The new rule would prohibit Apple’s current practice of preventing music streaming services from directing customers away from subscribing via an in-app purchase. In-app purchase subscriptions are routed through Apple’s payment service and thus require paying Apple a cut.
According to Bloomberg, Apple could also face a fine of up to 10% of its annual sales, though it notes that the EU penalties seldom reach that level. It also notes that orders for companies to change their business models can be significantly more impactful.
In 2019, Spotify filed a complaint with the European Union against Apple, accusing the tech giant of monopolistic behavior. According to Spotify, Apple was coercing app developers to utilize the App Store’s payment system, which was unfair. Additionally, Spotify claimed that Apple infringed on its right to inform users of cheaper prices on its website.
In response, the EU began an investigation and in 2021, a preliminary report was issued. That report did say that Apple was in breach of EU laws over the promotion restrictions or anti-steering measures, but not the App Store payment issue. In response, Spotify demanded decisive action against Apple.
In October, it was learned that Spotify CEO Daniel Ek has been lobbying the UK government, saying it should use its freedom from the EU to enact tough new laws to end Apple’s dominance with the App Store.
