Apple vs Spotify: The EU’s verdict on the music streaming war

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Apple fined $2 billion by EU for breaching antitrust rules over music streaming. Learn how the iPhone maker violated competition law and what this means for the future of the App Store and Apple Music.

Apple has been fined €1.8 billion ($2 billion) by the European Union for violating antitrust regulations in its App Store. The penalty is the result of a three-year investigation by the EU’s competition watchdog, which found that Apple abused its dominant position in the market for music streaming apps.


What did Apple do wrong?

The EU’s investigation was triggered by a complaint from Spotify, the world’s largest music streaming service, in 2019. Spotify accused Apple of imposing unfair and restrictive rules on app developers who wanted to offer their services to iOS users.

Specifically, Spotify claimed that Apple:

  1. Charged a 30% commission fee on all in-app purchases and subscriptions made through the App Store, which reduced the revenue and profitability of competing music streaming apps.
  2. Prohibited app developers from informing users of alternative and cheaper payment methods outside the App Store, which limited the choice and options of consumers.
  3. Favored its own music streaming service, Apple Music, by giving it preferential treatment in terms of visibility, promotion, and integration with other Apple products and services, such as Siri and HomePod.


The EU agreed with Spotify’s allegations and concluded that Apple’s practices distorted competition and harmed consumers in the European Economic Area (EEA).


What are the consequences for Apple?

The EU imposed a fine of €1.8 billion on Apple, which represents about 1.2% of its global turnover in 2020. This is the first time that the EU has fined Apple for antitrust violations, although it has previously fined other tech giants such as Google, Facebook, and Microsoft for similar offenses.

The fine is not the only sanction that Apple faces. The EU also ordered Apple to stop its illegal conduct and to refrain from any similar actions in the future. This means that Apple will have to:

  • Allow app developers to inform users of alternative payment methods outside the App Store, without any restrictions or penalties.
  • Reduce or eliminate its commission fee on in-app purchases and subscriptions, or apply it equally to all apps, including its own.
  • Ensure fair and equal treatment of all music streaming apps in the App Store, without favoring Apple Music or discriminating against rivals.

The EU said that Apple will have to comply with these measures within two months, or face additional fines of up to 5% of its daily turnover for each day of non-compliance.


How did Apple and Spotify react?

Apple said that it will appeal the EU’s decision, calling it “the opposite of fair competition”. The company argued that the App Store has been a “game-changer” for the music industry, creating new opportunities and benefits for artists, developers, and consumers.

Apple also defended its commission fee, saying that it reflects the value and security that the App Store provides to app developers and users. The company claimed that Spotify pays the commission fee only for a small fraction of its subscribers, and that it makes more money from iOS users than Apple does.

Spotify welcomed the EU’s decision, calling it a “historic day” for fair competition and innovation. The company said that the EU’s action will ensure that consumers have a real choice when it comes to music streaming services, and that app developers can compete on a level playing field.

Spotify also thanked the EU’s competition commissioner, Margrethe Vestager, and other regulators, lawmakers, and advocates who supported its case and pushed for a more open and competitive digital market.


What are the implications for the tech industry and the digital market?

The EU’s decision is a significant blow to Apple, which relies heavily on the App Store as a source of revenue and a gateway to its ecosystem of products and services. The decision could also set a precedent for other antitrust cases against Apple, both in the EU and elsewhere, involving other sectors such as e-books, gaming, and podcasts.

The decision is also a victory for Spotify, which has been a vocal critic of Apple’s App Store policies and a leader of the Coalition for App Fairness, a group of app developers who advocate for more transparency and fairness in the digital market.

The decision could also have broader implications for the tech industry and the digital market, as it signals the EU’s determination and willingness to enforce its competition rules and to curb the power and influence of the dominant tech platforms. The decision could also inspire and empower other app developers and consumers to challenge the practices and policies of the tech giants, and to demand more choice and innovation in the digital market.



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