Reportedly, the European Union (EU) plans to fine Apple a hefty $500 million for anticompetitive practices related to its App Store policy in the music streaming market.
Choking competition in the Apple’s App Store Garden
According to the EU, Apple has unfairly leveraged its control over the App Store to stifle competition in the music streaming market. Specifically, they accuse the tech giant of preventing music streaming services like Spotify from informing users about alternative ways to subscribe outside the App Store.
This practice, known as “anti-steering provisions,” forces users to subscribe through the App Store, where the company takes a hefty 30% commission on every transaction. This hurts music streaming services like Spotify and potentially inflates costs for users compared to subscribing directly.
It all started in 2019 when Spotify filed a formal complaint with the EU. This complaint triggered an investigation, and now, years later, the EU is ready to deliver its verdict.
The proposed €500 million fine is no small sum. It would be the largest antitrust fine ever imposed on Apple by the EU and a significant blow to their App Store revenue, which raked in over $54 billion in 2022.
If the fine is not overturned, it could have far-reaching consequences:
- Lower subscription prices: Music streaming services, freed from mandatory App Store commissions, might offer more competitive subscription plans, potentially leading to cost savings for users.
- Increased competition: With a more level playing field, smaller music streaming services could gain wider traction, fostering innovation and diversity in the market.
- Changes to App Store: The EU might impose additional restrictions on Apple’s App Store policies, potentially impacting how other apps operate and interact with users.
However, Apple is likely to challenge the fine, and the outcome of the case could remain uncertain for some time.
While the final decision awaits official announcement, the reported fine is substantial. It could be the largest antitrust fine ever issued by the EU against a tech company.
The EU might also mandate changes to Apple’s App Store policies. This could include allowing music streaming services to provide links to their websites for subscriptions or even permitting alternative in-app payment methods.
(Via Financial Times)
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