In response to the lawsuit against Apple by music streaming giant Spotify, the European Union plans to impose a fine of 500 million euros on Apple, but Apple has made a tough response this time.
According to foreign media reports, Spotify filed a lawsuit in 2019, accusing Apple of improper behavior in music streaming. After the trial, the European Union deemed Apple's behavior illegal and planned to impose a maximum fine of 500 million euros. Sources say that the European Union is expected to announce this ruling early next month. But Apple chose to speak out publicly to demonstrate the company's attitude on this matter.
On February 27th, an Apple spokesperson said in an interview with media outlets including The Paper, "We are pleased to support the success of all developers, including the world's largest music streaming app Spotify. Spotify does not pay any service fees to Apple, even if these services help them build, update, and share their apps with Apple users in 160 countries and regions around the world.". Fundamentally, their complaint is an attempt to endlessly use all of Apple's tools without paying any fees for the value they provide
The main contradiction between Apple and multiple platform level apps such as Spotify is the Apple tax (which requires a 30% commission), and the Apple anti circumvention principle, which prohibits apps from accessing external paid links within the platform.
Spotify has complained to the European Union that Apple is preventing music streaming apps such as Spotify from providing users with other ways to subscribe to their own services, thereby bypassing Apple's in app purchase commissions. The EU considers this action illegal. These regulations are commonly referred to as the App Store's anti circumvention principles.
Apple made significant concessions in March 2022 regarding this matter. The company allows the "reader" app to provide users with external links for paid registration. This means that multiple content platforms such as Spotify and Netflix can bypass the commission mechanism of Apple's own payment system while complying with Apple's rules.
However, Spotify and other companies are not satisfied with this. According to the previous report, Spotify subsequently stated that the relevant restrictions still exist, that is, Apple prevents other competitors from notifying iPhone users that there are cheaper payment methods outside of Apple's subscription channels. Sources say this is the main reason why Apple was fined.
Apple claims that the European Commission has been searching for an effective theory in the past decade. They made three different attempts; Every time, they changed and narrowed down the scope of the investigation. The case now only focuses on Apple's anti circumvention rules, claiming that iOS users do not know how to subscribe to music streaming services outside of the app. "But that's not the case. Spotify and other music streaming services market to consumers through channels such as email marketing, social media, text messages, and online advertising. It's not a problem for iOS users to subscribe to music streaming services outside of the app."
In fact, Spotify has indeed achieved tremendous success on the Apple App Store platform. Spotify is the world's largest digital music company in the European market, with a 56% share; On iOS, Spotify's market share is even higher than on Android.
"Their success is largely attributed to the App Store, as well as all the tools and technologies provided by Apple, which Spotify uses to build, update, and share its apps with Apple users around the world." Apple's spokesperson stated that the Spotify app has been downloaded, re downloaded, or updated more than 119 billion times on Apple devices; Can be used on App Stores in over 160 countries or regions worldwide.
Apple believes that there is no evidence in this case to suggest that consumers have been harmed, and in the exponentially growing digital music market, European consumers have more choices than ever before. In just 8 years, the number of subscribers has increased from 25 million to nearly 160 million, with an average annual growth rate of astonishing 27%. In addition, surveys in the past decade have never produced a feasible theory to explain how Apple hinders competition in such a clearly thriving market.
Apple believes that this survey not only does not promote competition, but may also strengthen the dominant position of market leader Spotify. Apple also publicly complained that this is why Spotify worked so closely with the European Commission in this case. In fact, they met with the committee over 65 times during this investigation.