Apple is set to receive a large fine and a ban on the company’s App Store practices that take large commissions on in-app subscriptions to its music-streaming rivals, like Spotify.
The company is expected to be fined up to 10% of its annual sales alongside the enforced change to its subscription policy.
Bloomberg reports, “EU regulators are putting the finishing touches to a decision on Apple’s practice of blocking music services from pushing their users away from the App Store to alternative, cheaper, subscription options, according to people familiar with the investigation. The decision is slated for early next year.”
Anti-consumer?
Currently, apps like Spotify don’t offer subscriptions in its iOS app as Apple takes a large chunk of commission for in-app subscriptions, up to 30%. These allegations against Apple date back to 2019 when Spotify “claimed it was forced to ramp up the price of its monthly subscriptions to cover costs associated with Apple’s alleged stranglehold on how the App Store operates.”
However, a Bloomberg report in June claimed “In early 2022, Apple began allowing Spotify and other music services to direct users to the web in their apps to sign up for subscriptions.” By allowing this in its guidelines, companies could bypass the 30% cut, allowing potential subscribers more pricing and subscription options.
At the time, Spotify disagreed with Apple’s claims as the company “hit back at Apple’s efforts, saying in June that the restrictions still existed and the changes were “just for show.”
We won’t know the results of the hearing until early 2024, but we can expect to hear much more about this saga as the new year begins. Earlier this month, reports suggested Spotify would return to in-app subscriptions but these reports were later squashed by the music-streaming giant.
