Apple Faces EU Punishment for App Store ‘Bullying’

DJ Khaled’s “All I Do Is Win” is in heavy rotation over at Spotify. 

Four years after the Sweden-based company lodged a complaint that Apple unfairly disadvantaged music-streaming competitors, the European Union is preparing to levy a hefty fine against the company and ban some of its App Store practices, sources told Bloomberg. The hammer is dropping just days after Google lost a similar US antitrust fight against Epic Games. Rage Against the Machine is trending on both sides of the Atlantic. 

Please Don’t Stop the Music

The dispute grew out of the 30% commission Apple takes from all App Store sales, plus the “anti-steering” tactics it uses to prevent people from seeking other, often cheaper, options by signing up via a company’s website rather than the App Store. Spotify says it was forced to raise subscription prices to cover the costs of the alleged App Store bullying — while cheaper options remained available for those who subscribe directly with Spotify.

Apple says it’s no longer an issue. Earlier this year, it eased its anti-steering policies, allowing Spotify and others to direct users to exit the app for cheaper options on the web. But at a private hearing in June with the European Commission, the EU’s antitrust body, Spotify said Apple’s change of heart was merely “just for show,” sources told Bloomberg. 

Now, it appears Spotify has convinced regulators:

• The European Commission is putting “the finishing touches” on its final decision, which sources told Bloomberg will formally bar Apple from using anti-steering practices against Spotify and other competitors.
• Apple may also face a fine as high as 10% of its annual EU revenue. Apple reported sales of roughly $94 billion in the EU in fiscal 2023.

Unhappy New Year: The final decision is expected early next year, which could neatly coincide with the Digital Markets Act, the EU’s comprehensive reforms targeting Big Tech that will take effect in March. Among the DMA’s rules are bans on Big Tech platforms favoring their own services, combining personal data across different services (like Facebook, Instagram, and Threads), and using data collected from third parties to compete against those third parties. Call it a major antitrust software update.