Apple €500m penalty bias: Apple is facing a substantial fine of €500 million ($539 million) for allegedly showing bias towards its own music app, sparking concerns about antitrust violations and market dominance in the streaming industry. The European Union has imposed the fine on Apple following a regulatory investigation into the company’s practices.
In 2019, Spotify accused Apple Music of unfair practices, alleging unpaid royalties and preferential treatment over third-party services.
The EU initially intended to fine Apple up to 10% of its global revenue, which could reach around $40 billion and cause major upheaval in the tech industry.
The main concern is that Spotify is subject to an “Apple tax” of 30% on all transactions (in this case the equivalent of $3 for every $10 in Premium subscriptions). While Cupertino says the rate only applies to the first year of subscription and drops to 15% after that, it fails to address its impact on repeat customers who cancel and then re-subscribe.
Additionally, Apple attributes Spotify’s success in part to its availability as a “free” app in the App Store. However, developers still have to pay to use a developer account, which contradicts the concept of “free” access.
In January of this year, Spotify announced to EU customers:
“You’re about to experience a new Spotify if you live in the EU. One where you can see all subscription pricing, promotions or deals, and even make purchases, all seamlessly within the app.”
This impasse also prevented Spotify from launching an in-app purchase service. If Apple complies with the Digital Markets Act (DMA), European users may be the first to use this new feature. However, it is another battleground in the ongoing conflict between the two companies.
Apple’s €500M fine exposes bias favoring its music app, raising antitrust concerns in the streaming industry. The EU’s decision to impose this penalty underscores the seriousness of competitors’ complaints, particularly Spotify’s. This significant fine signals potential regulatory changes for tech giants like Apple, with implications for competition and innovation. As the dispute continues, consumers and industry observers await further developments.
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