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EU Commission Set to Fine Apple €500 Million for App Store Violations

EU to fine Apple over spotify compaint

In a Financial Times report, it was revealed that Apple is likely to face a fine from the EU commission, expected to be around €500 million. The penalty is part of a complaint that Spotify filed in 2019 claiming that Apple’s policies for the App Store violated the EU’s competition laws.

What is the complaint?

The European Union claims that Apple broke competition legislation by including anti-switching restrictions to apps such as Spotify. The terms of this can not permit employees to advertise to their end users about the alternative subscription process outside the App Store, which would help to avoid the apple commission charges. While the investigation targets the broader impact of these policies, it primarily focuses on their effect on the music streaming sector. The EU argues that Apple’s practices unfairly favor its own Apple Music service over third-party competitors.

The Fix

The forthcoming ruling won’t mandate Apple to allow alternative in-app payment methods but will require music streaming apps to link users to external websites for subscription, where they may avoid Apple’s commission fees. Apple made concessions in 2022, relaxing anti-steering provisions for “reader apps” like Netflix and Kindle, allowing them to include a single link to their websites. However, Spotify seeks broader freedom to promote its subscription tiers, beyond the limits of the reader app rule. The EU’s investigation also examines Apple’s conduct before these rule changes, with implications for Spotify’s case.

The Digital Markets Act

With the impending introduction of the Digital Markets Act, Apple will permit Spotify to use alternative payment methods in the EU. However, it will still charge a 17% commission and a base fee per app install. Spotify’s CEO deems these terms impractical. The EU’s ruling is expected to be announced in the coming weeks, shedding light on the full extent of Apple’s violations and the repercussions for its App Store policies.

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