Apple is once again making headlines as it faces a potential €500m fine from the European Union (EU) over a longstanding dispute with Spotify regarding App Store pricing. This move by Brussels marks their first competition fine for the tech giant, as the EU probes allegations of Apple abusing its dominant position in the market to drive up prices and stifle competition.
The issue at the center of the investigation stems from accusations that Apple unfairly blocks apps on its App Store from informing users about alternative payment methods. Spotify, in its official complaint to the European Commission in 2019, claimed that Apple’s strict rules forced the music streaming app to raise the price of its monthly subscriptions to cover the associated costs.
Apple’s policy of taking a 30% cut from all purchases made through the App Store has been a contentious point for many developers and companies alike. Spotify, for example, was compelled to increase the price of its premium service from £9.99 to £12.99, while Apple simultaneously launched its own music streaming service at the £9.99 price point.
In an effort to address the concerns raised by the EU, Apple recently announced changes to its iOS mobile software, App Store, and Safari browser. These changes allowed companies to guide users to alternative and cheaper subscription options outside of the App Store. However, Spotify dismissed these changes as a “complete and total farce.”
Sources familiar with the investigation indicate that Brussels is likely to rule in favor of finding Apple’s actions to be illegal next month. If found guilty, the EU could impose a fine of up to 10% of Apple’s annual turnover, which amounts to $385bn.
This case is just one of many battles Apple has faced regarding its App Store fees. The company previously engaged in a highly publicized legal dispute with Epic Games, the developer of Fortnite. While Apple emerged as the victor in that particular case, a Californian court did mandate certain alterations to the App Store’s operations.
The looming fine serves as yet another example of the EU’s efforts to regulate the power wielded by tech giants. Starting in March, new rules will classify Apple, Amazon, Google, Meta (formerly Facebook), and Microsoft as “digital gatekeepers,” subjecting them to stringent competition regulations.
Apple faces potential €500m fine from the European Union (EU) over App Store pricing dispute with Spotify
Apple is facing a potential €500m fine from the European Union (EU) after allegedly abusing its dominant position in the market and driving up prices on its App Store. The EU is investigating Apple’s policy of blocking apps from informing users about alternative payment methods. Spotify filed a complaint with the European Commission in 2019, claiming that Apple’s rules forced them to raise their subscription prices to cover associated costs.
Definition: App Store – Apple’s digital distribution platform for mobile applications, allowing users to browse and download apps for their iOS devices.
Definition: Dominant position – When a company has significant power and control over a market, allowing it to impact competition and consumer choice.
Spotify accused Apple of forcing them to raise subscription prices to cover App Store fees
Apple takes a 30% cut from all purchases made through the App Store, a policy that has been contentious for many developers and companies, including Spotify. As a result, Spotify had to increase the price of its premium service while Apple released its own music streaming service at a lower price point.
Apple made changes to address EU concerns, but Spotify called them a “farce”
In an attempt to address the EU’s concerns, Apple made changes to its iOS mobile software, App Store, and Safari browser, allowing companies to guide users to alternative subscription options outside of the App Store. However, Spotify dismissed these changes as insufficient.
Definition: Farce – Something that is absurd or ridiculous.
The EU is likely to rule against Apple and could impose a fine of up to 10% of its annual turnover
Sources familiar with the investigation suggest that the EU will likely find Apple’s actions to be illegal. If found guilty, Apple could face a fine amounting to 10% of its annual turnover, which is approximately $385bn.
Apple has faced previous legal battles over its App Store fees
This is not the first time Apple has faced legal disputes regarding its App Store fees. The company had a highly publicized legal battle with Epic Games, the developer of Fortnite, in which Apple emerged as the victor but with certain mandated changes to the App Store’s operations.
Definition: Digital gatekeepers – Refers to certain tech giants like Apple, Amazon, Google, Meta (formerly Facebook), and Microsoft, who have significant control and influence over digital markets.
The EU is introducing new rules to regulate tech giants like Apple
Starting in March, new regulations will classify Apple, along with Amazon, Google, Meta, and Microsoft, as “digital gatekeepers.” These companies will be subject to stringent competition regulations imposed by the EU.
Related links:
– Apple
– European Commission
The source of the article is from the blog cheap-sound.com