Tensions are growing between Apple and Spotify. In 2019, the music platform, which reported Apple to the European Union on the grounds of unfair competition, reached its goal. The European Commission found Apple guilty of abusing its dominant position in the market and breaking competition rules.
The US tech giant has 12 weeks to defend and respond to the European Commission.
The starting point of the case comes from app store deductions, known as Apple tax. People or organizations that develop apps for iOS, iPadOS, and MacOS operating systems need to publish their apps through the App Store. The store provides developers with a reliable platform and the necessary tools for free. In return, however, the company receives a 30 percent commission on apps with revenues of more than $1 million.
Spotify, which said it gave a significant portion of its earnings to Apple because of the commission, claims the company is blocking competition. After the European Union also found Spotify justified, Apple faces a tough time. The US tech giant could face billions of dollars in fines.
At a press conference on the issue, EU Commission Vice President Margrethe Vestager said apple had been sent an official warning for violating competition rules. Noting that apps have to go to the App Store and accept the rules imposed on them to reach Apple users, Vestager said this paves the way for unfair competition.
Apple, which has pleaded not guilty to unfair competition charges, defended its App Store policies in a statement. “Spotify has become the largest music subscription service in the world, and we are proud of the role we play in it. Their claims that we get a share of 99 percent of their clients do not reflect reality. We only charge a 15 percent commission on subscribers they get through the App Store. Spotify wants to take full advantage of the App Store. But they don’t think they should pay for it.”
Apple is expected to appeal the decision and continue its legal battle. How the company’s appeal to the European Commission will play out remains to be seen.