other music streaming services from sharing with our users directly in our app about various benefits—denying us the ability to communicate with them about how to upgrade and the price of subscriptions, promotions, discounts, or numerous other perks.
Of course, Apple Music, a competitor to these apps, is not barred from the same behaviour. By requiring Apple to stop its illegal conduct in the EU, the EC is putting consumers first. It is a basic concept of free markets—customers should know what options they have, and customers, not Apple, should decide what to buy, and where, when and how.”
In response, Apple released a statement outlining its version of events and highlighting Spotify’s growth as a result of the App Store:
“Today, the European Commission announced a decision claiming the App Store has been a barrier to competition in the digital music market. The decision was reached despite the Commission’s failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast.
The primary advocate for this decision — and the biggest beneficiary — is Spotify, a company based in Stockholm, Sweden. Spotify has the largest music streaming app in the world, and has met with the European Commission more than 65 times during this investigation.
Today, Spotify has a 56 percent share of Europe’s music streaming market — more than double their closest competitor’s — and pays Apple nothing for the services that have helped make them one of the most recognizable brands in the world. A large part of their success is due to the App Store, along with all the tools and technology that Spotify uses to build, update, and share their app with Apple users around the world.
We’re proud to play a key role supporting Spotify’s success — as we have for developers of all sizes, from the App Store’s earliest days.”